It is a painful reality that nations must carefully regulate the export and import of certain “dual-use” technologies that could be used as weapons of war. While these regulations were intended to protect citizens, and are easily applied to items such as high-power lasers that carry intonations of “death rays,” overwhelming industry feedback indicates that these regulations are doing little to prevent the very thing for which they were designed.
At the end of the Cold War, the Coordinating Committee for Multilateral Strategic Export Controls (COCOM) agreed that its East-West focus was no longer the appropriate basis for export controls, and decided to establish a new arrangement to combat broader risks to regional and international security related to the spread of weapons of mass destruction and their associated enabling dual-use goods and technologies. In 1996, 33 founding member states reached consensus on a new multilateral export control arrangement to be called the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual Use Goods and Technologies (Wassenaar Arrangement or WA), which today includes 40 member states.
Items subject to control, such as high-power lasers, appear on agreed WA lists and individual countries interpret those lists in their own export-control documents. For example, a partial list of controlled lasers for the United States can be found in the Commerce Department’s Bureau of Industry and Security (BIS) Commerce Control List, section 6A005 (see table).
In response to complex and confusing specifications, and the emergence of new technologies such as fiber lasers, the WA laser controls were amended in late 2006 to move away from specifying lasers by individual type toward a focus on performance-based criteria of the laser beam itself (see www.laserfocusworld.com/articles/279294). Yet despite years of negotiations and carefully crafted language, WA laser controls are generally not well received by manufacturers of high-power lasers in the U.S., especially when they have a vested interest in successfully selling products into burgeoning markets such as The People’s Republic of China (PRC).
Objections to the WA export controls often center around the ways in which the controls are interpreted by various WA countries. In late 2006, the Laser and Electro-Optics Manufacturers’ Association (LEOMA; Pacifica, CA) objected to the U.S. BIS Revisions and Clarification of Export and Reexport Controls for the PRC—the “China rule”—on the grounds that the “onerous restrictions” and “overly broad prohibitions would inflict substantial financial harm on American companies, while benefiting our foreign competitors” who have not implemented “controls of similar scope on their trade with the PRC.” The letter went on to state: “We note specifically that of the four general types of lasers…proposed to be subject to the military end-use control…, three are currently available from our PRC competitors” within China.
Different interpretations
LEOMA executive director Breck Hitz launched the language amendment process back in 2001 and has represented the U.S. laser industry at the Wassenaar negotiations during the past five years. “If this proposal is implemented, the results will be a PRC military that has modernized either by purchasing comparable products and technology from foreign competitors, or by developing the technology with our PRC competitors,” he argued in a letter during negotiations. He said American companies would suffer from lower sales, fewer jobs, and erosion of industry leadership. Unfortunately, the letter had no effect and the China rule was implemented as proposed.
“U.S. companies suffer more than our allies who are also subject to the Wassenaar agreement because of substantially different interpretations of the text and because other countries have designed huge loopholes in the agreement that our U.S. negotiators fail to acknowledge,” says Martin Seifert, president of Nufern (East Granby, CT; recently acquired by Rofin-Sinar).
A LEOMA member whose company is directly impacted by the WA high-power laser export controls, Seifert also worries that controlled technology is being copied abroad. “Fiber in particular is susceptible to ‘reverse engineering’ and its potential use for both industrial and military applications is high,” he said. “After the telecom bust, we sold off millions of dollars worth of fiber manufacturing gear to all parts of the world and then, post-9/11, we sent home all of the scientists and engineers who had earned their Ph.D.s here, learned to make the products here, but did not possess a green card. Now we’re in the awkward position of having sent equipment and talent to uncontrolled parts of the world.”
Despite the efforts by many people in our government to minimize the impact of Wassenaar regulations on U.S. businesses, says Seifert, the fundamental policies require revision by understanding leaders. “We have seen many instances in the past few years where stringent and inflexible U.S. policies have allowed foreign competitors to emerge and displace U.S. industry with the associated loss of U.S. jobs. One recent example is the emergence of China as a supplier of night-vision devices.”
Jim Hardaway, deputy vice president of Neo-Neon International (He-Shan City, China; an LED and laser lighting company) and member of the board of directors for the International Laser Display Association (ILDA; Orlando, FL), has worked in China off and on since 1997, and offers an interesting perspective on how the WA controls look from within China. “China used to be dependent on Coherent and Spectra-Physics systems for higher powers,” says Hardaway. “But now, companies like Han’s Laser in China can routinely do 150 W with good beam performance.” Even though Hardaway acknowledges that the quality is still not there, he says that Chinese-manufactured lasers are becoming more and more formidable as China exchanges the “copy culture” for national pride. “Export controls are moot in light of China’s internal innovations,” says Hardaway. “The pump diodes, crystals, and other laser components come from the U.S. and Europe anyway and aren’t controlled. Not to mention the free-flow of research papers and unregulated sales on eBay.”
Globalization and China
Opponents of controls point not only to the “relaxed” interpretation of the regulations by many foreign countries and how these countries benefit at the expense of the U.S. (Cuban cigar, anyone?), but also to the fact that the WA controls unfairly ensure that certain manufacturers’ products are freely shipped into China, while others are restricted. For example, some physically heavier laser technologies are freely exported, arguing that they could never be flown in an aircraft, even though their power levels may be on par with more “lightweight” and therefore “riskier” technologies such as fiber lasers. And still another complaint—so contentious that nobody wanted to comment on the record—is that U.S. bureaucracy and the paperwork required to process an export transaction (sometimes a three- to six-month process) is often the major sales deterrent.
As export officials scramble to figure out how to streamline these regulations on a global basis, it may well be that the problem is solved through globalization. “Globalization and China”—the subject of the first International Enterprise Summit held on April 17 during the Pacific International Conference on Applications of Lasers and Optics—“are the most important issues, not just for the photonics and laser industry, but for almost all industries,” said Bo Gu, senior research scientist at GSI Group (Wilmington, MA). “China—currently the second largest economy in the world—is playing a significant role in the world’s economic growth today. In my opinion, any company that wants to have significant growth for the next decade will have to take China into its business planning and strategy. Failing to do so will give the competitive edge to the competition and some companies will miss the biggest growth opportunity for the next decade.”
The fact that China holds a great deal of U.S. treasury debt and is a major investor in the U.S. economy may have an impact on future policy related to “dual-use” items.
Even in the face of strong industry opposition and evidence that counters every argument in favor of the regulations, the U.S. government clings to the belief that these export controls are necessary evils. In theory, high-power lasers could be used as weapons of mass destruction; in reality, they are powerful tools for laser welding, materials processing, and medical and industrial research that benefit the population as a whole.
After many weeks of emails and phone calls asking the U.S. Commerce Department to voice its views in support of the export controls, my requests went unanswered. Perhaps there was just too much bureaucracy in the way.
This column explores somewhat confrontational and controversial technological and business issues in photonics, presenting opinions and commentary from industry experts who weigh in on the issues under debate. To share ideas for future columns, please contact Gail Overton at [email protected].
