CONGRESSIONAL RECORD -- SENATE

April 22, 1969

Page 9860

S. 1940 -- INTRODUCTION OF THE EXPORT EXPANSION AND REGULATION ACT

Mr. MUSKIE. Mr. President, on behalf of myself, Mr. PACKWOOD, and other Members, I introduce, for appropriate reference, the Export Expansion and Regulation Act of 1969. This bill is designed to replace the Export Control Act of 1949, which expires on June 30 of this year.

Hearings on this bill, as well as the Export Control Act, will begin on April 23, 1969, before the International Finance Subcommittee of the Banking and Currency Committee.

Mr. President, the Export Control Act was passed 20 years ago. I think it would be well for us to examine the circumstances under which it was passed and, without taking too much time, acknowledge some of the changes which have taken place since then.

In 1949, the entire world was struggling to overcome the ravages of the war. The Soviet Union had adopted policies and taken actions which were an obvious and immediate threat to the security of the United States and its allies. This threat, coming at the time and in the manner in which it did, raised tensions between the Western allies and the Soviet Union to a height never equalled before or since. It came at a time when all of Europe was economically and physically decimated. The United States was the only Western country whose industrial and technological capabilities remained intact. It was the only country capable of helping Europe regain its economic independence through technological, industrial and financial help. When Russia presented its threat, it was necessary for the United States to take whatever steps it could to minimize the danger. It should be remembered that Russia was also decimated by the war.

Consequently, to deny Russia the benefits of American trade and technology was one effective way of minimizing the Soviet threat, at least for the time being. This fact occasioned the passage of the Export Control Act. That act served to provide positive scrutiny and control over virtually all exports to the Eastern European countries which were not already controlled by even more restrictive measures.

At that time, the act was an effective means of denying the Soviet Union advanced technology and strategic materials which could have military application, and, consequently, it was an effective tool both for national policy and security.

But much has happened since 1949. The Soviet Union has rebuilt its economy so that its technological and industrial level is greater than ever. Thus, it can now produce many products which it formerly might have sought from the United States.

Also, our relations with the Soviet Union and other nations of Eastern Europe have changed. I would never pretend that our problems and differences with these countries are over. However, I do believe that we have moved to the belief that our problems and differences can, and ultimately must, be solved by constant attempts to effect a meeting of the minds. We must make these attempts over the conference table and in the marketplace -- wherever and whenever we can meet with our East European counterparts -- be they manufacturers, politicians, diplomats, or traders -- to discuss our mutual interests and concerns. In order to expand this dialog, it is necessary for us to actively seek ways and means to increase our contacts and dealings with Eastern Europe.

By taking advantage of every opportunity to meet, talk and deal, we should be able to accelerate what is going to be a long and laborious process to eventual understanding and accord.

There are other circumstances which have changed since the original passage of the Export Control Act which affect its current effectiveness. As I pointed out earlier, to deny the Soviets access to our goods and technology was at one time an effective way to minimize the threat to us.

For at that time, the denied goods and technology were available nowhere else. However, the United States was successful in its endeavor to help Europe and Japan rebuild. We were so successful that the free world economy surpassed its prewar level many years ago. There are now very few U.S. products which cannot be approximated or duplicated by one or more of our allies.

Moreover, our allies have not imposed the severe restrictions on themselves that we have upon ourselves in regard to trade with Eastern Europe. Consequently, at this date, a vast majority of products which cannot be obtained by Eastern Europe from this country because of our unilateral export restrictions can be easily obtained from one or more of our allies. In many other instances, goods which could be obtained from this country even under the current restrictions are bought elsewhere merely because of the nuisance and delays caused by excessive redtape made necessary by current U.S. regulations.

Thus, in short, restrictive U.S. trade practices formerly served to deny products to Eastern Europe. In most instances, they now serve only to deny sales to American business.

At one time, it is possible that this country could have said that it did not need the business -- there was a severe shortage of American dollars after the war, and no one seriously considered the possibility of a balance-of-payments deficit. Now the situation is different. Every day we struggle to improve our balance-of-payments picture -- over both the short and the long term. The latest figures show that the percentage growth of our exports is decreasing. The ratio of our exports to imports is getting worse. Under these circumstances, it would be foolhardy to refuse to consider allowing American business a more competitive access to an existing market -- an access which would in no way affect the national security.

These are a few of the compelling reasons to seriously consider bringing the U.S. trade practices in regard to Eastern Europe into line with the other countries of the free world.

Last summer, at my request, Senator MONDALE conducted extensive hearings on the subject of East-West trade. The material he accumulated is unique and comprehensive. It has been an invaluable aid in helping single out specific proposals which warrant further consideration by Congress. Many of these proposals are contained in the bill we are introducing. In the hearings which begin tomorrow, we will continue to explore means by which we can continue to afford maximum protection to the national security while, at the same time, allowing American commerce maximum opportunity to prosper without the burden of artificial barriers.

The PRESIDENT pro tempore. The bill will be received and appropriately referred.

The bill (S. 1940) to provide for continuation of authority for the expansion and regulation of exports, and for other purposes, introduced by Mr. MUSKIE (for himself and other Senators), was received, read twice by its title, and referred to the Committee on Banking and Currency.