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Volume 164: debated on Thursday 21 December 1989

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Question again proposed, That this House do now adjourn.

11.34 am

I am grateful for this opportunity to refer to COCOM and, in particular, to draw the attention of the House to the recommendations of my report to the Western European Union, which were unanimously endorsed by the parliamentary assembly in Paris earlier this month. As the House will be aware, COCOM stands for the Co-ordinating Committee for Multi-lateral Export Controls. It is the means by which for the past 40 years the western Alliance has prevented what my right hon. Friend the Prime Minister recently described as

"our most cherished scientific achievements"
from falling into the hands of the Soviet bloc. Matters in which the West is understood to have superiority include micro-electronics, optics, super-conductivity, passive sensors, phased array radars, lightweight composite materials, and air-breathing propulsions. In general, it is believed that we have a 10-year lead in technology over the East, with the Soviet bloc, for example, being eight years behind in semi-conductors, five to seven years behind in computers, and a decade behind in machine tools. When applied to western defence, that superiority in strategic technology has ensured peace and is contributing to the end of the cold war.

I accept that there remains a continuing need to protect those technologies through COCOM until arms control negotiations and reductions and confidence-building over a reasonable period justify a review of that need. However, my report to the Western European Union suggests that the western Alliance should now accept a number of realities in the light of current events in eastern Europe which have immediate consequences for the COCOM rules that control the trade in technology. It suggests that, in the light of performance, the enforcement of those rules needs to be critically examined. It suggests that the basis of those rules—the state of Soviet technology—needs to be reassessed. It suggests also that opportunities for trade in technology between East and West should be discussed more openly than ever before in a forum that already exists—the conference on security and co-operation in Europe —while still accepting that both sides have secrets to protect in the interests of their own security.

Despite our success in establishing the technology lead that I have mentioned, it is relevant to remind the House that COCOM's rules and controls have failed to prevent a serious transfer of technology to the Soviet bloc at the expense of our own security. The list of COCOM violations reads like a horror story. Illegal exports of American precision ballbearing grinding machines now enable the Soviet Union to manufacture more accurate guidance systems for missiles trained on western targets. Western technology, which manufactures drill bits for the Soviet oil industry, enables the Soviets to produce new armour-piercing projectiles. Western oceanograph technology enables the Soviet Union to locate our submarines with greater accuracy.

Probably the most publicised recent violation was the illegal sale of lathes and numerically controlled machine tools to the Soviet Union, for which Toshiba is paying a considerable price in being outlawed from United States markets. The theft from last year's Farnborough air show of the technology behind the Agile Eye helmet, which allows fighter pilots to aim missiles at targets simply by looking at them, should remind us that there is no let-up —what the Soviet Union cannot obtain by fair means it will seek to obtain by espionage, subterfuge and outright theft.

It is understood that the foreign intelligence section of the KGB and the GRU Soviet military intelligence remain as strong and as committed as ever to engaging their officers in missions of scientific and technological espionage, which is why, for as long as the Soviet Union undertakes such operations, it must always expect its spies to be expelled when they are found out. It cannot have it both ways—glasnost and espionage. That is why my report urges controls and enforcement procedures that are more effective, more efficient and common to all COCOM member states. Clearly they have not satisfied those criteria in the past.

Ideally, it must surely be sensible to seek national legislation based on an agreed control list that is commom to all COCOM member states. That, in itself, would do much to dispel the widespread resentment of many western companies that complain that the United States can control the exports of other COCOM states through its extra-territoriality claims yet appears to turn a blind eye when its own companies are selling banned items. The continued charge of double dealing and cheating is threatening to discredit COCOM—in particular, United States participation in it.

The United States attempted to embargo British and other western equipment for the construction of the Siberian pipeline but we subsequently found that it was supplying much of the equipment. On a much smaller scale, there appears to be a growing number of cases of European business men who dare not set foot in the United States because they have been put on a CIA blacklist simply for selling to eastern Europe without licence technology that is clearly obsolete. Others have found that they have been set up and entrapped by over-zealous United States customs officials on the pretext of breaches of the COCOM rules. A constituent of mine, Mr. Andrew Kuzan, obtained an American licence to export a second-hand obsolete test head to Hungary. The licence was withdrawn at the last minute without explanation. He was arrested for attempting to export sensitive technology illegally, and he has just spent two years in an American gaol. It was particularly galling for him and his family to find that only a few miles away from their home in Bournemouth there is an American enterprise that has won a Russian order to supply more advanced versions of the test equipment that he had been convicted of selling illegally. I drew my constituent's case to the attention of my hon. Friend the Minister of State for Defence Procurement nearly two years ago when he was Minister of Trade.

My second recommendation concerns the assumption of the current state of Soviet technology that is the basis of the COCOM rules. There is a growing amount of evidence to suggest that the COCOM rules are being inappropriately applied because our assessment of the state of Soviet technology does not stand up to analysis. For example, it was understood that the Soviets were well ahead in ground-based laser technology to knock out satellites and incoming missiles. But when American Congressmen visited the Soviet facility at Sary-Shagan this July, it was concluded that the Americans' own technology, being developed at White Sands, was further advanced and greatly superior and that the Pentagon had presented a worst-case assessment to boost the strategic defence initiative and advance COCOM. That is not the only example.

Last month, the chairman of the House Armed Services Committee accused the United States Government of defence statements that are
"out-dated at best and absolutely false at worst."
To the United States' credit, on that country's initiative, COCOM members have recently established security and technology meetings—STEM—to assess the state of technology for both East and West, but those assessments are not being reported to COCOM and are being left to national Governments to interpret for themselves. Nor have they said much about the state of Soviet technology. I urge a fundamental reassessment of the current state of Soviet technology and a complete review of the COCOM list in the light of the reassessment.

When President Gorbachev addressed the parliamentary assembly of the Council of Europe at Strasbourg in July, he said of COCOM that, even if one could justify such practices at the peak of the cold war, today many of its restrictions seem utterly ridiculous. He suggested that experts and representatives of respective Goverments could get together and break down the cold war logjams to bring secrecy down to the reasonable limits that are still required for security and to give the green light to normal trade in scientific knowledge and technology. Since then we have been told that such a transfer of technology would not be a one-way process and that there are benefits to us in the West to share.

Last month the Soviet deputy premier, Dr. Abalkin, urged in Brussels that there should be more technological co-operation between his country and the European Community:
"The Soviet Union has something it can offer, several lines of technology that have not yet been developed in the West. This has become clear since we lifted the lid of secrecy from our defence and space programmes. We want to act as partners on the basis of equality."
I believe that the time is now ripe to respond positively to President Gorbachev's appeal for western technology to support the restructuring of his economy for the betterment of his people, and for the sharing of technology between East and West for mutual benefit.

My report to the Western European Union suggests how we might achieve that. First, where on-site verification procedures for the transfer of sensitive technologies would be appropriate and would satisfy COCOM member states, let the list be liberalised accordingly. Secondly, as there is already an opportunity forthcoming for Europewide economic co-operation to be discussed, let it be used to discuss trade in technology. That opportunity will come as soon as next March in Bonn with the conference on economic co-operation in Europe as part of the CSCE process. That provides exactly the right forum for trade in technology to be discussed because it involves all COCOM member states—and all the states that it prescribes—that belong to Europe. It will also be underpinned by the Helsinki principles of security co-operation, human rights and confidence-building so recently reinforced by the Vienna concluding document.

There is already an impressive list of possible collaborative projects, most notably in space, which the strict application of COCOM rules, as they stand today, would prevent. If that happened, Europe would be the loser. Those projects range from the technologies of manufacturing and distribution, which can transform the standard of living of the people of eastern Europe, to participation in the Eureka project, shared research in nuclear technologies and the joint Anglo-American and Soviet project for a supersonic business jet.

Is there not scope for the United States, Japan, Britain, France, Germany and the Soviet Union to combine their resources and technology to produce that "space plane" known as the Orient Express, Hermes, Hotol and Sanger in the West, which it is the ambition of each country to build? That would be a symbolic end to the scandal of costly competition and duplication in space. I recommend that, should there remain areas of mutual suspicion and mistrust based on a false assessment of the state of each side's technology, a committee of experts should be established within the CSCE framework to make recommendations for the way forward in the sharing of technologies between East and West. That will clarify the no-go areas for each side and will confirm the areas that are ripe for mutual and maximum co-operation and on which future binding commitments can be entered into with confidence by both sides.

I hope that my hon. Friend the Minister will accept that my recommendations for the future of COCOM are responsible and realistic, and reflect the mood of these historic times. We are now, at last, moving forward to a new world in which man can share and pool his vast technological achievements for the benefit of all without fear that he is abandoning his own security. It is, of course, essential that whatever changes we propose, we carry our ally the United States with us. It has, after all, produced most, although not all, of that technological superiority under whose protection we have enjoyed unparalleled peace and prosperity. There is now evidence that the United States is responding. President Bush, after the Malta summit, said that President Gorbachev's approach
"now absolutely mandates new thinking on the part of America."
I hope that it will be accepted that the COCOM rules can be revised without abandoning our secrets, our advantage or our security and that the part of our technology that it is now prudent to share should be used to support reform, to enhance civilisation and to encourage perestroika in the Soviet Union, on the understanding that a stable, country and a happier Russian people are also in the interests of a stable, happier and peaceful world.

11.49 am

The House owes a considerable debt to my hon. Friend the Member for Bournemouth, East (Mr. Atkinson) for giving us the opportunity to discuss COCOM. It is not an organisation which frequently sees the light of day or is frequently the subject of great public discussion and scrutiny.

My hon. Friend is right when he says that the times through which we are living—times of great change, excitement, hope and opportunity in eastern Europe and in the Soviet bloc—throw into sharp relief the issues that the COCOM organisation and the COCOM principles embody. He has done a considerable service to the House in enabling the matter to be debated at this time.

However much COCOM may be reformed and retargeted, the fundamental point remains that it has a vital role in protecting our security interests through protecting our strategic technology. Running through my hon. Friend's speech was a recognition that that was the case. COCOM is not an economic embargo or a mechanism for applying sanctions. It is not a form of political leverage on the "proscribed destinations", which are principally the countries of the Warsaw pact and China. It is not a mechanism to ensure and preserve a technological gap between West and East for economic and commercial reasons.

Mr. Gorbachev, speaking to the Council of Europe in July, said:
"East-West relations have of late been bled white by COCOM."
That is a gross overstatement and it is wrong on two counts. Our exporting potential and performance have not been bled white; nor is the crippling economic mess in eastern Europe and in the Soviet Union a result of our strategic export controls. It is true that COCOM has had success in denying the Warsaw pact access to critical technology, but that has had virtually no impact on the eastern European civilian consumer. The impact has fallen on the military consumers, which is, of course, the purpose of COCOM. That is the real cause for the Warsaw pact's complaints about COCOM.

It is undeniable that COCOM controls have borne directly on some industrial sectors, but the real stranglehold on eastern European economic development has been caused not by controls on the top slice of western technology, but rather by the chronic economic, industrial and infrastructure inefficiencies stemming from a system of centralised planning. The current problems are due not to technology starvation, but to starvation of rational economic management and the West is already beginning to help the East to remedy this.

As my hon. Friend has stressed, Europe is experiencing a wind of change the like of which it has, perhaps, never experienced before. A vivid demonstration of this was provided recently in the halls of NATO where a Soviet Foreign Secretary criticised the Romanian regime, an ally in the Warsaw pact. However, we need to be assured of two points: that sensitive technology can be put to effective civil use, and that it will not instead be diverted to military use.

The West can gradually help to encourage the conditions for the former and, in the meantime, COCOM helps to prevent the latter. The movement in eastern Europe and the Soviet Union towards greater democracy and freedom in economic and political behaviour is vital. And I do not believe COCOM can or will stand in the way of this. Although it is an institution which was created at the time of Stalin, COCOM is not somehow a counterpart to Stalinism. We welcome the Soviet, Polish, Hungarian, Czech and East German debunking of Stalinism. However, the fact that that is happening, encouraging though it is, does not mean we can now debunk COCOM. Great expectations have rightly been aroused by developments east of the iron curtain. We shall do what we can to help to bring those expectations to fulfilment. However, to flood those reforming countries with high technology cannot be the answer.

All partners in COCOM recognise the need to control only those items of genuine strategic significance. With them, we are urgently considering ways in which COC'OM can respond both prudently and imaginatively to recent events. Media headlines of a move, especially from the United States, towards wholesale liberalisation are misleading. President Bush at a news conference on 16 December said on the need for reviewing COCOM:
"there are certainly still legitimate national security interests that must be preserved … But I think it is timely that we take a new look at some of the commercial constraints."
There is nothing here with which we or, I believe, our partners in COCOM would disagree. The question is how to turn agreement on the need for a measured yet flexible approach into practice.

Many ideas are already under discussion in COCOM and more widely. Let me set out a few of these. The first is streamlining—the process of continuously reviewing the COCOM control lists to ensure that they apply only to genuinely critical items. This process must and will continue.

Secondly, there is verification. Poland and Hungary have offered guarantees against diversion from civil to military end use. Those are welcome, but guarantees alone, as my hon. Friend will accept, are not enough. The verification of certain exports is already a part of COCOM procedure, but verification cannot unlock the door to a flow of high technology across the iron curtain. We shall use this method to the fullest practical extent, but we should not fool ourselves by believing that we shall be able adequately to police every sensitive export for the duration of its strategic life.

In principle, of course, it would be ideal if we had a totally detailed knowledge of the extent of Soviet technological capability, but this is impossible to measure accurately even if we could be granted access to every Soviet office, factory or laboratory. I remain to be convinced by the suggestion that the Bonn economic meeting of the CSCE should provide a forum for the detailed discussion of eastern technological capabilities. I doubt whether that meeting would have the necessary levels of expertise, but of course we can raise this with partners. It may offer a way forward in some respects.

All these ideas and others now need vigorous discussion between COCOM partners. Following the high level meeting in October, senior officials will again meet in Paris, probably in February. Their aim will be to draw conclusions and policy decisions from the present mix of ideas. It is too early to predict what policy lines will merge, but we shall be arguing that COCOM's response to reforms in eastern Europe should be developed in a considered and co-ordinated manner. As my hon. Friend has observed, COCOM countries have two alternatives, both of which involve taking risks, and they should take the more imaginative of the two paths.

I can assure the House that, subject to the continuing need to protect our vital security interests, COCOM will not be, must not be, an impediment to reform in eastern Europe. We can both assist the East and keep up our own insurance. COCOM need not, I believe, be inimical to these twin objectives.