Analysis of the Effects of U.S. National Security Controls on U.S.-Headquartered Industrial Firms (1986) / Chapter Skim
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VI. Overall Effects of U.S. Export Controls on U.S.-Headquartered Firms' Foreign Operations
VI. Overall Effects of U.S. Export Controls on U.S.-Headquartered Firms' Foreign Operations
Pages 70-80
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From page 70... ...
foreign sales covered by the licensing system already has built into it several competitive effects resulting from U.S. export controls.
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From page 71... ...
and EC trade with Bloc countries are the traditional advantages EC firms have due to long-standing business relationships and simple geography. 69Increasing Bloc trade was not identified as a major concern by the firms interviewed for this study with the exception of the machine tool industry.
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From page 72... ...
None of these estimates of the competitive effects of controls touches on other key competitive considerations.
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From page 73... ...
From the survey of U.S. firms who utilize validated licenses, it was estimated that in 1986 the direct administrative costs were about $0.5 billion.70 Larger firms evidently do not view the direct costs of compliance as a major difficulty, but smaller firms can find them influencing whether they attempt to export items requiring validated licenses and the type of validated license they use.
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From page 74... ...
traded goods face the same general macroeconomic set of conditions, whether positive or negative with respect to trade, the effects of export controls is a competitive burden that falls fairly narrowly on this one category. Some of the sources of the competitive burden imposed by the license system on U.S.
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From page 75... ...
And while the reported denial rate is quite low, 1 to 2 percent, in fact this results in part from firms negotiating their way through the system or withdrawing their applications before getting denied or avoiding applications for controversial products or destinations. These variances in processing times and variability in criteria for rejection all translate into uncertainty.
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From page 76... ...
It processes not only critical technology items, but also a large volume of low technology items -- 37 percent of the items in a sample of license applications fell within the acceptable limits of Administrative Exception Note 9 for COCOM. This category is essentially low technology that can be transferred to Bloc countries on -76
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From page 77... ...
sources. These less sensitive goods are more widely available abroad and therefore foreign customers are more likely to be driven to a foreign source by the presence of U.S.
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From page 78... ...
firms are very concerned about how their customers weigh these different variables. The information obtained from the questionnaire and interviews with firms indicated there is an erosion of the foreign customer base.
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From page 79... ...
controls were more stringent than those of other COCOM countries and at the margin affect business decisions. The third competitive element we were able to document was the way the license process puts smaller fins at a relative disadvantage.
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