Tussle Over High Technology

By Janice Castro

To maintain the U.S. technological edge over the Soviet Union, the Reagan Administration has nurtured a jerry-built device that frustrates both American businessmen and foreign allies. Washington requires so many export controls that it is difficult to ship abroad even such seemingly innocuous products as CAT scanners and a variety of ball bearings. Last week that play-it-safe national-security policy came under fire from a blue-ribbon panel representing the National Academies of Sciences and Engineering and the Institute of Medicine. In a major study, the panel argued that the restrictions do not work properly and that they cost the U.S. billions in lost exports every year. Though hotly contested by the Pentagon, the study won applause from other parts of the Administration.

At the core of the controversy are U.S. controls on so-called dual-use technologies, meaning commercial products that could have defense applications. High on the Pentagon's list are computers, ranging from Cray supercomputers, which could play a role in the Administration's Strategic Defense Initiative, to certain kinds of automated banking machines, which contain information-processing chips that could be useful for Soviet missile- guidance systems.

In its 600-page study, the 21-member panel, which was chaired by Lew Allen Jr., director of the Jet Propulsion Laboratory in California, argued that current controls were excessive. Despite the restrictions, the Soviets manage to obtain much of the sensitive technology they seek, said the group. Many of Moscow's gains come through espionage or illegal diversions from legitimate foreign customers. (One coup involved sophisticated look-down radar, originally a U.S. monopoly, now standard equipment on the latest Soviet MiG aircraft.) Meanwhile, friendly customers in Western Europe and Asia are increasingly looking outside the U.S. for goods on the dual-use list. In all, the study estimates, the controls cost the U.S. more than $9 billion in forgone exports annually, along with nearly 200,000 jobs.

Most of these problems, the study argues, can be solved by cutting the list of restricted goods to emphasize the security of manufacturing processes. But Pentagon officials have had a sharp rejoinder to the panel's conclusions. Says Deputy Under Secretary of Defense Stephen Bryen: "In computer technology alone, the Soviets had narrowed the gap on us to a year and a half. Due to our export restrictions, that gap is back up to seven or eight years." With an eye on the horrendous U.S. trade deficit, however, Commerce Department officials are openly sympathetic to the study's criticism. Says Paul Freedenberg, an assistant Commerce Secretary: "We can cut the list. We can be more responsive." The debate is likely to become sharper as concern over the trade balance continues to grow in the months ahead.

With reporting by Gisela Bolte and Bruce van Voorst/Washington