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A study on economic espionage activities post cold war

I pledge my honor I did not violate the Honor Code in writing this paper. During the Cold War, the threat of the Soviet Union was the focus of national security, and intelligence efforts were concentrated in monitoring it. Now, in the post-Cold War "new world order," national security is seen more in terms of economic strength and vitality than in terms of pure military capability. Furthermore, threats to our economic well-being abound. In the "global economy," no longer is there any practical or useful distinction between national economic relations and international economic relations.


Most national economies, like that of the United States, are no longer islands where domestic preferences alone dictate outcomes. For example, the devaluation of the Mexican Peso in late 1994 sent United States financial markets into disarray. Right now there are 23 countries engaged in economic espionage against United States targets.

These countries steal ideas, giving them, or in some cases selling them, to their domestic companies, which, in turn, use these ideas to create goods that compete against U. This is flat out industrial espionage against the United States. The three chief offenders are Russia, which, according to the Defense Intelligence Agency is preparing an economic spying blitz, Japan, which basically stole the United States market share in the microchip industry in the early 1980's, and France, a strong diplomatic ally that is very aggressive in its espionage efforts, having been known to deploy agents to search the briefcases of United States businessmen.

The number of industrial espionage cases under investigation is skyrocketing. The FBI is currently investigating about 800, twice the number it was in 1994. So, the danger to economic well-being provided by worldwide shocks and the proliferation of industrial espionage conducted against the United States, along with simple facts such the recent decline in America's ability to compete in certain key industries and chronic trade deficits, all support the recommendation that the United States expand its economic intelligence capabilities in the post-Cold War era, both on the offensive side and the defensive side.

On the offensive side, the United States should adopt a more aggressive macro-level economic intelligence policy. Clandestinely obtained economic intelligence can help governments decide anything from whether to raise interest rates, to what position to take in contentious trade negotiations.

Also, analysis of both clandestine and open source economic information can help the United States identify emerging markets, an important intelligence function as we try to reduce trade deficits.

This paper does not recommend fighting industrial espionage with an industrial espionage plan of our own. It is against United States policy to a study on economic espionage activities post cold war industrial espionage. Those that argue for a change in the policy should keep in mind that a United States industrial espionage plan would be akin to fighting fire with fire.

There is a reason why we are targets - we have the most advanced technology. The secrets we would be stealing may have already been stolen from us. The gain would be minimal, while the diplomatic and even life risks would be substantial. On the defensive side, the intelligence community IC should continue its efforts to improve counterintelligence, alerting the FBI to cases of trade secret spying in the United States.

  • If intelligence can glean the high points for me, terrific;
  • The end result of this process happened to be the profit of the private sector;
  • OSS , a clearinghouse for discovering and evaluating open sources, systems, and services, cites the March 1, 1996 report of the Commission on Intelligence;
  • In conclusion, the crux of the IC's economic intelligence production should continue to reside in the CIA;
  • University of Alabama Press, 1984.

The recently signed Economic Espionage Act of 1996 is a step in the right direction. The problem with this legislation, which for the first time makes trade secret theft punishable by law, is that it is called the Economic Act instead of the Industrial Act. This act protects trade secrets, which are what governments conducting industrial espionage desire. An economic espionage law would not be justifiable for the United States because macro-level economic espionage is an established function of our intelligence agencies.

The blurring of these terms, very common in the discussion on the roles of economic intelligence, must be avoided because it can be quite misleading. The United States should also continue its efforts to level the economic playing field, alerting foreign governments of their knowledge of unfair bids. This practice often results in at least a partial awarding of a contract to an American firm.

A reason why the Brown Commission recommends that the IC should decrease the level of economic intelligence is that the government tends to duplicate what is available from open sources. The government should keep an eye on open sources and avoid duplicating basic information, but open sources cannot serve as a replacement for government intelligence.

Government intelligence can serve as a useful "second engine," confirming and disclaiming what is out there, and also providing new insights through its clandestine collection capabilities.

Also, the CIA should continue to be the IC's main provider of economic intelligence, as there is not justifiable reason for moving the CIA's resources to another department. Economic intelligence has the potential to improve our economic-well being, and the post- Cold War A study on economic espionage activities post cold war, where economic challenges are replacing military challenges, is the appropriate time for the government to invest more resources in this intelligence capability.

Issues for Reform This paper will attempt to analyze relevant arguments on the role economic intelligence should play in the post-Cold War era.

  1. Above are the tangible measures for success.
  2. Since they do economic espionage here, when we are caught, the "rule" is to quietly dismiss the spies from the country.
  3. First of all, to repeat a point made earlier, 'The greatest concentration of analytical experts on international economic issues in the federal government resides in the CIA. Israel's economic espionage in the united states few nations' espionage activities in the united states suggest less andrew jack, post-cold war spies.
  4. Sounds like industrial espionage. What about our "defense?
  5. In its early days, the CIA was one of the few organizations that could carry out good international economic analyses; it had unique data and expertise. The blurring of these terms, very common in the discussion on the roles of economic intelligence, must be avoided because it can be quite misleading.

Definitions of Economic Intelligence, Economic Espionage, and Industrial Espionage Economic Intelligence Before discussing the role of economic intelligence in the post-Cold War era and taking up issues for reform, this paper will define some critical terms. According to A Consumer's Guide to Intelligence 1995a handbook prepared by the Central Intelligence Agency's CIA Public Affairs Staff, economic intelligence is "intelligence regarding foreign economic resources, activities, and policies including the production, distribution, and consumption of goods and services, labor, finance, taxation, commerce, trade, and other aspects of the international economic system.

So, espionage falls under the intelligence umbrella. This paper will discuss economic espionage and industrial espionage. These terms are sometimes carelessly used interchangeably, even by the Executive branch a recent example will be discussed in section VI. They are not the same thing, as one is acceptable government policy and the other is not. Economic Espionage Economic espionage is "clandestine or illicit attempts by foreign interests to assist their economic interests by acquiring economic intelligence.

It was reported that the U. It appears that reports based on the tapped conversations were given to U. This is a classic example of economic espionage. This clandestinely collected intelligence was not intended to advantage United States companies.

The United States was not acting on behalf of General Motors. Rather, the information was in the national interest, intended to give the United States an advantage in the negotiations. For years, economic data, collected by the National Security Agency's NSA electronic intercepts of international communications and human spies directed by CIA case officers, have been used to help U.

Industrial Espionage Industrial espionage is the "use of, or facilitation of, illegal clandestine, coercive or deceptive means by a private sector entity or its surrogates to acquire economic intelligence. Nor will government intelligence agencies conduct espionage against foreign firms to advantage United States firms.

Simply put, it a study on economic espionage activities post cold war against United States policy for the government to conduct industrial espionage. When asked about his specific notions on what economic intelligence ought to include, he replied: I do think you have to be very careful. I don't think there is any problem, for instance, in us knowing what Japan's advanced position in a trade negotiation is going to be.

A study on economic espionage activities post cold war

I think that's very legitimate and our intelligence capability is actually becoming quite good at that. Where I think you have to draw the line is, for instance, are we going to, through tax payer resources, be the ones that provide General Motors state secrets that we know exist that we took from a Japanese auto company? I think you have to draw the line. A Role for Economic Espionage However, in some instances, economic espionage has aided the profit of the private sector.

The enrichment of private stockholders was a secondary issue. The difference is that this help results from efforts to "level the economic playing field. Note that this is the appropriate procedure; the CIA, which is not a policymaking body, informs State, which is.

  • However, that does not mean that the IC should abandon its economic mission;
  • This post, located in Lourdes, is stealing valuable economic secrets and is supporting economic espionage against U;
  • Furthermore, threats to our economic well-being abound;
  • Warner points out another highly salient attribute of the post-Cold War era;
  • The French are aggressive.

In the end Brazil gave the contract to Ratheon, an American company. Intelligence reporting indicated that Indonesia was about to give the contract to Japan, partly because Japanese officials were promising that such a decision would mean more foreign aid from Tokyo.

This intelligence was brought before Bush administration officials, and they urged Indonesia to reconsider. Ultimately the contract was divided between American and Japanese bidders.

In the 17 months prior to April 1994, the CIA alerted policymakers about 72 times to specific cases where U. The definitions seem to imply that we employed industrial espionage.

  1. I don't think there is any problem, for instance, in us knowing what Japan's advanced position in a trade negotiation is going to be. The end of the Cold War and the new interest in economic intelligence has surprisingly not had a dramatic effect on the number of analysts devoted to the task.
  2. Instead economic officers are often burdened by low priority, even trivial requests related to State's own lack of coordination and parochialism in the economic field... So, when describing economic espionage in the United States, officials, journalists, and academics should use "industrial" when firms are being infiltrated by foreign intelligence.
  3. Telephone interview by Sean Gregory, December 19, 1996. Is a russian historian specializing in the political history of the cold war period and soviet espionage activities post-world war ii new left in cold.
  4. In the economic area, former DCI Robert Gates announced that the CIA was giving particular priority to counterintelligence methods designed to detect commercial "moles," and to counter bugging and other covert surveillance of U. First of all, to repeat a point made earlier, 'The greatest concentration of analytical experts on international economic issues in the federal government resides in the CIA.

Instead, economic intelligence was used to warn policymakers that the playing field was not level; France and Japan each had an advantage in the bids because they were coercing the respective foreign governments. The end result of this process happened to be the profit of the private sector. Even if the United States was awarded only a portion of the contract, as in the Indonesian example, or the contract had gone a study on economic espionage activities post cold war another country, the intelligence effort would have been a success.

The point is fair competition, not advantage for an American firm. The United States' economic intelligence effort should continue to keep up the good work and identify unfair "playing surfaces" abroad. Economic Intelligence and National Security The refrain is familiar: So, the argument goes, the intelligence agencies should shift their focus from combating communism to enhancing the United States' economic stability, as economic stability is a means of preserving national security. Is it reasonable to assume that the end of the Cold War has caused an evolution in the definition of national security?

This is the fundamental question. The National Security Act of 1947, which created the CIA and the DCI, states that the duty of the CIA, under the direction of the National Security Council NSCis to "correlate and evaluate intelligence relating to the national security, and provide for the dissemination of such intelligence within the Government using where appropriate existing agencies and facilities. The end of the Cold War has brought about an emphasis on the connection between economic stability and vitality and national defense.

University of Kentucky political science professor and former Navy intelligence officer William Warner writes, "With the strategic confrontation which characterized the Cold War substantially abated, if not altogether ended, there has been a worldwide revival of the traditional mercantilist notion that economic power is the fundamental component of national power.

Hancock notes how the definition of national security has evolved in the post-Cold War era, as it now incorporates national economic health and industrial strength. He and other commentators have remarked how the language of international trade has become increasingly militaristic in nature. For example, industries are "under siege," markets are "captured" and "surrendered. In a 1994 White House document, President Clinton explicitly stated just what his administration expected from U.

Of course, the "danger to democracy" in the Cold War era was Soviet communism. Now, economic health is a more focal concern. Therefore, it appears that economic security will no longer be construed narrowly within the confines of traditional views of national security - that is, strictly tied to the country's defense and foreign policies.

It is a growing security concern and warrants the support of the intelligence community. This is why it is especially surprising that only one of the five commissions on intelligence reform in the post-Cold War era recommended that economic analysis be given a higher priority. The discussion about economic intelligence and national security must be put in perspective.

Most economic issues may not directly threaten national security in the traditional sense. This traditional sense is the threat of the Soviet Union launching nuclear missiles towards American cities.

The fact is that American students are no longer doing air-raid drills in the classroom.

The first order threat of Soviet nuclear and ideological invasion no longer exists. In its place are "second-order" threats; terrorism, global organized crime, information warfare, and threats to economic stability. We will not all immediately perish if OPEC cuts back its oil exports. However, we will have to make sacrifices, as the experience of the 1970s shows.