US Export Controls Contributing to Proliferation of Chinese Tech Standards, Industry Says
The Commerce Department should immediately expand an exemption to allow U.S. companies to participate in standards-setting bodies that have members designated on the Entity List, industry representatives said. U.S. firms said they have been forced to avoid the bodies because they fear running afoul of U.S. export laws, a practice that could result in the U.S. losing important influence over the future of emerging technology standards.
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“If the fundamental contradiction of the U.S. government imposing controls on the ostensibly open and global standards system are not promptly addressed,” the Telecommunications Industry Association said, “the system might split into pieces and lead to the proliferation of Chinese standards both in the country and in markets around the world.”
In comments submitted this month (see 2111030009), technology trade groups and companies urged Commerce’s National Institute of Standards and Technology to make it easier for U.S. firms to participate in standards bodies, which are quickly being overtaken by Chinese companies, including ones with government ties. Commerce can start by expanding a 2020 Entity List exemption by the Bureau of Industry and Security, which effectively permitted the release of certain technology to Huawei and its affiliates on the Entity List if that release is in the context of a standards-setting body and not for commercial purposes (see 2006160035). That exemption should be expanded to include all Entity List members, not just Huawei, technology groups told NIST.
USTelecom called a potential expansion of the exemption “the most immediate and important action the U.S. government can take to improve the country’s global standards leadership.” Without it, American companies will continue to be excluded from “key” standards organizations that include Chinese members listed on the Entity List. “In the absence of clear exemption language, companies cannot be expected to participate,” USTelecom said. “However, standards-setting projects will proceed with or without the involvement of U.S. participants.”
Although industry has worked with BIS for years on crafting a rule to expand the exemption, the agency hasn’t yet issued any other authorizations (see 2109150036). A BIS spokesperson didn’t comment. The agency said in September that it has never issued a penalty in connection with standards development activities.
The longer BIS takes to expand the rule, the more the U.S. is placed at a “significant disadvantage in shaping critical standards,” the Alliance for Telecommunications Industry Solutions said. Among several recommendations, the group called on BIS to clarify that it allows releases in standards bodies of both technology and software designated as EAR99 -- goods listed in the Export Administration Regulations that generally don’t require export licenses. And like other commenters, the alliance also said the agency should “permit authorized releases to all entities on the Entity List” that participate in standards activities.
Not only does BIS’s rule not include other Entity List companies, it is also “narrowly worded” and “ambiguous” as to whether it covers “all standards-related activities” involving Huawei, Qualcomm told NIST. “These developments constrain U.S. companies from participating in key standardization activities even when such cooperation is essential,” the semiconductor company said, adding that they “might even force [U.S. companies] to cede their leadership position to their competitors.”
If Commerce decides against expanding its exemption, it should at least consider clarifying that the Entity List restrictions don’t apply to “regular interactions” in standards-setting bodies, the U.S.-China Business Council said. The council said U.S. companies have been “forced to sideline themselves … out of a fear of legal repercussions.”