June 11, 2021 at 5:00 am ET
Protecting our nation’s information and communications technology and services supply chain is a critical goal. Never have there been so many with the ability to cause harm to our infrastructure, consumers and the economy. However, this country’s federal cybersecurity policies need to complement the work private-sector companies are already doing to protect the supply chain, not burden them with new rules that dictate how they operate in a competitive global marketplace.
Earlier this year, on former President Donald Trump’s last day in office, the Department of Commerce published rules on the supply chains of American tech companies. These rules give the federal government virtually open-ended authority to void transactions in the ICTS sector deemed to be a national security threat.
The incomplete rules –– pushed through with the help of an executive order from Trump – disregarded the many critical comments offered by trade groups and companies throughout 2020, including those from the Consumer Technology Association. Now, on top of these costly and unclear rules, the Biden administration seems intent on creating more uncertainty for tech companies.
In March, the Department of Commerce proposed a new licensing process for companies to seek pre-approval for previously routine transactions in ICTS – such as entering into a contract or sale. This is part of a broader regulatory scheme that the U.S. government is undertaking to regulate tech activities that are global in scope, with the stated intention of securing the ICTS supply chain.
And last month, President Joe Biden signed an executive order to overhaul our federal government’s cybersecurity. While efforts to improve our cyber defenses should be applauded, many of the proposals in the executive order would put strain on companies already trying to protect critical systems. Vague requirements and definitions, potentially strict and confusing labeling regimes and misguided reporting requirements fail to fully help companies protect the ICTS supply chain. Instead, they force companies to devote resources to compliance rather than security.
All of these proposals are well-intentioned, but misguided. They threaten the global competitiveness of America’s top companies.
CTA and its members support the premise of such efforts – to enhance the security of the ICTS supply chain. But there are good reasons to believe this approach will cut off U.S. innovation at the knees, hamstringing our international competitiveness without making us any safer.
These rules come as the United States and other Western nations are in a global tech race with China – an international supplier of technology and tech components. Our government should enhance U.S. competitiveness, with the Department of Commerce leading such efforts. Instead, leaders in Washington debate proposals to weaken America’s best high-technology companies. As a result, the United States finds itself playing catch-up even as China surges ahead.
The Chinese government seeks a pre-eminent place in the world economy, caring little for privacy or freedom of its citizens – restricting their speech, religion and travel. As Biden said in his address to Congress on April 28, Beijing is “deadly earnest about becoming the most significant, consequential nation in the world.” Indeed, the Chinese government envisions a different future – one quite different than ours. Now is the time to support and embrace American crown jewel companies – not throttle their global competitiveness.
American businesses drive of our economy. We should let them innovate and engage in global supply chain activities – with appropriate due diligence, but without the need to seek government permission. CTA understands that the government wants to be responsive to security threats to global supply chains, including threats from China. But the Biden administration must consider the damage to competitiveness that could come from processes that introduce competition-killing uncertainty, are not transparent, or do not provide flexibility for companies to innovate.
For the United States to remain a global leader in ICTS, policymakers must avoid rushing to adopt vague and unclear rules that burden American businesses, forcing our nation to lag behind a growing China.
Instead, CTA encourages the government to work closely with the private sector, who shares the same goals of security, to create policies that provide certainty for businesses, ensure innovation and build on existing efforts to secure global supply chains.
As the Biden administration and Congress turn their focus to regulating technology, they should be mindful of the global challenge the West faces to protect our freedoms, our national need to innovate and our desire to push the envelope — all of which we need to compete on the global stage.
Gary Shapiro is president and CEO of the Consumer Technology Association, the U.S. trade association representing more than 2,000 consumer technology companies, and a New York Times best-selling author. His views are his own.
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