New Export Control Coordination Avenues Needed, Panelists Say

U.S. allies in Europe and Asia would support new efforts to coordinate on export controls for advanced technologies, including semiconductors, panelists said during an event this week hosted by the Center for Strategic and International Studies. But they also said those same countries don’t believe the world needs a new dual-use multilateral export control regime to replace the Wassenaar Arrangement, even though Russia remains a member and can block proposals.

Jan-Peter Kleinhans, director of technology an geopolitics at the German think tank Stiftung Neue Verantwortung, said there’s a “strong conviction” within Europe to preserve Wassenaar. He noted the regime is consensus-based and doesn’t consist only of like-minded countries, so it helps to drive agreement on national security issues even among nations that don’t all share the same goals. Germany and other countries believe “these are all assets of Wassenaar that need to be protected,” Kleinhans said.

But he also said Germany and others could support new “minilateral” forums “next to Wessenaar” that would include a select group of countries focusing on technology transfer issues affecting economic security. The U.S. Commerce Department has pursued similar efforts, including a so-called Global Export Control Coalition, which the Biden administration has so far used to coordinate export controls against Russia (see 2305190059).

Rem Korteweg, a senior research fellow at Clingendael Institute, a Dutch think tank, said “Wassenaar is important, but it's not sufficient.” He said the Netherlands “desperately wants to develop a multilateral solution” to address semiconductor-related export controls, partly to broaden its cooperation beyond the U.S. The Netherlands and the U.S. earlier this year agreed to harmonize some of their chip export controls (see 2303310031, 2303090032 and 2306300028).

“I don't think it feels comfortable with, for lack of a better word, of keeping the relationship bilateralized on semiconductor export controls with the United States,” Korteweg said. “It's not naive -- it knows which way the wind will blow them.”

He also said the Netherlands would be “very wary of any Wassenaar 2.0,” because it would “automatically be seen as an anti-Chinese tech bloc.”

The Dutch would instead support “targeted multilateral or plurilateral formats to discuss particular export regimes for sectors or technologies,” which he acknowledged could be a more complicated endeavor. “That might make it a little bit cumbersome,” Korteweg said, “but at the same time I think you need to do that to enable a multilateral solution to emerge which doesn't necessarily lead to very strong anti-Chinese reflexes.”

Wonho Yeon, a research fellow at the Korea Institute for International Economic Policy, was perhaps the most critical of Wassenaar, saying it has an “inefficient decision-making structure” and no formal mechanism for countries to coordinate on export licensing policy. He said South Korea thinks “we should have new mechanisms to deal with these issues. I think we can come up with a framework that does not replace the Wassenaar Arrangement, but compliments it by sector,” Yeon said, including in semiconductors.

He pointed to the Chips 4 alliance among the U.S., Japan, South Korea and Taiwan as an example (see 2302220046). “These kinds of frameworks could be linked and form a new kind of initial framework for discussing the semiconductor export controls.”

Although export controls are an important tool, Yeon also said South Korea believes the U.S. focuses “too much” on export restrictions in its effort to widen its technology gap with China “rather than figuring out how to capitalize on the Chinese market, which is the world's largest consumer of semiconductor chips.” He said the U.S. should instead double down on its chip industry funding, specifically referencing the Chips Act (see 2309220035)

“When seeking to widen the technology gap to guarantee a country's advantage,” Yeon said, “securing a stable flow of funds is as crucial as preventing technology leakage.”