Building A Tech Alliance

Commentary by James Andrew Lewis

Published October 29, 2024

This commentary is part of a report from the CSIS Economic Security and Technology Department, titled Staying Ahead in the Global Technology Race. The report features a set of essays outlining key issues on economic security for the next administration, including global technology competition, industrialization policies, economic partnerships, and global governance.

Read the Full Report

Calls to create some kind of technology alliance among democracies can be grounded in experience. We can identify requirements for developing an alliance and the actions needed to turn proposals into agreement. However, while alliances are easy to propose, they are hard to build.

The first, and most important, of these requirements is there must be a shared problem that potential partners wish to address through collective action. Maintaining U.S. technological dominance is not a shared problem and probably not the best appeal for partnership. Similarly, calling for a crusade against China is not universally appealing in Europe or Asia.

Europe is the crux of the tech-alliance problem. Countries like Japan and Australia are ready to work together with the United States, but there is a degree of ambivalence in Europe. There is also a degree of envy over U.S. technological success. European political culture is still shaped by the traumas of the twentieth century, and one explanation for extraterritorial regulation of U.S. technology companies is that Americans should "remember Europe's history" and how it creates deep concerns for fundamental rights such as privacy. Others say that the purpose of technology regulation is, at least partially, to slow down U.S. companies so that European companies can catch up.

Two phrases from Brussels highlight the problem: "European values" and "tech sovereignty" (or "digital sovereignty"). The first implies somewhat simplistically that there are different values in the United States and Europe. The second is more problematic. European sources say that tech sovereignty means not only independence from China, but also from the United States. Any proposal for a new alliance needs to show how it aligns with this EU goal of increased sovereignty.

One way to overcome sovereignty issues is to build a new technology alliance upon existing structures such as the G7 or the Wassenaar Arrangement, but both would need to be modified-the G7 by adding counties like Australia, South Korea, and the Netherlands and Wassenaar by removing Russia and perhaps Hungary. Other groups, including AUKUS, the Quad, and the U.S.-EU Trade and Technology Council, are too narrow to serve as a foundation.

Wassenaar, the current tech regime, has shortcomings. It is 30 years old, technological change challenges the scope of its controls, and it now lacks the strategic underpinnings that led to its creation (and Russia's membership). Wassenaar was a response to the end of the Cold War and was designed for that context. While it is not in Western interests to dismantle Wassenaar, it does need to be supplemented by measures that go beyond export controls. Judging from past experience, the best route might start with the G7 and then add additional countries, since the Wassenaar Arrangement itself grew out of G7 talks.

Who in the U.S. government makes the appeal for an alliance is also important. It must be a senior political figure from either the White House (preferably the president) or the secretary of state or treasury. In the past, the Department of Commerce has not been considered by other countries to have sufficient heft, although this may have changed in the Biden administration. In addition, many countries do not consider the Department of Defense the right counterpart for economic security issues. Other departments or staff-level proposals will not be taken seriously (remember that every government starts its review of a proposal by asking its embassy if the Americans are serious, and the embassies look for signs like senior-level interest, funding, and follow-through). Working an announcement into a presidential speech, even a single sentence, would help kickstart a technology alliance.

A formal proposal must immediately follow a presidential announcement. It must lay out initial thinking on which technologies are covered and the security rationale for the alliance, as well as provide details on membership criteria, frequency of meetings, secretarial functions, and what a commitment would entail in terms of time, money, and personnel. The proposal cannot be set in stone but rather should be presented as a discussion paper, open to amendment by other participants. Further, the United States must go into discussions knowing the minimum it can accept and what is essential. Ideally this would be a joint effort, specifically, a joint proposal coming from the United States, Japan, and a G7 European member.

A technology alliance may need to have both positive and defensive goals to attract wide support, but combining these two ends can be difficult. For example, managing technology transfer to China is a central strategic consideration, but so is coordinating policies and promoting the development of emerging technologies. While AUKUS is too focused on defense to easily translate into a broader tech alliance, Pillars 1 (advanced capabilities, including cyber, AI, and quantum and 2 (industrial base cooperation) could provide useful precedent. The most challenging issue in any joint effort to jointly create new technologies is how the members will share funding and intellectual property rights.

A final point to bear in mind is that it will take months, perhaps years, to create a new tech regime. An ideal time to start such an initiative is at the start of a new administration. The spring of 2025 could be the launch point.

James A. Lewis is a senior vice president and director of the Strategic Technologies Program at the Center for Strategic and International Studies in Washington, D.C.

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