Dual-Use Technology and U.S. Export Controls

The Emerging Technology Technical Advisory Committee (TAC) puts this public–private cooperation into practice at the domestic level. Comprised of representatives from U.S. industry and government with a secret-level clearance, the Emerging Technology TAC meets quarterly to help identify potential dual-use technologies and advise the U.S. Department of Commerce on relevant export control parameters.⁸ Similar export control policy discussions are taking place across the U.S. interagency with more focus on international coordination, including within the U.S. Department of State. However, persistent challenges such as data classification issues, security clearance requirements, and cultural differences between industry and government make it difficult to integrate industry perspectives.⁹

Additionally, to better inform its supply chain–disruption mitigation strategies, U.S. industry generally wants information on new or updated export controls sooner than the government is willing to release it. This is due in part to government concern that industry might use the information to lobby against the controls or somehow tip off adversaries, allowing them to stockpile technology inputs. There is, therefore, a tension between industry representatives wanting more information from the government on forthcoming controls while still receiving quick-turn government requests for information on technical specifications.

To best tailor and apply its export controls, the United States also requires complementary commitment from technology-leading allies and partners. The United States is limited in its ability to unilaterally control technologies because it no longer dominates the global technology research and development (R&D) or manufacturing landscapes. U.S. dominance in commercial nuclear energy in the 1970s, for instance, allowed the United States to keep Taiwan and South Korea from developing their own nuclear site facilities.¹⁰ Today, effective regulation demands more multilateral cooperation since emerging technology industry dominance is increasingly diffused along complex supply chains.¹¹

A clear and recent example of this dynamic is the global semiconductor industry and the rapid development of advanced node chips. On October 7, 2022, the United States enacted severe unilateral export controls against the People’s Republic of China (PRC) to curb its access to and development of advanced node semiconductor chips and supercomputers that underpin its defense and surveillance technologies.¹² However, due to the fragmentation of the global semiconductor supply chain, the United States needed the complementary commitment of leading chip-making tool producers—specifically Japan and the Netherlands—to effectively restrict Chinese access and development.¹³

Despite the increasing need for export control coordination between like-minded states, existing multilateral export control frameworks are too narrowly scoped to address today’s technological challenges. Current multilateral country–agnostic regimes such as the Wassenaar Arrangement, which coordinates multilateral export controls on dual-use technologies, focus on nonproliferation and conventional military–related objectives.¹⁴ These regimes are otherwise constrained in addressing emerging technologies, technology-enabled human rights violations, global supply chain disruptions, and China’s military–civil fusion strategy.

Current regimes are also consensus-based, making them transparent and inclusive but enabling individual members to intentionally impede critical export control action.¹⁵ For example, Russia’s membership in the Wassenaar Arrangement allows Moscow to undermine the development and enactment of new controls in response to its own invasion and continued war in Ukraine. Because of this, other members have had to pursue ad hoc controls outside of the multilateral Wassenaar Arrangement process.¹⁶

Considering these insights, the following recommendations build upon ideas raised by CNAS Technology Policy Lab participants to bolster U.S. domestic regulatory posture and export control alignment with allies and partners.

The White House must clearly articulate the national and international security objectives underpinning U.S. use of defensive economic tools to ensure constructive cooperation with allies and partners. Both U.S. National Security Advisor Jake Sullivan and Secretary of the Treasury Janet Yellen have reiterated that national security, not economic competitiveness, is the primary driver of U.S. export control policy. Meanwhile, U.S. policymakers have prioritized export control goalsetting within the Australia–United Kingdom–United States (AUKUS) trilateral security pact.¹⁷ These discussions should be expanded to include the use of other defensive economic tools, such as inbound investment screenings and outbound investment reviews, and should likewise take place within the United States–European Union (U.S.–EU) Trade and Technology Council (TTC), the Quad, and the G-7.¹⁸ Washington must reconfirm that U.S.–China tensions are not pushing the United States toward a new era of technology protectionism. Rather, strategic competition with China will necessitate even more international coordination and information-sharing among the world’s leading techno-democracies in the decades to come.

The U.S. interagency should replicate the Department of Commerce’s Emerging Technology TAC model wherever export controls are being discussed, to better integrate industry perspectives into export control development, deployment, and messaging strategies. The United States should likewise promote this approach in multilateral export control forums to enhance cross-national information-sharing for identifying and prioritizing critical technologies. Though not an export control regime, the U.S.–EU TTC is a good example of multilateral industry engagement as it invites private sector partners to organized events and solicits direct input on TTC discussions. In this same vein, the United States and its allies should develop concrete technology transfer and research guidelines to further encourage industry innovation.

The U.S. interagency should also pursue more formal relationships with independent research institutions such as academia, think tanks, and federally funded R&D centers (FFRDCs) for third-party technological analyses. This would help the government overcome some of the challenges with fully integrating industry into the export control development process, including security clearance issues and concerns about lobbying or providing advance warning to foreign counterparts. By relying on more neutral sources for technical specification information, industry could more freely consult the U.S. government on critical technology identification and supply chain mapping.

Congress should mandate the creation of and appropriate funds for a new unit within the U.S. Department of Commerce to explore the long-term economic impacts of export controls.¹⁹ This unit could be modeled after the U.S. Department of the Treasury’s Sanctions Economic Analysis Unit, which was announced in Fall 2022 to study the long-term economic impacts of sanctions.²⁰ Similar analyses on export controls would better inform future U.S. national security policy development and deployment.

The White House should continue engaging with allies and partners on the creation of a new multilateral export control regime to complement existing regimes and better respond to today’s technological and geopolitical landscape.²¹ Such a regime would comprise a core grouping of techno-democracies. It would act as a coordination mechanism in identifying technologies of shared concern and developing new controls with a broader range of policy objectives. These could include controls designed to address country-specific issues or activities of concern such as human rights abuses. The new regime could likewise coordinate the use of other defensive economic tools such as inbound investment reviews and outbound investment controls. Launched at the March 2023 Summit for Democracy, the new Export Controls and Human Rights Initiative drives at this expansion of policy objectives but requires additional maturation and a conducive regime to effectively coordinate multilateral action.²²

The United States should drive toward interim measures to strengthen export control coordination within existing multilateral regimes as U.S. allied and partner reactions to a new regime vary, and establishing sustained political will takes time. For example, the United States and its allies and partners should leverage the Wassenaar Arrangement experts group to better coordinate plurilateral controls and avoid the long-term use of ad hoc controls that could further fragment critical supply chains. The international community also needs more public datasets on critical and emerging technology supply and value chains to aid in this decision-making. Additionally, like-minded states should work to align their licensing and review policies to enhance existing coordination channels.

Finally, the U.S. government should appoint a high-level special envoy to advance diplomatic efforts related to export control issues. Adequate support for this position would require coordination between both the U.S. Department of Commerce (for its technical expertise) and the U.S. Department of State (for its global reach).

Maintaining robust dialogue with allies and partners in scoping a new multilateral export control regime is critical as states have different strategic objectives, regulatory frameworks, bureaucratic capacities, threat perceptions, and risk-tolerance levels. For example, states differ on their strategies regarding China, as well the role of economic restrictions within those strategies, which could undermine the potential for future country-specific controls.

To ensure that U.S. export controls are effective in deterring illiberal technology use going forward, the United States should prioritize public–private cooperation and conduct robust, long-term analysis on the economic impacts of export controls. Washington should clearly articulate its national security and foreign policy objectives to allies and partners, and initiate conversations on the creation of a new multilateral export control regime to better respond to today’s rapidly evolving technological landscape.

Acknowledgments

This CNAS Technology Policy Lab was made possible with the generous support of Schmidt Futures. CNAS also thanks all experts who participated in this Lab.

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About the Technology Policy Lab

This policy brief is a product of the CNAS Technology Policy Lab, a working group structure designed to incubate solutions to crucial yet underdeveloped technology policy problems. Each lab is composed of subject matter experts from academia, industry, and the policy community collaborating to develop concrete recommendations to bolster U.S. national security interests and promote American competitiveness. We thank all experts who participated in this Lab.