Little-known U.S. policy undermines CT manufacturing

By:  Sen. Chris Murphy
Hartford Business Journal

Today, defense manufacturers in Connecticut need to be able to sell globally in order to compete. And having visited dozens of Connecticut military manufacturing companies since I was elected to the Senate, I've learned that any factory in Connecticut can compete with those in China or Europe or Mexico if the playing field is level. But too often, that's not the case. Sometimes, it's unfair trade practices abroad that stand in the way of Connecticut companies selling to the world. Other times, it's the wrongheaded trade agreements, like NAFTA, that harm our state's companies. But the most egregious, unjustifiable obstacles to global defense trade come from a little-known set of rules that are imposed on Connecticut companies by the U.S. government. They are called the Arms Export Control Act and International Traffic in Arms Regulations (ITAR) rules, and I am on a mission to change them so that they don't hold our state's companies back from exporting.

Since the 1970s, ITAR rules force companies wanting to export products to go through a slow, redundant and burdensome process to prove to the government that their products would not aid our enemies' militaries if they fell into the wrong hands. Before they can sell their goods, American firms must get sign-off from a host of separate government agencies that move at a glacial pace. The process for determining a product's possible military use often seems arbitrary, capricious, and many times lacks the objective and technical rigor required to make fair determinations.

America's ITAR mess is no secret. Foreign competitors of American companies routinely use the U.S.'s notoriously inefficient ITAR certification process against us, even marketing their products as "ITAR-free" to get the upper-hand in pitches to prospective customers. This hurts Connecticut companies and, ultimately, costs Connecticut jobs.

One Connecticut company found out the hard way just how burdensome our ITAR process is. While working to launch a product to improve reliability and safety on commercial aircraft, they were subjected to huge licensing requirements, legal liability and massive costs that ultimately doomed the product and almost bankrupted the company.

The original intent of ITAR was to prevent the technological superiority of our military from slipping into the hands of terrorist or hostile countries — a noble goal. But the United States can ensure American companies aren't aiding our enemies without forcing U.S. companies into bankruptcy while trying comply with the rules.

In 2009, President Obama sought to fundamentally restructure the system by examining what we control, how we control it, and how we enforce those controls. Here's one example: the Obama administration has simplified regulations for equipment used commercially and moved almost all these products to a new streamlined Commerce Control List. This will reduce the number of regulatory hoops companies are forced to jump through and allow for faster export approval to over 30 U.S. allies. There is more work to be done, but this new export system will strengthen our national security and boost our economy.

The final step to fix these rules and open up more exports for Connecticut defense companies will be action from Congress to permanently codify the work done by the President Obama's Export Control Reform initiative. This will require a major piece of legislation from Congress to establish universal rules for the export of commercial items and protection of sensitive technology. I look forward to working with the Obama administration and the rest of my colleagues on both sides of the aisle to strengthen American made exports and keep more high-tech manufacturing jobs in our country.