Commission to Assess the Ballistic Missile Threat to the United States
Appendix III: Unclassified Working Papers


TOC / Previous / Next

Richard T. Cupitt 1 : "Export Controls and Missile Technology Transfers" The Impact of Export Controls on the Proliferation of Ballistic Missiles Developing a long-range ballistic missile program has proven more difficult in practice than simple theoretical arguments about technological determinism suggest. As Aaron Karp, Brian Chow and others note, few emerging regional powers can develop long-range missiles without substantial foreign assistance. 2 Those emerging powers with indigenous programs, moreover, relied on foreign assistance at first, and they operate at a technological level below the missile systems available to the United States and its allies. Even established powers with long-range ballistic missile programs can benefit from imports of US missile technology. This process makes export controls on military and dual-use missile technology a powerful, if controversial, tool in thwarting the proliferation of ballistic missiles. Based on discussions with officials involved in missile programs in China, India, Ukraine, and Russia, for example, multilateral export controls have delayed, prevented access, or simply increased the cost for a host of missile technologies. As put by one official with the Chinese Academy of Launch Vehicle Technology, export controls means that "our lab does not get the US technology we want." 3 Several emerging powers, moreover, have abandoned their ballistic missile programs altogether, such as the Condor-2 program, at least in part because of the costs imposed by export controls. Increasing acceptance of the guidelines for the transfer of missiles and missile technologies under the Missile Technology Control Regime (MTCR) continue to improve the prospects for sustained cooperation in restricting the transfers of missile technology. Governments of twenty-nine major supplier or transit countries belong to the MTCR, while several others claim to adhere to the guidelines. As important, MTCR "partners" have adapted the guidelines to address new concerns, such as the decision in 1993 to extend some controls over missiles capable of delivering chemical or biological weapons. The Limited Appeal of the MTCR and Export Controls in East and South Asia Unfortunately, only a few Asian governments embrace nonproliferation export controls, while others either tolerate or disdain them. 4 Even though more governments are adopting nonproliferation export control systems, only a few states in the region have systems in operation. Even among those, only the export control systems of Japan and Hong Kong appear highly compatible with current multilateral standards (see Table I). 5 More important for assessing the ballistic missile threat to the United States, the least consensus exists regarding controls on missile technology. Indeed, only Japan, South Korea, and Hong Kong appear to have the MTCR control list integrated into their export control regulations (see Table II). The lack of support for the MTCR in the region does not bode well for US interests. The People's Republic of China, India, North Korea, Pakistan, and Taiwan all have significant medium-to-long range ballistic missile or Space Launch Vehicle programs, while Indonesia and Thailand also have nascent space programs. 6 In addition to the well-known episodes of North Korean and Chinese exports of ballistic missiles and missile technology, Pakistan, India, and China all sought to import items for their ballistic missile programs during 1996. 7 Other states in the region also have the capacity to produce and export dual-use items. In 1997, for example, Taiwan exported (under license) items that appear to fall under either the MTCR Category II list or under the items controlled unilaterally by the United States for reasons of missile proliferation (see Table III). Solely based on an assessment of likely capabilities and current control policies, ballistic missile proliferation in the region will increase faster than the current rate into the next century as more countries produce critical dual-use technology. Limits on the Appeal of Missile Technology Controls in Asia If these emerging suppliers of dual-use items do not adopt export controls compatible with the MTCR, not only will existing ballistic missile programs benefit, more countries may seek to acquire new ballistic missile capabilities as critical items become more readily available. MTCR partners recognized this concern when they made an explicit appeal to non-members to adopt the aims and guidelines of the MTCR (and include missile proliferation controls as a topic in regional security institutions) after the 1997 Tokyo plenary. 8 Since 1996, MTCR partners also supported three seminars on transshipment, where representatives from Hong Kong, South Korea, and Singapore among other non-partners attended. During this period, the United States, arguably the most ardent champion of the MTCR, also discussed missile proliferation and export controls with China and both Koreas. The talks with South Korea, in particular, should lead to South Korea becoming an MTCR partner in the near future. Still, adding new members to the MTCR, beyond the inherent challenges that poses for information sharing and decision making in the organization, may reach an impasse because forces in the region appear to promote interests antagonistic to the spirit and guidelines of the MTCR. The recent collapse of several East Asia economies will put more pressure on firms in the region to export proliferation sensitive items (although it may constrain state-sponsored missile programs). The move away from state-ownership in China, already underway, will only exacerbate these pressures. The military modernization programs and the influx of weapons to the region also means that most governments already have a greater capacity to militarize their territorial, social, political, and economic disputes, including the use of missiles. Worse, few officials in East Asia see regional or global missile proliferation as a significant military threat to themselves, although several have concerns about ballistic missiles in specific dyadic relationships. 9 The most recent White Paper that covers Chinese nonproliferation policies, for example, does not mention missile proliferation as a threat or as a target of Chinese export control policies. 10 The reports of recent tests of a new Pakistani missile threatens to pit the subcontinent in an arms race that may result increased missile technology acquisition efforts by both sides (and stronger pulls on China and Russia to supply additional missile technology). Actions by the US government and companies also may have contributed to the lack of support for the MTCR in the region. Unlike the recent discussions on nuclear technology, the United States has few credible punishments or incentives to offer the country of greatest missile proliferation concern, China. US companies, under license, have exported technology to China that may have contributed to Chinese missile systems. 11 The United States has applied missile-related sanctions against Chinese entities on two occasions, which the President subsequently waived only to see charges of new exports of missile proliferation concern recur (see Table IV). Controversy also surrounds decisions not to impose sanctions in other cases regarding the transfer of missiles and missile technology to Pakistan. Although China has responded favorably to US (and Israeli) concerns regarding sales of missiles and missile technology in the Middle East, China runs a great risk of losing political credibility and an important strategic ally if it abandons support for the Pakistani missile program outright. Consequently, strong sanctions by the United States may put the Chinese in an untenable position, making China even less cooperative on other missile proliferation issues. Chinese officials also point to US aircraft sales to Taiwan and promotion of Theater Missile Defense systems as examples of US willingness to ignore nonproliferation objectives for short-term foreign (and economic) policy interests. Chinese officials often suggest that if Japan or Taiwan acquire a Theater Missile Defense capability in cooperation with the United States, then China will respond with a massive increase in missile production. As one official associated with the Chinese military put it, "we know how to defeat a missile defense system." 12 With a high degree of certainty, such an increase in production would mean more missiles available for export in subsequent years. Factors Favoring Increased Cooperation in Asia Fortunately, other factors should influence countries in the region, including China, to come in closer compliance with the MTCR. Most governments in the region, and many companies, want to build or maintain their reputation as a responsible "good citizen" in the world community. Time and again, relevant officials in the region emphasize that responsible behavior means no support for the proliferation of weapons of mass destruction. On a practical level, many enterprises and officials learn about export controls through their interaction with export control compliance programs of companies based in MTCR partner countries. Over 900 Japanese companies, for example, have internal compliance programs that generally include provisions for continuous training of employees in foreign affiliates about export controls. As a matter of company policy, this training usually entails product and end-user screening for missile proliferation items. If enterprises and national economies become more integrated into the global marketplace, then they will receive greater exposure to missile nonproliferation norms and rules, reducing the chance for accidental or unintended proliferation. In addition, several countries have witnessed an increase in the number of scholars and government officials interested in nonproliferation and export controls. The Chinese nonproliferation community, for example, now includes a new fifty person Arms Control and Disarmament unit in the Ministry of Foreign Affairs specifically charged with studying proliferation export control issues. In the case of Japan, anti-militarism forms an important part of the political culture and few firms seem willing to risk the opprobrium associated with proliferation activities. To the extent that a culture of nonproliferation emerges in the region, the opposition to intentional as well as accidental acts of missile proliferation should increase. Democratization and economic liberalization in the region may increase identification with the values of the Western security community. 13 The high correlation between MTCR partnership and membership in the Western security community suggests that aspiring members increasingly will abstain from missile proliferation activities the closer they identify with the MTCR partners on other security matters. The evidence from the cases of South Korea, Taiwan, and Hong Kong argue in favor of this position, while the theory helps explain the less than enthusiastic response nonproliferation export controls receives in Malaysia, Singapore, and elsewhere. Even the mixed policies of China (with its increasing economic but not political affinity with the West) and India (one of the few democratic polities with a state-oriented economy) follow from this approach. Although this liberal identity perspective remains open to debate, it seems well equipped to explain adoption of nonproliferation standards in other regions, especially Latin America and Eastern Europe, and should apply to Asia. Conclusion In the summer of 1995, MTCR partners considered the possibility of creating a multilateral treaty aimed at halting the proliferation of intermediate-range ballistic missiles. The resounding opposition put a preemptive halt to the proposal. Until now the MTCR, with all its weaknesses, has proven valuable in promoting the norm of missile nonproliferation and delaying or even rolling back proliferation-sensitive missile programs. Nonetheless, this can not warrant complacency. While the MTCR may not need fixing, few of the newly industrialized countries in Asia have adopted missile nonproliferation export controls. If this condition persists, several factors may converge to undermine the effectiveness of the MTCR in the very near future. Many opportunities, however, also exist to mitigate these pressures for proliferation in Asia. The bargains that might outline a multilateral treaty on missile proliferation might extend into other delivery systems, assistance for commercial space programs, security assurances and other elements currently outside the debate. Nonetheless, support for the norm of missile nonproliferation by the United States and its allies in the region, in terms of both behavior and rhetoric, can overcome the imperatives of technology diffusion to reduce the rate of proliferation of ballistic missiles in the next few years. Export controls, at best, buy time. How the United States and the other MTCR partners will use that time in the next few years will have a profound impact on the ballistic missile threat facing the United States in the next century. Table I Compatibility of Nonproliferation Export Control Systems, Early 1997* Compatibility Scores (Percent)** Japan South Korea Hong Kong Taiwan China Unweighted 97 90 87 76 38 Weighted 97 91 92 81 50 * From research supported by the Japan Foundation Center for Global Partnership, the Japan-United States Friendship Commission, the Chiang Ching-Kuo Foundation, and the University of Georgia. Table II Compatibility with MTCR Guidelines Status Japan South Hong Taiwan China Korea Kong MTCR Member or Claims Adherent Yes No No* No* Adherence Guidelines and Lists Integrated into No (under National Laws or Yes Yes Yes development) No Regulations * The special political status of Hong Kong and Taiwan has hindered their direct participation in the MTCR. Table III Missile Technology Related Items Exported by Taiwan, 1997 ECCN Description Cases Value (1,000US$) 1A02 Composite Structures or 9 3,641 Laminates 2B01 Numerical Control Units 11 1,209 3A01 Electronic Devices and 806 806,178 Components 4A02 Hybrid Computers 1 48 4A03 Digital Computers 3 31 5A01 Telecommunications items 11 2,020 7A01 Accelerometers 1 2 1004 Bombs, Torpedoes, Rockets, (Munitions) Missiles 42 3,812 Source: Board of Foreign Trade, Ministry of Economic Affairs, Republic of China Table IV Foreign Entities in East and South Asia Sanctioned by the US Government for Missile Related Activities, by Country and Sanction Action* Country Entity Sanction China Great Wall Industries China Group China Precision Machinery Two year restriction imposed Import-Export Corporation (Also June 1991. Waived March 1992. see Pakistan June 1991) Two year restriction imposed Ministry of Aerospace Industry July 1993. Waived November 1994. Also imposed on any and ten additional entities government activity related (Also see Pakistan July 1993) to missile, space systems, or military aircraft development or production. Space and Upper Atmosphere Pakistan Two year restriction imposed Research Commission June 1991. Expired. Ministry of Defense Two year restriction imposed July 1993. Expired. Lyongakasan Machineries and Two year restriction imposed March 1992. Expired. Also Equipment Export Corporation imposed on any government North Korea activity related to missile, Changgwang Credit Corporation space systems, or military aircraft development or (Also see Iran March 1992) production. Lyongakasan Machineries and Equipment Export Corporation Two year restriction imposed Changgwang Credit Corporation June 1992 (Also see Syria June 1992) Changgwang Singyong Corporation Two year sanction imposed May (Also see Iran) 1996. India Indian Space Research Two year sanction imposed May Organization 1992. Expired. Source: Carnegie Endowment for International Peace Nuclear Non-Proliferation Project. * This does not include three instances where names and nationalities of the US government withheld the names and nationalities of the entities from the public. ------------------------------------------------------------------------ 1. Richard Cupitt is the Associate Director for Research and Washington Liaison, Center for International Trade and Security, University of Georgia. Has written extensively on international trade, national security, and multilateral cooperation. Currently evaluating nonproliferation export controls. 2. See Aaron Karp, Ballistic Missile Proliferation: The Politics and the Technics, New York: Oxford University Press, SIPRI publication, 1996; or Brian G. Chow, Emerging National Space Launch Programs: Economics and Safeguards, Santa Monica: Rand, 1993. 3. Interview, November 1997. 4. Although I limit my remarks to East and South Asia, many of these concerns apply to the Middle East and the newly independent states of the former Soviet Union. Much of the information in this report comes from field research in Hong Kong, Japan, Malaysia, the People's Republic of China, the Republic of China, and Singapore as well as discussions with export control officials from Indonesia, the Republic of Korea, Thailand, and Vietnam conducted over the last four years. Support for this research has come from the Center for Global Partnership, the Chiang Ching-Kuo Foundation, Japan-United States Friendship Commission and the Center for International Trade and Security. 5. For an explanation of the assessment methodology and some Asian examples, see Richard T. Cupitt, "Nonproliferation Export Controls in Asia," The Journal of East Asian Affairs, XI, 2 (Fall/Summer 1997), pp. 452-480. 6. For an excellent discussion of missile programs in the region, see David G. Wiencek, Dangerous Arsenals: Missile Threats In and From Asia, Bailrigg Memorandum 22, Lancaster, UK: Centre for Defence and International Security Studies. 7. Director of Central Intelligence, The Acquisition of Technology Relating to Weapons of Mass Destruction and Advanced Conventional Munitions, July-December 1996, Biannual Report to Congress, June 1997, pp. 4-5. 8. http://www.sipri.se/projects/armstrade/mtcr_jointappeal.html. 9. South Korea with North Korea, Taipei with Beijing, and India with Pakistan, for example. The Japanese government, however, has become increasingly sensitive to the issue of missile proliferation 10. State Council of the People's Republic of China, China: Arms Control and Disarmament, Beijing: Information Office, November 1995. 11. The Bush and Clinton administrations, for example, approved 11 waivers of export control restrictions to allow Chinese rockets to launch satellites with US technology. In a recent case, the Clinton administration reportedly gave approval to Loral Space and Communications to launch another satellite, possibly compromising an investigation of Loral and Hughes Electronics for transferring sensitive missile information in their assessment of a February 1996 launch of one of their satellites at the Xichang Satellite Launch Center, see Jeff Gerth and Raymond Bonner, "Companies Are Investigated for Aid to China on Rockets," The New York Times, April 4, 1998, pp. 1, 3. Also see United States General Accounting Office, Export Controls: Some Controls Over Missile Related Technology Exports To China Are Weak, GAO/NSIAD-95-82, Washington: USGPO, April, 1995; and United States General Accounting Office, Export Controls: Sensitive Machine Tool Exports to China, GAO/NSIAD-97-4, Washington: USGPO, November, 1996. 12. Interview, Beijing, March 1995. 13. For a general discussion of this view, see Andrew Moravcsik, "A Liberal Theory of International Politics," International Organization, 51, 4 (Autumn 1997), pp. 513-553; or Alexander Wendt, "Constructing International Politics," International Security, 20, 1 (Summer 1996), pp. 71-81.


TOC / Previous / Next