Estevez Advice to Next BIS Leader: Work With Allies, Don’t Overuse FDP Rule
Outgoing Bureau of Industry and Security Undersecretary Alan Estevez said he would advise his successor to continue coordinating export controls with allies and to not immediately turn to extraterritorial restrictions, such as the foreign direct product rule.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Estevez, speaking Jan. 14 during an event hosted by the Center for Strategic and International Studies, said negotiating controls with allies is “hard” and that the U.S. and its allies’ “interests don't always align.” But Estevez said diplomacy over the last four years of the Biden administration has helped to convince some trading partners to side with the U.S.
“When I go and visit allies, regardless of where they are, and start talking about the risks of artificial intelligence used by adversarial powers against not just us, but them, they say, ‘Yeah, we need to protect ourselves here,’” Estevez said. “I think my advice to my successors in the Trump administration would be to continue that hard work.”
Although the Biden administration worked to convince the Japanese and Dutch governments to impose some semiconductor-related export controls, it also has used other tactics to restrict China from buying sensitive foreign-made technology, including through the foreign direct product rule. BIS most recently introduced two new foreign direct product rules in December to require export licenses for certain foreign-made chip manufacturing equipment that contains U.S.-origin integrated circuits and other components (see 2412020016).
Estevez cautioned against relying too heavily on the rule.
“The foreign direct product rule is a great tool in our toolbox,” he said. “But just willy-nilly using that is also not good. There’s a balancing of interests there.” Estevez added that sometimes it “may not be the best use of that tool when you can negotiate an agreement with” allies.
Estevez said he hasn’t spoken to any incoming Commerce Department officials serving under the next administration, although “there's a team on the ground in Commerce” speaking to the agency’s career officials about “what we've been doing and how we've been doing it.” He also said he has spoken to people who he believes will hold “key roles” in the Trump administration outside of Commerce.
“I can't say what they're going to do. Many of them actually can't really say exactly how it all plays out,” Estevez said. “My advice would be to sustain these alliances and build on them. That's the key toward true protection here.”