The U.S. and the European Union should better align their export license exceptions, export controls and policies to avoid “unnecessary friction on trade” between the two sides, particularly surrounding chip equipment, the Semiconductor Industry Association said. The group said American semiconductor companies depend on overseas markets in Europe, and regulatory harmonization could help to “level playing fields with respect to export controls, particularly their scope, application, and enforcement.”
At a virtual World Economic Forum, U.S. Trade Representative Katherine Tai, the director-general of the World Trade Organization and CEOs in manufacturing and shipping said traders will change the ways they manage supply chains because of lessons from the COVID-19 pandemic. Tai said "the pandemic in particular has laid bare vulnerabilities in this version of globalization that we have and existing supply chains that we all feel strongly that we need to address."
The U.S. this week imposed new sanctions against Russia for its “destabilizing” activities in Ukraine and privately previewed a harsher set of potential trade restrictions, including major new export controls on chip equipment. Although it remains unclear if those specific export restrictions would be coordinated with allies, the U.S., Germany and the U.K. all said Jan. 20 that they are ready to impose “massive consequences and severe economic costs” on Russia if it continues down a path to war.
The U.S. is working with Japan to build a multilateral forum to control exports of advanced technologies, which would be specifically aimed at limiting shipments to China’s military, The Japan News said Jan. 10. The forum would also include Europe and other like-minded countries and could restrict sales of semiconductor manufacturing equipment, quantum cryptography, artificial intelligence and other emerging technologies, the report said. The two sides are “currently specifying the fields to be subject to regulation” and hope to “establish a new framework for a small number of countries with advanced technology.” The White House didn’t comment.
Taiwan’s government will soon require companies to seek approval before they sell their assets, plants or subsidiaries in China to Chinese counterparts or other local buyers, a move that could create more oversight over transfers of sensitive technologies, the Financial Times reported Dec. 21. The new regulation, which is expected to take effect by early January, is designed to protect Taiwan’s semiconductor technologies, the report said. But some tech industry executives fear the restrictions could be too broad and “hinder overall future technology advancement.”
World merchandise trade dipped 0.8% in the third quarter of 2021 following four straight quarters of expansion, the World Trade Organization said, pointing to supply chain disruptions, with imports in North America and Europe weaker than forecast; production input shortages, in particular semiconductor shortages; and rising COVID-19 cases as the omicron variant recently emerged, as the causes. Trade volume was up 11.9% year-to-date through September, although this was slightly lower than the WTO's most recent trade forecast, the trade organization said. With export and import prices rising sharply, the value of world merchandise climbed 24% year-on-year in the third quarter. This boost was fueled by primary commodities including fuels, which saw prices double from the third quarter of 2020 to the third quarter of 2021, the WTO said.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which has 11 member countries since the U.S. backed out in 2016, has attracted four applications this year, from the United Kingdom, Taiwan, China and, most recently, South Korea. The U.S., which took a leading role in negotiating the high-standard free trade agreement, is unlikely to ask to come back in the next two years, panelists on a Hudson Institute discussion agreed.
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.
China expressed serious concern over reports that the U.S. may impose tougher sanctions on the Semiconductor Manufacturing International Corporation, China's leading semiconductor manufacturer. In Dec. 15 comments, a spokesperson for China's Foreign Ministry said that "by overstretching the concept of national security, certain US politicians politicize and instrumentalize science and technology and economic and trade issues based on ideology." The spokesperson said the sanctions would run contrary to market economy and fair competition principles and harm the prospect of security in global supply chains.
Beijing’s Wise Road Capital and South Korea's Magnachip Semiconductor Corporation terminated their merger, the two companies said this week. They received permission to withdraw their filing with the Committee on Foreign Investment in the U.S. after being told that CFIUS would not approve Wise Road’s acquisition of Magnachip.