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June 17, 1990

THE WINNERS AND LOSERS IN COCOM’s RELAXATION OF EXPORT CONTROLS

By CBR Staff Writer

The 17 members that make up the watchdog group CoCom are slowly relaxing the trade restrictions between member countries (NATO countries, excluding Iceland plus Japan and Australia) and the Eastern Bloc. At a the meeting in Paris earlier this month, the group decided to revise the controlled technologies list, removing 38 items from 116 listed categories. At the centre of the controversy are the dual-use technologies which cover computers, machine tools and telecommunication technologies. It is argued that such technologies though ostensibly sought by Eastern Europe for civilian purposes could be used by the military.

US intransigence

For this reason the US government in particular has been jumpy about easing such restrictions, while Western Europe has been far keener to start marketing products to its Eastern half. Indeed, in February CoCom talks ground to a halt largely because of US intransigence on the issue. However, since then, according to the International Herald Tribune, the mood in the US has changed to the extent that its House of Representatives has passed The Export Facilitation Act of 1990 which proposes to free controls on goods and technologies to most countries, reduce the role of the Department of Defense in determining which technologies are militarily significant, and decontrol any items after further technological advances are made in their fields. While the Act has not yet been debated in the Senate and so is not binding, it nevertheless marks a significant change in US attitudes. All of which is good news for vendors in the information technology sector represented by CoCom where, by and large, technological advance is being driven by the civilian rather than the military industry. As from July 1 printed circuit boards manufacturing equipment, telemetering and telecontrol equipment for use with aircraft, space vehicles or weapons, semiconductor diodes and transistors are among the 30 items deleted from the Industrial List. Furthermore, from that date the following seven items will be liberated up to the level currently allowed only for exports to China: equipment to make special electronic devices or magnetic recording media, robots, electronic testing equipment, assemblies of electronic components, analogue to digital and digital to analogue converters, cameras and fibrous and filamentary materials. In other words, these items will be covered by Open General Export Licences. Moving specifically to how this relaxation from July 1 will effect computer sales, CoCom says that most personal computers up to the 80386 level will be eligible for export with hardly any restrictions. Memory sizes of up to 32Mb will be allowed and the only restriction will be on items such as graphic workstations designed for high-end computer-aided design and manufacturing applications. Similar relaxations will apply to items such as magnetic disks, tapes, communication channels and local area networks. The agreement suggests that in certain cases (depending on end use and geographical destination) very high grade computers may be allowed to be exported as part of another system. Peripheral equipment such as graphic input devices and digitising equipment, image scanners, optical mark recognition equipment, all printers (unless embargoed by IL1572), graphic displays for signature and security checking, light gun devices (or manual graphic input devices) and CD-ROMs will all become decontrolled. The processor data rate relating to the above equipment has been set at 275M-bits per second which means that machines like IBM’s AS/400, DEC’s MicroVAX 3000, Hewlett Packard’s HP3000 series and Control Data’s Cyber 840 will all be decontrolled. As for equipment shipping on its own and not as part of a system most disk drives with capacity up to 165Mb, write-once drives up to 3.2Gb, RAM stores up to 2Mb, magnetic tape drives up to 6250 bits per inch and streamer tapes with transfer rates up to 16 million bits per second will all become decontrolled. Also communication channels will be free from export control up to 9,600 bits p

er second, and displays or monitors up to 1,280 by 1,024 resolution with a maximum of 256 colours or shades of grey. Local area networks up to 20m bits per second with no inter-network gateways will also be allowed. On top of these relaxations, companies will also now be able to request licences to export computer systems with processing data rates of up to 1,000M-bits per second – this includes IBM 3090Es, ICL 3980s, DEC 8830s and 80486-based personal computers. According to Computer Systems News, some East European countries that have agreed to prevent the re-export of computers (Poland, Hungary and Czechoslavakia) will get favourable consideration to import systems up to 2,000M-bits per second.

Favoured countries

CoCom lifted controls on most exports to East Germany pending political unification with West Germany. Again such favoured countries will get different treatment as regards exports of telecommunication equipment – enabling them to buy common channel signalling equipment, Integrated Services Digital Network facilities and optical fibre systems up to 156M-bits per second not eligible for export to countries such as Romania, Bulgaria and the USSR. However controls on larger PABXs, as well as for cellular services will have a blanket relaxation. In fact the Herald Tribune says the US is not at all happy about the relaxation of telecommunications equipment to any East European country on the grounds that its National Security Agency would find it harder to listen in on conversations in these countries. This has resulted in the US government blocking a proposal by US West Inc to build a $500m fibre optics line across the USSR. A less advanced system proposed by Cable & Wireless has also been stopped by the UK Government. Telecomunications companies aiming for a worldwide digital network would find it far less expensive to lay a line across mainland Russia than have to circumvent it. As ever the fight is on between commerce and politics.

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