Analysis of the Effects of U.S. National Security Controls on U.S.-Headquartered Industrial Firms (1986) / Chapter Skim
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II. Structure of U.S. Export Trade and International Sales as They Relate to the Export Licensing System
II. Structure of U.S. Export Trade and International Sales as They Relate to the Export Licensing System
Pages 11-26
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Export Trade and International Sales as They Relate to the Export Licensing System In order to analyze the influence of the export control licensing process on U.S. firms' competitiveness, one first needs to understand the general characteristics of U.S.
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firms centers on the manufacturing sector. The extent to which the manufactures versus total merchandise distinction matters can be gauged by looking just at the data for the value of Individual Validated Licenses (IVLs)
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U.S. Foreign Sales As indicated in the simple schematic of Figure 5, the export controls cover a portion of U.S.
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high technology export trade into the same geographic groups used in Table 1, exports to COCOM country destination are only about half of total U.S. high technology exports with nearly an equal amount going to Other Country destinations (the East Asian Newly Industrialized Countries (NICs)
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firms report they are especially confronted with unequal treatment with regard to what can be licensed and the ease of getting a license approved relative to 16For electronics trade with some regions of the world, especially South East Asia, a large part of U.S. export trade consists of subassemblies which are assembled and then reexported back to the U.S.
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as well as their direct exports from the United States, one needs to look at the global span of U.S.-based firm sales, including exports, if one wants to develop a more complete measure of the scope of U.S. business activity reached by the national security controls.
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exports that are likely to come under the U.S. national security controls, the set of U.S.
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Restating that slightly, almost three-quarters of the foreign sales of U.S.-based enterprises which are most likely to be covered by national security controls occur in COCOM countries. To obtain a total of all U.S.
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Of manufactures exports, 24This estimate is an extrapolation taking into account real growth and general price level changes, but does not take into account any negative factors, such as relative tightening, if any, of U.S. export controls.
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national security controls.
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multinational corporations, the structure of their complex international manufacturing, distribution ard marketing networks may be affected by changes in U.S. licensing regulations.
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The U.S. national security controls process covers not only products as they flow across the U.S.
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The controlled transactions can be divided into transactions controlled for national security or other purposes.29 The national security controls are implemented via either bulk or individual licenses. The largest portion of the total value of U.S.
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In FY1985 (1984.4-1985.3) , Commerce records indicate that applications for individual licenses were received for approximately $64 billion of manufactures exports.30 In the same time period, license approvals for manufactured goods totalled about $50 billion.31 This figure includes more than just the value of licenses for direct export from 30In this time frame, Commerce received applications totaling $10S.5 billion.
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exports covered by an individual validated license uses only data developed from the Academy Questionnaire sample of firms which have foreign sales and whose sales are to some degree covered by the licensing system.33 Forty-one percent were shipped or sold General Destination (GDEST) ; that is, without requiring a validated license.
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The portion requiring a license was divided between 39 percent utilizing an IVL and the balance of 61 percent going under a bulk license. Thus, of the $78 billion of foreign sales covered by a validated license in 1985, about $30 billion was covered by an IVL.34 This compares reasonably well with the range of the other estimate of between $22 to $36 billion for IVL covered shipments.
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