Global Tech Alliance Would Strengthen Export Controls, Counter Chinese Trade Practices, Experts Say

Like-minded democracies should establish a global technology alliance to safeguard sensitive technologies and improve export restrictions, technology and trade experts said. The alliance -- which would initially include Australia, Canada, the European Union, France, Germany, Italy, Japan, the Netherlands, South Korea, the United Kingdom and the U.S. -- should act to increase export controls on critical technologies and work to counter China’s illegal technology transfers and operations at international standards-setting bodies.

An Oct. 21 report -- authored by experts from the Center for a New American Security, the Mercator Institute for China Studies and the Asia Pacific Initiative -- lays out a framework for the technology alliance, including criteria for adding new members and voting powers among members on technology issues. The proposed alliance would hold “regular meetings” among senior government officials to cooperate on technology policy and tackle a range of global priorities.

Those priorities include placing multilateral export controls on sensitive technologies, including advanced semiconductor manufacturing equipment, an area where alliance member countries have an “unquestioned advantage.” The authors said controls on semiconductor exports to China “would be an effective way of maintaining a technological competitive advantage in semiconductor fabrication.”

Similar to other multilateral bodies, such as the Wassenaar Arrangement, alliance members would “create a community where the same level of protection is granted by all members for a clear and narrowly defined set of technologies for which protecting and maintaining a competitive edge is paramount,” the report said. U.S. officials said they are working to form a group of the U.S.’s closest technological allies to coordinate on export controls and joint research on emerging technologies (see 2007300044).

But the report's authors stressed that “consultation and cooperation with the affected companies” will be “essential to offset the costs of technology protection.” While crafting the report, the authors said, they discussed the impacts with industry and said they recognize that some controls may be harmful.

“We talk a lot about multilateral export controls, and this is something that is going to affect quite a few companies,” said Martijn Rasser, a senior fellow at CNAS and one of the authors of the report, speaking during an Oct. 21 event hosted by the think tank. “There's a lot of second- and third-order consequences that we need to talk through with industry … so they can be implemented in such a way that we don't harm the competitiveness of companies in the tech alliance countries.”

Shin Oya, a senior consulting fellow with the Asia Pacific Initiative and another of the report authors, said the group not only recommends strong export controls but also more support for private companies to increase competitiveness. Even so, the proposed alliance would focus on making sure sensitive technologies aren’t transferred to dangerous governments. “Right now, [export control] coordination between like-minded countries is not efficient enough,” he said.

The alliance should also focus on countering China’s strategy to dominate international standards-setting bodies (see 2006240039), which is meant to reduce China’s “dependence on foreign intellectual property and standards,” the report said. The alliance may consider “making resources available for companies to send full delegations” to the bodies and to “submit the broadest possible portfolio of technologies to standards-setting bodies for consideration.”

The alliance would also allow countries to increase information sharing on other Chinese trade activities causing concerns, such as forced technology transfers. Alliance members may even cooperate on investigations concerning export control violations and other “unwanted tech transfers” to make China’s technology acquisition efforts “much more challenging.”

The authors said they are optimistic that a technology alliance would work and could form soon. “You're already seeing the little sprouts of different countries looking into this,” Ainikki Riikonen, a research assistant at CNAS, said during the event. “I think part of the key for a technology alliance is to just kind of stitch these efforts together and have an actually cogent and intentional approach to this.”