Reviews | The neglected agency at the center of Biden’s Chinese strategy
The role and responsibilities of the Department of Commerce have grown in size and complexity, contrary to its capacities and resources. This shift reflects the nature of competition with China (and one of the reasons the “new cold war” analogy is wrong): economic security and the benefits of non-military technology are of disproportionate importance. compared to traditional military force. It’s still crucial, of course, but a lot of the daily competition takes place in the realm of commerce. Just as other departments, such as the Treasury and Homeland Security, have been reorganized and restructured as their relevance to national security increased, the Biden administration must reform the resources, structure, and authorities of the Commerce Department if its strategy in China must succeed.
In 2018, the The Trump administration said that economic security is national security. The proclamation articulated a change that had been underway for years: the once obscure enforcement of trade and security laws was now the spearhead to meet China’s challenge.
The Biden administration, like its predecessor, calls China more than a military threat. As the Department of Defense prepares for a conflict with China, other parts of the US government are focused on reducing China’s economic and technological might, bolstering US might in these areas and thwarting an economic model. Chinese which is in contradiction with the principles of the free market.
The importance and neglect of the Commerce Department is exemplified by a relatively obscure office called the Bureau of Industry and Security (BIS). As an enforcer of export controls, this agency has become the zero point of technological competition with China. Geoeconomic tools such as export controls, investment reviews, and technological trade restrictions are now key levers in the national security strategy. Yet the office suffered from a lack of strategic direction and insufficient resources.
In 2018, Congress adopted the Export Control Reform Law, which aimed to restrict the export of certain technologies for both civil and military purposes. The law directed BIS to develop a list of “emerging and foundational” technologies that could be protected by new export controls. Three years later, however, these lists are not Again finalized, in part due to inadequate coordination between BIS and other agencies. A report by the US-China Economic and Security Review Commission found that Commerce had “failed to fulfill its responsibilities.” Critics fear further delays will worsen national security risks by hampering the work of the Committee on Foreign Investment in the United States, which controls transactions involving foreign investment. This does not bode well for the much more complex and extensive data collection and analysis efforts that will be required if the ministry is to carry out its expanded mission.
For example, the Commerce Department plays a leading role in the investigation of the supply chain of semiconductors, advanced computer chips that are essential for most modern technological devices, and a key front in technological competition. American-Chinese. In response to a large semiconductor shortage, President Joe Biden signed a decree calling for a comprehensive review of America’s critical supply chains. Commerce has been tasked with analyzing the risks at every stage of the semiconductor supply chain (design, manufacturing, assembly) and is the point of contact for industry leaders to raise concerns related to the semiconductor supply chain. ‘supply.
While the ministry made sensible recommendations in its 100-day program supply chain review report, policymakers should consider whether it can continue to perform such high-speed, large-scale analysis continuously across a range of sectors and industries. To do this, Commerce will need a comprehensive understanding of foreign and domestic industrial and technological trends, which in turn requires access to information currently lacking in the Department. Then, making sense of the information will also require resources they don’t have: people with the knowledge to analyze the data as well as technical solutions, such as AI-based methods to extract information and integrate data. disparate.
An important source of information that the Department of Commerce is unable to collect on a large scale is detailed industry surveys. These surveys are used to collect information not available derived from other sources (financial, production, research and development, and export control data) and are therefore essential to better understand the economic security of the United States, its allies and partners, and its adversaries. The Commerce Department has the power to conduct them, but only does so sporadically because of lack of resources. Failure to fully utilize these powers results in underinformed national security decision making, an avoidable handicap.
Like the scale and the urgency As Chinese competition has appeared to policymakers in the White House and Congress, their expectations of the Commerce Department have changed dramatically and rapidly. Today, the agency needs to be reorganized into three main categories: resources (money and personnel), structure and authorities.
While the department has received a steady increase in its funding over the past few years, the White House and lawmakers can do more to increase its resources to match its expanding mission. An important reform is to use the defense budget to finance certain commercial programs in which the military has a vested interest, such as the control of exports of military technology. This would not be unprecedented: In the past, Congress has used the defense budget to fund Department of Energy nuclear programs and infrastructure security work under the Cybersecurity and Infrastructure Security Agency (part of of the Department of Homeland Security).
Congress could also play a role in resolving personnel issues at Commerce by creating new incentives for recruiting talent. It could establish special hiring authorities to streamline cumbersome processes and offer incentive pay for skilled talent – something Congress has done in the past, as it has with the departments of homeland security and defense, to signal that A particular priority or problem needs more attention. and resources.
Trade also needs structural and organizational reform, especially within the BRI. The BIS focuses almost entirely on export controls, but could tackle a broader set of non-traditional threats if Congress gave it the power. In 2004, as the war on terrorism intensified, the Treasury Department created the Bureau of Terrorism and Financial Intelligence, where the department has consolidated all of its skills in the fight against money laundering and illicit and terrorist financing. Reorganizing the BIS in a similar fashion would allow Commerce to centralize its authorities on export controls, supply chain security, and other national security risks that are not of a military nature.
The Commerce Department should do more to take advantage of the wide range of open source intelligence. A myriad of open source reports are produced daily by the private sector, NGOs, foreign government agencies; National security analysts increasingly recognize the value of this information for policymakers to better understand technological developments, research trends and industrial capacity. Commerce could set up an information fusion center to integrate all open source information accessible and used by the different offices of the ministry, to ensure that this information is accessible and used in a timely and efficient manner.
Finally, Congress should designate the Commerce Department as a member of the intelligence community. Last year, the intelligence arm of the Space Force became the 18th member of the intelligence community. Other less traditional members include the Treasury and Energy departments. As a member agency, the Department of Commerce could establish an intelligence analysis office that would not only support internal missions requiring information on national security, but would also provide policy makers across government with the analysis. of Commerce on economic and technological issues.
US-Chinese competition poses a complex and evolving challenge. The Commerce Department will play a critical role in developing and implementing a winning strategy, but its ability to fulfill this role will depend on its resources and powers.
Throughout modern U.S. history, the government created, funded, adapted, and restructured departments whose missions matched the threat the country faced, but whose capabilities fell short. of this mission. After the September 11 attacks, Congress created the Department of Homeland Security to deal with the terrorist threat. The 1947 National Security Law was a response to the emerging competition with the Soviet Union, prompting the creation of the Defense Ministry and the establishment of key national security entities including the CIA, the Security Council National and Joint Chiefs of Staff. Righting the ship at the Commerce Department won’t be so dramatic and far-reaching, but the impact can be just as profound.