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Non-Profit IT Institute Calls for Narrowly Constructed U.S. Export Controls

30 May 2019

The Information Technology and Innovation Foundation, an independent non-profit research and educational institute, issued a report on 20 May analysing U.S. export controls on emerging technologies. Export controls regulating the transfer of controlled technologies or services outside of the United States can range from requiring an application process to monitoring production and downright bans.

The ITIF report argues that tightening these restrictions on exports of new and emerging technologies could cause U.S. companies to lose US$14.1 to US$56.3 billion in export sales over five years, with missed export opportunities threatening 18,000 to 74,000 jobs. This wide range reflects the authors’ decision to make multiple projections based on assumptions of export reductions of five, ten or 20 percent. ITIF recommended that restrictions “be constructed to target specific military technologies as narrowly as possible while BIS evaluates the potential of coordinated international action, which is necessary for any export control regime to be effective.”

ITIF observed that the U.S. Department of Commerce’s Bureau of Industry and Security is preparing new rules to extend export controls to an enlarged set of emerging and foundational technologies (EFTs). These rules are being established pursuant to the Export Control Reform Act, signed into law on 18 August 2018. According to ITIF, BIS has been directed to impose export controls on EFTs that are “essential to the national security of the United States” and are not already subject to such controls. BIS must institute licencing requirements for exports of these technologies to nations in country group D:5, which includes mainland China as the only significant U.S. trading partner.

Congress had stated that more stringent export controls are needed to protect U.S. technologies from aggressive attempts by mainland China and other actors to obtain those technologies using both legal and illicit means. While Congress did not provide definitions for emerging or foundational technologies, BIS issued a notice in November 2018 seeking public input on 14 categories of technology being considered for potential designation as emerging technologies, specifying that an additional list of foundational technologies is forthcoming. The general categories of technology currently under review include the following.

  • biotechnology (e.g., nanobiology, synthetic biology, genomic and genetic engineering, and neurotech)
  • artificial intelligence and machine learning technology (e.g., neural networks and deep learning, evolution and genetic computation, computer vision, planning, etc.)
  • position, navigation and timing technology
  • microprocessor technology (e.g., systems-on-chip or stacked memory on chip)
  • advanced computing technology (e.g., memory-centric logic)
  • data analytics technology (e.g., visualisation, automated analysis algorithms or context-aware computing)
  • quantum information and sensing technology (e.g., quantum computing, encryption or sensing)
  • logistics technology (e.g., total asset visibility or distribution-based logistics systems)
  • additive manufacturing (e.g., 3D printing)
  • robotics (e.g., micro-drone and micro-robotic systems. swarming technology, self-assembling robots and molecular robotics)
  • brain-computer interfaces
  • hypersonics (e.g., flight control algorithms, propulsion technologies and specialised materials)
  • advanced materials (e.g., adaptive camouflage, functional textiles or biomaterials)
  • advanced surveillance technologies (e.g., faceprint and voiceprint technologies)

ITIF suggested that any new rules be carefully crafted to focus on defence-related technologies and warned against broad restrictions on the sale of EFTs. State-of-the-art technology often changes too rapidly for export rules to readily adapt, the organisation noted, which means that broad rules risk putting U.S. makers of fast-advancing products in the position of having to petition rule makers and then waiting for definitional changes while foreign competitors sell products that have quickly become mainstream. ITIF added that imposing export controls on technologies that are globally available from foreign firms does not significantly slow the adoption of those technologies by potential adversaries, but it does redirect revenues from firms in the United States to their foreign competitors, which hampers U.S. competitiveness.

Looking at past export controls on communications satellite technology, the report noted that imposing strict and broad controls on such technology rather than on narrow technologies with specific military applications failed to prevent other countries from developing a satellite industry. Accordingly, ITIF favours narrowly constructed and tailored export controls that focus on limiting the proliferation of technologies that are vital to securing a military or national-security advantage for the United States.

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ARTICLE TOPICS

TECHNOLOGY24757
USA36116
NORTH AMERICA36097
EXPORT CONTROL115033
TRADE DISPUTE76304

ARTICLE TOPICS

TECHNOLOGY24757
USA36116
NORTH AMERICA36097
EXPORT CONTROL115033
TRADE DISPUTE76304
PROTECTIONISM74995

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