In a wide ranging conversation at Georgetown University, Under Secretary of Commerce for Industry and Security Alan Estevez shared his perspective on the evolution of export controls and the road ahead. [Excerpts edited for length and clarity]
"I believe now that we are at sort of a foundational inflection point as to the role and purpose of export controls," Estevez said. " Commerce is in the middle of national security in a number of spheres these days.
"We do it from two perspectives. We do it from offense and we do it from defense. Offense is things like Chips Act. So how are we going to build chip production in the United States, where we have assured supply? Semiconductors are the foundation of a lot of what goes on in our economy.
"Again I said assured supply, not sufficient supply because we're still going to rely on.[others] for providing semiconductors. That includes potentially adversarial nations we're trying to wean ourselves away from. "And it's not just semiconductors. It's working through things like the TTC in our work with Europeans or IPEF for work with our Asian allies around things like reworks and supply chain issues.There's lots of other things that could happen.
So if COVID didn't wake you up, Putin's invasion of Ukraine should have taught you not to unreliable on single source supply. We need to have diverse supply, and those are the things that we're working on.
"The core of the defense structure is our export controls. Protecting the technology that our adversaries could use against us, should it ever come to any kind of kinetic action.
The Chinese have their sovereign nation. They can modernize their military. There's nothing that the United States can really say to prevent that. They can modernize their military, they just can't do it with our stuff. Our stuff or our allied stuff? And that's the goal that we're trying to achieve in our export controls.
There is impact in the economy, but that's not the goal. So the goal remains the same to impede Chinese military modernization. I think we need to be realistic that it is not stop. Stop is pretty much an impossibility. So all we're doing is putting up impact time. It's time and it's money. It's going to cost them more and it's going to take them longer to achieve the same outcome.
" [In Russia] the analogy I like to use is an Anaconda. It's going to slowly squeeze the life out of the Russian industrial base. Probably not fast enough for the Ukrainians. We are slowly going to squeeze the life out of the Russian defense industrial base. I'll know I'm successful when they're throwing rocks on the front line there.
"I talked to companies all the time. No company wants to be told I'm going to shave revenue from them. Most of them understand the rationale of why we're doing it. Most of them, they'll comply. . They're all really good American companies, They're all going to apply. Uh. They might not be happy.
"Companies are going to do what companies do. Companies are in the business of making profit for them and their shareholders. That what drives the innovation in the American system. It's a good system. We support that system where I want that innovation, that innovation is key, not just to run faster for defense, it's key for the underpinning of the American economy and the economy of our allies. And we want that. So we're we encourage companies to go out and innovate.
Bringing together countries to put controls on, Russia, we've had varying degrees of success in different countries. Countries in Central Asia where we see companies that didn't exist till March 2022 that are now on the receiving end of weird trade like, you know, 12,000% increase in laptops going to Armenia, where there hasn't been a 12,000% increase in population. We're going into those countries. I've met with ministers of all these countries. We've sent teams out with Treasury as well.
I know when I meet with them that they live in a very tough neighborhood. And that now a state on their border seems to think that any state that had SSR on the end of it belongs to it. So you gotta recognize that. But we also tell them there's a problem. You take care of it, or we will. And so it's it's whack A mole. Gotta keep on.
[With Russia] we're sort of out of bullets on what else we can do. You know we can go full embargo. Our goal has never been to harm the Russian people per se. Like stopping medicines from going has its own negative effect.
China is a harder question. There's it's hard question for us too. The economies are intertwined. Where do you make the most impact and what's the negative consequence of that impact? Sometimes that trade space impacts our national security too.
We have some proposals in Wassenaar related to quantum, again and are going to propose it this year that Russia's gonna not vote for. Wassenaar is a consensus organization. Wassenaar is going to operate under a consensus -1 capability.
Biotech is another area, especially areas like synthetic biology, which have all sorts of upsides and downsides. The trick on areas like biotechnology is, one, what's my choke point that I'm really going to go after? Is it widely available or is it really a choke point?
And two. I'm not trying to impede the PRC from curing cancer. That's good for mankind, Sometimes those same machines do this and do that.
I am working to beef up technological capability, both internal and external to BIS. We need tech inside BIS. In the DoD world, where we never had enough money, we had a lot of money. So I'm always gonna go back: I need resources to do this job better. I need to build out that capability. I want to see BIS using 21st century tools when I leave.
I'd like to have like the DARPA model in the BIS. It would be hard to do that because DARPA has separate hiring authorities and people in DARPA, roll in and out of government. They come in from whatever lab, academia or company that they're working at on this very hard problem. And then we say, hey, come to DARPA and we're going to give you an even harder problem in your field of study. But it's going to be the coolest thing you ever work on your life. They want to come do that for four or five years, and then they go back.
Coming and saying, hey, I want you to come in here so you can explain to me how I can regulate this technology, right? Nonetheless, again, my secretary says she's working to make BIS the most important fun place to work in government. And I'm all in on that role. And so we're looking for smart people.
Comments
No comments on this item Please log in to comment by clicking here