Coalition opposes tougher export rule

Two dozen groups representing some of the biggest U.S. companies urged the Commerce Department on Friday to scrap a proposal to tighten national security controls on exports to China and start over.

“Our fundamental view is the regulation should be withdrawn and reconsidered in its entirety after thorough consultation with exporters,” the coalition of manufacturers, software companies and technology industry groups said in a letter to the department’s Bureau of Industry and Security.

The groups, however, also suggested changes to the proposed regulation that would make it “clearer, simpler and less burdensome with respect to the national security decisions that company employees must make.”

U.S. companies fear that the proposal would give foreign competitors a big advantage in China’s fast-growing market.

The security bureau issued the proposed regulation July 6 with the aim of strengthening a longtime U.S. policy of blocking exports that would allow China to enhance its military capability.

In a notice published in the Federal Register, the bureau outlined actions aimed at facilitating trade to “legitimate civil end users in China” while blocking some technologies from being used in military applications. It proposed creating a list of “validated end users” to which certain items could be exported.

But the groups representing companies including Boeing Co. and Microsoft Corp. complain that many of the goods covered by the regulation “are readily available to China’s military from alternative sources, both foreign and indigenous.”

The proposed rule wouldn’t provide any additional security benefit and could damage other U.S. efforts to strengthen relations with China and to persuade it to become a “responsible stakeholder” in the global community, the groups said.