Brown Opening Statement at Hearing on Export Controls

WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – delivered the following opening statement at today’s hearing entitled ‘Export Control Reform Implementation: Outside Perspectives’.

Sen. Brown’s remarks, as prepared for delivery, follow: 

Thank you, Chairman Crapo, for holding this hearing, and thank you to our witnesses for being here today.

Last year, Congress passed ECRA, the Export Control Reform Act to strengthen our country’s ability to protect technology that’s critical to our national security from being stolen by countries like China. We did that through creating a permanent statutory basis for U.S. export controls, which we passed alongside FIRRMA, the Foreign Investment Risk Review Modernization Act, to give CFIUS more authority to look at a broader range of transactions.

We passed both of these to strengthen our national security, and give us stronger tools to protect ourselves from countries trying to get their hands on our most sensitive technologies. 

Today, nearly one year later, this hearing will help us to assess whether ECRA is being appropriately implemented and enforced, and whether the system has the resources to get the job done. 

In ECRA, we included provisions designed to address emerging and foundational technologies. We know how fast technology changes, and we knew we needed tools that would evolve with those changes. 

Congress also wanted to make sure that the identification of these technologies remains an ongoing and organic process, and that new controls would be targeted to technologies that are considered essential to U.S. national security. 

The law also directed federal agencies to take into account foreign development and availability of those technologies, and the effect controls would have on the development of the technologies within the United States.

We want to protect U.S. national security priorities through tough, appropriate export controls.  Ultimately, important national security and law enforcement considerations should be paramount, but kept separate from trade and economic considerations. Unfortunately, as with its treatment of ZTE and Huawei, this administration seems to be failing that crucial test.

Although export control decisions can appear to be simple, each one requires complex policy and legal analyses – ones that involve statutes, regulations, international commitments, intelligence and law enforcement equities, industrial base implications, license administration, foreign availability, and multilateral and bilateral foreign policy issues.

The technologies we’re looking at are often complex and they’re constantly evolving. Technologies that were once sensitive become ubiquitous. Commercial technologies that aren’t normally sensitive can still be applied to new uses, or by end users of concern, in ways that threaten our national security. Concerns about destinations, end users, and end uses vary widely and change constantly. 

This is, in other words, complicated stuff.  And we must get it right.

As Commerce proceeds with its rulemaking process on emerging and foundational technologies, this Committee must ensure that Commerce hews to the standards established in ECRA. 

It’s hard to have a conversation about export controls and emerging technologies without addressing the role China plays in these areas. 

Through its Belt and Road Initiative and its Made in China 2025 initiative, China is executing ambitious plans to develop new technology and manufacturing capabilities. It is investing heavily in artificial intelligence and 5G infrastructure. It is reported to be investing $10 billion in a national quantum information lab. And it is two years into an additive manufacturing plan to create a $3 billion industry by next year.

China is laser-focused on dominating the technology and manufacturing sectors in the decades to come. That ought to have us worried – especially when we remember China’s history of using the same technologies it develops for economic purposes to also help modernize its military – this was a key driver of our efforts to update CFIUS and export controls last year. They should remain a focus of our executive agencies as they set controls and issue licenses under new export control laws and regulations. 

China’s sometimes illegal acquisition strategies require a forceful response from the U.S. government and our international allies. In that sense, the United States is not alone in the issues it faces from China. 

That’s why, as Commerce and other agencies identify and consider controls on emerging and foundational technologies, it’s important that any new unilateral controls be implemented with an eye toward multilateral agreements.

Multilateral controls – like multilateral sanctions – are much more effective if they are imposed by and with our allies, and if control standards are harmonized as much as possible.

Thank you. I look forward to hearing from our witnesses.