The Cable

Berman fires opening salvo in export reform debate

The Obama administration and Congress are working busily but separately to update the nation's export control regime, which regulates the export of sensitive technologies abroad and hasn't seen real reform since the Export Administration Act (EAA) was last rewritten in 1979. Today, Rep. Howard Berman (D-CA) will unveil a comprehensive bill to update laws on how technology exports are regulated.

"The current export control statute is an out-moded relic of the Cold War that focuses on economic warfare against old adversaries and fails to account for today's threats," Berman said in a statement sent to The Cable. "Updating this law is essential to our national security and necessary to sustain our cutting edge technology sector and create new, high quality jobs. A new export control law is necessary to preserve our competitive advantage."

Berman's bill, which can be found here (PDF) would alter the list of dual-use technologies -- those export items which have both military and civilian uses -- to reflect the changes in technology and the marketplace that have taken place over the last 30 years.

"The U.S. still controls -- unilaterally -- high performance computers and machine tools that are now freely available in global commerce," Berman said. "We need to re-focus our licensing and enforcement resources on items that we can control effectively."

There a bipartisan consensus that the export control regime needs to be updated but no real consensus on exactly what to do. The EAA technically lapsed once from 1994 to 2000 and again from 2001 to the present but the White House has been able to keep the provisions in force by using what's known as emergency presidential authority to extend its provisions every year since.

But those reauthorizations haven't taken into account changes in what particular technologies should or should not be regulated, Berman argues, and restrict the competitiveness of U.S. industries in the evolving global marketplace.

A key feature of Berman's bill is that it "modernizes the definition of national security to include sustaining U.S. leadership in science, manufacturing and our high-tech workforce, and requires the president to balance traditional security goals with maintaining U.S. academic and manufacturing leadership in applying controls," according to a fact sheet (PDF) provided to The Cable.

In some ways, the bill would allow more U.S. technologies to be exported to all countries, such as industrial production machine tools, industrial lasers, high performance computers, some computer chips, and night vision and infared technology, which are now available globally.

In other ways, the bill would tighten controls by adding threats that didn't exist in 1979, such as technologies pertaining to internet crime, cyber warfare, bioengineering, and certain aspects of nanotechnology.

"Berman's bill just doesn't seek to remove things, but it also directs the president to keep the control system current with what technologies need to be restricted," a committee aide said.

Berman, who is the ranking Democrat on the House Foreign Affairs Committee, knows his bill isn't the only game in town. Committee chairwoman Ileana Ros-Lehtinen (R-FL) is also said to be preparing a bill, but her legislation would be more of a reauthorization of the current law with specific tweaks, as opposed to Berman's more comprehensive overhaul.

The White House also has its own ongoing initiative, an intensive interagency process led by Mike Froman, the senior director for international economics at the National Security Council. There have been principal-level and deputy-level meetings on the issue; the technical working group includes representation from Eric Hirshorn's shop at Commerce, Ellen Tauscher's bureau at State, and Jim Miller's staff at the Office of the Secretary of Defense.

The White House is said by congressional aides to be considering a major government reorganization on this issue, which would potentially merge the export regimes under the EAA and Arms Control Export Act, which is not covered in Berman's bill. The White House is also working with former National Security Advisor Brent Scowcroft, who co-chaired a National Research Council study on export controls.

"The national security controls on science and technology are broken. They weaken national security and reduce [economic] competitiveness," Scowcroft testified in 2009.

Berman's staff knows their bill isn't fast tracked to become law but sees it as a way to spur the discussion.

"We're at the stage legislatively of putting ideas on the table against a backdrop of high-level interest in the Congress and in the Obama administration," the committee aide said.

The Cable

Wendy Sherman emerges as top pick for State’s No. 3 post

Former State Department counselor Wendy Sherman, a long time confidant of Secretary of State Hillary Clinton, has emerged as the "leading candidate" to replace Bill Burns as the third-highest ranking official in Foggy Bottom, according to two State Department officials.

Sherman, currently the vice chair of the Albright Stonebridge Group, was counselor to Secretary of State Madeline Albright, where she also held the role of North Korean policy coordinator. She served as assistant secretary of State for legislative affairs from 1993 to 1996 under Secretary of State Warren Christopher. She is also chair of the board of directors of Oxfam America and serves on the U.S. Department of Defense's Defense Policy Board.

Sherman is a long time friend of Clinton's and was a major part of her nomination preparation and transition teams, one State Department official said. She served as an agency review lead for the State Department's transition after the 2008 election along with National Security Advisor Tom Donilon. And, as an official with some experience dealing with East Asia she will help to fill the void being left by the departing Deputy Secretary of State Jim Steinberg, the current No. 2.

Steinberg is leaving to take over as dean of the Maxwell School at Syracuse University. He will be replaced by Undersecretary of State for Political Affairs Bill Burns. The short list for Burns' replacement included Sherman and former Ambassador to Pakistan Anne Patterson, but President Barack Obama announced last week he intended to nominate Patterson as ambassador to Egypt.

We're told that the Sherman appointment is not a 100 percent done deal, but very close. If confirmed, she would be a political appointee taking over a job that is normally filled by a career foreign service officer. But Burns, a career foreign service officer, is taking over a job normally reserved for a political appointee, so the general balance of the leadership atop the State Department between politicos and diplomats would remain roughly the same.

Burns, who has been integral to the State Department's response to the Arab revolutions, had his confirmation hearing before the Senate Foreign Relations Committee on Tuesday.

"We have our share of problems, but it is a mistake to underestimate our enduring strengths and our capacity to do big and difficult things," Burns said in his hearing. "That capacity will be tested in the months and years ahead."