Arms Control vs. Saving Jobs Critics Say the Administration's High-Tech Export Policy Protects Jobs but Threatens Global Security Series: COVER STORY. Clinton's Economic Conundrum

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EARLIER this month, just before President Clinton embarked on his whirlwind tour of NATO headquarters, Eastern Europe, and the former Soviet Union, an odd group gathered at Washington's landmark Old Ebbitt Grill to protest the administration's stand on the manufacture, use, and transfer of weapons of mass destruction.

If the grill's dark, wood-paneled meeting place of lawmakers and lobbyists exudes Establishment, these scientists and lawyers, ex-government officials and feminists, security specialists and former arms negotiators are challenging it.

They are impassioned about the dire consequences of a weak United States position on arms control.

At the core of their concern is the conflict between Mr. Clinton's stated priority to be the beacon of global nonproliferation efforts and his vigorous drive to push high-technology, high-value-added American goods into overseas markets.

Many United States products, from chemicals to computers - so-called "dual use," because they can have either or both military and civilian application - reap big revenues for exporters. As American industries suffer losses from defense cutbacks and canceled Pentagon contracts, they are scrambling to sell those goods abroad.

Clinton's advisers were "at a fork in the road, and they chose jobs," says Kenneth Luongo, a member of the Old Ebbitt Grill group and an arms-control and international security expert for the Union of Concerned Scientists.

"The political guys are working this issue and they put the tangible - economics - way ahead of the intangible, the ephemeral - nonproliferation," he says. Commercial Uses

"The ability to sustain this {economic} recovery depends on the ability to penetrate world markets," says Jeffrey Garten, commerce undersecretary for international trade. "1994 will have to be the {year for the} most aggressive kind of trade promotion we have ever seen."

"We need to have unimpeded access to technology to comply with the requirements of our industry," says Paolo-Tarso Flecha de Lima, Brazil's ambassador to the United States.

Many security experts express frus- tration over the Clinton administration's lack of focus on their issues. Michael Krepon, a former official with the Arms Control and Disarmament Agency, says he and his colleagues are uneasy because "there's nobody on the president's national security staff who's doing any long-term thinking about arms control and nonproliferation."

Mr. Luongo, who agrees, says the stress is on the economy. "It's basically a jobs issue - that's how the administration is pitching it," he says, referring to the strong argument for decontrolling US exports in order to increase US competitiveness. But while the White House is anxious to boost export sales, it must consider "what role it wants to be seen playing in clandestine weapons programs," Luongo says.

Most of the export initiatives emanate from Congress. In what some observers have described as a showdown between the country's national-security adherents and boosters for high-tech exports, congressional lawmakers have introduced legislation to liberalize controls on exports of cryptographic computer software. If passed, the bill would move jurisdiction over this issue from the National Security Agency to the Commerce Department.

The bill's advocates say the software capability is available worldwide from more than 500 sources and estimate that the restrictions mean up to $9 billion in annual revenue losses to unrestricted foreign software suppliers.

Opponents warn that US sales will only make it easier for nefarious entities - criminals, terrorists, belligerent governments - to do their work. The struggle is just one of countless considerations the US policymakers must grapple with as they try to balance economic needs with security.

"These {Clinton administration} guys think they can come up with a magic elixir that promotes jobs and works towards nonproliferation," Luongo says. …