U.S. government throws in towel on computer export limits

The White House essentially threw in the towel Wednesday on the government’s ability to limit exports of high-performance computers, while also acknowledging that there’s little the United States can do to prevent other nations from developing high-powered systems by harnessing computer power through networked clusters of machines.

As part of an announcement that substantially relaxes the limits placed by the U.S. on computer exports, the Clinton administration said it “has concluded that there are no meaningful or effective control measures for computer hardware that address the technological or marketplace challenges” identified during a policy review that began in the fall of 1999.

The United States adopted export restrictions in 1993 in an effort to keep high-performance computing power out of the hands of nations that might use it to improve their military capabilities. But hardware and chip manufacturers have argued that the controls put them at a competitive disadvantage against vendors from other countries.

This is the sixth time the United States has raised the export levels, but the White House said it was already apparent by mid-1999 that computer hardware capabilities were “outpacing the ability of export control policy to keep up.” The recently-completed policy review found that efforts to control sales of computer hardware are “becoming ineffective and will be increasingly so within a very short time,” the administration added.

In addition to the continuing growth in microprocessor performance, the White House noted that systems can easily be tied together into multi-CPU machines. And advancements in interconnect technologies that let users build large clusters of networked machines has “become the single most important challenge to the ability to effectively control computer hardware,” it said.

As a result, the White House Wednesday eased its sales restrictions to the so-called “Tier 3” nations — such as India, Pakistan, China, Vietnam and countries in the Middle East. The new limits allow exports of computers with processing power of up to 85,000 million theoretical operations per second, more than three times higher than the previous limit of 28,000 MTOPS. The old limit is roughly equal to the performance of a system running four Intel Corp. 64-bit Itanium processors.

The new policy also eliminates export licensing requirements for systems being sent to Brazil, Chile, South Africa, Thailand and other countries designated as “Tier 2” trading partners. Those countries, along with former Tier 3 nation Lithuania, are being combined into the “Tier 1” category that now includes the likes of Western Europe, Japan and Canada.

No prior review by the government would be required on any systems being exported to users in the countries that make up the enlarged Tier 1 group, the White House said. The U.S. Congress has 120 days to review that change before it takes effect, while the Tier 3 export-limit changes are subject to a 60-day review.

The White House is maintaining a “virtual embargo” against computer sales to “Tier 4” countries, consisting of Iraq, Iran, Libya, North Korea, Cuba, Sudan and Syria. It also said the policy review showed that there still “is merit in continuing to control national security and proliferation-related software” — a finding that prompted President Clinton to order a six-month effort aimed at identifying additional measures that could be taken on the software side.

The steps announced Wednesday won praise from the Computer Coalition for Responsible Exports, a group of computer and semiconductor makers that includes companies such as IBM, Sun Microsystems Inc., Unisys Corp., Dell Computer Corp. and Intel Corp., and others.

Louis V. Gerstner Jr., IBM’s chairman and CEO of IBM, said, in a statement that the vendors “applaud the Clinton administration’s ability to keep government regulations in line with the rapid pace of technological change.”