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and foreign direct investment (FDI. SelectUSA is a low-cost and effective tool in attracting FDI to the U.S. and to re-shore manufacturing and research and development. In a world in which corruption is rampant, these are among the most effective tools in leveling the playing field for U.S. communities and companies seeking to engage with governments and potential overseas investors.

Given the value placed on senior-level engagement by many governments and companies, this consolidated Office of Trade and Investment Advocacy should be headed by a Deputy Assistant Secretary. The new office should also seek congressional authorization to utilize its FDI-promotion tools to encourage reshoring by U.S. businesses.

BUREAU OF INDUSTRY AND SECURITY

During the past two decades, technology transfer from America and its allies has helped accelerate adversaries’ technological and weapons capabilities. This technology transfer on a massive scale has occurred because of adversaries’ exploitation of the U.S.’s open economy and education system through both commercial transactions and university and government research programs. Examples include the People’s Republic of China’s dramatic leaps forward in semiconductor design and fabrication, battery energy storage, nuclear weapons capabilities, artificial intelligence, space and aerospace engineering, and hypersonic weapons deployment.

At the same time, the U.S. has systematically failed to protect critical assets. Rather than promulgate policies to better prevent technology transfer, the U.S. government has either ignored the problem or, worse, from 2008 through 2016 instituted a government-wide “Export Control Reform” process to loosen the Export Administration Regulations (EAR) governing exports of dual-use items to facilitate technology transfer to adversaries, either directly or indirectly through third-country transfers.

Those reforms still present in the Department of Commerce’s EAR must be reversed. The United States needs stronger rules to protect technology transfer to adversaries while promoting technology integration and interoperability with allies. Further, U.S. export control regulations should be utilized to prevent theft of personally identifiable information and to encourage U.S. companies to shift production out of China and further diversify their supply chains to better advance US. national security interests.

For all the below recommendations, BIS needs to move unilaterally while it works with allies to implement complementary export control policies. Waiting to act until allies are ready to move in lockstep is not an option while America’s national security is at risk.

Emerging and Foundational Technologies. The Export Control Reform Act of 2018 (ECRA) gave BIS permanent statutory authority to regulate exports of dual-use items (goods, software, and technology). ECRA also mandated that BIS

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regulate exports of emerging and foundational technologies. Although the scope of such technologies is vast, to date BIS has only controlled just over 40 of these technologies. This does not meet the clear statutory intent of Congress that ECRA be leveraged to ensure that the United States maintains a technological advantage in technologies bearing upon national security interests.

Currently, BIS self-identifies technologies that merit control under the EAR with minimal input from other federal agencies. This mechanism should be improved. BIS should create an open, transparent rulemaking process by which any industry participant, private entity, or branch of the government may, at any time, submit nominations for emerging /foundational technologies for control. Then, on a quarterly basis, BIS should make public such recommendations (while holding the identity of the submitter confidential) for public input, followed by an explanation about its ultimate decision to control or not control the items, its reasons, the level of controls applied (stringent or permissive), and the relevant Export Control Classification Number (ECCN) under the Commerce Control List. Commerce should also institute a mechanism whereby its decisions can be challenged, including ona confidential basis.

Licensing Procedures: Adjudication and Transparency. Currently, if the Departments of Defense, State, Commerce, and Energy disagree on an export license decision, the disagreement may be escalated to the Operating Committee—and subsequently to the Advisory Committee on Export Policy led by BIS’s Assistant Secretary for Export Administration. The Assistant Secretary does not need to lead the dispute resolution, and this process should be revised by giving lead authority to BIS’s Under Secretary, who is better able to account for diverging views.

Moreover, BIS’s authority to overrule other agency votes should be changed. Each agency should have one equal vote and, if a licensing dispute remains unresolved, the final decision should be elevated to the National Security Advisor and the Secretaries of Defense, State, Commerce, and Energy.

Additionally, to improve congressional oversight of BIS’s license adjudication process, BIS should provide specific congressional committees with data from the Automated Export System on a quarterly basis. Electronic files should contain U.S. exporter by name; product description (e.g., harmonized system code and ECCN/U. S. Munitions List designation); end user and destination country; and when a license was required, whether the license was granted or denied. BIS currently denies just 1.2 percent of export licenses. These data reporting requirements can help Congress better determine whether BIS is adequately protecting national security through appropriate use of export controls or whether additional direction from Congress is required.

Improve End-Use Checks. The integrity of the export control system may be validated only through adequate end-use checks. BIS must deny export licenses to countries that do not permit adequate end-use checks (e.g., China/Russia) by U.S. authorities. BIS should also strengthen the forensic audit capabilities of its