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THE PACIFIC RIM

Red Tape Snarls High-Tech Trade

March 15, 1985|DANIEL SOUTHERLAND and STUART AUERBACH | The Washington Post

WASHINGTON--The United States and its allies are working to break a logjam of applications for high-technology sales to China that is choking the West's export-control apparatus, according to Administration officials and diplomatic sources.

The heavy increase in high-tech sales to China--the U.S. share last year is estimated at more than $1 billion, up from $300 million in 1983--threatens to overwhelm the Coordinating Committee for Multilateral Export Controls (Cocom).

The Paris-based organization, made up of NATO members and Japan, controls the flow of strategic products to Communist nations.

"We've become so concerned with China we can't focus on the more important East Bloc," the Soviet Union and its Eastern European allies of the Warsaw Pact, one U.S. export specialist said.

During a meeting in Paris last month, high-level representatives from the 15 members of Cocom set a May 1 deadline for proposals to speed up the China licensing process and clear away the backlog of license applications. The United States alone, which requests 70% of all Cocom license applications, had 877 cases pending last month, 807 for products destined for China.

William Schneider Jr., undersecretary of state for security assistance, science and technology, said it might be possible to halve the time required to get most licenses approved.

Problem Has Intensified

"We made a decision to improve the administrative apparatus," Schneider said in an interview. "It should be possible to process applications faster."

The problem has intensified with China's decision to make high-tech purchases, especially computers, a prime element of its modernization program. China bought $101.2 million of U.S. computers last year, and the American Embassy in Peking expects sales to double this year.

China's top leader, Deng Xiaoping, made the ability to get high-tech products from the United States a condition of closer ties between the two nations, and President Reagan approved a liberalized export policy for Peking in 1983. But Administration officials said the delays are undermining that policy.

"Cocom is smothered," said an Administration official. "We're not implementing the President's liberalization policy. We're just paying lip service to it.

"The situation is serious, really serious," he continued. "We're talking about a year's delay on license approval" for even the least sophisticated types of technology.

In the past, the question of selling technology to Communist nations has split the Administration badly, with the Pentagon taking a hard line and the Commerce Department more willing to make sales, especially of products that are available around the world.

The Pentagon, moreover, was accused by William Root--a former State Department expert on East-West trade--of allowing strategic technology to slip to the Soviet Bloc by refusing to cooperate with other Cocom members and delaying the formation of a unified Western policy. Schneider said, however, that the Administration is united on the need to accelerate the China trade and that the Defense Department is "aggressive in pushing for it."

U.S. Allies See Increase in China Trade

The U.S. allies, who also are beginning to see an increase in their China trade, supported American efforts to speed the Cocom process. Initially, Administration officials said that they were concerned that the Western European members would seek concessions on sales to their primary Communist markets in Eastern Europe in exchange for streamlining the China licensing procedures.

"That never materialized," an Administration official said. He added that France, Germany and Great Britain pressed the U.S. delegation to go even further. The options range from taking sales to China out of Cocom's purview, which the Administration is not supporting, to merely making Cocom more efficient, which some officials believe is not enough to clear the backlog of China applications.

There is some pressure from outside government to remove China sales from Cocom's purview on the grounds that it is a friendly Communist nation that no longer poses a threat to the West.

Richard Holbrook, assistant secretary of state for East Asia and the Pacific in the Carter Administration, supported that view last month in a Wall Street Journal article that said: "It is time to separate China, once and for all, from the anachronisms of a system aimed at the Soviet Bloc." Holbrook, a senior adviser to Shearson Lehman Bros., assists American companies in getting export licenses for China trade.

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