U.S. Government Eases Computer Export Rules

FRAMINGHAM (02/02/2000) - The U.S. government yesterday announced plans to relax federal export controls on computers for the second time in the last seven months.

But computer industry officials who are lobbying for greater reform of the technology export-control system said they don't expect to see that happen in the short term.

The changes would raise the system-performance levels at which computer vendors need to get licenses from the U.S. government for sales to customers in so-called Tier 2 and Tier 3 countries. The latter category, for example, includes China, Russia, India and Israel.

Ed Black, chief executive officer of the Computer & Communications Industry Association (CCIA) in Washington, said the changes announced yesterday only provide "a temporary reprieve" from the need to continually loosen export limits as mainstream computing power increases.

"We shouldn't be worrying every six months about raising the (allowable performance) levels so we can sell computers," Black said in an interview today. "It really is an obsolete system as it's now structured."

The CCIA hopes to convince the U.S. government to overhaul the export-control system, but Black said the vendor trade association doesn't expect to make much headway this year because of the upcoming presidential elections and other foreign-policy issues.

"Most people in the industry don't think this year is the one where we want to try (to get big changes approved)," Black said. In fact, the CCIA isn't even putting forward any specific proposals for change at this point, he added.

One change the CCIA would like to see is the relaxation of a requirement that U.S. Congress be given advance notice before export controls can be modified.

Because of that, most of the changes announced yesterday won't take effect for another four to six months.

In a statement, U.S. President Bill Clinton promised another review of the performance levels in April and said he wants Congress to reduce the notification period to one month "so that we can keep up with the rapid pace of technological change."

The Information Technology Industry Council (ITI), another Washington-based trade association, also said this week that further relaxation of computer export controls is one of its top legislative priorities. Dan Hoydysh, director of Unisys Corp.'s Washington office and co-chairman of an ITI committee that monitors export regulations, said the adjustments being made by the government are barely keeping up with the pace at which new technology is introduced.

Outdated export control rules could harm U.S. computer and semiconductor companies that have to compete against foreign vendors unencumbered by such rules, Hoydysh added. "There seems to be a perception that no one in the world can make these products but us," he said. "That's simply not true."

(The IDG News Service contributed to this report.)

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