Sizing Up US Export Disincentives for a New Generation of National-Security Export Controls

J. David Richardson (PIIE) and Asha Sundaram (University of Cape Town, South Africa)
Policy Brief
May 2013

In the early 1990s, US export controls that aimed to keep high-tech goods and technologies out of the hands of enemies deterred from $15 billion to $25 billion of such exports. Recent US export controls seem to deter US high-tech exports considerably less. As percentages of seven broad industrial categories of high-tech exports, estimated American export shortfalls from national security controls have fallen from roughly 5 percent in the early 1990s to slightly over 1 percent in the mid-to-late 2000s. Ongoing reform of American national-security export controls would seem to have only modest effects on the level of US high-tech exports. American exporters seem to have developed a distinctive competitive ability to shift their sales efforts flexibly among customers and products that are subject to tight, loose, and few controls. Important importing countries seem to have developed a distinctive ability to shift their sourcing flexibly among alternative suppliers, including a growing set of emerging exporters of high-tech goods. They are, however, still denied half of their potential high-tech imports from the ten exporters from which the authors draw their estimates.