Export Controls

Inside U.S. Trade today published an analysis of the effect of President Obama's re-election on a variety of international trade issues, among them export controls and their effect on the U.S. Munitions List and Commerce Control List. An excerpt:

On export controls, the major question now facing Obama in his second term is how aggressive a stance he will take when it comes to pushing forward his reform initiative. The administration put the political aspects of the initiative on hold in the months leading up the election, partly because pushing ahead could have had adverse ramifications in Congress or provided fodder for criticism on the campaign trail.

Obama must decide whether to start the implementation process by notifying Congress that the administration is moving items in the categories of aircraft and aircraft engines from the U.S. Munitions List (USML) to the less stringent Commerce Control List (CCL), or whether to continue to seek an accommodation with Congress on the extent of the details that need to be included in those notifications.

Under the Arms Export Control Act, a formal notification of moving an item from the USML to the CCL triggers a 30-day layover in which both chambers must pass a joint resolution of disapproval if they want to voice opposition to the proposed change. But one observer said that a successful political strategy for proceeding with notification depends on reaching an accommodation with Congress.

Congressional critics have already moved to alter the notification requirements for the export control reform initiative, which would move a very large number of items off the USML. For instance, the House has already approved a specific provision in its version of the National Defense Authorization Act (NDAA) that would require the administration to enumerate all of the items that it wants to transfer, to the extent possible.

This is a direct reaction to the administration’s favored approach of notifying the items to be removed with fewer details in large, "catch-all" categories. The Senate is expected to take up its version of the NDAA in a lame-duck session of Congress, and it is unclear to what extent it will approve the same provisions on notification that the House put forward. Administration officials have criticized the House language as undermining their ability to make far reaching reforms.

It is unclear if the Obama administration will initiate the notification of USML changes in the lame-duck session, which in the House starts on Nov. 13. Some private-sector sources said they expect the notification process may be delayed until next year.

The administration may also choose to wait until the next Congress comes into power because the leadership of the House Foreign Affairs Committee, which has jurisdiction over export control policy, will be completely different.

Current Chairman Ileana Ros-Lehtinen (R-FL), a vocal critic of the administration's reform plan, will relinquish her position under Republican House rules limiting a committee leadership position to six years. Ranking Member Howard Berman (D-CA) is also leaving Congress after losing his race against Democratic rival and fellow committee member Rep. Brad Sherman (D-CA).

As a result of these changes, the administration may hold off until the views of the new committee leadership on the notification process become more clear. Foreign Affairs is the primary committee of jurisdiction for export controls in the House, and the administration must notify the committee of any transfers. . . .

Some believe that the effort has already lost some steam due to personnel changes; while Defense Department officials have said that Secretary of Defense Leon Panetta supports the initiative as strongly as his predecessor, Robert Gates, there seems to be little public evidence of that.

Similarly, the departure of Ellen Tauscher, who served as the State Department's undersecretary for arms control and international security, for health reasons has slowed progress on export control reform issues. Sources said that Tauscher had the export control knowledge and the political stature to advance export control reform issues within State and that the same combination does not exist in either her successor, Acting Undersecretary Rose Gottemoeller, or in Assistant Secretary for Political and Military Affairs Andrew Shapiro and his deputy, Beth McCormick.

Some sources said the delay in the reform process that was put in place in the months leading up the election occurred despite the fact that the two regulations needed to proceed to notification have been completed in terms of the technical work. One is a regulation that would put forward a definition of what constitutes an item "specially designed" for military applications, and the other governs the transition of items from the USML to the CCL.

According to one private-sector source, the administration has made it clear that the latest version of the "specially designed" rule has been significantly reworked from a revised proposed rule. If that is accurate, it would likely require another round of public comments, which would further delay congressional notification.