ECRA May Not Have Been Necessary to Control Emerging, Foundational Tech, Former Head of BIS Says

The Export Control Reform Act may not result in significantly different controls on emerging technologies (see 1912130055) than what would have been proposed under the U.S.’s existing export control system, a former top Commerce Department official said. Eric Hirschhorn, former undersecretary for the Bureau of Industry and Security from 2010-2017, also said Commerce’s efforts to restrict sales of foundational technologies might be too late. “I have grave doubt whether the assignment to control emerging and foundational technologies will result in controls significantly different from what the existing system -- which operates fairly well -- would have produced,” Hirschhorn said in a Jan. 3 post for China Business Review.

Although there are “positive aspects” of ECRA, Hirschhorn said, such as the initiative's focus on controlling items that pose serious national security threats, “there likely will turn out to be less here than meets the eye,” he said. The process is proving not “quite as simple as Congress imagined,” he said, which may be responsible for the delay in publishing the controls (see 1911070014).

Hirschhorn argued that ECRA might not be “anything new,” saying the U.S. has been imposing export controls for years. “When it comes to controlling emerging technologies, the government has little choice but to do what it already has been doing for decades and what ECRA, read closely, is telling it to do now: follow emerging technologies closely,” he said. He also said it is difficult to write regulations that are “sufficiently precise to be meaningful,” as controls over broad categories of technologies could stifle U.S. competitiveness and will likely not be effective. When any item is controlled “too tightly,” he said, “there’s a good chance that we will drive research and development, and ultimately production, offshore.”

“The Commerce Department can’t issue a regulation that says, ‘Don’t send any artificial intelligence technology to China’ unless that regulation sets out particular applications and technical parameters,” he said. A general prohibition would not be specific enough to inform exporters what they cannot sell to China, he said, or even inform Commerce agents, “let alone ... prosecutors, judges, or juries, when an exporter may have broken the law.” So far, however, the controls Commerce has published have been narrowly tailored (see 1905220051), and Hirschhorn said “future rules will be similar. But this takes time.”

In addition, it may be too late to control many foundational technologies, he said. Commerce is currently working on an advance notice of proposed rulemaking to restrict sales of foundational technologies (see 1912100019), or technologies that are widely available or were once controlled but are no longer restricted. Hirschhorn said problems may arise when trying to control widespread technologies with plenty of foreign availability.

“The problem with controlling foundational technologies, then, is their ubiquity,” he said. “Preventing China from acquiring such items made here or based on our technology could end up hurting U.S. companies, U.S. workers, and our overall defense industrial base more than it impairs the Chinese effort to dominate us economically.”