By Dan Jones
President Clinton announced plans to loosen controls on the export of high-performance computers and semiconductors yesterday. In a prepared statement, the president said that the reforms were needed because of the extraordinarily rapid rate of technological change in the computer industry. Industry bodies – such as the Computer Coalition for Responsible Exports (CCRE) – have cautiously welcomed the proposed reforms, describing them as a good first step. Hewlett-Packard chairman and CEO, Lew Platt, who heads up the CCRE, said that the administration was acting to avoid the ‘technology train wreck’ we’ve all been anticipating but described the proposals as only half a solution, because the reforms will require Congressional approval and a six-month period before they go into effect.
The US operates an export control system that calculates the power of computing equipment through a measurement of millions of theoretical operations per second (MTOPS) and grades what equipment can be sold to what country on a tiered basis (CI No 3,681). The biggest change under the under the Administration’s plan is that computers that perform at up to 6,500 MTOPS can be exported to tier-three countries, such as China, Israel and India, without approval from the US government. The previous legislation, passed in 1996, restricted exporters to shipping computers that performed at up to 7,000 MTOPS, but only with government approval. Computers that perform between 6,500 and 12,300 MTOPS can be now be exported to those countries if exporters notify the US government. Sales of computers in this range to military users will still require individual export licenses. The Administration has also committed to regular six- month reviews of the process.
The Administration plan would also raise the export control threshold to tier II countries – primarily ‘friendly’ Latin America and Asian countries – to 20,000 MTOPS. Previously the threshold was pegged at 10,000 MTOPS. The Administration has pledged to review the new numbers with the expectation of raising them to the 32,000-36,000 MTOPS range in six months. The government has maintained its stance on not granting technology export licenses to tier four or ‘rouge’ countries, such as Iran or Iraq.
The reforms have at least started to address one of the major complaints of the industry – that restrictions were not keeping pace with technology. For instance, a Pentium III processor has an MTOPS rating of 1,300, so that the under the 1996 restrictions an exporter would, in theory, require government approval to export a two-processor workstation to China. The government seems to have accepted the absurdity of this situation. In his statement, President Clinton said maintaining the controls as they stood would hurt US exports without benefiting our national security. However, the industry had been hoping for a loosening of restrictions on exports to military customers, which has not materialized.
