CONGRESSIONAL RECORD -- SENATE

December 23, 1969

Page 41136

EXPORT ADMINISTRATION ACT OF 1969 -- CONFERENCE REPORT

Mr. MUSKIE. Mr. President, I submit a report of the committee of conference on the disagreeing votes of the two Houses on the amendment of the House to the amendment of the Senate to the bill (H.R. 4293) to provide for continuation of authority for regulation of exports. I ask unanimous consent for the present consideration of the report.

The ACTING PRESIDENT pro tempore. The report will be read for the information of the Senate.

The assistant legislative clerk read the report.

(For conference report, see House proceedings of today.)

The ACTING PRESIDENT pro tempore. Is there objection to the present consideration of the report?

There being no objection, the Senate proceeded to consider the report.

Mr. MUSKIE. Mr. President, I am most happy to support the conference report on H.R. 4293.

This bill is the product of many months of work by many of us who believe that the export administration procedures followed by the United States need extensive revision in order to assure that the national security of the United States is fully protected and, at the same time, to assure that American business has the opportunity to compete freely in the world marketplace.

Mr. President, I believe that the conference report achieves these two objectives. There are many changes in existing law embodied in the conference report. The existing law provides that the President shall deny an export license if an item would contribute significantly to the military or economic potential of a nation or nations threatening the national security of the United States.

The existence of the economic potential criterion has caused considerable confusion and unnecessary restriction in the interpretation and application of the existing law. Obviously, virtually any export would contribute to the economic potential of a nation. But it is equally obvious that there was no intention under the existing law that all exports be prohibited to the specified nations. This confusion and uncertainty as to what the law actually means has apparently led to overly restrictive interpretation by the executive department and has also curtailed the efforts of American business to export to the specified nations because of the uncertainty of business as to what the congressional intent is in regard to these exports.

The conference report removes any reference to economic potential. This removal should alleviate the confusion and focus on the primary objective of regulating exports, which is to protect the national security.

Another major change in the existing law which is contained in the conference report is a congressional mandate concerning regulation of the export of items which are available outside the United States from nations other than those nations threatening the national security of the United States.

The bill makes clear the intent of Congress that an item which is available from certain nations, other than the United States, shall be freely exportable from the United States without licensing requirements unless overriding national security considerations still require that the item be controlled. Such decision to control should be made only after full and complete consideration has been given to the availability of this item from other sources. In such cases the Department of Commerce must report to the Congress, in the quarterly report following that decision, the reasons for requiring an export license in such detail as national security and foreign policy permit. This report should include such detail as the pertinent articles, materials, supplies, data or information; the nation or nations affected by the decision; and the reasons, subject to the specified limitations, for the decision to control the item, in spite of its availability elsewhere.

In addition to these two key provisions, the bill contains a number of provisions which represent an improvement over the existing law. The new act includes a finding that the unwarranted restriction of exports has a serious effect on the balance of payments.

It contains a finding that the uncertainty of policy toward certain exports has had the effect of curtailing the attempts of American business to export items contained in those categories. It states that this curtailment has been to the detriment of our trade balance.

Thus, the new act recognizes specifically the importance of American exports to the balance of payments of the United States, and, implicit therein, their importance to the overall financial and economic well-being of this country.

The act includes a new statement that it is the policy of the United States to encourage trade with all countries with which we have diplomatic or trading relations while, at the same time, restricting the export of goods and technology which would make a significant contribution to the military potential of certain nations which would prove detrimental to the national security.

Thus, in the legislation dealing with the administration of exports, there is the express policy to encourage the flow of trade.

The act requires the Secretary of Commerce to institute such changes as are necessary to facilitate and effectuate the fullest implementation of the policy of the act with a view to promoting trade with all nations with which the United States is engaged in trade.

It also requires the Department of Commerce to review its control lists with a view to make promptly any changes and revisions as may be necessary in furtherance of the policy of the act.

The Department is required to report its actions in this regard to Congress on a regular basis.

The act requires the Department of Commerce to keep the business sector of our economy advised of the changes in export control policy and procedures instituted by it in conformity with the act with a view to encouraging the widest possible trade.

The act also requires the President to seek the information and advice from private industry in regard to the export policies and procedures utilized by him.

The act requires that it be administered in such a manner so as to reduce the cost of record keeping and export documentation requirements that are required of American business. A periodic review of these requirements must be made and Congress must be kept up to date on what the administration is doing in this respect.

It establishes a new procedure whereby exporters may be kept fully advised of the status of their license applications along with pertinent factors which may affect their application.

Mr. President, I have given a brief summary of the innovations contained in this act. There is certainly no way for us to know the precise effect this act will have on American business.

However, I am confident that if the act is administered in a manner which implements the policies and objectives sought by those of us who have spent a great deal of time on it that there will be a substantial increase in the efforts of American business to enter the world market and there will be a substantial increase in the exports from the United States.

Mr. President, at this time, I wish to express my appreciation to the distinguished Senator from Minnesota (Mr. MONDALE), who was the principal architect of this new policy in the Senate, and to my distinguished colleague, the Senator from Utah (Mr. BENNETT) for his cooperation in making possible a compromise of these difficult issues at literally the last moment in this session.

Any mention of the success of the compromise which has been worked out would be incomplete without reference to the untiring efforts of the distinguished Senator from Massachusetts (Mr. BROOKE). He truly has been the key figure in working out this compromise with the administration. For those of us on this side of the aisle, as well as those on the other end of the Capitol, I wish to express my very deep appreciation to him for his efforts.

Mr. BENNETT. Mr. President, I appreciate the kind things my friend the Senator from Maine has said about my participation in this activity; and I was delighted to have him add an expression of appreciation to the Senator from Massachusetts (Mr. BROOKE), because during the last few hours in which this final solution was hammered out, it was the Senator from Massachusetts and not the Senator from Utah who bore the brunt of this accomplishment.

Mr. President, I believe that it is in the best interest of this Nation that the conferees were able to reach an agreement on language for section 4(a) of the Export Administration Act. If we had not, it would have been necessary to control our exports under the Trading With the Enemy Act, and although the administration was ready to do that if necessary, it would not have been a convenient way to protect the security of the United states while still allowing exports not affecting our security.

The strong feelings on this issue are reflected in the fact that the statement of the managers of the conference for the House contains only a reference to the actual language changes from the act approved by the House and that agreed to in conference this morning. No interpretation of the language could be agreed upon by the conferees.

In the absence of such interpretation, I believe that it is necessary that one point is made clear. I have submitted two questions to the manager of the conference report for the Senate, which I will ask that he give me his understanding of the will of the conferees.

The first question is:

Is it the intent of the conferees in section 4(a) that the Department of Commerce be required to pre-survey all of the thousands of items that might be subject to export in order to retain them on the export control list?

Mr. MUSKIE. My specific answer to that question is no. I should like to amplify it in this way:

What the conference envisions -- and I think this is true of all the Senate conferees -- is an orderly transition into the new policy, embodied in this Act. What is involved is the requirement that new policies must be set in regard to more than 1,300 categories of goods. The setting of these new policies will necessarily require a period of time which is, at this time, incapable of precise determination. The act leaves the administration the flexibility it needs in regard to the time it will take to review its control lists in the light of the new availability mandate. How long this takes will be up to the administration and will depend on the vigor with which the review is undertaken by the administration. We express the hope that the administration will take the initiative and move quickly into the new policy areas.

Mr. BENNETT. I thank the Senator from Maine.

The second question is:

It is my understanding then, that under section 4(a) reporting requirements, items presently on the control list may be retained without a report to Congress as to why they are being retained until a review is initiated as a result of a specific license application from an exporter. Is that correct?

Mr. MUSKIE. Yes. Insofar as the language of section 4(b) is concerned, the specific licensing application is one triggering action provided in the law. The receipt of license applications, and the reappraisal of the control lists to be initiated by the administration will cause the complete lists to be examined in the light of the new availability criterion. As this examination takes place, the administration will revise its control lists as it makes determinations on the question of availability. In the meantime, however, the Commence Department will continue to have the authority to control categories now on the list.

Mr. BENNETT. I thank the Senator from Maine. I realize, of course, that section 4(a) will, before it is fully implemented, require a more or less systematic review of all the items on the control list and I assume that we in the Banking and Currency Committee can expect reports on the actions taken as a result of that continual and systematic review.

I am sure we are all in agreement as to the goal which we hope to reach. I am very happy that the differences that separated the two Houses have been worked out, even in the closing minutes of the session, so that this act which would otherwise expire on the 31st day of December can continue in force.

Mr. MUSKIE. Let me say this in addition, that the distinguished Senator from Utah has referred to the fact that no interpretation of the language of the conference report could be agreed upon by the conferees. In explanation of what the Senator has said, and it is a correct statement, the extensive negotiations we have had with representatives of the administration have led to a rather complete understanding, at least as between the Senate conferees and the administration, of what we have in mind with this legislation. So that, although it is not technically an official interpretation of the language, I think it is the kind of understanding which will make it possible to work out wise policies in this field.

I now yield to the Senator from Minnesota (Mr. MONDALE).

Mr. MONDALE. Mr. President, may I express my deep appreciation and admiration to the distinguished Senator from Maine (Mr. MUSKIE) for his gifted contribution to the measure which we are about to adopt today.

This is the first significant trade liberalization measure passed by Congress since the end of World War II.

It is important by virtue of its own terms. But it may be that its symbolism is even more important, because, for years, deeply patriotic U.S. businessmen, seeking to sell peaceful, nonstrategic items to Eastern Europe have been subject to the charge that there is something wrong with their patriotism, even though they knew that such efforts were in this Nation's best interests, and even though they knew that to restrict such trade would be self-defeating for the United States, because increasingly other nations in Western Europe, as well as Japan and other free world countries, were producing identical items and it was no longer a question of denying something to the nations of Eastern Europe but a question of U.S. businessmen being permitted to participate and compete with them.

Thus, I think this act today should encourage not alone the Government in its administration of the act, and of other acts that bear upon East-West trade, but should be further support for U.S. businessmen in seeking to find and expand markets in Eastern Europe in the peaceful, nonstrategic trade categories.

Repeatedly, throughout this act, we have declared it to be the policy of the United States to support such a movement on the part of U.S. businessmen.

Second, I think that this act is important, in that it finally brings into focus the point I have referred to earlier, the most absurd feature of the operation of the present Export Control Act.

Under the present act over 1,300 items on categories of goods are freely available elsewhere in the world but we unilaterally prevent our own businessmen from selling them in Eastern Europe, even though we deny nothing to these nations.

The heart of the legislation is directed at that patent absurdity and asks the executive branch, particularly the Department of Commerce, quickly to review those areas in which this condition continues to exist, and to the extent that the Nation's national security permits, to decontrol those items as quickly as possible.

I am hopeful -- and I understand that the Department of Commerce now supports this measure – that it will follow through in the full spirit and intent of this measure.

Finally, this proposal calls for more open and public administration of the act. The present legislation was passed in 1949 during the darkest days of the cold war, and during the worst days of Stalin. Its operation was from that time on, a dank and closely kept secret. How the Export Control Act was administered, on what basis it would grant or deny licenses on what basis it would delay, and on what basis the Export Control Office would consult or not consult with businessmen, or the Congress -- it was almost as though it were a Secret Service-CIA operation, beyond the legitimate right of anyone to know or to understand.

The pending legislation asks that it now become a public operation to the fullest extent the Nation's security permits, and asks for the first time that U.S. businessmen be widely advised and be widely permitted to consult with the Department of Commerce on general policy on the administration of the Export Control Act; but more specifically, in one of its sections, it asks that the particular applicant for an export control license be informed at every stage of the application process as to precisely what it is that bears upon the granting or the denial of that license, it provides a fair hearing and it would inform each exporter of the reasons for the denial, if an application is denied.

This measure seeks to aid the business community in achieving the objective of expanded East-West trade, and asks that it become a public operation. It requires that those who deal with the agency be freely and honestly dealt with. In the same way, it seeks that same sort of relationship between Congress and the Department of Commerce, by asking that we be given full and detailed reports, to permit Congress in cooperation with the executive branch to achieve the objective of this legislation.

This I regard to be a terribly important first step to a healthy reform of trade policies in nonstrategic goods to Eastern Europe.

I hope that we may quickly adopt reforms in export-import financing policies as well. I remind the Senate that every industrialized country in the world has a bank like the Eximbank which extends credit or loans to their businessmen to do business around the world. Ours is the only bank which is prevented by law from any participation at all in assisting U.S. business in nonstrategic items in eastern Europe, except for Yugoslavia.

This is something we could not deal with in this legislation, but I hope we may deal with in the near future.

Finally, we must have reform of most-favored-nation treatment for most eastern European countries. I was pleased to read the other day that the President has recommended expanding trade opportunities with China. I see present on the floor the Senator from Washington (Mr. MAGNUSON), who has been 12 years ahead of us in proposing expanded trade with China. Yet, in spite of the proposed new initiatives with China -- with which I agree -- we seem intent on restricting trade, for example, with Rumania. One of the ways we restrict that trade is by refusing Rumania most-favored-nation treatment, on grounds which are difficult to understand.

So I hope, in addition to Ex-Im reform, we can take those long overdue steps in the extension of the most-favored-nation treatment to many nations of eastern Europe as well.

Let me conclude by again renewing my expression of deep appreciation to the distinguished Senator from Maine for his inspired and creative support in this effort.

Mr. MUSKIE. I thank the Senator from Minnesota and compliment him again for his very real and effective leadership in connection with this legislation. I am sure it is clear that the legislative history and discussion of the merits which he has just put into the record, is a reflection of the knowledge and background and ability he brings to this field.

I would like now to yield to my good friend from Massachusetts, who has been such a key figure in working out the compromise at this last moment.

Mr. BROOKE. I thank the Senator from Maine. I certainly want to thank him for his very kind and generous references to my participation in this legislation. I also want tc thank my distinguished colleague from Utah (Mr. BENNETT), for his usual, selfless manner in making these very kind remarks.

I have nothing but the highest commendation for Senators MUSKIE, MONDALE, BENNETT, HUGHES, and other Senators who worked in the conference committee, and for members on the House side who worked so closely with us on this very important legislation.

Mr. President, it is important legislation. It enables the American businessman, at long last, to compete with the businessmen of allied nations in trading with the eastern European countries.

We have not had a truly competitive position in the past. I think this legislation puts us on parity with businessmen from allied nations. It is something that has been long in coming. I am certainly grateful that the distinguished Senator from Maine and the distinguished Senator from Minnesota have been so strong in their support of the legislation, as has been well outlined.

I shall not delay the Senate longer in repetition, but, as the Senator from Minnesota (Mr. MONDALE) said, we are now opening up negotiations with respect to trade with Communist China -- the Red Chinese, so-called. I agree with Senators who have spoken on this subject. I think it has been long-coming. I agree, too, that the Senator from Washington (Mr. MAGNUSON) has been a leader in this field.

We cannot ignore 800 million Chinese people -- and it may be 1 billion people -- who are on earth at the present time. Sometime that has got to stop. One of the ways it must stop is to begin to trade with those people in nonstrategic items that will not jeopardize the national security. No one wants to jeopardize the national security of the United States. We have not jeopardized the national security of the United States in this piece of legislation. Let there be no doubt about that.

The measure before us represents progressive legislation in this field which has been needed for a long period of time. I hope it is just the beginning of what we are able to do. The Helsinki talks have so far proved to be fruitful. At least, the tone of them has proved to be fruitful. We have every hope that when we meet with the Soviets in Vienna and in Helsinki again, there will be more fruitful progress. Certainly, I hope these negotiations with the Soviet Union will help us thaw the cold war and reduce the fears and threats of these two powerful nations, as was helped by the nonproliferation treaty, and as we hope to achieve in the strategic arms limitation talks. I hope further good results will be forthcoming. This all ties in with what this Nation is trying to do.

President Nixon and the Commerce Department have been cooperative with regard to this legislation, for which we are all grateful.

Again, I want to thank the distinguished manager of the Senate conferees for all the effort he has put into this undertaking, and to thank also the Senator from Minnesota (Mr. MONDALE), the Senator from Utah (Mr. BENNETT), and the other Senators who have made efforts in this field.

Mr. MAGNUSON. Mr. President, will the Senator from Maine yield?

Mr. MUSKIE. I yield.

Mr. MAGNUSON. Mr. President, I am very pleased with this legislation, because for a long time I have been saying what the distinguished Senator from Massachusetts and the distinguished Senator from Minnesota said. I do not know what the title of the bill is going to be, but it is a tool for peace. Trade in legitimate, nonstrategic products is a bridge to help relieve tensions in the world. It is much better than diplomatic meetings, where people get together and understand one another.

As the Senator from Massachusetts pointed out, we cannot just ignore 800 million people. They are there. By 1985 it is estimated that the population of China will be 1 billion people -- one-third of the world's population.

The people behind the Iron Curtain -- not the governments, but the people -- are eager for the things that we make. If there is to be any revolution in Russia, it will be by the women of Russia.

When a husband comes home and says, "Oh, we are big Communists. We can run the world," the wife says, "if you are so good, why can't I get a decent pair of shoes or a better electric iron or a better refrigerator?"

I think there is a revolution going on on the part of people who have legitimate needs. The one country in the world to help furnish those needs is the United States, and in the meantime we will create a lot of good will.

Mr. MUSKIE. Mr. President, I thank the distinguished Senator from Washington.

I am not going to detain the Senate long. My distinguished colleagues from Minnesota (Mr. MONDALE), from Massachusetts (Mr. BROOKE), and from Washington (Mr. MAGNUSON) have expressed hopes that I trust may be advanced at least a little by this legislation. At least, they have spelled out its motivation.

I would like to take this opportunity to compliment the President upon the initiatives he has taken. They are very small initial initiatives with respect to trade with Red China. I was delighted that he should have taken those initiatives at a time when we were in negotiation over this legislation. I think the steps which he took encouraged us to believe that he and we were really moving, and intended to move, in the same direction.

There are long and difficult days and years ahead of us. There will be many frustrating negotiations, contacts, and talks with the Soviet Union. But I think in the long run, unless we can move in the directions indicated in this legislation, we cannot hope to move at all in the direction of peace.

Mr. President. at this time I want to pay tribute to the staff of the Banking and Currency Committee, particularly Hugh Smith, assistant counsel, to the committee, and Tim Naegele, assistant minority counsel, and to Jean Dubofsky and Duane Scribner, both formerly of Senator MONDALE'S staff, and to Jane Fenderson of my staff for their long hours of extremely effective staff work on this bill.

So, Mr. President, I yield the floor.

The ACTING PRESIDENT pro tempore. The question is on agreeing to the conference report.

The report was agreed to.