Dan Ikenson, who spent decades in trade policy at the libertarian Cato Institute, said he defended China's behavior for years after it joined the World Trade Organization. "I was in favor of welcoming China into the trading system," he said. But now, Ikenson said during a June 9 webinar hosted by the R Street Institute, he has come to see that China's last 15 years of state-directed capitalism produced enormous externalities. He said some of those externalities include the rise of populism, the political rejection of free trade, and even, in part, the presidency of Donald Trump.
3M, a U.S. producer of aluminum oxide fibers, announced that its “Nextel 312 ceramic fibers and textiles” were removed from export control license requirements due to a Commerce Department final rule published in March (see 2103260019). The rule made several revisions to the agency’s Commerce Control List to implement changes made during the 2019 Wassenaar Arrangement and removed license requirements for a range of Nextel 312 products, including Nextel 312 “fibers, rovings, yarns, sewing threads, tapes, sleevings, and fabrics,” 3M said June 2. The products are “now available globally,” the company said, “reducing previous barriers that slowed down global customer adoption.”
Canada released its 2020 report on military goods exports this week, detailing changes last year to export control policies and providing statistics for a range of export information, including country data and permit licensing information. Canada said it “slightly improved” permit processing times in 2020 and listed Saudi Arabia as its largest non-U.S. export destination. Canada also said it denied 58 applications for exports of military, dual-use and strategic goods or technologies in 2020, a significant increase from the previous five years, when it had denied fewer than 10 permits per year. Forty of the 58 denied permits were for dual-use exports to China or Hong Kong.
U.S.-China Business Council President Craig Allen, former deputy assistant secretary for China in the State Department, said that the Chinese were taken by surprise by how little has changed in the new administration. “There was an expectation between [Donald] Trump and [Joe] Biden, there would be a loosening of technology regulations,” he said, but Commerce Secretary Gina Raimondo has taken steps to tighten export restrictions that affect Huawei, and there have been actions under the new Information, Communications and Telecommunications Services (ICTS) regulations.
A brief sketch of President Joe Biden's budget priorities, released April 9, proposes increasing Commerce Department funding by 28%, or $2.5 billion. In a bullet list of where extra funding would go, without line-item details, the administration said it would like to guarantee “Commerce has additional staff and resources to analyze export control and Entity List proposals, enforce related actions, and implement executive actions related to export controls and secure telecommunications.”
Intel “generally” opposes the U.S. imposing “unilateral export controls” on foreign tech companies suspected of threatening U.S. national security, Tom Quillin, senior director-security and trust policy, told a virtual forum convened April 8 by the Commerce Department’s Bureau of Industry and Security to identify risks in the semiconductor supply chain (see 2103290003). BIS said it will use feedback from the forum, plus comments received in its notice of inquiry (see 2104060045), to help shape recommendations to the White House on President Joe Biden’s Feb. 24 executive order to relieve supply chain bottlenecks (see 2103110047 and 2102240068).
Officials from the Commerce, Energy and State departments held a virtual event with Malaysian government officials this week to commend Malaysia’s efforts to implement strategic export controls. The event was held to commemorate the 10th anniversary of Malaysia’s Strategic Trade Act, which provides a “strong regulatory framework” for export controls, Jeremy Pelter, acting undersecretary for the Bureau of Industry and Security, said in an April 8 statement. The U.S. agencies said they remain “committed to advancing strategic trade control cooperation now and into the future.”
The Bureau of Industry and Security's decision to eliminate certain reporting requirements for encryption items (see 2103260019) should exempt a greater number of companies from filing mandatory declarations with the Committee on Foreign Investment in the U.S., DLA Piper said in an April 6 post.
Three Sheppard Mullin lawyers, across two continents, say the outcome of the new aggressive stance against China's rising technological manufacturing sector is yet to be seen, but that they don't expect the Biden administration to back away from the most significant export control actions taken under President Donald Trump.
The Bureau of Industry and Security's January rule on foreign military intelligence agencies took effect March 16 but the agency may consider revising the scope, according to a BIS spokesperson. The rule, which was issued in January under the Trump administration, was captured as part of the Biden administration’s regulatory freeze as BIS decided whether to follow through with the new export restrictions (see 2103090038). Although the restrictions took effect, an agency spokesperson said March 16 that it will continue to review feedback to determine whether the changes are “warranted.”