Thune Bill Would Make Network Security an Official Objective of Trade Deals

A bipartisan proposal would take a second stab at convincing a key U.S. ally to shun Chinese telecommunications equipment provider Huawei in building out its fifth-generation mobile network.

On Thursday, Sen. John Thune, R-S.D., the majority whip, introduced the Network Security Trade Act. 

While critics have implored policymakers to keep issues of trade and the economy separate from those related to network security, the legislation doubles down on an approach the Trump administration has embraced.

The U.K. officials—along with Germany and France—have decided they can manage any security risks Huawei presents, despite U.S. warnings to discontinue longstanding intelligence-sharing operations. Secretary of State Mike Pompeo has indicated intelligence sharing continues with the allies.

“There is a lot of promise with new and advanced technologies like 5G, but the United States can only deliver on those promises if we maintain the security of communications networks, both at home and abroad,” Thune said in a press release announcing the bill. “This legislation would ensure the security of equipment and technology that create the global communications infrastructure are front and center in our trade negotiations, because you can’t have free trade if the global digital infrastructure is compromised.”

The bill does not name specific state-owned companies. But it is clearly meant to target Huawei and other Chinese entities.

“This bill sends an important message to our allies and trading partners that our concerns with Huawei are not fleeting or superficial,” said co-sponsor Sen. Mark Warner, D-Va. “While we’ve seen multiple Administrations exhort foreign partners not to use Huawei, we’ve continually failed to see a long-term, sustained, multi-lateral strategy to safeguard the global telecommunications market and foster innovative, competitively priced alternatives. Our digital trade agenda must emphasize the need for secure communications networks, built on fair competition, and this legislation helps accomplish that.”

The Trump administration has already activated its trade apparatus for promoting U.S. companies abroad. 

The Commerce Department’s International Trade Administration is planning “cybersecurity business development” trips to South America and India, where U.S. officials will facilitate “customized, one-on-one, business appointments with pre-screened potential buyers, agents, distributors, and joint venture partners” for U.S. companies.

Officials reached by Nextgov would not say whether the effort is in reaction to Huawei’s expanding presence in the ITA’s target regions. 

The Trump Factor

The Network Security Trade Act could be seen as a way to Trump-proof upcoming trade negotiations with the U.K. and others.

During trade negotiations with Beijing, China hawks such as Senate Minority Leader Chuck Schumer, D-N.Y., and Sen. Marco Rubio, R-Fla., feared the president would let go of cybersecurity conditions in exchange for greater purchases of U.S. soybeans.

The trade negotiations with China have left tough questions of what exactly Beijing would do to punish intellectual property theft for a to-be-determined “phase two” of the deal.

In one indication of the Trump wild card effect, the president in May 2018 tweeted he would reverse the addition of Chinese company ZTE to Commerce’s Entities list. Too many Chinese jobs would be lost by banning U.S. companies from doing business with the company, which is accused of sanctions violations for doing business with Iran, Trump said.

Congress has since passed legislation that would require congressional approval for such reversals.

Thune’s Network Security Trade Act “would direct the executive branch to ensure that the equipment and technology that are used to create the global communications infrastructure are not compromised.”

“It would achieve that goal by addressing barriers to the security of communications networks and supply chains and unfair trade practices of state-owned or state-controlled communications equipment suppliers in new trade agreements,” according to the press release. “Confronting these issues, which this legislation requires, is critical as the United States begins formal trade talks with the United Kingdom and other allies.”

The U.K. is counting on striking a bilateral deal with the U.S., following its exit from the European Union, but British Prime Minister Boris Johnson has promised to abandon the effort if its own demands are not met.