Nat'l Security Strategy Outlines Efforts to Improve Export Controls, Screen Outbound Investments

“The strategy indicates that we have to turn the page on the traditional formula for trade” to better address vulnerable U.S. supply chains and 21st century issues, National Security Adviser Jake Sullvian said during an Oct. 12 call with reporters. He also said the U.S. will continue to “bring to bear all of the tools of national power at our disposal,” including “sanctions and export controls on Russia to squeeze their capabilities.”

The administration is “enhancing investment screening, export controls, and counterintelligence resources” to better counter intellectual property theft and forced technology transfer, the strategy says. That includes working with allies to improve our collective capacity to withstand attempts to degrade our shared technology advantages, including through investment screening and export controls.”

The strategy also said the U.S. should pursue the “development of new regimes where gaps persist,” specifically mentioning controls over biological and chemical weapons and other items to “prevent terrorist acquisition.” The administration will “ensure multilateral export control regimes are equipped to address destabilizing emerging technologies and to align export policies in like-minded states toward countries of concern,” the strategy said.

The administration said it is “already rallying” allies “to advance an international technology ecosystem that protects the integrity of international standards development and promotes the free flow of data and ideas with trust.” This effort includes work already started through the U.S.-EU Trade and Technology Council and the Indo-Pacific Quad, document says.

“Across this work, we seek to bolster U.S. and allied technology leadership, advance inclusive and responsible technology development, close regulatory and legal gaps, strengthen supply chain security, and enhance cooperation on privacy, data sharing, and digital trade,” the strategy says. The Commerce Department is hoping to create a new multilateral export control framework to better control semiconductors and other advanced technologies, but it remains unclear if the effort will result in a new, formal regime (see 2206290032).

The strategy also makes clear the administration is “pursuing targeted new approaches” to modernize its technology trade restrictions, including an outbound investment screening mechanism “to prevent strategic competitors from exploiting investments and expertise in ways that threaten our national security, while also protecting the integrity of allied technological ecosystems and markets.”

Sullivan, speaking later in the day at an event hosted by Georgetown University, said the administration is "making progress in addressing outbound investments in sensitive technologies," particularly technologies "that would not be captured by export controls and that could accelerate the capabilities of our competitors in the most sensitive areas."

The White House has not previously publicly committed to creating an outbound investment screening regime but believes it could help fill certain gaps in semiconductor-related export controls (see 2209140041). Lawmakers have urged the White House to hold off on issuing a unilateral outbound investment executive order and instead work with Congress on such a regime (see 2210040025).

Sullivan also touched on the broad China-related export controls announced last week by the Commerce Department, which he said are "premised on straightforward national security concerns" and aimed at protecting technologies used to develop advanced military systems and mass surveillance capabilities (see 2210070049).

"Many of you have heard the term small yard, high fence when it comes to protecting critical technologies," Sullivan said. "Choke points for foundational technologies have to be inside that yard and the fence has to be high, because our strategic competitors should not be able to exploit American and allied technologies to undermine American and allied security."

The strategy also touches on traditional trade issues, saying the U.S. must also rely on “access to foreign markets to promote U.S. exports.” The administration is “working to update the current trading system to promote equitable and resilient growth,” the strategy says, including seeking “new export opportunities that benefit American workers and companies.”

Sullivan also said the U.S. is continuing to assess its relationship with countries that may be supporting Russia, including Saudi Arabia, which has decided to cut oil production in a bid to raise prices amid a global energy shortage (see 2210110004). Several lawmakers this week said the U.S. should cease weapons sales to Saudi Arabia.

“The president wants to make sure that he is consulting closely with the Congress” on the issue, Sullivan said, adding that he will “make his decisions about how we proceed with respect to the relationship on his timetable.”

Sullivan stressed that Biden is not in a rush. “When it comes to arms sales, I would just point out that nothing is moving imminently,” Sullivan said. “So there is not an imminent decision that has to be made on the question of arms sales. But that is something that he will be looking at.”