Center for American Progress

An E-mail Exchange Between the Department of Commerce and the Center for American Progress

An E-mail Exchange Between the Department of Commerce and the Center for American Progress

: Lawrence Korb and Caroline Wadhams of the Center for American Progress published the following op-ed in the Boston Globe.

US Should Set Example on Limiting Arms Exports

It is understandable why the Bush administration is pleased about the European Union's decision to put off lifting its arms embargo on China until next year. Among other things, lifting the embargo has the potential to shift the balance of power in the Taiwan Strait and to allow the further proliferation of weapons technology. However, the administration's ability to get Europe to change its mind permanently would be enhanced if the United States had a more enlightened arms sales policy. Like its predecessors, the Bush administration has adamantly resisted any attempts to curb America's own arms sales or to establish a code of conduct for these sales.

According to the Congressional Research Service, between 2000 and 2003 – the last year for which accurate figures are available – worldwide arms sales totaled $148 billion. The US share amounted to $76 billion, more than the rest of the world combined, a trade that is estimated to kill thousands of innocents annually.

And while the president criticizes Europe for wanting to sell arms to China, which still has an egregious human rights record, the United States consistently exports arms to some of the worst human rights offenders. In 2003 alone, 46.2 percent of US arms sales went to the developing world, many to regimes in volatile regions with poor human rights records.

For example, the Middle East: In the last four years, the United States sold more than $12 billion in arms to Saudi Arabia, Egypt, and Kuwait, none of which meets any criteria for democratic governance or has a sterling record on human rights.

In Saudi Arabia, according to the State Department 2004 Country Reports on Human Rights Practices, security forces ''abuse detainees and prisoners, arbitrarily arrest and hold persons in incommunicado detention," the judicial system remains flawed, and the government restricts freedom of speech, press, religion, and movement, continues to ''discriminate against women, ethnic, and religious minorities and to impose strict limitations on worker rights."

Egypt is no better. The State Department called its human rights record poor, providing examples such as the torture of prisoners, arbitrary arrest and detention, and restrictions on freedom of press and assembly. The administration's case against the Europeans is weakened further because in the last four years it delivered $3 billion in arms to Israel, the second largest arms provider to China after Russia. It has never put pressure on Russia to reduce its arms sales to China.

Finally, there is evidence that US companies have been indirectly selling arms to China despite the embargo. According to Dieter Dettke of the Friedrich Ebert Foundation, 6.7 percent of Chinese dual-use imports come from the United States while only 2.7 percent come from Europe.
For more than a decade, many in the Congress have recognized the hypocrisy of US arms policy. Beginning in the early 1990s, Democratic Representative Cynthia McKinney of Georgia and others on both sides of the aisle, including archconservative Republicans such as Bob Dornan and Dana Rohrabacher of California, led the fight to introduce a Code of Conduct for US arms sales. The code would have established eligibility requirements for foreign governments to be considered for US military assistance and arms transfers. Among other things, governments would have had to promote democracy, respect human rights, not engage in certain acts of armed aggression, and fully participate in the UN Register of Conventional Arms.

In 1999, Congress passed the International Arms Sales Code of Conduct Act, which required the administration to begin negotiations on international agreement criteria for arms transfers. But the Bush administration, like the Clinton administration before it, has made little progress. Instead, most of their efforts in this area appear to involve relaxing export controls.

The US role in the global arms trade is dangerous for international security and poses a threat to American people. Once US companies sell their arms abroad, the American people have little or no control over how they are used and transferred.

Our arms transfers have indirectly strengthened violent groups and problematic regimes in Afghanistan, Colombia, Haiti, and Liberia, contributing to widespread human rights violations and instability. Many of the weapons used by the Taliban and Al Qaeda to fight US troops during military operations in Afghanistan were originally sold to insurgents by the United States in the 1980s.

For its own security the United States needs to summon the courage to establish a clear set of eligibility criteria for US arms sales and reinvigorate efforts to create international agreement.

As a first step, it should embrace the draft treaty developed by the Control Arms Campaign Coalition that would prohibit arms transfers where there is a high risk of weapons being used to violate international human rights or humanitarian law, or in contravention of the UN Charter's rules on nonaggression. The United Kingdom has already thrown its support behind such an initiative. Supporting the British position would enhance the administration's ability to convince the European Union not to sell the wrong things to China.

March 30, 2005: The Administration responds.

To: Web Account American Progress
From: Secretary Peter Lichtenbaum, Acting Under Secretary for Industry and Security, U.S. Department of Commerce

Please deliver the following note to Dr. Lawrence Korb:

Dear Dr. Korb,

I do not think we have met, but by way of introduction, I am serving as the Assistant Secretary of Export Administration at the Commerce Department, and as Acting Under Secretary for Industry and Security.

I am writing with reference to your recent op-ed, entitled "US should set example on limiting arms exports." While I found the op-ed quite interesting, I would like to take issue with one point, where you state that "there is evidence that US companies have been indirectly selling arms to China despite the embargo. According to Dieter Dettke of the Friedrich Ebert Foundation, 6.7 percent of Chinese dual-use imports come from the United States while only 2.7 percent come from Europe." It is not accurate to cite data on dual-use sales to support a statement regarding arms sales. U.S. law, and international practice, clearly distinguish between munitions (arms), which are controlled by the State Department, and dual-use items, which are controlled by the Commerce Department. While there is an embargo on U.S. arms sales to China, there is no such embargo on dual-use sales. The distinction is an important one.

Peter Lichtenbaum

April 11, 2005: The Center writes back.

To: Secretary Lichtenbaum
From: Larry Korb & Caroline Wadhams

Dear Secretary Lichtenbaum:

Thank you for your response to our op-ed. It is good to know that individuals with important positions pay attention to our ideas. And as scholars dedicated to presenting the truth to power, we are more than willing to listen to all sides.

As you correctly indicated in your email, there is a formal difference between arms and dual-use exports. But, this distinction, as important as it is, does not deny the reality that the United States exports equipment and technology to China that actively contributes to Beijing's ability to wage war. For instance, according to 2004 U.S. Census Bureau data, the U.S. exported to China $4.2 million in engines and turbines for military aircraft; $5.2 million in tanks, artillery, missiles, rockets, guns and ammunitions; $9.9 million in military-type goods; and $573,000 in advanced nuclear technology. The U.S Government also approved licenses for export to China for optical sighting devices for firearms, high density radiation shielding windows, aluminum and titanium alloys in the form of tubes, chemicals, precursors of toxic chemical agents, explosives or detonator detection equipment, and more (shown in the Bureau of Industry and Security's Annual report for 2005 in Appendix F: Approved Applications for Country Group D: 1 and Cuba).

While the administration contended that these products would be used for valid purposes, the reality is that you cannot verify that each and every export goes to the intended recipient for its stated purpose. As I am sure you are aware, the GAO released a report in January 2004, entitled, "Post-Shipment Verification (PSV) Provides Limited Assurance That Dual-Use Items Are Being Properly Used." The report stated that the Department of Commerce approved 26,340 licenses for the export of dual-use items during fiscal years 2000 to 2002, and that 28% of these licenses involved dual-use exports to countries of concern, including China. The report concluded, "Commerce conducted PVC checks on few of these licenses… During fiscal years 2000 to 2002, Commerce completed PSV checks on 428, or about 6 percent, of the dual-use licenses it approved for countries of concern." The report discusses reasons why the PSV process is weak, including the fact that "some countries of concern, most notably China, limit the U.S. government's access to facilities where dual-use items are shipped, making it difficult to conduct a PSV."

Thus, the U.S. government and the American people cannot be confident, as they should be, that our exports are being used in a manner consistent with our national security and nonproliferation interests.

As we stated in our article, we are convinced that until the United States gets it own house in order on the export of arms and related technology, it will continue to face an uphill battle convincing other countries-including even our closest allies-to implement and enforce tougher international rules on the spread of these materials.

We would be more than happy to host an event at the Center that would give you and your colleagues at the State Department an opportunity to discuss this critical issue.

We also would like to put your query and our response on our website. Would that be okay with you?

Larry Korb & Caroline Wadhams

April 19, 2005: The Administration responds.

To: Larry Korb & Caroline Wadhams
From: Secretary Lichtenbaum

Thank you for this response. I would appreciate if you would provide the underlying Census data on which the analysis below is based. This would facilitate assessment of the conclusions you draw. I would also ask that you refrain from posting the exchange until we have been able to assess your conclusions below, in order to present the public with additional relevant information (e.g., relating to the GAO report) and ensure that the posted exchange fully reflects the Commerce Department's position. I expect that we could provide this assessment shortly after receiving the referenced Census data.

Peter Lichtenbaum

April 20, 2005: From the Center.

To: Secretary Lichtenbaum
From: Caroline Wadhams & Larry Korb

Dear Secretary Lichtenbaum:

Thank you for your response. We will wait to post our exchange until we hear from you.

The 2004 Census Data for exports to China is found at:

The approved U.S. licenses for export to China can be found at the following link:

We would also like to draw your attention to recent comments by Representative Curt Weldon (R-PA), the second-ranking Republican on the House Armed Services Committee, in a joint meeting of the House Armed Services Committee and the House International Relations Committee on April 14, 2005, at which you testified. As you know, Representative Weldon stated that U.S. policies on trade toward China are hypocritical, and that U.S. national security interests are being harmed by U.S. technology transfers to China. His statements corroborated what we found in our own research on this issue.

Below is a segment of the transcript from that meeting:


Weldon: I was one of nine commissioners on the Cox committee, five Republicans and four Democrats, that sat for seven months behind closed doors and looked at all the evidence to make a fundamental conclusion to the Congress about whether or not our security was harmed in 1995, '96 and '97. And our conclusion was unanimous: U.S. security was harmed by the technology transfer to China. But it was harmed by our own doing. We transferred the technology to China. Here's a chart I produced back in 1999. Let's see. Let me run off the technology: warhead design, machine tooling, low-observable technology, telecommunications, propulsion, high-powered computers, encryption, space launch. That was from the U.S. to China. And I saw the evidence of CEOs of American companies able to get presidential waivers to send technology into China.

We ended the COCOM process in 1995 – we ended it – that was the legitimate process of controlling technology between the Europeans and us. We decided that we would end that process and replace it with something called the Wassenaar pact, which is a joke. And we wonder why the technology's flowing.

Are we really sending the right signals to the Europeans? Are we the real role model or are we hypocrites?

The point is that we have not had a good track record. And the advantage we have in Congress is that we're here through administrations. I've been here 19 years, and I can tell you, if I were a European looking at the track record of the U.S. on the issue of selling technology to China voluntarily, I would say, "And you're going to tell us what to do?"

Now, I support the administration's position. I had a study done in 1998 of the violations of arms control treaties by China and Russia to Iran, Iraq, Syria, Libya, North Korea, Pakistan and India. There were 38 sanctionable violations of arms control treaties in sending technology. We imposed the required sanctions six times out of 38. We saw the Chinese selling ring magnets to Pakistan for their nuclear program. We imposed sanctions and then waived them a couple of years later. We saw the Chinese selling M-11 missiles to Pakistan. We imposed sanctions and then waived them later.

The point is that our foreign policy, in both Democrat and Republican administrations, has not set the example that I would like to see set for the Europeans in telling them not to lift the embargo. The fact is we've had a checkered pass in terms of technology that we ourselves provide to China.

There was a limitation on the high-end supercomputers that could be sold in the world marketplace back in the mid '90s. Only the U.S. and Japan were producing them at the time. And the U.S. unilaterally, without talking to Japan, decided it would sell high-end computers to China, and we did. And the assurance we got from the State Department was, and the Commerce Department, "Oh, we will get certificates of end-use as to who the end-user is." Well, tell me when those certificates come in. Because those high-end supercomputers that we sold to China ended up at all their military labs, at their military industrial complex.

That was a U.S. decision. In fact it was preceded by a visit of our secretary of defense at the time, and there was even a letter written by our president to one of our defense contractors that I have copies of, I'll put it in the record, saying, "We hope to reduce the amount of limitations on selling high-end technology to China."

Now, I'm a real patriotic American, and I'm a strong supporter of our military, and I don't want to hurt the Chinese, I don't want to hurt the Europeans, but our foreign policy is the problem. If we can't have a consistency in setting an example to those countries that we now want to listen to us, then we can expect the result to be what I hope it's not, and that is their effort to sell technology to assist their own markets.

To be honest with you I'm disappointed in the discussion from the administration. I would have liked to see the three of you and the leadership of this president – who I support fully – come in and tell us what specific steps we can take in the Congress to stop the huge imbalance of trade that is actually financing the growth of this outrageous Chinese offensive military capability. That's what I want to hear. I want to hear the specific steps that we can take. We'll give them to you. This Congress, Democrats and Republicans, are ready to pass any initiatives that we can take on the trade front to stop the imbalance of trade which is financing China's military growth.

But I think the key thing for us in the future is having a consistent foreign policy. We're going to be here for the long term. Administrations will come and go, but looking at it over the past 19 years, there's only one word that I can use for our foreign policy that's got us in this mess today, and that one word is hypocrisy.


Thank you for your responsiveness to our concerns. We look forward to speaking with you further.


Larry Korb & Caroline Wadhams

(May 4, 2005: The Center faxes the administration the Census data.)

May 4, 2005: The administration responds.

To: Caroline Wadhams
From: Matthew Borman, from the U.S. Department of Commerce

Thanks for the fax. I see three of the four categories ((50020) Engines and turbines for military aircraft; (50050) Tanks, artillery, missiles, rockets, guns and ammunition); (50070) Parts for military type-goods). We will review the data underlying these statistics to see what is involved and whether these were coded correctly by the exporter.

Do you have a citation for the $573,000 in advanced nuclear technology?

Matt Borman

May 11, 2005: The Center responds.

To: Matthew Borman, U.S. Department of Commerce
From: Caroline Wadhams

Here is the other citation for the $573,000 in advanced nuclear technology. Please let me know if you can't get into this link on the Census Bureau's website, and I will fax it.


May 19, 2005: The Center writes again.

To: Matthew Borman, U.S. Department of Commerce
From: Caroline Wadhams & Larry Korb

Dear Mr. Borman:

As discussed in our previous correspondence, we would like to post the exchange between the Center for American Progress and the Department of Commerce as soon as possible on our website. Please let me know by close of business on Monday if you have any objections. If I do not hear from you, we will assume that you are fine with our posting it.

Thank you,

May 20, 2005: Administration responds.

To: Caroline Wadhams
From: Matthew Borman

Thanks. I will send you a response to this on Monday.

May 23, 2005: The Administration follows up with the Center.

To: Caroline Wadhams
From: Matthew Borman

I have given Acting U/S Lichtenbaum a draft response to review. He is likely to finish his review tomorrow. Until he completes his review, we do not concur in posting the exchange between the CAP and DOC. As I mentioned to you earlier, our initial review of the actual shipping data behind the Census data indicates significant reporting errors by the exporters. For example, we have identified $4.5 million in military exports that actually went to Canada but were mistakenly reported to Census as going to China.


May 23, 2005: The Center responds.
To: Matt Borman
From: Caroline Wadhams

Okay, we'll wait to hear from you.

Thank you,

May 25, 2005: Administration responds with an official letter.

Under Secretary for Industry and Security
Washington, D.C. 20230

Dear Dr. Korb:

This responds to your recent correspondence regarding the European Union's (EU) potential lifting of its arms embargo on China. The gist of your original article, and your subsequent correspondence, has been that the United States is not in a strong position to advocate that the EU retain its arms embargo on China because of our own export policies relating to arms and dual-use items. As discussed below, I do not agree with that view, and the statistics you have cited do not support the proposition.

First, while I appreciate your recognition of the important distinction between arms and dual-use items, I disagree with your description of this as a merely "formal" difference. In fact, there is a qualitative difference between arms, which include not only weapons, but also sophisticated hardware, software, and technology specifically designed for military applications, and dual-use items which are for commercial applications but that also may have military uses. This fundamental distinction is evidenced by the different export licensing jurisdictions in the United States and the distinctions between arms and dual-use items in the multilateral export control regimes. The United States maintains an arms embargo on China. Because dual-use items (such as computers) have important commercial uses, we do not have an embargo on exports of dual-use items to China. However, we have a general policy of denying export license applications for dual-use items to Chinese military end-users.

Second, the evidence does not show that "the United States exports equipment and technology to China that actively contributes to Beijing's ability to wage war," assuming that this statement refers to lawful exports in meaningful quantities. In support of this statement, you cited 2004 U.S. Census Bureau data. Our review of the actual shipping documents underlying the 2004 Census data you cited has found that the data has significant coding errors, made by the filing party. For example, of the $5.2 million of 2004 U.S. exports to China indicated in the category "tanks, artillery, missiles, rockets, guns and ammunition" (Census 5-digit end-use code 50050), $4.5 million were actually exports to Canada. The filer entered the country code for China (CN), instead of the country code CA for Canada. The trade data thus records these as exports to China when the items actually went to Canada. We will continue to review the underlying shipping data for any additional coding errors that cover the data you cited. We will provide you with the results of this analysis when it is completed.

Third, you state that the U.S. Government cannot verify that each and every export goes to the intended recipient for its stated purpose. While this statement is literally true, the U.S. Government administers the dual-use export control system to provide a high degree of confidence that the great majority of items exported to China under licenses are used by the licensed end-users for the licensed use. As support for your statement, you cited the January 2004 Government Accountability Office (GAO) report regarding post-shipment verifications (PSVs) on licensed items. Please be aware of the following:

  • The GAO expressed concern that China limits the U.S. Government's ability to conduct PSVs. However, after long negotiations, this Administration successfully concluded an end-use visit understanding with China in April 2004 that allows BIS to conduct PSVs and pre-license checks. These end-use checks are proceeding as needed, in combination with other tools, to help ensure U.S. dual-use items are being properly used in China. BIS has eliminated the backlog of end-use checks, and all of the checks thus far have generally been favorable.
  • The GAO claimed that Commerce conducted PSV checks on few of its licenses to countries of concern. However, a proper assessment would have produced a ratio of end-use checks that was about three times as large. GAO's calculations were flawed in several respects:

    – GAO based its calculations on a list of countries it designated as "of concern," without explanation, while BIS uses a list of 16 destinations that is more comprehensive and reflective of diversion concerns. By limiting the list, GAO understated BIS's coverage.

    – GAO did not include the many pre-license checks (PLCs) conducted in those years, even though PLCs are also an end-use check to prevent diversion.

    – GAO included technology transfer licenses, for which PSVs are not relevant.

    – Finally, a proper comparison would take the number of licenses issued during a given time period, and determine what portion of those licenses was subject to end-use checks (both PLCs and PSVs). Thus the GAO methodology compared "apples and oranges" by counting end-use checks on licenses issued before the period of review, and excluding checks on licenses issued during the period of review when the check occurred after the period of review.

More fundamentally, PSVs are only one of several tools the U.S. Government utilizes to help ensure items exported to China, and other countries, are not diverted to unauthorized uses. For example, license applications undergo a thorough interagency review, including input from the intelligence community, before they are approved.

Finally, your original article asserted that 6.7% of Chinese dual-use imports come from the United States while 2.7% come from Europe. We have checked with the source you cited, and it is our understanding that the source of the statistics you cited was an April 2004 article, "Should the EU Arms Embargo against China Be Lifted?", written by Gudrun Wacker. That article relies upon a 1998 GAO report on Chinese military (not dual-use) imports between 1989 and 1998. This data is now at least 7 years old and primarily includes the value of commercial communications satellites, items only the United States treats as arms. You also cited Representative Curt Weldon's statement at the joint House International Relations Committee and Armed Services Committee hearing regarding U.S. exports to China. Yet Representative Weldon acknowledged that this statement was based upon an analysis that he had done in 1999. Accordingly, it is my understanding that the information cited by Representative Weldon is now also several years old and is not based upon actions taken by this Administration.

As demonstrated above, U.S. export controls fully support our opposition to the EU's lifting its arms embargo on China. Thank you for the opportunity to respond to your concerns about U.S. policy in this important area.


Peter Lichtenbaum

May 26, 2004: Administration writes the Center.

To: Larry Korb
From: Secretary Peter Lichtenbaum

Just a note to say thanks for your patience as we worked to analyze some of the data you presented. I very much appreciate your commitment to an informed exchange of views on this important issue, and think it will result in a substantial service to the public.

Best regards,

Peter Lichtenbaum

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