USCBC Comment on Controls on Certain Laboratory Equipment and Related Technology to Address Dual Use Concerns About Biotechnology

The US-China Business Council (USCBC) welcomes the opportunity to submit comments to the Bureau of Industry and Security (BIS) on the Controls on Certain Laboratory Equipment and Related Technology to Address Dual Use Concerns About Biotechnology. USCBC solely comprises more than 270 US companies that do business in China. Many of our members depend on their market share in China to enhance and undergird their global competitiveness. As such, their businesses in China make America stronger and more secure by providing revenue sources that fuel investments and drive employment back at home.

USCBC appreciates the crucial role export controls play in preventing the proliferation of technologies with national security implications and dual-use applications. However, we believe that export controls can only be effective national security tools when they control technologies for which there is no foreign availability. In instances where China possesses the ability to domestically manufacture controlled products and when other countries do not adopt equivalent export control measures, US export controls simply disadvantage American companies without inhibiting access to controlled products. Removing American companies from the market will, contrary to US national security objectives, reduce competition in China and artificially create market space for Chinese and international firms to fill.

Further, onerous license requirement will provide China with an impetus to accelerate domestic substitution initiatives. USCBC data indicates this is already occurring. According to our member survey, 43 percent of companies have been affected by US export controls. Of that group, 48 percent say export controls cause them to lose sales to Chinese competitors and 30 percent lost sales to international competitors.

It is therefore crucial that such measures be structured so that they only impact items for which the US is the sole source and are clearly linked to national security end uses. To that end, robust, transparent mechanisms should be instituted to assess foreign availability in the long term and adjust the parameters of ECCNs accordingly. Further, given the overwhelmingly civilian end uses of technologies controlled in the IFR, a robust exemption process should be instituted for items that are destined for hospitals and other research institutions for medical end uses.