Urges Commerce to Rethink Recently Proposed Regulation on China
Washington, DC- National Foreign Trade Council (NFTC) President and former Commerce Department official Bill Reinsch today in remarks before the Practicing Law Institute said that the United States has come a long way in targeting controls on exports, but warned that expanding controls on exports to China is an ineffective way to protect national security interests and undermines U.S. competitiveness.
“Focusing on specific end uses and end users forces us to learn more about the items we are controlling and more about our adversaries’ efforts to use those items, both of which improve the system’s efficiency,” said Reinsch in his remarks.
Among the problems Reinsch discussed were questions about exactly what “know” and “military end use” mean for companies that genuinely want to comply with all guidelines. “After initial assurances that the term would be defined to mean actual knowledge and no more, the published version instead returns to the more expansive existing definition,” Reinsch said.
With respect to “military end use,” Reinsch noted, “The expansive definition used attaches considerable liability to a broad range of industries and raises numerous questions. For example, if an exporter has information that a product could be used for the design of both military and civilian products, would the “military end use” definition apply?”
Reinsch also questioned the efficacy of the proposed export control regulation as a means to protect national security interests when exports that could have military end use are also produced by commercial manufacturers, not just military ones.
Finally, he pointed out that few if any of our trading partners and allies intend to implement the same regulation, which means we will be acting unilaterally when many of the newly-controlled items are available from multiple foreign sources, including China itself.
Reinsch also explained why healthy high tech industries are essential to our national security. “Because of rapid technological change, the military has been shifting to commercial products and away from specially designed items. That puts them in the position of relying on civilian producers whose major markets are civilian and export,” said Reinsch. “Those producers win the competitiveness race by staying ahead of their competition, and they do that by plowing their profits back into R&D on next generation products. America’s future lies in our ability to keep on winning that race,” he continued.
Advancing Global Commerce for Over 90 Years
The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in