Notes on Creating an Export Control Regime

The growing recognition among allies of the risks of unconstrained technology transfer to China has led to a wave of proposals for new export controls in the Trade and Technology Council, AUKUS, the Quad, and perhaps with a collection of semiconductor-producing nations. The intent is to buttress (if not replace) existing regimes, chief among them the venerable Wassenaar Arrangement. These proposals are timely, but direct experience with regime creation points to essential requirements to translate welcome ideas into an actual regime. Here are some of these requirements.

A Shared Problem

Potential partners need to begin with a shared problem they wish to address through collective action. Wassenaar’s shared problem was the recognition that export controls needed to be reformed after the end of the Cold War (for the Europeans this means shrinking controls; for the United States, it means preserving them). Maintaining U.S. tech dominance, one goal for many current proposals is not a shared problem, runs headlong into European concerns, and it is probably not the best lead in any appeal for partnership. Similarly, calling for a crusade to decouple from China is not universally attractive in Europe and some Asian countries. This is changing as China’s behavior worsens. The best case for a new regime can be built around China’s predatory trade behavior, its illegal appropriation of intellectual property, and its many coercive actions.

New Concepts for Tech Transfer Controls

Wassenaar grew out of work by the National Academy of Sciences in the 1980s on how to reform export controls. Wassenaar was also shaped by the experience of creating Missile Technology Control Regime (MTCR) and by closed negotiations among the five permanent members of the Security Council on conventional arms transfers and a G7 initiative on terrorism-related dual-use transfers. This gave the Wassenaar negotiations a strong foundation. As in any negotiation, many paths that initially seemed promising for Wassenaar become political dead ends. One criticism of Wassenaar is that it did not go far enough in moving away from its predecessor, and any talks today will need new thinking on emerging technologies and the close commercial connections with China. The chief tension is between the old approach to export controls, which is based on technology performance thresholds (which allow continued exports of technology) and disentangling China from the global economy, which adopts a broader approach than provided by performance thresholds. The concept “higher walls around fewer goods” dates from the 1980s, and a 30-year-old concept is not be the best foundation for new regimes. Wassenaar is also based on 1980s approach focused on controlling hardware and only caught software when it was associated with controlled hardware. A new approach will need to not only move away from performance threshold and expand controls on software. Research and “intangible” goods are now more important. Wassenaar also needs to better deal with emerging technologies, but effective control first requires a restatement of goals and mechanisms.

Senior Political Leadership

Wassenaar began life as a presidential proposal with close attention and support from the secretary of state and undersecretary of state (whose hard work and diplomatic skill led to a successful conclusion). This gave it political heft that another agency cannot bring, even if it is at the cabinet level. It is incredibly helpful for a negotiator to be able to ask, “Would you like me to have my president (or secretary of state) call your president (or foreign minister) on this issue?” If the negotiator can deliver on this, it only needs to be done once for the message of very strong U.S. interest to be made clear.

While assistant secretaries and their deputies can lead working groups, they lack the weight to reach consensus and will not produce results. The Department of Defense (DOD) is disqualified, as other countries rely on economic ministries and do not think like or fully share the views of DOD. This is not an arms control negotiation, and many countries did not even bring military representatives. Support from Germany and Japan is crucial given the size of their economies. In Germany, Wirtschaft (Economics), the chancellery, and the Foreign Office remain the key counterparts and Japan similarly requires the Ministry of Economic, Trade and Industry and the Ministry of Foreign Affairs. The biggest change to the geometry of export control negotiation is the increased prominence and directive role of the European Commission. Similarly, the trend in the United States has from more than a decade been to shift responsibility from the Departments to the National Security Council. These shifts can complicate reaching agreement. Commerce was seen as to much of an advocate for the private sector. This leaves the Department of State as the best lead, faute de mieux.  

Clear Links to the Larger Security Agenda

Wassenaar came at a heady time of NATO expansion and cooperation with Russia. Linking Wassenaar to these larger efforts gave it a powerful impetus. It was part of a larger diplomatic initiative to engage Russia and members of the former Warsaw Pact on security issues. Not all of the details are public, as talks were conducted at senior diplomatic levels or even at summits but U.S.-Russian cooperation in space is a suggestive parallel. This was a welcome source of income for Russia and let the United States meet shortfalls in its own space program and keep Russian engineers from working for Iran or China. Similar “trades” made Wassenaar attractive. What these trades would look like today is an open question, but it could involve intelligence cooperation and cooperative work on emerging technologies, but they should go beyond export controls and there should be some link to a positive agenda. The export control community can become bogged in technicalities and the big picture can get lost. This can discourage foreign leaders from taking a proposal seriously.

Membership

Who to invite is important. For political reasons created by NATO expansion that made sense at the time, Wassenaar took a “big tent” approach. Wassenaar continued the precedent of including key Asian allies and all NATO members, even if they did not make the full range of technologies. In any effort today, the same incentive for a big tent approach is not there, and a more focused (and smaller) membership would be more likely to reach consensus. A better precedent might be the now-dormant U.S.-Japan bilateral arrangement on high-performance computing or the MTCR, which began with only a few members. Membership was limited to those who actually made the technologies of concern and shared common political principles.

Staging

Any new initiative must begin as a presidential announcement. Wassenaar grew out of G7 meetings (augmented with a few other key nations, like Australia and the Netherlands), and this remains an ideal launchpad. There has to be a formal proposal (such as a white paper) that immediately follows a senior-level announcement. A formal plan should lay out initial thinking on membership, frequency of meetings, secretarial functions, and the proposed span of topics a new regime will cover. The more general the proposals, the less chance of success. Proposals cannot be set in stone but presented as a white paper, open to amendment by other. Part of the preparation if for the United States to decide in advance what is the minimum it needs in light of these amendments.

Not Unilateral

In Wassenaar, the United States had the Dutch chair the plenary, the Norwegians chair the guidelines working group, and the Germans chair the list working group. This was not to hide U.S. involvement—everyone knew this was a U.S. initiative—but to build support and bring a wealth of diplomatic experience to show the breadth of support (the Norwegian chair, for example, had also chaired the MTCR). These chairs were particularly helpful with the European Union. A joint proposal with other nations has more traction. One approach might involve the United States, Japan, and a major European economy. While the United States can try to do this alone, it cannot play all the leading roles. The current ransomware initiatives, with working group chaired by different partner nations, is a current example of how to successfully employ this approach.

Nation-States Only

Wassenaar did not involve the participation of private actors nor did the United States consult formally with them in developing its positions. Whether this is still feasible today is an open question, but limiting participation and membership to states remains central to building an effective regime. Countries will not sign a binding agreement or cede Coordinating Committee for Multilateral Export Controls (COCOM)-style veto powers to the United States, but the MTCR model of political agreement, shared norms for responsible exports, and lists of controlled technology, still works.

Measuring Success

Alliances are easy to propose but hard to create. These are not ironclad rules, and it is possible that an energetic Secretary of Commerce or a close partnership between the National Security Council and a Cabinet Department could provide adequate basis for negotiations, if there is presidential involvement and new thinking that is attractive to foreign partners. This list also provides an easy checklist to assess progress, since the involve specific, public actions. There should be a sense of urgency in moving ahead with renewed expert controls after the 20th Party Congress and with the right diplomatic strategy and negotiators, it should be possible to get agreement before January 2025 (serious negotiations can take months). People may not like all these suggestions, but they were vital for successful conclusion of earlier export control negotiations and likely to be vital for any new agreement.  

James A. Lewis is senior vice president and director of the Strategic Technologies Program at the Center for Strategic and International Studies in Washington, D.C.  

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2022 by the Center for Strategic and International Studies.

 

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James Andrew Lewis
Senior Vice President; Pritzker Chair; and Director, Strategic Technologies Program