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What Would a US-Led Global Technology Alliance Look Like?

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Trans-Pacific View | Economy

What Would a US-Led Global Technology Alliance Look Like?

There’s been much talk of uniting tech-leading democracies to compete against China. What would that mean in practice?

What Would a US-Led Global Technology Alliance Look Like?
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In its early weeks, the Biden administration has wisely signaled that it plans to shift U.S. focus away from the Middle East and toward global competition with China. In addition to the political and military realms, Washington will need to compete with China in the realm of technology. And it is here that fresh thinking is most needed. Such an approach will require new frameworks for action, and there are a number of proposals for how tech leading democracies can come together in different multilateral and minilateral formats. Few, however, offer recommendations on how to turn these ideas into action.

We propose that the tech-leading democracies engage and coordinate in a framework based on three central legs: aligning strategic perspectives with regards to China; harmonizing our regulatory regimes with regards to investment and export control; and deepening economic and technology cooperation.

China is making major investments in key strategic technologies such as 5G telecommunications, quantum computing, and artificial intelligence, which over time could translate into economic and military advantages over the United States. It has pursued policies of forced technology transfer and intellectual property theft. It has worked to create new regional economic mechanisms and tried to shape existing international institutions to facilitate a friendly environment for Chinese technology companies. And worryingly, it has converted many new information technologies designed to provide greater freedom and opportunity to humanity into tools of oppression to be leveraged by the surveillance state and exported those tools to other autocratic governments.

There is much the United States can do on its own to respond to this challenge, such as investing in research and development, updating its export control regime to better protect U.S. technological advantages, and investing in the education of the next generation of scientists. But the United States will be more effective working in concert with like-minded countries and rallying its allies and partners to craft a unified approach to technology policy.

Ideas for such groupings include countries such as Australia, Canada, Finland, France, Germany, India, Israel, Japan, the Netherlands, South Korea, Sweden, the United Kingdom, and the United States. Because each country has distinct interests and objectives, a repeatable but adaptable approach is needed to structure the lines of effort for establishing a common ground and agreeing to a shared playbook, such as concerns over supply chain risks, standard-setting, and secure digital infrastructure.

To do this, we propose a framework with three legs: aligning strategic perspectives; harmonizing regulatory regimes; and deepening economic and technology cooperation. The United States should create bilateral and minilateral working groups on China with its tech-leading democratic allies that are focused on each leg. These efforts should then feed into more senior level working group on technology cooperation with allies and partners or less formally into the discussions already happening at the most senior levels between the United States and its partners on how to deal with the issue of China and technology. Each leg would be weighted according to what aspects of the specific bilateral relationship is most relevant.

The first working group, chaired by the State Department and its foreign counterparts, would focus on aligning strategic perspectives on China. This will be a challenge. Many of the United States’ partners have different threat perceptions of China and different views on how to balance the economic benefits that come from engagement with China and the need to work together on global transnational issues such as climate and pandemics. Their publics also have different perspectives on China’s global role and that of the United States, which plays into what is politically feasible for some U.S. partners. Still, even though all differences will not be overcome, a shared understanding of the threats, challenges, and opportunities for successfully navigating a dynamic geostrategic competition are necessary for effective collaboration.

The second task is harmonizing regulatory regimes. U.S. policies for investment screening and export controls meant to protect U.S. technology are transforming rapidly to deal with the challenges posed by China. The working group would serve as a means to coordinate and communicate changes in policy and to iron out differences over what technologies are considered sensitive and how to most effectively safeguard technological advantages. This could pave the way for streamlining bilateral tech sector investments and expanding the Foreign Investment Risk Review and Modernization Act whitelist that exempts companies from foreign states whose regulatory regimes are up to U.S. standards from extra scrutiny. The Treasury Department should lead the U.S. side, and include export control experts and officials from the Committee on Foreign Investment in the United States (CFIUS).

The third area would focus on deepening economic and technological cooperation to enhance the U.S. position in its strategic competition with China, as well as providing U.S. partners with economic incentives, benefits, and sound alternatives to Chinese investments and technologies. Led by the National Security Council’s senior director for technology and national security, the U.S. side would include officials from the departments of State and Commerce, the Office of Science and Technology Policy, the National Labs, and the Defense Innovation Unit. With their foreign counterparts, these officials can lay the groundwork for collaboration on issues such as setting norms for technology use, supply chain resilience, joint R&D efforts, human capital exchanges, and creating tech investment mechanisms. This could include pushing back against the use of using surveillance technology to suppress ethnic minorities or silence political opponents, striking manufacturing agreements for pharmaceuticals, teaming up on energy storage research, and providing sustainable loans to less-developed countries for digital infrastructure development as a substitute for China.

A set of strong bilateral and minilateral relationships along these lines would likely serve as a springboard, and potentially an accelerant for effective plurilateral approaches. For example, the nascent effort underway among the Quad countries could be the foundation for engagement with ASEAN; collaboration with the Netherlands on semiconductors would support broader engagement with the European Union’s microelectronics strategy; and working with Canada to reform and enhance the National Technology and Industrial Base (NTIB) sets the stage for better engagement with the United Kingdom and Australia, newer NTIB members, on national security R&D and production. Ultimately, the goal is to create one or more true technology alliances.

One of the major advantages the United States has in its strategic competition with China is its network of reliable, technologically sophisticated, and democratic allies. The consultative framework we proposed, which focuses on bridging gaps and aligning on how to handle the geostrategic technology competition with a rising China, can bring economic and security benefits for all parties. It can be pursued on a bilateral basis or in smaller groupings of key European and Asian partners, and serve as the basis for a broader alliance of the world’s tech-leading democracies.