ACCESSION NUMBER:223916 FILE ID:EP-255 DATE:04/14/92 TITLE:(Following FS Material Not for Publication) (04/14/92) TEXT:*92041455.EPF *EPF255 04/14/92 * (Following FS Material Not for Publication) GATES: DEMANDS FOR ECONOMIC INTELLIGENCE UP SHARPLY (Text: Washington Post article of April 14) (720) On April 14, The Washington Post published the following article by George Lardner Jr. on page A5 under the headline, "U.S. DEMANDS FOR ECONOMIC INTELLIGENCE UP SHARPLY, GATES SAYS": (begin text) CIA Director Robert M. Gates said yesterday that government demands for intelligence about international economic affairs have increased dramatically, outnumbering other issues the nation's intelligence community has been asked to address. A recent review of the intelligence requirements in 20 policymaking agencies and departments found that 40 percent of the requirements "are economic in nature," Gates said in a speech to the Economic Club of Detroit. Gates said the CIA and the rest of the U.S. intelligence community have no intention of engaging in industrial espionage. But he said the areas they will watch "cover a lot of ground," from global economic trends and technological developments to government lobbying, suspicious financial links and unusual commercial deals. The special study of national security needs was ordered by President Bush last November and sought to assess future requirements through the year 2005. While U.S. intelligence will continue to give higher priority to 1roblems such as turmoil in the former Soviet republics, weapons proliferation, international terrorism and narcotics trafficking, the study "highlighted the dramatic increased importance of international economic affairs," Gates told an audience of more than 500 at Detroit's Cobo Center. "The most senior policymakers of the government clearly see that many of the most important challenges through and beyond the end of this decade are in the international economic arena -- and they have fleshed out that insight with a detailed set of requirements for the intelligence community," Gates said in his prepared text. The proposed new U.S. intelligence budget for fiscal 1993, estimated at a record $30 billion-plus, has already been changed markedly from the initial submission in February to reflect the results of the special study. Gates said nearly two thirds of the new intelligence budget "will be directed at a wide range of issues and challenges other than the former Soviet Union." By contrast, he said, in 1980 "at the height of our commitment of resources to the Cold War," 40 percent of the budget was aimed at other problems. The CIA director outlined "three broad tasks" for the intelligence community in the economic field. The first, and the broadest, he said, is supporting the administration and Congress "as they set this country's economic course." This involves monitoring global economic trends, bilateral and multilateral economic negotiations and the economic traditions, customs, laws and regulations of individual countries. Gates said some countries act as "sharpsters in the international economic arena." In targeting them, he said, "subsidies, government-to-government lobbying, schemes to promote exports and restrain imports, unwritten agreements, strange financial links and unusual commercial deals are all illustrative of economic behavior that we in the intelligence community need to understand and follow." A second related task, he said, is to monitor technological trends that could affect national security, such as new high-performance computers that could be used for military purposes, semiconductor devices that could lead to new generations of smart weapons, and breakthroughs in telecommunications that could give rise to entirely new industries. "In each of these areas," Gates observed, "U.S. dominance is a thing of the past." The third main task, he said, is counterintelligence, "to protect our economy from those who do not play by the rules." Some foreign intelligence services "have turned from politics to economics and ... the United States is their prime target," Gates said. Gates emphasized, however, that U.S. intelligence "does not, should not, and will not engage in industrial espionage." He said such spying raises serious ethical and legal questions as well as problems involving sources and methods. "Plainly put," Gates said, "it is the role of U.S. business to size up their foreign competitors' trade secrets, marketing strategies, and bid proposals. Some years ago, one of our clandestine service officers said to me: 'You know, I'm prepared to give my life for my country, but not for a company.' That case officer was absolutely right." (end text) (Preceding FS Material Not for Publication) NNNN .