The U.S., the Netherlands and Japan need to prepare for “expanded” Chinese retaliation as a result of their pact to impose new export controls on advanced semiconductor equipment (see 2303310031 and 2303090032), the Center for Strategic and International Studies said in a commentary this week, adding that China has “long put national security goals above those of market efficiency.”
About 10% of critical raw materials, as measured by value, faced export restrictions in the last decade, according to a new report from the Organization for Economic Co-operation and Development -- and the use of restrictions grew five-fold in the 2017-2019 period, compared with the two-year period 10 years earlier. Export taxes are the most frequent restriction, the authors said, adding: "This may be related to the fact that, under WTO rules, quantitative restrictions on exports are generally prohibited while export taxes are not."
The upcoming expiration of the Bureau of Industry and Security's temporary general license outlined in the China-related chip controls from October presents “good opportunities to see” how the agency will “interpret and enforce the new restrictions,” Lee, Tsai & Partners said in a recent client alert. The TGL expires April 7, when BIS has said it will begin reviewing license applications for activities that were covered by the TGL on a case-by-case basis (see 2301270026).
G-7 trade ministers stressed the importance of export controls this week and said they will continue to work together to counter evasion tactics. The countries, including the U.S., Japan, Germany, the U.K., France, Italy and Canada, said export controls are a “fundamental policy tool to address the challenges posed by the diversion of technology critical to military applications,” adding that they “continue to work with other states” to strengthen the restrictions.
The Bureau of Industry and Security is preparing new proposed export controls on automated peptide synthesizers, building off a September advanced notice of proposed rulemaking (see 2209120021). The agency sent the proposed rule for interagency review March 29.
Japan recently loosened export restrictions on shipments of hydrogen fluoride, fluorinated polymide and resists to South Korea following the end of a long-running trade dispute between the two countries. Japan's Ministry of Economy, Trade and Industry said it added the three items, which are high-tech materials used in smartphone displays and chips, to the scope of its "Special General Bulk Export License system," effectively lifting the restrictions. The announcement, which took effect March 23, comes after South Korea withdrew its dispute complaint at the World Trade Organization (see 2303240044 and 2303170015).
The Biden administration will soon announce a new “code of conduct” to improve export controls on goods and technology that could be used for human rights abuses, an effort being rolled out as part of the second Summit for Democracy this week, a senior administration official said during a March 29 call with reporters. The code, which the U.S. said it was “working to develop” during the first democracy summit in 2021 (see 2112090030), “commits subscribing states to better integrate human rights criteria in their export control regimes,” the White House said in a fact sheet.
The Defense Department is proposing a regulatory revision that would require certain contractors to provide their export authorizations to the Defense Contract Management Agency. The change would revise the Defense Federal Acquisition Regulation Supplement to require contractors to provide the agency with export license exemptions, export license exceptions, export licenses or other approvals when the contract “requires government quality assurance surveillance oversight and has delivery to, or production or performance in, government quality assurance countries,” the rule said. Comments are due May 22.
U.S. defense export regulations are the “biggest speed bump” and need to be addressed to foster closer technology collaboration between the U.S. and allies, former Navy Secretary Richard Spencer said this week. Spencer, speaking at the National Press Club of Australia, said the International Traffic in Arms Regulations “has to be addressed; it will be addressed,” according to a March 20 report from InnovationAus.
The U.S should build a new international technology task force to increase technology trade cooperation with allies, the German Marshall Fund said in a report this week. The report, authored by GMF technology policy experts Karen Kornbluh and Julia Trehu, said the task force could focus on semiconductors, green technologies and critical minerals, and would allow members to share supply chain data and “provide a venue for countries to reconcile export controls.”