U.S. should define its secret technology

Robert Reich

TEXT OF COMMENTARY

KAI RYSSDAL: Another big acquisition fell apart today, and the credit squeeze had nothing to do with it. Back in September, the private equity group Bain Capital offered $2.2 billion for 3Com. Trouble was 20 percent of the purchase price would've come from a Chinese company, Huawei Technologies. The prospect that Huawei might get its hands on some sensitive technology didn't sit too well with the federal agency that gets to decide these kinds of things, the Committee on Foreign Investment in the United States.

Commentator Robert Reich says it's time America decide what the phrase "sensitive technology" really means.


ROBERT REICH: Which is more important -- exporting our technologies or preventing foreigners from getting access to them? Apparently the U.S. government has no idea. Its left and right hands are moving in opposite directions.

On the one hand, the Commerce Department is busy trying to revive the White House's free-trade agenda by relaxing restrictions on some militarily sensitive exports. The president even issued a directive streamlining export regulations on products that include military and so-called "dual-use" technologies that might have military uses, things like aircraft parts and computer equipment.

American exporters have been complaining that the old process, requiring them to get a license each time they want to sell these sorts of things, is just too cumbersome and was hurting their businesses. Under the streamlined system, foreign buyers can be cleared in advance. Five Chinese companies have already been pre-cleared to buy some American products with potential military uses.

Okay, so we're exporting more military-related technologies to China, right? No. With the other hand, the Justice Department and the Immigration and Customs Enforcement agencies have been cracking down on such exports.

Just last week, the Justice Department charged a former Boeing engineer with turning over trade secrets to China. In the fiscal year that ended September 30, the number of people charged with violating export control laws was up 50 percent from a year earlier. The crackdown has already endangered several global deals.

Now it's not unusual for different parts of our government to move at cross purposes, and when it comes to China, policymakers have been debating for years over whether to make trade or national security the driving force, but now we have two initiatives heading in diametrically opposite directions, and the result is confusion, waste and lots more work for Washington lawyers.

Now it may be a wild suggestion, but why can't the government just distinguish between militarily sensitive American technologies that must not be exported at all and technologies whose export would benefit both the United States and foreign nations.

KAI RYSSDAL: Robert Reich is a professor of public policy at the University of California Berkeley. His latest book is called "Supercapitalism."

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

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