Think Tank Scholars Say EU, Japan, US Aligned on Export Restrictions
Think tank scholars said the World Trade Organization isn't well suited to deal with technology sharing restrictions, but that the G-7 and coordinated bilateral actions have been effective so far.
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Emily Benson, a senior fellow with the Center for Strategic and International Studies who focuses on trade, investment and technology issues, said the U.S. agreement with the Netherlands (see 2303090032) and Japan (see 2303310031) to not sell advanced chip manufacturing equipment to China took an extraordinary amount of diplomacy, so she wonders: "Can that be replicated in the future?"
Benson, who spoke at a CSIS forum on transatlantic dialogue on the Indo-Pacific on June 7, said the restrictions came as countries learned China had produced its first 7-nanometer chips. She said it was achieved with technology stolen from another producer, and that China couldn't yet produce chips that small at scale.
Matthew Goodman, a CSIS colleague in international business, said it's new that Europe and the U.S. are so aligned on economic policy -- and the invasion of Ukraine explains quite a bit of that convergence. He said export controls and investment screening to prevent the leakage of technology is "at the heart" of the work being done by the U.S.-EU Trade and Technology Council, but said both sides still have work to do to align their controls.
"I think there are a lot of questions around what technologies we need to do it on … and how far we need to go," he added.
Shihoko Goto, director for Indo-Pacific enterprise and geoeconomics at the Wilson Center, said Japan was aware of excessive reliance on China before the U.S. became focused on it, since China banned the export of rare earths to Japan in 2010 to punish it for geopolitical actions Japan took. "Both Japan and the United States agree that China is the biggest threat to global economic stability," she said, "and they are in alignment to keep critical technologies out of the hands of Beijing as well." Japan has even established a cabinet post focused on economic security, she said.
Goodman said he worries that "economic security" will be used as a pretext for protectionism. The Section 232 tariffs on steel and aluminum were justified under economic security claims, though Goodman did not refer to them specifically.
Goto said Japan feels that even as the Biden administration talks about ally relationships, it has been protecting its economic interests at a cost to allies' industries. "It’s very worried about protectionism in the United States," she said.
"Tokyo is very aware that there is very little appetite in the United States at the moment to move forward with multilateral free trade agreements," Goto noted, but even so, Japanese officials always talk about how they want the U.S. to return to the Trans-Pacific Partnership when they travel to the U.S.