Democrats Probing BIS Plan to Pivot Away From Export Control Forums With Allies

The lawmakers said they’re especially concerned by comments made by Undersecretary Jeffrey Kessler in a closed-door town hall meeting in March, in which he outlined a broad effort to pull back from export control forums with trading partners (see 2503280039 and 2504140055). Kessler specifically said he wants to engage less with the U.S.-EU Trade and Technology Council and the multilateral Wassenaar Arrangement.

Gregory Meeks of New York, the ranking member of the Foreign Affairs Committee, and Zoe Lofgren of California, the ranking member of the Science, Space and Technology Committee, said they’re “worried that if the United States goes it alone or attempts to bully our partners, they will increasingly hedge to the [People’s Republic of China] instead of working” with the U.S.

BIS needs to continue trying to “bring our allies along in aligning their export controls with ours, using appropriate leverage available to you,” they wrote in a May 27 letter to Commerce Secretary Howard Lutnick.

Meeks and Lofgren asked Commerce to respond to a series of questions by June 5, including about:

• The agency’s current policy on participating in multilateral councils and forums, including the Multilateral Action on Sensitive Technologies, the TTC and other multilateral agreements and plurilateral agreements, such as the U.S.-Japan-South Korea trilateral agreement.
• The steps Commerce is taking to coordinate with allies on export controls on critical technologies, such as semiconductors and chip manufacturing equipment.
• How Commerce is taking into account foreign availability as it designs and coordinates its controls.
• Any additional staffing, resources or authorities that Commerce needs to “more effectively coordinate with partners on controls on technology entering” China.

They also asked for a briefing from BIS staff “to better understand how you are approaching these questions.”

“While it’s important to prevent U.S. technology from powering the PRC’s military,” Meeks and Lofgren said, “a coordinated approach with partners and allies is necessary in critical technology areas such as advanced semiconductors and semiconductor manufacturing equipment (SME), to prevent the PRC from developing critical capabilities that are detrimental to our national security.”

They noted that both the Biden and Trump administrations have either imposed new controls on sensitive chips and chip equipment destined to China or added Chinese companies to the Entity List for seeking to buy those items. They said Biden “achieved some success” in convincing allies to impose similar controls, pointing to talks with the Netherlands and Japan (see 2412040031 and 2411140037), but also acknowledged that controls across all three nations “remain misaligned in key ways, from a lack of end use controls” to inconsistent denials of export license applications.

“We recognize that organizing these coalitions can be challenging, but working with allies and partners achieves real results,” the lawmakers said, referencing the coalition of nations built to impose sanctions against Russia after its invasion of Ukraine in 2022. “We urge you to continue to engage with our partners and allies to build a similar coalition focused on the PRC.”

While diplomacy is “not always as fast as we would like, is the only effective option in the long competition with the PRC,” they said.

Meeks and Lofgren said Commerce should help create small coalitions of countries that have market shares in “particular critical technology sectors” and use those coalitions to coordinate new export controls. For example, for semiconductors, the U.S. should be “broadening coordination beyond Japan and the Netherlands to include South Korea, Taiwan, and others.” Other forums, such as the TTC, “can help advance such coordination while furthering U.S. global leadership and interests on standards development, technology transfer, trade, and many other multinational issues.”

If the U.S. and BIS instead withdraw from these dialogues, it could give other countries an “excuse” to not adopt similar restrictions and possibly push them to work closer with U.S. adversaries, the lawmakers said. They said the Trump administration’s tariff threats have pushed the EU to pick up talks with China, and they noted that leading chip equipment maker ASML of the Netherlands recently announced it would be building a facility in China, “a decision that runs counter to U.S. interests and could only have been made with European government support.” They also said China in April met with Japan and South Korea for the three countries’ first multilateral economic dialogue in five years.

If the U.S. decides to go it alone, the lawmakers warned against a “unilateral approach that overly relies” on the foreign direct product rule, which BIS can use to place licensing requirements on certain foreign-made items that are made with U.S.-origin software or technology. Meeks and Lofgren said BIS should use the FDP rule “as a last resort,” adding that “abuse of the rule may further weaken our standing with allies and partners and result in the removal of U.S. suppliers from major global supply chains in the long run, which would be disastrous for our economy and our ability to outcompete the PRC on critical technologies.”

They said a better "path would be to coordinate controls with other partners and help them build enforcement capacity,” so BIS doesn’t “have to monitor and police millions of transactions alone. We would be willing partners in ensuring that BIS has the tools and resources to make U.S. controls more effective.”

A BIS spokesperson didn’t respond to a request for comment.

The letter comes more than a month after other Democrats, including members of the House Select Committee on China, urged Commerce to reconsider its plans to pull back from export control dialogues (see 2504100070 and 2504010056).