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Security Concerns Spark Battle Over Export Controls

July 15, 1987|From Reuters

WASHINGTON — When George Kachajian looks at one of the industrial "wafering saws" his firm produces, he sees a kind of sophisticated salami slicer.

But when the Defense Department looks at the same $100,000 saw, which cleaves the tiny silicon chips for computers, it sees another bit of Western know-how that could end up boosting Soviet military power.

"You have ideologues in the Pentagon who would not ship sand to East bloc countries," scoffs Kachajian, chairman of Silicon Technology, a small New Jersey manufacturing company.

Kachajian and his saws epitomize a bitter policy dispute that has long pitted U.S. exporters against U.S. national security guardians. The dispute turns, essentially, on one question: How can Washington deny militarily useful technology to the Soviet bloc without impeding legitimate trade?

Kachajian still is fuming because the Pentagon for years blocked his applications for a license to export the 4,000-pound wafering equipment, which he describes as a "glorified salami slicer" of many commercial uses. The military, however, calls the device a potential boon to Moscow's defense industry.

The saw slices silicon ingot into thin wafers. That is a step in making integrated circuits, which, defense experts note, are crucial to advanced weapon systems.

"When the Soviets incorporate Western technology in their military programs, we must spend more on our own defense, often vastly more," former Pentagon official Richard N. Perle told Congress shortly before he left the Administration recently.

But integrated circuits also are used in such commercial electronic equipment as television sets, radios and stereos.

That is the market Kachajian, who finally got his export clearance for the Soviet bloc in March, hopes to exploit.

Behind the security-versus-commerce dispute is an export control system of tangled laws, regulations and international agreements designed to deny the Soviets access to Western technology of potential military value.

Enforcement has grown more stringent under the conservative, staunchly anti-communist Reagan Administration.

The Pentagon claims more than 5,000 Soviet military projects already are benefiting from Western technology.

Most of the trouble centers around so-called "dual-use technology," used in both military and non-military equipment.

That would include such major high-tech items as mainframe computers above certain performance standards, artificial intelligence systems, fiber-optic transmission systems, satellite communication systems and some laser printers.

But it also covers such offbeat items as wire bonders, jig grinders, World-War-II-vintage marine boilers--and, until recently, Kachajian's wafering saws.

The boilers, for instance, are still on the U.S. Commodity Control List because of doubts as to whether similar hardware is available to the Soviet bloc from somewhere else.

"U.S. export licensing practices and procedures currently limit the global competitiveness of the U.S. electronics industry," grumbled the American Electronics Assn. in a statement issued at congressional hearings on this dispute.

A National Academy of Sciences report in January also said that the Reagan Administration may be "over-correcting" for earlier weaknesses with its zealous enforcement of export controls.

The issue has even sparked conflict between agencies of the U.S. government--such as the Commerce Department, which promotes international trade, and the Pentagon--and at times has strained relations between America and some close allies.

Currently, the United States controls 27 categories of products that none of its main industrial trading partners regulates. That strikes many critics as excessive considering the huge annual U.S. trade deficits.

"Much of the trade debate has focused on restrictions imposed by other countries on our exporters," said Rep. Don Bonker, (D-Wash.), who heads a House subcommittee on international economic policy. "But in this case the U.S. government has imposed the restrictions on our own exporters."

The Reagan Administration is showing signs it feels the pressure of all this criticism. It announced this spring it would ease some of its export control standards.

The main concession was a promise to liberalize the "foreign availability" loophole in restrictions, which generally allows a U.S. product to be exported provided it is already available from other sources.

Kachajian got his clearance after it was learned comparable-quality saws could be bought from Switzerland.

The Administration now promises to grant export licenses within 20 days of such a finding "unless unacceptable risk of diversion (to the Soviet bloc) is demonstrated."

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