Export Controls Risk Damaging US AI Sector, Trade Associations Say

Artificial intelligence export controls should only be imposed multilaterally and should contain no ambiguity in order to minimize harm on U.S. competitiveness, trade groups told the Commerce Department this week. They said the controls also should clearly distinguish between “general purpose” and “application specific” AI software so the restrictions only cover items that pose genuine national security concerns.

“Overly broad export controls on technology products undermine the ability of companies to participate in the global marketplace,” the Information Technology Industry Council told Commerce. “Absent multilateral action, the resulting policies are likely to be less effective and cause more challenges for industry.”

U.S. companies for years have urged Commerce to pursue emerging technology controls multilaterally and ensure they’re narrowly targeted, but the set of comments released this week highlights some of the top trade concerns of American AI companies at a pivotal juncture in U.S. export control policy. Commerce earlier this month introduced a set of unilateral chip-related export controls for China, including restrictions on items used in AI applications (see 2210070049).

Many of the trade associations -- which were responding to the International Trade Administration's August request for information on U.S. AI export competitiveness (see 2208150020) -- said the U.S. should only impose controls that don’t impede American development and commercialization of AI. The controls should specifically avoid restricting exports related to autonomous vehicles (AVs), the Alliance for Automotive Innovation said.

“To bolster the technology leadership of the U.S. generally and in the future mobility space specifically,” the group said, “it is critical that companies in the U.S. retain access to global markets to justify the significant investments required to commercialize AVs.”

AAI urged THE ITA to work with Commerce’s Bureau of Industry and Security to “consider the potential impact” AI export controls will have on U.S. automotive competitiveness, particularly surrounding AVs. If the controls are imposed, they should first be coordinated with trading partners and agreed to at the multilateral Wassenaar Arrangement, the group said.

The restrictions also should include certain “exclusions” for software, hardware and firmware and any technologies “related to mobility, robotics, and infrastructure that support and enhance civil automobile applications,” AAI said. “Furthermore, intracompany license exceptions or grandfathering provisions should be considered that allow companies to continue to utilize resources from talent-rich countries, with appropriate safeguards.”

Aside from powering AVs, AI also can be used with facial recognition technology for “advanced safety” features in cars, the Alliance for Automotive Innovation said. Any facial recognition technology controls should be crafted to restrict “surveillance uses” without “unintentionally impeding the U.S.-based development, commercialization, sale, and export of innovative new technologies that will help make vehicles safer and smarter,” the alliance said.

Several other trade groups made similar arguments, saying Commerce should only impose export restrictions that distinguish between items used for benign, commercial applications and those used for more nefarious purposes. The U.S. Council for International Business said that effort likely will be a “challenge” but is important to avoid hurting American AI export competitiveness. “It will be critical to ensure that AI controls are not unduly expansive but are, instead, targeted and specific to AI items, software, or technology that pose a potential national security or foreign policy harm,” the council said.

The controls should specifically target facial recognition technology “purely or predominantly for use by law enforcement or security services,” AAI said. If this distinction isn’t clear, ITI said the U.S. risks disrupting the “virtuous cycle of private-sector R&D investments made possible by revenues from sales of U.S. products to a diverse customer base in overseas market.”

Several groups also asked Commerce to make sure any new export controls have clear definitions and due diligence requirements and avoid vague wording. The export restrictions must be “clearly articulated to industry,” the Aerospace Industries Association said. “Without this transparency, significant time and resources will be wasted and the U.S. will artificially shrink its potential global market share.”

The agency should provide “specific guidelines for any newly controlled technology or items,” the U.S. Council for International Business said. “An effective export control regulation provides the industry with clear, specific guidelines that allow no room for interpretation.”

The U.S. Chamber of Commerce urged Commerce to work “closely” with U.S. companies as it's crafting potential AI restrictions “to avoid unduly restricting trade.” This includes U.S. efforts to create an outbound investment screening regime (see 2209140041), which could restrict U.S. investments in China if the deal involves certain sensitive technologies, including AI. The council said U.S. officials have acknowledged that AI is a “broad field covering a variety of capacities ranging from mundane commercial applications to those with national security implications, and it appears these efforts will endeavor to restrict the screening mechanism to the latter” instead of the “entire diverse field of AI.”

Several trade associations also referenced foreign regulations that could hurt U.S. AI exports. The Coalition of Services Industries pointed to the EU’s draft AI Act, which “could prove trade restrictive and unnecessarily hinder" U.S. exports. The bill, which the coalition called the “most high-profile attempt by a government to draft regulations for AI,” could also “impair” U.S. exports of AI services to the EU through proposed limits on the cross-border transfers of non-personal data, the group said. “Since data is an essential component of many AI services, there is a real risk that such a policy could end up serving as a barrier to the cross-border delivery of U.S. AI services into the EU.”

An ITA spokesperson said the agency is still reviewing the comments. In its April request for information, the agency said it was hoping to learn about "potential opportunities for and challenges to increasing U.S. export competitiveness for AI-enabled technologies.”