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C: U.S. NATIONAL SECURITY AND THE RISKS OF DEPENDENCE ON FOREIGN . . .
Pages 99-111

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From page 99...
... Systems on Foreign Technologies, 1990; The Analytical Science Corporation (TASC) , Foreign Vulnerability of Critical Industries, 1990; National Defense University, U.S.
From page 100...
... For example, foreign production sites or transportation channels might be clestroyed or disabled by military action, natural disasters, or accidents. Foreign sources might also withhoIc' supply from the United States for political reasons; the government of a foreign production site might be allied with countries hostile to the United States, be threatened by such countries, or may be under the pressure of public opinion to withhold the component or piece of equipment in question.
From page 101...
... 7U.S. Department of Commerce, Office of Industrial Resource Administration, The Effect of Imports of Ceramic Semiconductor Packages or' the National Security: An Investigation Conducted Under Sectior' 232 of the Trade Expansion' Act of 1962 (Springfield, Va.: National Technical Information Service, 19934.
From page 102...
... merchant production of ceramic packages has declined in recent years, as several domestic producers have scaled back production or exited the business, and remaining producers have cut back investment and R&D. In early 1993 two of the remaining domestic producers petitioned the Department of Commerce to conduct an investigation under Section 232 of the Trade Expansion Act of 1962, which allows for trade relief to domestic companies if imports are found to threaten national security.
From page 103...
... Some might argue that DoD and other government officials should take Japanese and other foreign supplier attitudes into account in determining the appropriate scale of domestic production, the acceptable level of clepenclence by foreign-controBed domestic producers on critical inputs from abroad (such as "green tape" or the unfired ceramic material that is the basic input in the case of ceramic packages) , and the trade policy and other instruments necessary to ensure adequate supply.
From page 104...
... flat pane} display producers are not present in the high-volume markets, such as laptop computers, that are driving manufacturing technology and costs. These markets are dominated by Japanese companies.
From page 105...
... that as Korean and perhaps other companies enter the market, flat panel displays are likely to become commodities, leading to intense price competition U.S. entrants would be hard pressed to become profitable competing in commercial markets; · that the initiative will cause trade friction subsidizing R&D for companies that commit to production skirts GATT provisions, and recipients of DoD support will eventually press for trade protection; and .
From page 106...
... Although Barfield argues that DoD's estimates of near-term military demand are overstated, and therefore there should be no urgency to launch a major government initiative, he does not contest the fundamental importance of the technology for future defense needs. '9"In requesting the lifting of the 62.67 percent import duty on active matrix flat panel displays, OIS Optical Imaging System, Inc.
From page 107...
... Although Korean companies may ultimately be successfid, this is not assured. Active matrix liquid crystal (lisplays share some characteristics with DRAMs, such as the need for large capital investments and the imperative for meticulous efforts to improve manufacturing yields.
From page 108...
... INDUSTRIAL BASE EROSION Dependence on foreign sources raises a more diffuse risk to national security that capabilities lost in one segment will weaken related sectors, leading eventually to a general! downgrading of U.S.
From page 109...
... For example, loss of U.S. commercial competitiveness in an industry that at first glance appeared to have little security importance, consumer electronics, has indeed contributed to the current lack of a U.S.
From page 110...
... firms to petition the government to restrict foreign imports in cases where the loss of domestic production is thought to entail national security risks. The Committee on Foreign Investment in the United States also exists to prevent the loss of such critical capabilities.
From page 111...
... capabilities in specific areas of commercial technology with significant military applications and national security importance, cooperating with other agencies as necessary. Even though efforts to monitor and address these issues are on the rise, managing dependence is an issue that will be with us for the foreseeable future.


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