Losing control: job creation argument may prompt Congress to move on arms export reform.

Author:Magnuson, Stew
 
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With elections approaching and a worsening unemployment outlook, observers are wondering if 2010 will be the year when Congress begins reforming the regulations that control the export of military technology and data overseas.

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"I'm more optimistic today than I have been in some time that there is going to be some kind of fundamental change," said an industry executive, who has worked on export control in the government and the private sector for the past 25 years.

The International Traffic in Arms Regulations code controls goods and data that can be used by foreign militaries. The ultimate goal is to prevent sensitive defense technologies from ending up in the hands of potential adversaries.

Every military item, from nuts and bolts on trucks to fighter jets, requires an export license. The Department of Commerce processes licenses for "dual-use" times--those that have commercial as well as military applications. The most sensitive technologies and know-how are on the "munitions list," which requires more stringent controls. The State Department's directorate of defense trade controls is responsible for issuing licenses for munitions list items.

Among the technologies on this list are small arms and ammo, explosives, tanks and other military vehicles, sensors, body armor, certain biological agents and spacecraft systems.

Proponents of reform say the list is outdated and contains many items that are no longer exclusive to U.S. manufacturers. The onerous requirements for gaining a license causes them to lose business to overseas manufacturers that produce the same technologies and are not under the same tightly controlled regulations.

Industry advocacy groups are making a renewed push to reform the regulations. Meanwhile, the Obama administration is reviewing the policies and one House committee has already held a hearing on aerospace export control reform.

"As far as how extensive the reforms are going to be, it's kind of tough to tell," said Shaun McDougall, international military arms analyst at Forecast International. "The storm has been brewing for years ... especially with the economy in the shape that it's in. The pressure is increasing."

There are three possibilities this year, said the executive, who wished to remain anonymous because his company prefers to speak on the issue through industry advocacy groups.

The strongest possibility for reform this year would come in the form of bilateral agreements with...

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