Reforming Export Controls Could Boost Sales by $64 billion, Create 340,000 Jobs

Jan 27, 2010

Reforming export controls was the topic at an important Capitol Hill breakfast meeting today. The Washington Times reports that those present included "senior House and Senate leaders as well as the chairmen and ranking members of the House and Senate foreign affairs, armed services and banking committees" alongside Defense Secretary Robert M. Gates, White House National Security Adviser James L. Jones, Commerce Secretary Gary F. Locke, Under Secretary of State for International Security Ellen O. Tauscher, and former National Security Adviser Brent Scowcroft.

The Chamber is pleased to see current and former administration officials of both parties pressing to reform export controls. The goal is to strengthen U.S. national security by prohibiting foreign sales of sensitive technologies while simplifying or eliminating controls where they serve no real security purpose.

A study issued yesterday by the Milken Institute and the National Association of Manufacturers found that "modernizing U.S. export controls could increase exports in high-value areas. By 2019, these policy adjustments could enhance real GDP by $64.2 billion (0.4 percent), create 160,000 manufacturing jobs, and heighten total employment by 340,000."

The stakes are high: America’s high-tech and defense industries generate $350 billion in exports, a sum representing nearly one-third of U.S. merchandise exports. These industries constitute a remarkable competitive strength for the U.S. economy and support approximately 3.5 million well-paying high technology jobs across the United States. As the study cited above shows, the current export control system needlessly undermines their ability to generate jobs and innovative growth.

"Fewer items, higher walls" is the phrase coined by Secretary Gates, a longtime proponent of export controls modernization. In other words, those few highly sensitive technologies with significant military applications must be protected with high walls. But when technologies are already widely available from America’s trade competitors, controls make no sense. In short, closing the barn door long after the cows left does nothing for the cows — or for American jobs.

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