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Preventing Foreign Technology Theft is Aim of New House Bill

Thursday, January 24, 2019
Sandler, Travis & Rosenberg Trade Report

Legislation introduced in the House of Representatives Jan. 22 seeks to safeguard U.S. technology and intellectual property from export to or influence by China and to protect U.S. businesses from unfair competition by China.

“Beijing’s Made in China 2025 initiative has made it clear that the Chinese government’s objective is to drive American companies out of business and move their technology and jobs to China at any cost, including the use of illegal trade practices,” said Rep. Mike Conaway, R-Texas, one of the bill’s sponsors. The Fair Trade with China Enforcement Act (H.R. 704) would respond by “barring the sale of national security sensitive U.S. intellectual property and technology to China, as well as ensuring that China is paying its fair share in taxes.”

According to a press release from Conaway’s office, H.R. 704 is the companion legislation to S. 2, which would create an Office of Critical Technologies and Security at the White House that would be responsible for coordinating across agencies and developing a long-term, whole-of-government strategy to protect against state-sponsored technology theft and risks to critical supply chains. “While the United States is operating in a 24-hour news cycle, China has a long term plan reaching 50 to 100 years,” explained bill co-sponsor Rep. Tim Ryan, R-Ohio. “We need to get ahead of the game and strengthen our economy, and this legislation will put us on that path forward.”

The new office would be directed to coordinate and consult with federal and state technology and telecommunications regulators, the private sector, nongovernmental experts and academic stakeholders, and key international partners and U.S. allies to ensure that every available tool is being utilized to safeguard supply chains and protect emerging, foundational, and dual-use technologies. The goal is to improve the federal response to challenges such as China and other nations attempting to achieve technological and economic superiority over the U.S. through the improper acquisition and transfer of critical technologies as well as U.S. reliance on foreign products that have been identified as national security risks (e.g., those manufactured by Chinese telecom companies ZTE and Huawei).

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