Since the early days of the Cold War, the United States has restricted the export of certain advanced technologies and the sharing of sensitive scientific and technical information with foreign nationals. Initially, these restrictions were justified on the grounds that the Soviet Union and its Warsaw Pact allies were engaged -- through fronts, third parties, and outright espionage -- in a systematic effort to buy or steal information, technology, and equipment developed in the West that they could then use in their own military systems. Because Soviet industry could not design or produce certain high-tech products, such as personal computers or sophisticated machine tools, the Soviets were forced to obtain them by other means. By successfully denying technology to the Soviet Union, the United States enabled NATO to maintain a strategic and tactical advantage without having to match the Warsaw Pact nations' troop strength in the field. Yet 20 years after the fall of the Berlin Wall and long after the Soviet Union ceased to exist, the same system of export controls remains in place. It has only become more arcane and ineffective with time.
U.S. export controls have survived largely because of outdated "fortress America" thinking -- the view that the United States is the primary source of most militarily useful scientific ideas and products and that it can continue to deny technology to potential adversaries without seriously damaging the global competitiveness of U.S. companies or, in the end, jeopardizing national security. In an earlier era, when the United States was far more economically and technologically dominant, the costs associated with a technology-denial strategy were easier to absorb. But in today's highly competitive world, the business lost due to export controls poses a threat to the well-being of key U.S. industries; estimated losses range as high as $9 billion per year.
OUT OF CONTROL
In the early 1990s, after the breakup of the Soviet Union, it became increasingly clear that the United States, its NATO allies, and Japan no