解決全球新興經(jīng)濟(jì)安全三難困境

OCTOBER2024

AREPORTOFTHECSISECONOMICSECURITYANDTECHNOLOGYDEPARTMENT

StayingAheadintheGlobalTechnologyRace

ARoadmapforEconomicSecurity

editor

NavinGirishankar

OCTOBER2024

AREPORTOFTHECSISECONOMICSECURITYANDTECHNOLOGYDEPARTMENT

StayingAheadintheGlobalTechnologyRace

ARoadmapforEconomicSecurity

editor

NavinGirishankar

contributors

GregoryC.Allen

IlariaMazzocco

AdamFrost

JosephMajkut

KirtiGupta

ErinMurphy

BarathHarithas

WilliamA.Reinsch

ScottKennedy

RichardRossow

JamesA.Lewis

SujaiShivakumar

CSIS

CENTERFORSTRATEGICSINTERNATIONALSTUDIES

IIAReportoftheCSISEconomicSecurityandTechnologyDepartment

AboutCSIS

TheCenterforStrategicandInternationalStudies(CSIS)isabipartisan,nonprofitpolicyresearchorganizationdedicatedtoadvancingpracticalideastoaddresstheworld’sgreatestchallenges.

ThomasJ.PritzkerwasnamedchairmanoftheCSISBoardofTrusteesin2015,succeedingformerU.S.senatorSamNunn(D-GA).Foundedin1962,CSISisledbyJohnJ.Hamre,whohasservedaspresidentandchiefexecutiveofficersince2000.

CSIS’spurposeistodefinethefutureofnationalsecurity.Weareguidedbyadistinctsetofvalues—nonpartisanship,independentthought,innova-tivethinking,cross-disciplinaryscholarship,integrityandprofessionalism,andtalentdevelopment.CSIS’svaluesworkinconcerttowardthegoalofmakingreal-worldimpact.

CSISscholarsbringtheirpolicyexpertise,judgment,androbustnet-workstotheirresearch,analysis,andrecommendations.Weorganizeconferences,publish,lecture,andmakemediaappearancesthataimtoincreasetheknowledge,awareness,andsalienceofpolicyissueswithrele-vantstakeholdersandtheinterestedpublic.

CSIShasimpactwhenourresearchhelpstoinformthedecisionmakingofkeypolicymakersandthethinkingofkeyinfluencers.Weworktowardavisionofasaferandmoreprosperousworld.

CSISdoesnottakespecificpolicypositions;accordingly,allviewsexpressedhereinshouldbeunderstoodtobesolelythoseoftheauthor(s).

?2024bytheCenterforStrategicandInternationalStudies.Allrightsreserved.

Acknowledgments

ThisreportismadepossiblebygeneralsupporttoCSIS.Nodirectsponsor-shipcontributedtothisreport.

CenterforStrategicandInternationalStudies

1616RhodeIslandAvenue,NWWashington,DC20036

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StayingAheadintheGlobalTechnologyRaceIII

Contents

IVIntroduction:ResolvingtheEmergingEconomicSecurityTrilemma

NavinGirishankar

PROTECTINGSENSITIVETECHNOLOGIES,PRESERVINGU.S.ADVANTAGE

2MismatchofStrategyandBudgetsinAIChipExportControls

GregoryC.Allen

5FromReactiontoStrategy:ANewFrameworkforU.S.ExportControlEnforcement

BarathHarithas

8DefensiveMeasuresAgainstChina:TimeforaReevaluation

ScottKennedy

THEINVESTINGINAMERICAAGENDA

13ClusteringforInnovation

SujaiShivakumar

17MeetingtheEnergyDemandsofEconomicCompetition

JosephMajkut

20IntellectualPropertyRightsandtheFutureofU.S.TechnologicalLeadership

KirtiGupta

23TheNecessityofaNationalInterestAccount

AdamFrost

TECHNOLOGYCOOPERATION,COMPETITION,ANDECONOMICRELATIONS

27India’sAscendingRoleforU.S.EconomicSecurity

RichardRossow

30MakingInfrastructureintheIndo-PacificaSuccess

ErinMurphy

34CantheUnitedStatesHaveaTradePolicyWithoutMarketAccess?

WilliamA.Reinsch

37RethinkingCompetitionwithChinaonCleanTechnologies

IlariaMazzocco

TECHNOLOGYSTATECRAFTANDGLOBALGOVERNANCE

41BuildingaTechAlliance

JamesA.Lewis

44AbouttheEditors

46AbouttheContributors

52Endnotes

INTRODUCTION

Resolvingthe

EmergingEconomicSecurityTrilemma

ByNavinGirishankar

T

heUnitedStatesisinthemidstofagenerationalshiftineconomicpolicyanditsroleinnationalsecurityplanning.Eveninthesepo-larizedtimes,thereissurprisingconsensusacrosstheAmericanpo-

liticalspectrumthattheeconomicpoliciesandglobalinstitutionsfosteredsinceWorldWarIIarenolongeradequate.TheylefttheUnitedStatesvul-nerabletocompetitionwithnon-marketactors,principallyChina;domesticeconomicdislocations;andglobalcrisessuchasclimatechangeandpan-demics.Thesevulnerabilitiespersistandwillawaitthenextadministration.

Globaltechnologycompetitioncontinuestogatherpace.Earlierthisyear,U.S.secretaryofcommerceGinaRaimondocomparedthecontem-porarychipsracetothespaceraceofthe1960s:anewSputnikmoment.1Indeed,wemaybelivingthroughfiveSputnikmomentsatthesametimeacrosssemiconductors,artificialintelligence(AI),quantumcomputing,cli-matetechnologies,andbiotechnologies.Losingouredgeinanyoneoftheseareas—especially,thetriadofchips,AI,andquantum—couldmeaningfullydiminishtheUnitedStates’economicprospectsandnationalsecurity.2AsDaríoGil,chairoftheNationalScienceBoardandseniorvicepresidentanddirectoratIBMResearch,notedattheboard’s490thMeeting,“scienceandtechnologyarethenewcurrencyofglobalpower.”3

Stayingaheadofthetechnologyraceismorechallengingthanever.TheUnitedStatesanditsalliesmustcontendwithaprimarycompetitorthatusesitsscaleandprowesstoweaponizeinnovation,floutfaircompetition,exercisecontrolovervitalvaluechains,andengageineconomiccoercion.Meanwhile,Chinacontinuestoreapthebenefitsofhavingplayedthelonggamewithcountriesaroundtheworld,particularlyintheGlobalSouth.AtstakefortheUnitedStatesanditsalliesistheirlong-termprosperity,theresilienceandsecurityoftheirmarketsanddemocracies,andtherules-basedeconomicordertheyfosteredforthreegenerations.

Astheserealitieshavecomeintoclearerviewinrecentyears,thepasttwoU.S.administrationshaveputtheirrespectivestamps—indesignandtenor—on“economicsecurity,”rewritingtheimplicitcontractbetweengov-ernmentsandmarkets.UndertheBidenadministration,U.S.economic

IVAReportoftheCSISEconomicSecurityandTechnologyDepartment

securitypolicyevolveddramaticallyinpursuitofcompetitiveness,resil-ience,andnationalsecuritygoals.G7andotheralliesfollowedsuit,withpolicymakersinJapanandtheEuropeanUnioncodifyingformaleconomicsecurityframeworks,creatingmandateswithintheirrespectivegovern-ments,anddevelopingsimilarpolicies.4

TheUnitedStates,inpursuitofcompetitivenessandresiliencegoals,hasimplementedpromotemeasuresentailingunprecedentedpublicandprivateinvestmentsinrevivingU.S.chipmakingandbuildingcapabilitiesacrosscleantechandothertechnologies.Asecondsetofmeasureshassoughttoaligncompetitivenessandnationalsecuritygoalsbyprotectingtechnologiesandmarketsbyexpandingexportcontrols,sanctions,andinvestmentscreening,aswellasacontinuationofstrategictariffs.Athird,inparttocounterChina,hasinvolvedplurilateraleconomiccooperationagreementswithpartnersonsupplychainresilienceandtheenergytransi-tion,aswellasbilateralinitiativesontechnologyinnovation.

EarlyimplementationhasshownsignsofindustrialrevivalacrosstheUnitedStates:privatesectorinvestmentcommitments—domesticandfor-eign—instrategicsectorssuchaschips,cleanpower,clean-techmanufac-turing,andotherstotaledover$900billionoverthepastfouryears.5AndprotectmeasuressuchasexportcontrolshavebluntedChineseandRussianacquisitionofdual-usetechnologies.Andyet,implemenationchallengeshaveemerged,alongwithsecond-ordereffects.

WhileexportcontrolsonRussiadegradedPutin’swarmachineintheearlydays,theirefficacyhasbeentestedbytransshipmentfromthirdcoun-triesandRussia’scontinuedrelianceonChinesechipsandchipmakingmaterials.Similarly,whilenewU.S.exportcontrolsinitiatedin2022and2023bluntedChina’saccesstosensitiveAIchips,Beijinghasrespondedwithitsownindustrialpoliciesto“designout”andcircumventU.S.con-trolsandstandards.Ithasalsoenactedtit-for-tattraderestrictionsonpro-cessedcriticalminerals—akeychokepointinthechipsandelectricvehiclevaluechains.6

Tensionsbetweentheprotect,promote,andpartnerstrategieshaveemerged,particularlyregardingtheuseofsubsidies,taxbreaks,anddomesticsourcingrequirementsaimedatpromotingU.S.chipmakingandcleantechnologies.Thesepolicieshavesparkedconcernsamongkeyallies—Japan,SouthKorea,andtheEuropeanUnion—overasubsidyrace-thatcoulddisadvantagetheirownindustries.7Similarly,theU.S.governmenthasledeffortstoengagepartnersvianeweconomiccooperationagreementssuchastheIndo-PacificEconomicFramework(IPEF)andtheAmericasPartner-shipforEconomicProsperity(APEP).Theseagreements,however,donotcomewitheitherincreasedmarketaccessormeaningfulfinancingbenefitsthatpartnersseek,inpartduetoU.S.domesticpoliticalconsiderations.ThesedonotfarewellrelativetoChina’slong-termplayintheGlobalSouth,notwithstandingconcernsabouttheBeltandRoadInitiative’sflaws,includ-

StayingAheadintheGlobalTechnologyRaceV

ingdebtoverhangandpoorstandardsinsomecountries.

Giventheselimitations,thebiggerquestioniswhetherthepro-mote-protect-partnerframeworkaddsuptoalong-termeconomicsecu-ritystrategy.Theanswertothatquestionwilldependonhoweffectivelythenextadministrationnavigatestheemerging“economicsecuritypolicytrilemma.”Whilenotquiteanimpossibletrinity,thetrilemmameansthatpolicymakerswillbeabletopursueanytwosetsofmeasures(forexam-ple,promotingdomesticindustriesandprotectingdual-usetechnologies)butnotwithoutsacrificingthethird(forexample,deepintegrationwithsupplychainpartners).ThiscollectionofessaysfromleadingexpertsatCSIS’snewlyformedEconomicSecurityandTechnologyDepartmentisourcontributiontothisdebate.

AnEmergingEconomicSecurityTrilemma

COMPETITIVENESS

“Protect”

Exportcontrols

Investmentscreening

Sanctions

Strategictari?s

Secureandtrustedtechnologymarkets

“Promote”

IndustrialinvestmentsR&Dinvestments

NATIONALSECURITY

“Partner”

Economicalliances

Commercialdiplomacy

RESILIENCE

Source:Author'sowncreation.

Animmediatepriorityistoassesstheimpactofprotectmeasuressuchasexportcontrols,sanctions,investmentscreening,andstrategictar-iffs,includingtheirsecond-ordereffects.GregAllenandBarathHarithasunderscoretheimportanceofbuildingthecapabilitiesoftheDepartmentofCommerceandrelateddepartments.Butthatalonewillnotbeenough:theUnitedStatesmustworkeffectivelywithallies,asJamesAndrewLewisargues,onforgingapost–WassenaarArrangementtechnologyalliancewithmeaningfulEuropeanandAsianbuy-in.Atsomepoint,though,ScottKen-nedywarns,theadministration’suseofdefensivemeasureswillstretchtheUnitedStates’abilitytomilitatetherules-basedeconomicorderthatithasfosteredfordecades.

Ultimately,themostcriticallong-termpathfortheUnitedStatesistoout-innovateChinaacrossadvancedtechnologies.TheCHIPSandScienceActaswellasInflationReductionActsputinplaceanumberofbuildingblocksofastrategy—investmentsinindustrialinfrastructure,researchanddevelopment(R&D),andtheworkforce;acreativecapitalandinvestmentattractionprogram;andpartnershipswithsupplychainpartners.AsSujaiShivakumarnotes,theUnitedStateswillneedtofinishtheswingwith

VIAReportoftheCSISEconomicSecurityandTechnologyDepartment

investmentsintechnologyclustersandR&Dcooperationthatwillrequireasustainedbipartisanefforttobearfruit.AdamFrostcallsforanationalsecurity–focusedapproachtodirectingU.S.governmentfinancingincriticalandemergingtechnologies.Inaddition,JosephMajkuthighlightstheneedfortechnologyenablerssuchasaccesstocleanpower,alongwithalargetransmissioninfrastructure,tofuelAIandadvancedmanufacturing.

Promotetoolsalonearelimited:innovationdoesnothappeninisola-tion,nottomentionthecostofpromotetoolstothetaxpayeramidalreadyunprecedentedlevelsoffederaldebt.Ratherthetime-andstress-testeddriversofinnovationarecompetitioninsecure,trustedinternationaltechnol-ogymarketsandcooperationwithallies,includingonresearchanddevelop-mentandsupplychains.Strongenforcementofintellectualpropertyrights,KirtiGuptaargues,isessentialifinnovatorsaretoentermarkets.Giventheglobalanddistributednatureoftechnologyvaluechains(frombasematerialstoendproducts),IlariaMazzoccoremindsusoftheproductivitybenefitsthatwillaccruetoU.S.cleantechfirmsthattakerisks,competeinglobalmarkets,andintegrateintovaluechains.

NowherearecompetitivemarketsandafavorableinvestmentclimatemoreimportantthanintheGlobalSouth.Withoutmeaningfulmarketaccessorsubstantialfinancingcommitments,BillReinschandErinMurphyargue,agreementssuchasIPEFareunlikelytoattractlong-termbuy-infrompartners.Asareminderofwhatispossible,RickRossowpointsoutthattheU.S.-Indiacommercialpartnership,includingitsfocusonchips,criticalminerals,andothercriticalandemergingtechnologies,couldprovepivotalforbothcountries,withpotentialspilloversforothers.

Wearewellintotheeraofeconomicsecurity.Theneedforanalliedapproachisnowaxiomatic,butitwillrequiretheUnitedStatestoleadandpartnerinequalmeasures.Thechallengeforthenextadministrationistobuildontheearlylessonsofrecentyearsanddevisealong-term,bipartisaneconomicsecuritystrategythatbalancesdomesticgoalswithinternationalcooperationandthecomplexitiesoftheglobalmarkets.

StayingAheadintheGlobalTechnologyRaceVII

ProtectingSensitive

Technologies,Preserving

U.S.Advantage

MismatchofStrategy

andBudgetsinAIChip

ExportControls

GregoryC.Allen

“

GregoryC.Allen3

RegardlessofwhowinstheNovember2024

election,exportcontrolrepresentsagreat

dealofunfinishedbusinessforthenext

presidentialadministrationtotakeon.

”

T

wodatesfrom2022arelikelytoechoingeo-Grandhistoricalturningpointsrarelytakethe

politicalhistory.Thefirst,Russia’sfull-scaleformoflongbureaucraticdocuments,buttheOcto-

invasionofUkraineonFebruary24,hardlyber7exportcontrolswereoneofthoseraretimes.

needsfurtherexplanation.ThesecondisonethatTendaysafterthenewregulationscameout,Secre-

manyAmericansmaynotrecognize.OnOctober7,taryofStateAntonyBlinkensaid:“Weareataninflec-

2022,theU.S.DepartmentofCommerceissuednewtionpoint.Thepost–ColdWarworldhascometoan

exportcontrolregulationsthatplacedadefactobanend,andthereisanintensecompetitionunderway

onU.S.salestoChinaofthemostadvancedcomputertoshapewhatcomesnext.Andattheheartofthat

chiphardwarethatpowersmodernartificialintelli-competitionistechnology.”1

gence(AI)models.Blinkenisright.EventhoughtheOctober7export

TheUnitedStatesandChinaagreethatleadershipcontrolswereinmanywaysnarrowlytargetedononly

inAItechnologyiscriticaltothefutureofmilitarythemostadvancedAIchipsandchipmakingtools,as

power.Foryears,Chinesegovernmentandmilitaryawhole,thepolicymarkedamajorreversalofover

procurementrecordsopenlyadvertisedthedesirefor25yearsoftradeandtechnologypolicytowardChina

photo:dan74/adobestock

U.S.chipstopowerChineseAIsurveillancesystemsinatleastthreeways.

andnewAImilitarysupercomputingfacilities.SinceFirst,thecontrolsweretargetedatmultiple

morethan90percentofAIchipsusedinChinesedatachokepointsacrossthesemiconductorsupplychain,

centersaredesignedbyU.S.semiconductorcompa-blockingsalesnotonlyoftheadvancedAIchipsbeing

niesandarethereforesubjecttoU.S.exportcontrols,usedbytheChinesemilitarybutalsotheadvanced

lossofaccesstotheU.S.chipmarketcouldputChina’ssoftwareandequipmentrequiredtomakethem.The

entirefutureasanAIsuperpowerinjeopardy.UnitedStatesistryingtoensurethatChinacannot

replacewhattheUnitedStatesisnolongerwillingtosell.

Second,theexportcontrolsapplyonageo-graphicbasisforChinaasawhole,notjusttotheChi-nesemilitary.ThatisaresponsetoChina’sstrategyofmilitary-civilfusion,whichhasworkedtodeepenandobscurethelinkagesbetweenChina’scommer-cialtechnologycompaniesandChina’smilitary.

Third,previousU.S.exportcontrolsweredesignedtoallowChinatoprogresstechnologicallybuttorestrictthepacesothattheUnitedStatesanditsalliesretainedadurablelead.Thenewpolicy,bycontrast,insomecasesaimstoactivelydegradeChi-na’stechnologicalcapabilities.WithoutaccesstotheUnitedStates’enablingtechnology,manyleadingChi-nesesemiconductorfirmshavebeensetbackyears.

IttookalongtimefortheUnitedStatestogethere.AfterdecadesofratchetingChinesegovernmentprovocations,theBidenadministrationbasicallysaid,“enoughisenough.”

Thisisnotapolicyofdecoupling(yet),butitisproofoftheUnitedStates’unwillingnesstoremaintightlycoupledtotheChinesetechnologysectorunderpreviousconditions.Subsequentpolicies,suchastheTreasuryDepartment’soutboundinvestmentrestrictionsonChina’sAIandsemiconductorindus-tries,hintattheUnitedStates’desireformorecom-prehensiveeconomicsecurityandtechnology.

Butthereisacriticalgapbetweenthestrategicimportanceandsophisticationofthepolicy’sdesignandtheresourcesthatthegovernmentisallocatingtoenforceit.

TheBureauofIndustryandSecurity(BIS)attheU.S.DepartmentofCommerceistheagencychargedwithenforcingexportcontrols,notjustonsemicon-ductorsboundforChinabutforallU.S.dual-usetech-nologyexportsthatmightendupinRussia,Iran,NorthKorea,orotherrestricteddestinations.Toimplementitsworkoverseeingtrillionsofdollarsineconomicactivityandpolicingsmugglingoperationsworldwide,BIShasfewerthan600employeesandarelatively

paltrybudgetofjustunder$200million.Semiconduc-torsarejustonetechnologycategoryoutofhundredsthatthisorganizationisresponsibleforenforcing.

ReportingbyTheInformationfoundatleasteightChineseAIchip-smugglingnetworks,witheachengagingintransactionsvaluedatmorethan$100million.2ChinaisbettingthatitsnetworkofsmugglersandshellcompaniescanfindtheleaksintheBISexportcontrolenforcementbarrier.AslongasCongresscontinuestoneglectBISbyprovidinggrosslyinadequateresourcescomparedtothesizeandimportanceofitsmission,Chinahasareason-ableexpectationofsuccess.BISneedsnotonlymoremoney,butalsomoreskilledstaff,moreenforcementagents,andbetterenablingtechnology,especiallyfordataanalysis.

Moreover,theDepartmentofCommerceneedsmorehelpfromtherestofthegovernment,inpar-ticulartheU.S.intelligencecommunity.DeclassifiedCentralIntelligenceAgencydocumentsshowthattheintelligencecommunitywasdeeplyinvolvedinassistingexportcontrolenforcementduringtheColdWaranddeliveredsolidresultsbydoingso.3Thesearecapabilitiesandprioritiesthathavesignificantlyatrophiedinthepost–ColdWarerabuturgentlyneedtoberestored.

RegardlessofwhowinstheNovember2024election,exportcontrolrepresentsagreatdealofunfinishedbusinessforthenextpresidentialadmin-istrationtotakeon.

Finally,theUnitedStatescannotdothisalone.U.S.alliesneedtotakeagoodlookattheirownexportcontrolsandbroadereconomicsecuritytoolboxes.TherearesomeinnovativeeconomicsecuritypolicyexperimentsgoingoninplaceslikeTaiwan,SouthKorea,andJapan.Alliesneedtoshareinformationonbestpractices,alignapproaches,anddevoteappropriateresourcestohaveareasonablechanceofsuccess.

4MismatchofStrategyandBudgetsinAIChipExportControls

FromReactiontoStrategy

ANewFrameworkfor

U.S.ExportControlEnforcement

BarathHarithas

“

6FromReactiontoStrategy

ItiscriticalthattheU.Sgovernmentdoesnotengageinareactivedancethatleadstooverstretchandinevitablefailure.Crucially,

theUnitedStatesmustmoreeffectivelyrallyalliestojointhefray,transformingafragmentedresponseintoaunitedfront.

”

T

heUnitedStateshasreliedona“siegewall”ofcratesfortransportation,withextensivelogisticsand

exportcontrolstokeepcriticaltechnologiespost-salessupportneeded.Thelatterproductcate-

(e.g.,advancedsemiconductors)outofChi-goryhasshownfarlessevidenceofsmugglingcom-

nesehands.Therehavebeenincreasingreportshigh-paredtochips,whichhavereportedlybeensmuggled

lightingtheleakinessofexportcontrols,callingintoinbulkordersvaluedover$100million.2

questiontheefficacyofwhatincreasinglyappearstoThisessayoffersthreerecommendationsfor

beatechnologyMaginotLinefortheUnitedStates.Inimprovingexportcontrolenforcement:

lightofselectivefailures,criticshaverushedtodeclare

1.Enforcementeffortsmustprioritizeareas

exportcontrolsineffective,overlookingthecomplexi-

wherecomplianceismosttractable.This

tiesthatinformtheirenforcementandimpact.

requiresaclear-eyedunderstandingofthe

Theeffectivenessofexportcontrolscannotbeobjectivesbehindexportcontrols.Thegoal

reducedtoasimplebinaryassessment;itiscontin-isnotmerelytopreventspecificendproducts

photo:justinsullivan/gettyimages

gentuponthespecificproductcategoriesinquestion.fromreachingChina;rather,thetruelitmus

Forinstance,thesmugglingofchipshasprovenalarm-testofthesecontrolsliesintheirabilityto

inglystraightforward.In2023,NVIDIAshippedoverimpedeChina’sindigenizationcampaign.

amillionleading-edgechips,eachvaluedatapproxi-Forinstance,whilepreventingadvanced

mately$40,000andportableenoughthat609unitssemiconductorsfromreachingChinaiscru-

canfitintoasinglefreightbox.1Conversely,ASMLcial,thegreaterconcernisensuringthat

soldonly53state-of-the-artextremeultraviolet(EUV)Chinacannotmanufacturethesetechnol-

lithographymachinesin2023,eachcosting$350mil-ogiesatscale.Controlsshouldtargetmore

lionandrequiring13truck-sizedcontainersand250stronglycriticalchokepointssuchassemi-

BarathHarithas7

conductormanufacturingequipment,espe-ciallyEUVmachines,serviceandrepaircomponents,andelectronicdesignsoftware.Giventheinherentleakinessofexportcon-trolsforchips,itiscrucialtorecognizethatthesemeasuresareatbestatooltoincreaseacquisitioncostsforChinaintheshortrun.Theultimatelong-termobjective,however,mustfocusonunderminingChina’seffortstowardtechnologicalindigenizationandself-sufficiency.

2.Thecurrentapproachtoexportcontrolenforcementresemblesagameof“whack-a-mole,”wheresmugglingnetworksemerge,vanish,andreemergefasterthantheycanbeaddressed.Toovercomethiscycle,regula-torsneedtomovefromthereactiveblacklist-ingofsuspiciousentitiestoimplementingapreapprovalsregime.Inotherwords,insteadoffixatingonwhomtobarfromthegame,authoritiesshouldshifttheirfocustowardwhogetstoplay.Bysodoing,regulatorscanmoreeffectivelylimittheavenuesavailableforsmuggling.

Thiscanbeoperationalizedthrough:(1)establishingacertificationprocessduringinitialprocurementtocreateamarketplaceoftrustedsellersandtoenhancecomplianceknowledgeamongstakeholders;(2)imple-mentingdigitalwaybillstoreducedocumen-tationfraudandimprovetraceability,therebyaddressingcustomsevasion;and(3)mandat-ingtheuseofpreapprovedlogisticsproviderswhoarerequiredtoreportanyconsignmentsnotreceivedwithinaspecifiedtimeframetotheBureauofIndustryandSecurity(BIS)attheDepartmentofCommerce.Thismeasurewillhelpidentifysuspiciousentitiesandfacilitatetimelyspotchecks,creatingamoreeffectivefeedbackloopfordetectionandenforcement.

3.TheUnitedStatesmustworkmorecloselywithalliedpartnerstomultilateralizeexportcontrols.U.S.exportrestrict