* Obama says reforms will boost security, create jobs
* Exporters complain Cold War-era rules stymie sales
By Doug Palmer
WASHINGTON, Aug 30 Streamlining U.S. export
restrictions on defense goods and high-technology products will
help create U.S. manufacturing jobs while boosting national
security, President Barack Obama said on Monday.
"While there is still more work to be done, taken together,
these reforms will focus our resources on the threats that
matter most, and help us work more effectively with our allies
in the field," Obama said in remarks videotaped for a Commerce
Department conference on export controls on Tuesday.
"And by enhancing the competitiveness of our manufacturing
and technology sectors, they'll help us not just increase
exports and create jobs, but strengthen our national security
as well," Obama said.
The initiative, which already has been one year in the
making, responds to frustration felt by U.S. defense and
high-tech companies, who say export controls that date to the
Cold War cost them billions of dollars in lost sales.
U.S. allies also complain they often face long waits to get
spare parts for U.S.-made weapons systems because of licensing
requirements as rigorous as for the weapons themselves.
Obama said his administration was moving to reduce
licensing delays by harmonizing and eventually consolidating
two separate export control lists -- the Commerce Control List
run by the Commerce Department and the U.S. Munitions List
overseen by the State Department.
That "will allow us to build higher walls around the export
of our most sensitive items while allowing the export of less
critical ones under less restrictive conditions," he said.
Big U.S. defense manufacturers such as Boeing (BA.N),
Honeywell (HON.N) and United Technologies (UTX.N) are expected
to benefit from the reforms, much of which the administration
can implement without approval from Congress.
Simplifying the system will also help the competitiveness
of small and medium-sized companies, which "rarely have the
resources to ensure compliance with the current export control
regime," said Marian Blakey, president of the Aerospace
In the past, turf battles between the Commerce Department
and State Department over which agency controls a particular
technology has led to lengthy licensing delays.
The new system creates a "bright line" between the two
lists to clarify to exporters and foreign buyers which
department has jurisdiction.
It also classifies weapons, technology and related goods in
three tiers, according to their military and intelligence
importance and how available they are from other suppliers.
Weapons of mass destruction are on the top tier.
Starting with one category on the U.S. Munitions List,
tanks and military vehicles, the administration expects about
42 percent of the 12,000 items it licensed last year to be
moved to the Commerce Control List and about 32 percent could
be decontrolled altogether.
About 26 percent are expected to remain on the U.S.
Munitions List, with none in the highest tier, about 18 percent
in middle tier and the remaining 8 percent in the lowest tier.
In the coming months, the administration will go through
the same process for the 19 other categories on the U.S.
Munitions List, which includes electronics, firearms,
ammunition, aircraft, naval vessels and spacecraft, with the
aim of finishing by early 2011.
Eventually, the administration wants to create a single
control list run by an independent agency outside of the
Commerce Department or State Department. It also wants to
create a single enforcement agency. All three goals require
congressional approval and are not expected to happen this
However, in his videotaped comments, Obama said he would
sign an executive order giving U.S. Immigration and Customs
Enforcement authority to coordinate enforcement of export
controls now divided among several government agencies.
The administration is also moving licensing operations at
the State Department, Commerce Department, Defense Department
and other agencies onto a single information technology system.
It does not need congressional approval for that.
(Editing by Mohammad Zargham)