A former U.S. trade representative and treasury secretary this week cautioned the Biden administration as it prepares to introduce a new outbound investment screening regime, saying new authorities like these tend to expand over time and could eventually be used beyond their intended purpose.
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Commerce Secretary Gina Raimondo, whose department is responsible for three of the four pillars in the Indo-Pacific Economic Framework, told a think tank audience that she is "determined to finalize agreements with all of these countries on all three pillars I’m managing" by a summit at the end of November. The IPEF, which does not liberalize tariffs but does seek to lower non-tariff barriers in its trade pillar, also includes a tax and anti-corruption pillar, an infrastructure and decarbonization pillar, and a supply chain pillar, which was already agreed to earlier this year.
A spokesperson for China's Ministry of Commerce said China is "deeply dissatisfied" with Japan's export restrictions on semiconductors (see 2303310031), which took effect July 23 "[d]espite China's serious concerns." The spokesperson said during a press conference this week that the country has made "serious démarches to Japan at various levels." Imposing trade restrictions "to push for decoupling and disrupt" high-tech supply chains is "wrong and against the law of the market economy, the principle of free trade and international economic and trade rules," the spokesperson said. China wants Japan to keep its larger trading relationship in mind and "not to abuse export controls," the spokesperson said.
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U.S. policymakers should explore new ways to restrict transfers of items and services that China may be using to advance its artificial intelligence capabilities, such as data, algorithms and human capital, the Center for a New American Security said in a report this week. Although the administration should “aggressively” restrict exports to China of advanced semiconductor equipment, the report said Washington also needs to “seek out creative tools to regulate other basic building blocks of AI.”
The U.S. this week sanctioned more than 100 people, entities and ships supporting Russia’s war efforts against Ukraine, including one of its top metals producers and leading construction companies, Kyrgyz Republic firms sending Moscow dual-use technologies, and other businesses helping the government evade international sanctions. The new designations are meant to further restrict Russia’s ability to import military goods and technology, slash revenue from its mining sector, undermine its energy capabilities and “degrade Russia’s access to the international financial system,” the Treasury Department said.
A former senior export control official with the Commerce Department told the House Select Committee on China that he thinks the Entity List is ineffective against China, because countries can change their names, establish partnerships, change locations, and because the Entity List is a "meat cleaver" approach, given that listed parties are subject to very strict licensing requirements.
Republicans on the House Select Committee on China urged U.S. officials this week to cut off a broader range of exports to China, arguing that trade with China is helping to fund Beijing’s efforts to undermine American national security. Committee chair Mike Galagher, R-Wis., specifically asked witnesses from the Commerce, State and Defense Departments to enact a technology export ban on Huawei that the administration has reportedly been considering for the last year (see 2301310009).
A State Department official this week denied allegations that the agency has held back sanctions and export controls in an effort to limit damage to the U.S.-China relationship, saying the Biden administration continues to enforce a range of human rights-related trade restrictions against Beijing. But the official also said the administration hasn’t yet imposed mandatory sanctions under the Uyghur Human Rights Policy Act of 2020 and was accused by at least one lawmaker of failing to comply with a congressional subpoena that sought information on sanctions against China.
Export Compliance Daily is providing readers with the top stories from last week in case you missed them. You can find any article by searching for the title or by clicking on the hyperlinked reference number.