Foreign Policy Export Controls

Testimony was given concerning: (1) the extension of foreign policy export controls in effect prior to the passage of the Export Administration Amendments of 1985; and (2) the consultation process used in soliciting business views on the controls' extension. GAO noted that: (1) prior to the 1985 amendments, it was difficult to accurately assess the economic impact of foreign policy controls over time and quantify the extent to which foreign purchasers viewed the United States as an unreliable supplier because of the controls; (2) under the 1985 amendments, the President may only impose, expand, or extend export controls if he consults with Congress, makes certain determinations regarding the impact of proposed controls, and consults with the affected industry and foreign countries; and (3) if goods and technology subject to foreign policy controls are available from foreign sources, the Secretary of Commerce must license exports of controlled items. GAO found that: (1) when the purpose of the control is to induce a country to modify its behavior or punish it for that behavior, the act restricts presidential discretion because he would not be able to maintain controls where there is widespread foreign availability; (2) when controls are imposed for symbolic purposes, they take on dimensions beyond their original purpose and the target of the controls essentially incurs no cost; (3) when foreign availability makes foreign policy export controls unsuitable as a meaningful penalty, the President may choose a symbolic objective for the controls; (4) the costs of such controls are borne by U.S. businesses, which lose export sales to firms in other countries not participating in the export controls; and (5) a majority of public commenters felt that the solicitation of comments through the Federal Register was an unacceptable or ineffective form of consultation and advocated a more direct solicitation of opinions from affected industries.