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[b]Bush Lifts Speeds Limits on Computer Exports[/b]

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Wednesday January 2 7:38 PM ET

Bush Lifts Speeds Limits on Computer Exports

By Andy Sullivan

WASHINGTON (Reuters) - President Bush (news - web sites) on Wednesday allowed U.S. technology firms to sell high-speed computers to Russia, China, India and countries in the Middle East, easing a Cold War-era ban designed to halt the spread of nuclear arms.

Computer manufacturers may now export computers capable of complex three-dimensional modeling, calculating fluid dynamics, and other advanced applications to Pakistan, Vietnam and other so-called ``Tier 3'' countries without specific permission from the government.

The Bush Administration more than doubled the processor speed limit, from 85,000 Millions of Theoretical Operations Per Second, or MTOPS, to 195,000 MTOPS.

A typical U.S. home computer now sold in retail stores is capable of roughly 2,100 MTOPS. The limits on computing power come into play on more powerful workstations and so-called server computers used to manage organizations.

The restrictions were put in place in 1979 as part of a broader effort to limit the spread of nuclear weapons. Giving countries such as India and Pakistan advanced computing power would allow them to develop missiles and other weapons more easily, the reasoning went.

Exports to U.S. allies such as Canada, Mexico and all of Western Europe do not face such restrictions. On Wednesday, Bush added the Baltic nation of Latvia to that list.

The U.S. will maintain its embargo on technology exports to North Korea (news - web sites), Iraq, Iran, Libya, Cuba, Sudan and Syria.

Computer manufacturers have opposed the limits, pointing out that, while the United States has restricted exports other countries have not, allowing Tier 3 countries, which include many Eastern European nations, to get their hands on fast computers, while placing U.S. manufacturers at a competitive disadvantage.

High-tech companies welcomed the move.

``We are pleased and we think it represents good progress,'' said Intel spokesman Chuck Mulloy, a spokesman for Intel Corp. (Nasdaq:INTC - news) ``It'll provide some headroom for export control for us over the next couple of years.''

Bob Cohen, a vice president at the Information Technology Association of America, an industry group, said it would provide a much-needed sales boost.

``It's certainly a step in the right direction,'' Cohen said. ''It's going to help our industry climb out of some of the doldrums we've been in the past year.''

In recent years, the government had moved to ease export restrictions. The Clinton Administration boosted the MTOPS limit to 85,000 from 28,000 last January and the Senate passed a bill on Sept. 6 that effectively removed MTOPS limits.

But efforts in the House of Representatives stalled as the Sept. 11 hijacking attacks renewed national-security concerns. In November, the House of Representatives voted to extend the existing regime until next April.

Intel, as the world's largest chipmaker and manufacturer of microprocessors, stands to benefit from the move. With the increase, computer systems that use many Intel processors strung together to make more powerful computers can be exported, translating into more potential sales for Intel.

Mulloy said Intel would continue to press the government to abandon the MTOPS standard and measure high-tech exports another way.

``We continue to believe that, for the longer term, the best methodology is not one based on performance, but on a market- based formula,'' Mulloy said.

The calculation of MTOPS involves counting the number of operations that could be performed by the computer during a second, based on a specified formula. The actual number of operations varies based on factors such as the chip's cycle speed.

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I don't think tags can be used in subject headings.

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