reviews of dual-use licenses are today more thorough than ever before. In the case of munitions exports, we are committed to a policy of responsible restraint in the transfer of conventional arms and technologies. A key goal in the years ahead is to strengthen worldwide controls in this area, while facilitating exports of items that we wish to go to our allies and coalition partners. The DTSI, which we look to enhance our future interoperability with our friends and allies, is one such effort that will streamline U.S. munitions export control processes while also devoting additional resources to increasing the security scrutiny applied to munitions exports. The President’s decision to seek agreements with close allies that would permit extension of Canada-like exemptions to the ITAR for low risk exports will significantly enhance U.S. competitiveness while also enhancing export controls.
Encryption is an example of a specific technology that requires careful balance. Export controls on encryption must be a part of an overall policy that balances several important national interests, including promoting secure electronic commerce, protecting privacy rights, supporting public safety and national security interests, and maintaining U.S. industry leadership. After reviewing its encryption policy and consulting with industry, privacy and civil liberties groups, the Administration implemented significant updates to encryption export controls in January 2000 and concluded a second update in October 2000. The new policy continues a balanced approach by streamlining export controls while protecting critical national security interests. U.S. companies now have new opportunities to sell their software and hardware products containing encryption, without limits on key length, to global businesses, commercial organizations and individuals. Most U.S. mass-market software products, previously limited to 56 and 64 bit keys, are approved for export to any end user.
In October 2000, the Administration finished another review of its policy to ensure that it maintains balance while taking into account advances in technology and changes in foreign and domestic markets. The most significant change is that the U.S. encryption industry may now export encryption items and technology license-free to the European Union and among several countries (including major trading partners outside of Western Europe). The update is consistent with recent regulations adopted by the European Union; thus assuring continued competitiveness of U.S. industry in international markets. Other policy provisions implemented to facilitate technological development include streamlined export provisions for beta test software, products that implement short-range wireless encryption technologies, products that enable non-U.S.-sourced products to operate together, and technology for standards development. Post-export reporting is also streamlined to increase the relief to U.S. companies of these requirements. Reporting will no longer be required for products exported by U.S.-owned subsidiaries overseas, or for generally available software pre-loaded on computers or handheld devices. These initiatives will assure the continuing competitiveness of U.S. companies in international markets, consistent with the national interest in areas such as electronic commerce, national security, and support to law enforcement.
Similarly, computer technology is an area where the application of export controls must balance our national security concerns with efforts to promote and strengthen America’s competitiveness. It is likely we will continue to face extraordinarily rapid technological changes that demand a regular review of export controls. Maintaining outdated controls on commodity-level computers would hurt U.S. companies without benefiting our national security. For these reasons, in February 2000, the Administration announced reforms to computer export controls; the reforms permit sales of higher-level computer technology to countries friendly to the United States. Export control agencies will also review advances in computer technology on an ongoing basis and provide the President with recommendations for updating computer export controls every six months.
U.S. efforts to stem proliferation cannot be effective without the cooperation of other countries. We have strengthened cooperation through a host of international WMD nonproliferation regimes, and we will continue to actively seek greater transparency in conventional arms transfers. These efforts enlist the world community in the battle against the proliferation of WMD, advanced conventional weapons and sensitive technologies, while at the same time producing a level playing field for U.S. business by ensuring that our competitors face corresponding export controls.
Providing for Energy Security
The United States depends on oil for about 40% of its primary energy needs, and roughly half of our oil needs are met with imports. And although we import less than 15% of the oil exported from the Persian Gulf, our allies in Europe and Asia account for about 80% of those exports. For some years, the United States has been undergoing a fundamental shift away from reliance on Middle East oil. Venezuela is consistently one of our top foreign suppliers, and Africa now supplies 15% of our imported oil. Canada, Mexico, and Venezuela combined supply almost twice as much oil to the United States as the Arab OPEC countries. The Caspian Basin, with potential oil reserves of 160 billion barrels, also promises to play an increasingly important role in meeting rising world energy demand in coming decades.
Conservation measures and research leading to greater energy efficiency and alternative fuels are a critical element of the U.S. strategy for energy security. Our research must continue to focus on developing highly energy-efficient buildings, appliances, and transportation and industrial systems, shifting them where possible to alternative or renewable fuels, such as hydrogen, fuel cell technology, ethanol, or methanol from biomass.
Conservation and energy research notwithstanding, the United States will continue to have a vital interest in ensuring access to foreign oil sources. We must continue to be mindful of the need for regional stability and security in key producing areas, as well as our ability to use our naval power, if necessary, to ensure our access to, and the free flow of, these resources.
Promoting Sustainable Development
True and lasting social and economic progress must occur in a sustainable fashion, that meets the human and environmental needs for enduring growth. Common but reparable impediments to sustainable development include:
• Lack of education, which shuts people out from participation in technological advance.
• Disease and malnutrition, which stifle productivity.
• Pollution, environmental degradation, and unsustained population growth, the remediation of which is much more costly than pre-emptive action.
• Uncontrolled exploitation of natural resources (e.g., overhunting or overfishing of species for food, overcutting of timber for firewood, overgrazing of grasslands by cattle), which can be serious impediments to sustainable development.
• Unsustainable foreign debt obligations, which encourage currency devaluations and capital flight, and can absorb a substantial share of small economies’ resources.
Efforts by the United States to foster sustainable development include: