A House Ways and Means subcommittee was warned yesterday that tough sanctions against Toshiba Corp. for transferring technology to the Soviet Union could injure American workers and businesses.
The panel's trade subcommittee opened hearings yesterday on two bills that would ban imports of Toshiba products to penalize the company for selling the Soviets propeller-milling technology that makes submarines quieter and more difficult to detect. Similar legislation passed the Senate last week.
A ban on imports of Toshiba products "can cause serious economic harm to the American information technology industry," Joseph Tasker, a lawyer representing the Computer and Business Equipment Manufacturers Association and the Computer and Communications Industry Association, said in a statement.
Members of CBEMA also fear that an import ban would establish a precedent that other governments could use to hold U.S. parent companies liable for export violations by their foreign subsidiaries.
Dawn Spain, owner and president of Compu-Phone Inc., a Maryland telephone interconnect company that relies on Toshiba products, said in a statement that an import ban would "undo all my years of effort" to build a successful business.
Edward Drewinski, undersecretary of state for security assistance, science and technology, told the subcommittee that unilateral sanctions could cause the disintegration of the Coordinating Committee for Multilateral Export Controls, which attempts to prevent diversion of sensitive technology to communist countries.
Stressing the importance of multilateral cooperation, Drewinski predicted that COCOM would agree on tougher penalties for export offenders at a meeting under way in Paris.
But former defense undersecretary Richard N. Perle ridiculed COCOM and Drewinski's confidence in its potential for policing strategic export violations. Administration officials, he said, "have become so accustomed to the absence of any progress that they are all too ready to regard the most trivial hints of tractability as a significant step forward."
Sponsors of the House legislation insisted that any action less than a total ban would send the wrong signal to other companies. "This is a clear-cut case of treason and treachery," Rep. Duncan Hunter (R-Calif.) said.
"Corporations who would sell out the United States" must receive "the ultimate penalty and be closed out of the American market," said Rep. Donald Lukens (R-Ohio).
Bills offered by Hunter and Lukens would ban all imports from Toshiba and a Norwegian firm involved in the same transaction, Kongsberg Vaapenfabrikk. Hunter's bill calls for immediate sanctions, while Lukens' provides for a two-year "adjustment period" to enable U.S. companies to find alternative suppliers.
Several members of the panel expressed concern that stiff sanctions might cost thousands of U.S. jobs and disrupt a number of major American manufacturers.
Rep. William Frenzel (R-Minn.) called Hunter's proposal an "ex post facto hanging law," and said it would be hard to justify to Americans who would be adversely affected.
Toshiba, through various U.S. subsidiaries and affiliates, employs about 4,000 Americans at its 10 production facilities here. The chairman of Toshiba America, Nobuo Ishizaka, has said that some may be dismissed if sanctions are imposed.