[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]




 
 H.R. 3680, TO AMEND THE NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL 
   YEAR 1998 WITH RESPECT TO THE ADJUSTMENT OF COMPOSITE THEORETICAL 
            PERFORMANCE LEVELS OF HIGH PERFORMANCE COMPUTERS

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                                 MARKUP

                               BEFORE THE

                            SUBCOMMITTEE ON
                INTERNATIONAL ECONOMIC POLICY AND TRADE

                                 OF THE

                              COMMITTEE ON
                        INTERNATIONAL RELATIONS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 6, 2000

                               __________

                           Serial No. 106-154

                               __________

    Printed for the use of the Committee on International Relations


        Available via the World Wide Web: http://www.house.gov/
                  international--relations

                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
67-608 CC                   WASHINGTON : 2000






                  COMMITTEE ON INTERNATIONAL RELATIONS

                 BENJAMIN A. GILMAN, New York, Chairman
WILLIAM F. GOODLING, Pennsylvania    SAM GEJDENSON, Connecticut
JAMES A. LEACH, Iowa                 TOM LANTOS, California
HENRY J. HYDE, Illinois              HOWARD L. BERMAN, California
DOUG BEREUTER, Nebraska              GARY L. ACKERMAN, New York
CHRISTOPHER H. SMITH, New Jersey     ENI F.H. FALEOMAVAEGA, American 
DAN BURTON, Indiana                      Samoa
ELTON GALLEGLY, California           MATTHEW G. MARTINEZ, California
ILEANA ROS-LEHTINEN, Florida         DONALD M. PAYNE, New Jersey
CASS BALLENGER, North Carolina       ROBERT MENENDEZ, New Jersey
DANA ROHRABACHER, California         SHERROD BROWN, Ohio
DONALD A. MANZULLO, Illinois         CYNTHIA A. McKINNEY, Georgia
EDWARD R. ROYCE, California          ALCEE L. HASTINGS, Florida
PETER T. KING, New York              PAT DANNER, Missouri
STEVEN J. CHABOT, Ohio               EARL F. HILLIARD, Alabama
MARSHALL ``MARK'' SANFORD, South     BRAD SHERMAN, California
    Carolina                         ROBERT WEXLER, Florida
MATT SALMON, Arizona                 STEVEN R. ROTHMAN, New Jersey
AMO HOUGHTON, New York               JIM DAVIS, Florida
TOM CAMPBELL, California             EARL POMEROY, North Dakota
JOHN M. McHUGH, New York             WILLIAM D. DELAHUNT, Massachusetts
KEVIN BRADY, Texas                   GREGORY W. MEEKS, New York
RICHARD BURR, North Carolina         BARBARA LEE, California
PAUL E. GILLMOR, Ohio                JOSEPH CROWLEY, New York
GEORGE RADAVANOVICH, Califorina      JOSEPH M. HOEFFEL, Pennsylvania
JOHN COOKSEY, Louisiana
THOMAS G. TANCREDO, Colorado
                    Richard J. Garon, Chief of Staff
            Michael H. Van Dusen, Democratic Chief of Staff
            John P. Mackey, Republican Investigative Counsel
                     Parker Brent, Staff Associate
                                 ------                                

        Subcommittee on International Economic Policy and Trade

                 ILEANA ROS-LEHTINEN, Florida, Chairman
DONALD A. MANZULLO, Illinois         ROBERT MENENDEZ, New Jersey
STEVEN J. CHABOT, Ohio               PAT DANNER, Missouri
KEVIN BRADY, Texas                   EARL F. HILLIARD, Alabama
GEORGE RADANOVICH, California        BRAD SHERMAN, California
JOHN COOKSEY, Louisiana              STEVEN R. ROTHMAN, New Jersey
DOUG BEREUTER, Nebraska              WILLIAM D. DELAHUNT, Massachusetts
DANA ROHRABACHER, California         JOSEPH CROWLEY, New York
TOM CAMPBELL, California             JOSEPH M. HOEFFEL, Pennsylvania
RICHARD BURR, North Carolina
             Mauricio Tamargo, Subcommittee Staff Director
        Jodi Christiansen, Democratic Professional Staff Member
                Yleem Poblete, Professional Staff Member
                   Victor Maldonado, Staff Associate



                            C O N T E N T S

                              ----------                              
                                                                   Page

Markup on H.R. 3680, to amend the National Defense Authorization 
  Act for Fiscal Year 1998 with respect to the adjustment of 
  composite theoretical performance levels of high performance 
  computers......................................................     1

                                APPENDIX

Prepared statements:

The Honorable Ileana Ros-Lehtinen, a Representative in Congress 
  from Florida, and Chair, Subcommittee on International Economic 
  Policy and Trade, Committee on International Relations.........     8
The Honorable Donald A. Manzullo, a Representative in Congress 
  from Illinois..................................................    10

Bill:

H.R. 3680........................................................    13


 H.R. 3680, TO AMEND THE NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL 
   YEAR 1998 WITH RESPECT TO THE ADJUSTMENT OF COMPOSITE THEORETICAL 
            PERFORMANCE LEVELS OF HIGH PERFORMANCE COMPUTERS

                              ----------                              


                        THURSDAY, APRIL 6, 2000

              House of Representatives,    
         Subcommittee on International Economic    
                                      Policy and Trade,    
                      Committee on International Relations,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:10 p.m., in 
room 2172, Rayburn House Office Building, Hon. Ileana Ros-
Lehtinen (Chair of the Subcommittee) presiding.
    Ms. Ros-Lehtinen. This Subcommittee will come to order.
    American ingenuity, creativity and talent has throughout 
the centuries spiraled the United States into a position of 
global leadership. It has enabled us to adapt and build upon 
economic, political and social changes to usher in a new era of 
prosperity and opportunity.
    Just as Eli Whitney's cotton gin served as the catalyst for 
the Industrial Revolution, the computer industry responsible 
for one-third or real economic growth continues to serve as the 
driving force behind the incredible commercial expansion that 
the U.S. is now enjoying. However, it cannot continue this 
unparalleled trend unless it is able to innovate and compete in 
new markets. This goes to the heart of the legislation that we 
are considering today.
    H.R. 3680, introduced by our House colleagues David Dreier 
and Zoe Lofgren takes into account emerging threats and 
security considerations by maintaining a limited waiting 
period. Nevertheless it offers a practical, judicious and 
realistic solution to the challenges faced by our computer 
industry by reducing the Congressional review period from 180 
to 30 days. H.R. 3680 would make the waiting period more 
reasonable and bring it into line with other review periods for 
changing national security export controls.
    Currently, for example, there is a 30-day waiting period 
established by Congress to remove articles from the munitions 
list, a list of Defense articles and services that are subject 
to export controls including such items as artillery, launch 
vehicles, missiles, rockets, torpedoes, warship, aircraft, and 
tanks. Yet we maintain a 180-day waiting period for exports of 
supercomputers.
    From a practical perspective it does not make any sense for 
military items or arms transfers to require less time for 
Congressional review than that which is required for 
supercomputers. These products and technology have broad 
commercial application and an innovative cycle or life cycle of 
less than 3 months. If we do not reduce the waiting period and 
expedite the process for our computer industry, we will have a 
situation where new export controls will be out of date by the 
time they are approved.
    For example, the new policy announced by the Administration 
on February 1st of this year will be an anachronism by the time 
the current 6-month review period expires on August 1st. It is 
impossible for computer export control policy to keep pace with 
the ever-changing technological and market realities unless we 
pass H.R. 3680 to reduce Congressional review to 30 days.
    We need to avoid a repetition of recent events. For 
example, last Fall Apple Computers began marketing its new 
single processor personal computer whose power exceeded the 
computer export control threshold in effect at that time. 
However, Apple was unable to sell any of these new systems 
because the adjustment made by July of last year did not become 
effective until January, 2000. IBM was in a similar situation 
with its new Aptiva personal computer line.
    H.R. 3680 is a bipartisan bill which provides immediate 
relief for the computer industry, an industry which is 
conducting landmark, cutting edge work to maintain U.S. 
technological leadership. H.R. 3680 maintains the delicate 
balance between national security and market considerations 
while providing a more responsive, realistic approach to export 
controls on supercomputers.
    I am proud to be a cosponsor of this measure, and I am 
encouraged by the fact that all the majority Subcommittee 
Members have also rendered their support as cosponsors, and 
that person needs some Florida orange juice for Dana, and I am 
proud to recognize Mr. Robert Menendez of New Jersey, our 
Ranking Member. Thank you, Bob.
    [The prepared statement of Ms. Ros-Lehtinen appears in the 
appendix.]
    Mr. Menendez. Thank you, Madam Chairlady, and I am glad we 
are holding this markup. I would have hoped that the 
legislation would be as futuristic as the room is and would 
have a few more things to it, but at least we are doing 
something.
    Madam Chairlady, the Republicans' impromptu inclusion of a 
180-day Congressional notification period for increasing the 
MTOPS level for export sales in the 1998 National Defense 
Authorization Act handicapped the American computer industry. A 
180-day review period has made it impossible for the U.S. 
Government to respond quickly to the latest advances in 
computer processing technology.
    Last summer for example, new personal computers introduced 
by Apple and IBM surpassed the MTOPS level for exports for Tier 
3 countries like Israel and Egypt. It was not until after the 
180 day notification period ended in January that these 
computers were allowed to be sold without a license.
    Later this year Intel is expected to introduce the Itanium 
chip that will allow a computer that uses four chips to operate 
at nearly 23,000 MTOPS, a level that exceeds current policy for 
export sales to Tier 2 and Tier 3 countries. In the computer 
industry, where the average shelf-life of a computer is no more 
than 18 months and probably closer to 12, a 6-month delay in 
sales is a very long time, particularly when overseas 
competitors are nipping at the heels of American companies.
    For this reason I strongly support this legislation. 
However, I am disappointed that this legislation only addresses 
the MTOPS notification period. The legislation does not address 
other NDAA-derived problems like the 120-day notification 
period for moving countries between tiers and burdensome post-
shipment verification requirements.
    More importantly, while this bill fixes one problem, it is 
not a substitute for reauthorizing the EAA and updating our 
Cold War export control policies.
    I intended to offer amendments today to address these 
issues, but in the interest of the bill's passage in the House 
I have decided to withhold at this stage from offering any 
amendments. It is unfortunate that there are those who cannot 
see clear to making these very important changes that would 
ensure America's continued leadership in the computer industry.
    America's industry deserves laws that are responsive to 
today's global economy and not laws that were created over two 
decades ago to respond to Cold War era threats.
    I know that the Chairlady shares my view that in order to 
sustain our leadership in the global economy we must take 
action. I hope that she and other enlightened Members of the 
Republican caucus can talk to some of their colleagues about 
the importance of reauthorizing the EAA. No one in the Congress 
is advocating for changes that would undermine our national 
security, but rather for policy changes that would ensure our 
national security while also streamlining our export control 
laws to focus on those countries and those exports that are of 
greatest concern to our nation.
    It is our obligation to address this issue and to ensure 
that our laws reflect what is in the best interest of our 
nation. Failure to do so keeps the Congress and its legitimate 
role out of the issue and cedes it to the executive branch, so 
instead of this piecemeal approach, we should consider 
comprehensive legislation, namely the EAA, to reform our export 
control laws, but I do urge for the purposes of solving part of 
our problems that our colleagues support today's legislation. 
Thank you.
    Ms. Ros-Lehtinen. Thank you so much, Mr. Menendez. Mr. 
Rohrabacher, Mr. Crowley, do you have opening statements?
    Mr. Crowley. Yes.
    Ms. Ros-Lehtinen. Yes, Mr. Crowley.
    Mr. Crowley. Thank you, Madam Chairman.
    I am here today to speak in support of H.R. 3680 to amend 
the National Defense Authorization Act and reduce the waiting 
period for the export of computers from 180 days to 30 days. I 
am proud to cosponsor this legislation, which will enable 
American high tech companies to compete effectively around the 
world.
    Currently the NDAA requires a 6-month waiting period before 
the Administration can update Tier 3 countries' export control 
laws. When NDAA went into effect in 1998 the bill targeted 
computers that operated above 2000 MTOPS. Today's personal 
computers operate in the 4000 MTOPS range and office servers in 
the 12,000 MTOP range.
    The current 6-month waiting period clearly does not make 
sense for products that have a 3-month innovation cycle and are 
widely available from our foreign competitors. I know that some 
of my colleagues think that this legislation is not going far 
enough. I agree with them and I am looking forward to working 
with my distinguished colleagues on this Subcommittee to 
overhaul the U.S. export control system in a more comprehensive 
manner, but we also have to realize how time-sensitive the 
passage of H.R. 3680 is.
    The new Intel microprocessor, the Itanium, will be 
available at midyear. A four-way Itanium processor computer is 
projected to perform above 22,000 MTOPS, therefore the recent 
update to a threshold of 12,500 MTOPS will already be out of 
date when it takes effect.
    Make no mistake, our current economic boom relies heavily 
on the information technology industry. The IT sector 
contributed about 35 percent to U.S. economic growth in recent 
years and foreign sales are crucial to that success, but our 
broken export control system threatens to cost the computer 
industry valuable sales in some of the most critical markets in 
the world.
    We should concentrate our resources on controlling real 
supercomputers and not waste them on controlling widely 
available business computers. This bipartisan legislation is 
supported by the Administration and the computer industry, and 
I urge my colleagues to vote in favor of it today.
    Thank you, Madam Chair.
    Ms. Ros-Lehtinen. Thank you so much, Mr. Crowley.
    Hillel, if you could pass on to the Chairman our deep 
dissatisfaction. I had told all the Subcommittee Members that 
our images would be portrayed as rock stars on this giant 
screen before us, but alas, it is not to be, and I was 
practicing my air guitar all morning.
    Mr. Crowley. Madam Chair, I just want to let you know, I 
think you are a rock star, no matter whether you are on the 
screen or not.
    Ms. Ros-Lehtinen. Aw--thank you. He's good. He's good.
    Pursuant to notice, the Subcommittee will now turn to the 
consideration of H.R. 3680, which the Staff Director will 
report, Mr. Tamargo.
    Mr. Tamargo. H.R. 3680, a bill to amend the National 
Defense Authorization Act for Fiscal Year 1998 with respect to 
the adjustment of composite theoretical performance levels of 
high performance computers.
    Ms. Ros-Lehtinen. Without objection, the Clerk will read 
the text of the bill.
    Mr. Tamargo. To amend the National Defense Authorization 
Act for Fiscal Year 1998 with respect to the adjustment of 
composite theoretical performance levels of high performance 
computers. Be in enacted by the----
    Ms. Ros-Lehtinen. Without objection, the bill is considered 
as having been read and is open to amendment at this point.
    Are there any amendments? If there are no amendments, the 
Chair will put the question on favorably reporting the bill to 
the full Committee.
    So many who are in favor of the question, say aye.
    [Chorus of ayes.]
    Ms. Ros-Lehtinen. So many who are opposed, say no.
    [No response.]
    Ms. Ros-Lehtinen. The ayes appear to have it. The ayes have 
it and the bill will be forwarded to the full Committee.
    [The bill appears in the appendix.]
    I thank the Members for their cooperation, and before we 
adjourn I would like to recognize Mr. Bereuter for some 
statements and we will be in touch with Chairman Gilman about 
prompt consideration of this measure in the full Committee next 
Thursday, April 13th.
    Mr. Bereuter.
    Mr. Bereuter. Madam Chairman, I have no comment. I just 
want to commend you on being so expeditious and I was happy to 
get here in time for the vote.
    Ms. Ros-Lehtinen. Thank you so much.
    The Subcommittee will stand in recess subject to the call 
of the Chair. Thank you.
    [Whereupon, at 2:25 p.m., the Subcommittee adjourned 
subject to the call of the Chair.]
      
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                             APRIL 6, 2000

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