Cocom Feuds Over Trade to East Bloc

By Frederick Kempe and Eduardo Lachica, Staff Reporters
The Wall Street Journal

July 17, 1984

Paris -- A nervous secrecy surrounds the Coordinating Committee for Multilateral Export Controls, the club charged with keeping strategic Western goods out of Communist hands.

Known by its members as Cocom, the organization doesn't exist in most of its members' national laws. It isn't listed in the Paris phone directory, and its headquarters at 58 Rue la Boetie has no identifying plaque. Office personnel head off phone calls to its delegates, and its cramped, ill-equipped offices are off-limits to outsiders.

But, perhaps most crucially, Cocom's secrecy vows insulate the public from news of the feuds among its 15 members -- the North Atlantic Treaty Organization countries minus Spain and Iceland and plus Japan. The clashes generally revolve around U.S. attempts to economically squeeze the Soviets as much as possible and European wishes to sell items without proven military uses. Cocom sources say damage control between allies is taking up more time than export control.

"The key concern is how to prevent an organization that was created to hurt the Soviet Union from doing more harm to the Western alliance," one Cocom delegate says.

Born in 1950 to coordinate Western export policies toward Communist countries, Cocom has become a litmus test for the state of the alliance. Its internal clashes thus far haven't erupted into public brawls, but papered-over differences keep it from being the potent export-control device that many would like. U.S. efforts to beef it up are largely failing. Cocom remains a voluntary organization without sanctions against violations of its rules, further bogged down by needing unanimous approval for its decisions.

Cocom's annual budget is half a million dollars -- a pittance alongide the precious Western technological edge it protects. The Pentagon gave Cocom its first photocopy machine last year. But Cocom still lacks an air conditioner at its second-floor quarters in a U.S. Embassy annex.

Moreover, Cocom delegates are rarely technological experts and often have neither trade nor military expertise. The Japanese delegate for instance, was a cultural attache in Manila before coming to Paris.

Despite its faults, member countries still want Cocom to survive, even if most aren't willing to give it sharper teeth. Even at its worst, they say, Cocom keeps export controls on the agenda. "Without this organization, competition among Western exporters would have escalated the technology sales to the East," says Dale Tahtinen, U.S. deputy assistant secretary of state for international trade controls.

Predictably, Western exporters are Cocom's most vocal critics. West European and U.S. business lobbies complain that Cocom costs them delays and denials of sales of marginal strategic importance -- goods they believe the Soviets either can make themselves or can buy outside Cocom.

U.S. business executives groan loudest that far more permissive European export controls and lax attitudes toward enforcing Cocom rules cost them millions of dollars in orders. Moreover, West European companies shy away from buying U.S. know-how due to a time-consuming U.S. licensing bureaucracy that controls a third more items than are on Cocom's list.

Cocom compiles three lists of items that can't be sold without its approval to Communist countries, including the Warsaw Pact nations, Albania, China and the Southeast Asia Communist nations. The first and second lists -- for military and atomic-energy products -- cause only occasional disputes. But the third list -- for "dual use" civilian products that could also have military applications -- gives rise to many headaches.

The Europeans want a broad economic relationship with the Soviet bloc; they think the link adds to European security. The Pentagon brands that attitude as naive. "The fundamental problem is that the American concept of security is overwhelmingly military in nature," says Karl Kaiser, director of Bonn's Foreign Policy Institute. "That espoused by Europeans is equally economic."

Those philosophical and economic differences give rise to trench warfare in negotiating sessions. Paul Freedenberg, a U.S. Senate aide who recently visited Cocom, complains about "the device of prolonged debate or endless haggling about the meaning of words to stretch discussions into years of debate."

The U.S. angers allies by making unrealistic demands as an initial bargaining position to be compromised later. William Root, a former State Department official who resigned last year due partly to complaints about the U.S. export-control strategies, charged that these U.S. tactics erode U.S. credibility. He said it also weakened export discipline among other members who must willingly agree to Cocom's nonbinding agreements for them to be effective.

Recent negotiations focused primarily on a list of 100 U.S. requests for items to be put on the list, most of which would strengthen the embargo. Details are hard to come by, but Cocom sources say angry debate has revolved around such items as robotics, personal computers and diesel motors.

Robotics technology hasn't been controlled in the past, and West Europeans question the wisdom of controlling something they claim is relatively widespread. Personal computers with networking capability could be used militarily by the Soviets for better command control, but British and Japanese particularly argued that Moscow could buy that technology at the corner store in such places as Singapore, Hong Kong, Sweden or Austria.

The U.S. argues that the Soviet T-72 and T-80 tanks and diesel-power submarines have suffered much due to underpowered engines, saying that the Soviets shouldn't be allowed to buy a more reliable and advanced diesel engine available in West Germany. "The West German business community smells overzealousness" in that U.S. position, says a German trade expert.

Irked Europeans contend that the Pentagon is calling the shots in the U.S. negotiating positions, although the State Department is legally the lead U.S. agency. Many believe that the Pentagon's Richard Perle, despite his junior rank of assistant secretary, is the pivotal man in U.S. Cocom strategy. Mr. Perle's determination to play hardball with the Soviets has endeared him to Defense Secretary Caspar Weinberger and other Reagan administration hardliners.

The Cocom process has been slowed considerably by Washington infighting between Mr. Perle and various Commerce and State Department officials. Allies were guessing who was doing what to whom and stalling until they were sure what the Washington line would be.

But in recent months the Pentagon appears to have softened its position in dealing with other U.S. agencies as well as with its Cocom partners. "A cost-benefit analysis showed the cost to the alliance wasn't worth the benefits in Moscow," says one U.S. diplomat.

Stephen Bryen, head of the Pentagon's export-control bureaucracy, says of the allies, "We have mellowed some, but they have hardened some, too." Since early spring, Cocom has added electronics-grade silicon, printed circuit boards and their technology, ceramics used in semiconductor manufacturing, large floating dry docks, some robotics technology and spacecraft to the control list.

But the U.S. has also withdrawn many items, cancelled its drive to get Cocom upgraded to treaty status, and has at least delayed its request that Cocom establish a military subcommittee to bring the defense community a permanent role. West European delegates had warned the U.S. that they couldn't get parliamentary approval for an organization that essentially limits national sovereignty over export policies.

"Cocom must remain an informal organization," says Angela Stent, an East-West trade expert at Georgetown University. "Any attempt to make it a formal institution would spell its demise."

But controversies continue to haunt U.S.-European trade relations, threatening to blow up into open disputes. The Pentagon, for instance, has called for a meeting this fall to change China's status in Cocom so it could be sold more sophisticated technology. Britain, which wants to sell China Harrier jets, is in favor, but other European countries -- notably France and West Germany -- have been strongly opposed.

The French and West Germans fret about offending the Soviets, a major business partner, by warming to the Chinese. They note that the U.S. liberalized its trade policies towards China prior to President Reagan's visit there in April of this year.

"Suddenly the United States becomes flexible when it touches their own economic interests," says a senior French official with a frown.

Indeed, one of Cocom's major problems is that member nations often ignore it or go around it when national interests take precedence. The French, Cocom sources say, are the worst offenders.

France recently delivered a sophisticated telephone exchange to the Soviet Union despite U.S. protests that it could be used for military purposes.

Pact on Computers

WASHINGTON -- The U.S. and its allies agreed on more liberal standards for the export of computers, software and telecommunications equipment to Soviet-bloc countries.

The agreement capped several years of tough Cocom negotiations. "We're generally pleased with it," a senior Pentagon official said. "It's balanced in that it allows transactions on widely available products and gives us protection on the really critical items."

The computer standards, the first set by Cocom since 1976, represent a major updating of rules on a big sector of the electronics trade. Reagan administration aides described the new rules as a compromise between the tight controls sought by the U.S. and the freer trade desired by Japan and many Western European countries.

Cocom agreed to decontrol what it calls "non-rugged" personal computers, or most of the 8-bit devices commonly sold around the world for home or office use. However, the "rugged" types -- those that are designed for portability and rough use -- can be sold to the Soviet bloc only at the "discretion" of Cocom's member governments, Pentagon aides said.

Some 16-bit personal computers can be exported depending on their specifications. But the 32-bit models, the most advanced generally available to Western customers, continue to be banned.

Cocom also established new export thresholds for minicomputers. Some types below certain data-processing rates and memory capacities can be sold to the Soviets. "Superminis," the most sophisticated products in this category, will be banned for Eastern-bloc sales.

Cocom decontrolled all "mainframe" computers, the largest types in commercial use, except those with a data-processing rate higher than 48 million bits of information a second. The previous threshold was 32 million bits a second.

The rules agreed on software exports are the first ever laid down by Cocom. The so-called off-the-shelf products available in most stores can be exported to the Soviets, but more sophisticated ones, with potential military applications, can't be shipped there.

Copyright (c) 1984, Dow Jones & Co., Inc.