Washington, D.C. – Today at 10 a.m., House Foreign Affairs Committee Chairman Ed Royce (R-CA) will convene a hearing entitled “Modernizing Export Controls: Protecting Cutting-Edge Technology and U.S. National Security.” Live webcast and witness testimony will be available HERE.

Below is Chairman Royce’s opening statement, as prepared for delivery at the hearing:

“Today, the committee will review our export controls and foreign investment review process, which are critical to protecting both our national security and our economic edge.

The United States is the world’s largest exporter of goods and services. Our trade relationships and our leadership in science, engineering and manufacturing support tens of millions of good-paying American jobs.

Alarmingly, our competitive edge is increasingly under attack by policies from China, Russia and others that seek to obtain advanced technologies and intellectual property by hook or crook. As some may recall, in 2011 this committee held a hearing on China’s ‘indigenous innovation’ policy. Then, I noted ‘The Chinese government has been turning-up the pressure on U.S. and other foreign businesses to share sensitive technology with Chinese state-owned enterprises as the cost of selling in the Chinese market.’ This is especially true today.

Making matters worse, our outdated regulatory safeguards have potential gaps that could permit transfers to potential adversaries of the ‘know-how’ essential to sensitive emerging technologies like artificial intelligence and robotics.

In this global economy, turning inward is not the solution to these challenges. But we also cannot allow others to cheat U.S. employers – or worse, use our sensitive technology to undermine our national security.

That’s why Ranking Member Engel and I have introduced the Export Control Reform Act of 2018, which would repeal the expired and Cold War-era Export Administration Act of 1979 and replace it with a modern statutory authority to regulate ‘dual-use’ items. Under our approach, modernized U.S. export control laws and regulations will continue to have broad authority, governing the transfer of less-sensitive military and dual-use items and technology to foreign persons, whether that transfer takes place abroad or here in the U.S.

As governments like Beijing pursue sweeping strategies to acquire advanced technologies from the U.S. and our allies, our bill utilizes unilateral controls where necessary. It will also improve coordination with allies to strengthen export controls and inward investment security.

Meanwhile, the Committee on Foreign Investment in the United States (CFIUS) would continue to review certain ‘covered transactions’ that are defined as the acquisition or control by foreign persons over a U.S. business. The vast majority of these investments are productive and should be welcomed.

Modernized U.S. export controls and appropriately crafted CFIUS reforms are complimentary responses to the challenges we face, and together would improve the ability of the U.S. to remain a leader in innovation, strengthen the industrial base and protect technologies essential to national security. Our goal is an efficient regulatory system that promotes both our national security and economic prosperity.

We have with us today three practitioners in the field with long experience in the CFIUS process and with U.S. export controls, and we hope their testimony today will provide the committee with insights into how to proceed on these important and challenging issues.”

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