Washington, DC, July 13, 2005 - In a letter sent yesterday to U.S. House of Representatives members, the Electronic Industries Alliance (EIA) registered its strong opposition to legislation (H.R. 3100) that would prohibit U.S. defense cooperation projects with any foreign government whose policies permit arms transfers to China, regardless of whether such transfers actually occur. The legislation could also terminate participation by U.S. defense firms in existing projects.

"H.R. 3100 is symptomatic of rising anti-China sentiments articulated in House legislation that will only exacerbate efforts to build better trade relations with a nation that will be important to the U.S. in the 21st century," EIA President Dave McCurdy said. "We should nurture better ties with China instead of passing ill-advised legislation that can affect U.S. trade and security. We support the United States' goal of dissuading other governments from making arms transfers to China. Enactment of H.R. 3100, with its automatic, unilateral sanctions aimed at countries that are among our closest allies, would only undercut, not advance, U.S. efforts to achieve that goal. It is counterproductive to consider passing legislation that threatens European and other governments with a virtual U.S. embargo on mutual defense cooperation and technology transfer at a time when U.S. officials are in intense discussions with officials of those same governments on a common approach to arms transfers in East Asia. H.R. 3100 could also impede the ability of U.S. defense and technology firms to work with companies in Europe, Israel, Canada and Australia, and disrupt U.S. defense relationships and projects with our allies. We urge that the bill be withdrawn from the House schedule."

Under provisions outlined in H.R. 3100 (the East Asia Security Act), companies with operations, including subsidiaries and affiliates, located in several countries would be unable to acquire U.S. defense assets without a license, even if the company does not make arms transfers to China. The East Asia Security Act would also impose unilateral sanctions on any foreign government or company that makes more than one transfer to the Chinese military, intelligence or security agencies, retroactive to January 1st of this year. This would apply both to munitions items and to a broad range of dual-use items, even when legally transferred to China under the laws of another country.

In the letter to House Members, EIA noted that H.R. 3100's potential damage to defense and aerospace companies who are Alliance members is significant; in the aerospace sector alone, total U.S. aerospace sales to the European Union exceeded $23 billion last year, accounting for 40% of U.S. aerospace exports.

As policy counterweights, EIA is urging both the Bush Administration and Congress to devote resources and attention to developing more productive relations with China. "Proposing legislation such as H.R. 3100 sends the wrong signal to our allies and trading partners," McCurdy said. "We need to start appreciating the critical nature of the U.S.-Sino relationship and stop responding to these challenges with sledgehammer protectionist policies that only prove detrimental to trade and security concerns."

Click here to download the July 12th letter (in Adobe Acrobat PDF format) sent to U.S. House of Representatives Members.

About EIA: The Electronic Industries Alliance (EIA) is the leading advocate in Washington, D.C., for the U.S. high-tech industry. The Alliance, which traces its origins to the Radio Manufacturers Association (chartered in 1924), is a partnership of electronic and high-tech associations and companies whose mission is to promote the market development and competitiveness of the $400 billion U.S. high-tech and electronics industries through domestic and international policy efforts. EIA's corporate members - nearly 1,300 - provide products and services ranging from microscopic electronic components to state-of-the-art defense, space and industry high-tech systems, as well as the full range of telecommunications and consumer electronics products. Headquartered in Arlington, Va., the Alliance is made up of the Electronic Components, Assemblies & Materials Association (ECA); the Government Electronics & Information Technology Association (GEIA); JEDEC; the Telecommunications Industry Association (TIA); and leading consumer electronics companies who participate in EIA's Environmental Issues Council. EIA is also heavily involved in cyber security issues through the Internet Security Alliance (ISAlliance), and education issues, through the National Science & Technology Education Partnership (NSTEP).