• Short Supply -- Under the authority of the Export Administration Act, as amended, IRA monitors the export of commodities which may be
in short supply domestically. The output of IRA's monitoring activities are periodic reports on exports of various commodities (e.g., wood
exports to Pacific Rim nations). These reports are used in conjunction with IRA-directed interagency investigations (e.g., the ongoing Short
Supply Log Exports Investigation) of private petitions requesting the imposition of short supply export controls. IRA then makes policy
recommendations on the requests for short supply export controls. In addition, IRA provides the private sector and BXA's export licensing
office with policy guidance concerning requests to export domestically-produced crude oil.

o Priorities and Allocations under Title I of the Defense Production Act, the Defense Priorities and Allocations System regulation has been
established to ensure that the military can obtain the industrial resources needed for national defense, both for current defense programs and
in time of national emergency. The program assures that industry assigns appropriate priority to the production of military hardware and
other defense items, and that scarce resources are allocated first to national security-critical projects. This priorities and allocations system
has enabled defense programs to limit cost overruns and remain on schedule.

o Emergency Preparedness/National Defense Executive Reserve --IRA spearheads Commerce's effort to develop, evaluate, and refine programs to meet Government's enhanced industrial resource responsibilities during a national emergency. IRA prepares readiness plans for the emergency control of industrial production and distribution, and thus ensures the continuity of government operations during a national emergency. IRA recruits and trains the National Defense Executive Reserve, a skilled cadre of industry executives prepared to serve as senior managers of Government industrial resource efforts. IRA participates in inter-agency readiness exercises to train senior policy officials and evaluates the nation's ability to respond appropriately during a national emergency. IRA also represents Commerce during interagency efforts to revise resource base mobilization policy in light of continuing changes in the economic and military dimensions of national security.

IRA was also a major participant in developing an Administration offset policy as required by the 1989 Defense Authorization Act. The President announced this policy in April, 1990. IRA will continue as a major participant in implementing the President's policy which calls regard. for discussions with foreign governments toward reducing the adverse impacts of offsets and requires periodic reports on progress in this Under the Omnibus Trade Act of 1988, IRA will be involved in reviewing counter-trade and offset policies and effects and will recommend potential options to the President. IRA's expertise on offsets is also used to support offset issues that arise in the course of its reviews of defense MOU's under the 1989 and 1990 Defense Authorization Act, such as occurred with regard to the Korean Fighter Program.

o National Defense Stockpile IRA provides Commerce input into activities related to policy development and ongoing operation of the National Defense Stockpile, a holding of strategic and critical materials unavailable domestically in sufficient quantities. IRA: (1) conducts analyses of mobilization planning factors used for Stockpile goal setting and other national security planning purposes; (2) determines lead times by industry sectors to increase production capacity during a national emergency; (3) chairs the inter-agency Market Impact Committee which reviews the impact on domestic and foreign markets of planned Stockpile acquisitions and disposal; and (4) undertakes reviews of other critical material issues such as implementation of Comprehensive Anti-Apartheid Act provisions determining national security exemptions to prohibitions on trade with South Africa.

o Foreign Investment Assessments

Section 721 of the Defense Production Act provides the President with authority to undertake investigations of mergers, acquisitions, and takeovers to determine their impact on the national security. As part of an interagency group chaired by Treasury, IRA conducts detailed defense industrial base-proposed foreign investment transactions including the history and backgrounds of the acquiring and U.S. firms, the technologies involved, the existence of military contracts, export control regulations, U.S. and foreign markets for the affected items, and other relevant factors within 30 days of notification of a takeover. Should any concerns be raised within this 30-day period, the interagency group may initiate a 45-day investigation during which IRA conducts even more detailed reviews. Ultimately, a recommendation will by made by the group to the President who may take action to limit foreign investment if the national security is threatened.

o North Atlantic Treaty Organization

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IRA is responsible for the Department's role in the coordination of industrial preparedness and economic planning between the U.S. and its NATO allies. IRA represents the United States on the NATO Industrial Planning Committee (IPC), a body which supports the identification of critical industry capabilities and coordination of industrial production during periods of crisis or war. As the NATO Alliance continues to evolve, the IPC will be involved in economic security issues including, but not limited the NATO R&D base. to, (1) EC 1992 and NATO; (2) U.S. -European cooperation in industrial technology modernization; and (3) impact of new technologies on

Our industrial

U.S. industrial might has been and remains the cornerstone of the country's national security and deterrence posture. preeminence and technological leadership have for many years been accepted as a given. But the United States is no longer unchallenged in the global arena, as evidenced by our massive trade deficits, declining "smokestack" industries, increasing reliance on foreign products and capital, and inability to compete in world markets.

There is a growing awareness in the Congress and in the country as a whole that existing Government policies regarding the defense industrial base are no longer effective. These policies, many of which have been in place since the onset of the Cold War, have not kept pace with changes in the world economy. Congress has begun to take action in a number of areas designed to ensure a healthy, competitive industrial base able to meet defense and civilian demands. Congressional action ranges from increased emphasis on education of our young people (human capital) to encouraging development of emerging technologies.

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Several pieces of legislation relate specifically to the Department of Commerce's role in maintaining a competitive defense industrial base including: (1) the Omnibus Trade Act of 1988 that establishes new responsibilities for Commerce in the areas of assessment of the impact of foreign investment on the U.S. defense industrial base and national security, development of policy options regarding an appropriate Administration strategy for counter-trade and offsets, and in the analysis of the trade, economic and industrial competitiveness impacts of offsets on U.S. national security; (2) the Defense Authorization Act of 1989 and the National Defense Authorization Act for Fiscal Year 1991 (HR 4739) that greatly expands IRA's responsibilities for the assessment of the trade, economic, and industrial competitiveness impacts resulting from memoranda of understanding governing defense cooperation between the U.S. and foreign governments (this act also provides for a Commerce role in negotiations to limit the adverse effects of offsets on the U.S. industrial base); and (3) the Defense Production Act of 1950 and related Executive Order 12656 mandates IRA's responsibilities for the performance of industrial base assessments, industrial mobilization analyses and greater participation in industry-related civil emergency preparedness activities.