USCBC Comments on Implementation of the United States Government National Standards Strategy for Critical and Emerging Technology

National Institute of Standards and Technology

Docket Number 230818-0199

December 19, 2023

The US-China Business Council (USCBC) welcomes the opportunity to submit comments to the National Institute of Standards and Technology (NIST) regarding the RFI on Implementation of the United States National Strategy for Critical and Emerging Technology (NSSCET). USCBC is a nonpartisan, nonprofit organization representing 280 American companies that do business with China. Many USCBC members are global leaders in CET. They are active in international standards development organizations (SDOs) and participate in standards-setting processes in many markets, including China.

Standards serve as building blocks for product development and help ensure interoperability, functionality, and safety. Success in market access and commercialization is based on ensuring that standards are driven by industry-developed technologies in an open and inclusive way. Standards provide many benefits to the health and safety of consumers and are foundational for global communications and information exchange. Most governments around the world, including the United States and China, have recognized standards as an important component of international industrial competitiveness and have devised strategies to support their firms in standards-setting activities. While the NSSCET contains many positive aspects that support US participation, we are concerned that parts of the NSSCET do not adhere to principles which support the construction of an open, inclusive international standards setting system that furthers market access, interoperability, and commercialization of products. If global standards-setting activities that involve participants from the United States and China become bifurcated, American firms will ultimately bear the costs.

Concerns with the NSSCET

The NSSCET states that China seeks to undermine the integrity of standards processes, uses coercive economic influence to promote its standards, and seeks maximum unilateral influence and market dominance. It also states that standards coalitions with allied countries are needed to provide a counteract to China’s influence. We offer two observations about this statement.

First, the description of China in NSSCET implies that US industry is losing at international standardization. Recent scholarship demonstrates that, quantitatively, the number of Chinese stakeholders in SDOs is growing but they are far from dominant. Furthermore, while increased headcount may lead to increases in the number of standards proposals to SDOs, it has not necessarily resulted in proportionate increases in the adoption of those proposed standards.

Second, the NSSCET does not acknowledge that some SDOs already have safeguards that ensure equal participation and influence in standards-setting activities. Overall, the private sector-led standards system is well equipped to maintain a level playing field for all standards participants. The system is diverse and comprises organizations with different decision-making processes, meaning it is difficult to make broad characterizations. For example, committees in International Organization for Standardization (ISO) and International Electrotechnical Commission (IEC), such as the ISO/IEC Joint Technical Committee 1 which sets standards for information technology, use a one country, one vote system.

Rather than undertaking a general, across-the-board strategy to all SDOs, NIST should conduct analyses to determine exactly which SDOs raise concerns and identify specific cases where China has wielded improper influence. Each SDO has a unique governance structure, and the dynamics of standards development vary across industries, making a one-size-fits-all policy approach challenging. Overgeneralization raises the risk that policy solutions will seek to address issues that are unique to some standards bodies and not relevant to the system at large.

NIST and US government policymakers should take steps to fully understand industry motivation for standards development as they refine their strategy. Most companies use standards to develop practical and timely solutions for clearly defined market problems. Industry is constantly conducting value proposition and risk benefit analyses to determine which SDOs suit their present needs. Diminished US participation in an SDO is an indication that US industry sees value elsewhere, not that China is ascendant in standards setting.

NIST should consider the role of standards and the work of technical committee staff and the mechanisms within SDOs that exercise oversight of the technical work. Standards are akin to the alphabet of the language rather than the technology itself. Just because a standard is proposed by a China-based stakeholder does not necessarily mean that Chinese technology will be used in the end application. Technical committee participants, most of whom come from industry, use a consensus-based, transparent system to create optimal solutions to commercial challenges. The overwhelming majority of standards are a significant evolution from and refinement of the original proposal. Existing SDO governance mechanisms are also adept at addressing bloc voting to the limited extent that it occurs.

To the extent the NSSCET creates an exclusionary posture toward China, it will risk encouraging the creation of parallel standards systems in which US companies will bear the brunt of the costs. The formation of standards groups with US allies and partners risks China creating parallel, competing standards in which US industry has reduced visibility and ability to participate. This trend is already prevalent in home networking technology and was accelerated by Huawei’s addition to the US Entity List and related BIS actions in 2019. Although later revisions were made to export rules related to standards development activities, Chinese participation in US-led standards has continued to suffer as a result and has in turn led to the proliferation of competing Chinese standards. NIST and the Department of Commerce should consider opening a robust dialogue with China, such as through newly formed bilateral working groups, to restore trust and assure Chinese commercial stakeholders that they can participate in standards with the United States.

Inclusive policy approach

There are many elements of the NSSCET that will construct a more transparent and inclusive standards process. Greater government support for workforce investment and R&D investment will enable US stakeholders to remain active in standards activities, but more can be done. Presently, the high cost of US-based standards events and onerous US visa processes compel SDOs to meet in other countries where the government is willing to host, including China. NIST should work within the interagency process to ease visa rules for visitors that come to the US for standards meetings. NIST should also encourage interagency solutions that can provide venues or other financial support for SDOs to host major meetings in the United States. Attendance rates are typically higher for participants from a meeting’s host country.

To be clear, China has its own standards promotion programs. Some of them, such as training programs for due diligence and technical review, are constructive. Others, such as those that provide financial incentives to set international standards and standards components of multilateral arrangements led by China, enable China to externalize its domestic standards and state-led standardization system. Rather than act with exclusionary measures of its own, the US government should maintain its role as a global advocate for the voluntary, open-participation, market-driven, consensus-based standardization system that has enabled US leadership in many fields. With such advocacy, the United States can continue to be a model for China, Europe, and others.

A practical first step would be to fill the standards attaché position at the US Embassy in Beijing, as this would provide an advocate for US companies seeking access to standards activities in China. Looking further, the US government should be active in regional forums with Chinese involvement, such as APEC, the G20, the Organization for Economic Cooperation and Development, and the World Trade Organization (WTO). The United States should be an advocate for adherence to WTO Technical Barriers to Trade Agreement principles for adoption of international standards in domestic technical policies, standards, and conformity assessment to facilitate global trade and interoperability and to enable the realization of economic benefits from global trade. Through the above agreements and other multilateral arrangements such as the Quadrilateral Security Dialogue, Indo Pacific Economic Framework, and the Trade and Technology Council, the US government should support capacity building programs in key strategic regions and countries to promote the voluntary, market-driven, consensus-based, private sector-led standards system. Doing so will ensure US leadership in global standardization efforts and promote standards-setting best practices which create a level playing field for all and allow the best technologies to advance.