Amidst intensifying U.S.-China technology competition, the importance of Congress’s role in overseeing the Executive’s strategy and response measures is hard to overstate. To measure the effectiveness of congressional oversight of the Commerce Department’s export controls, this essay applies the framework proposed by former Senator Carl Levin and Elise Bean in their article “Defining Congressional Oversight and Measuring its Effectiveness.”
Despite raising the public profile of the issue and contributing to policy changes, congressional oversight of the Commerce Department’s export control and licensing policy towards Huawei since 2019 has had limited success: in the absence of bipartisan interest, limited cooperation from the agency in response to frequent and overly broad inquiries have detracted from the effectiveness and quality of oversight activities.
Background
In 2019, the Trump Administration determined that Huawei, a Chinese telecommunications giant, presented a threat to U.S. national security. Huawei and its affiliates were added to the Commerce Department’s Entity List, which prohibits U.S. companies from exporting certain equipment and technology to designated entities absent a specifically granted exception or license. Restrictions on Huawei enjoy bipartisan support. However, congressional oversight of the agency’s Huawei export controls proved intractable.
Legislation, Regulation, and Oversight
By statute, Congress delegated authority to implement export regulations to the Commerce Department’s Bureau of Industry and Security (“BIS”). BIS can grant licenses that, on a case-by-case basis, permit companies to engage in otherwise prohibited exports. BIS, in turn, is under the oversight jurisdiction of the House of Representatives Foreign Affairs Committee. In the Senate, the National Security and International Trade and Finance Subcommittee of the Committee on Banking, Housing, and Urban Affairs oversees export controls that BIS implements. The Export Control Reform Act of 2018 (“ECRA”) requires that “[a]ny information” obtained under the export administration regulations “shall be made available to a committee or subcommittee of Congress of appropriate jurisdiction, upon the request of the chairman or ranking minority member of such committee or subcommittee.” In other words, BIS is obligated to provide such information in response to congressional inquiries, including from a ranking member of a Foreign Affairs Committee.
Measuring Effectiveness of Congressional Oversight
To measure the effectiveness of a congressional investigation, Levin and Bean proposed an analytical framework comprising four measures: (1) the quality of the investigation; (2) bipartisanship; (3) credibility; and (4) policy impacts.
- Quality of Congressional Inquiry
Factors affecting the quality of a congressional investigation include the importance of the issue to the public, appropriate scope and use of investigative tools, opportunity to respond, usefulness of the facts gathered, consensus regarding key facts, a written product reporting the outcomes, and ability to attract attention.
- Issue Prominence. The Chairman of the House Foreign Affairs Committee, Michael McCaul (R-TX), consistently framed his inquiries into BIS licensing policy in terms that were broad and relevant to the general public: U.S. technological leadership in a struggle for the global balance of power. Because global competition without a level playing field understandably presents risks — not just for U.S. national security and foreign policy interests, but also for many individual participants in the U.S. economy — the Chairman’s issue framing enhanced its importance to the public. Moreover, increasing media coverage and studies of China’s unfair trade practices in technological competition raised the public profile of the Executive’s response, adding to the perceived significance of congressional oversight over BIS’s export ban and licensing policy vis-à-vis China’s “champion” companies.
- Scope and Tools of Investigation. Chairman McCaul used various investigative tools to collect relevant information from BIS, including a series of requests for documents, briefings, hearings, and questions for the record. From November 2020 to November 2022, he in his capacities as Chairman and Ranking Member of the Foreign Affairs Committee sent six broad information requests to BIS regarding export controls towards Chinese entities with some Huawei-related questions. Most narrow in scope was Chairman McCaul’s March 6, 2023 inquiry, which was focused exclusively on the BIS’s Huawei licensing policy. In addition to agency officials, Chairman McCaul contacted key members of the presidential Administration, including National Security Advisor Jake Sullivan, regarding the BIS’s export control policy.
- Opportunity to Respond. The timing of Chairman McCaul’s initial inquiries did not consider the need for a new Administration to conduct a policy review. From the outset, Chairman McCaul urged his Senate colleagues to block Gina Raimondo’s confirmation as Commerce Secretary due to her unwillingness to commit to keeping Huawei on the Entity List. In turn, the agency declined to provide a clear policy statement to Congress, citing policy review for more than two years now. At a February 28, 2023, hearing before the House Foreign Affairs Committee, Department of Commerce Under Secretary for Industry and Security Alan Estevez stated that Huawei’s licensing policy was still “under assessment.” The agency provided limited responses to congressional information requests. Reissuing his oversight requests to BIS on January 13, 2023, Chairman McCaul stated that “BIS’s dereliction in providing basic transparency and accountability” contributed to a 90-day review, which aims to determine whether the Commerce Department “should continue to lead implementation of the export control system.”
- Usefulness of Facts Gathered. On October 21, 2021, BIS provided the House Foreign Affairs Chairman export license statistics covering a six-month period from November 9, 2020, to April 20, 2021, with a brief explanatory annex. The annex, cautioning that release of the aggregate licensing data “over an arbitrary snapshot in time, risks politicizing the licensing process.” In March 2023, BIS provided another dataset regarding aggregate licenses for the Entity List exports. To date, BIS has neither provided to Congress responsive information to enable meaningful analysis of the agency’s licensing policy towards Huawei, nor explained why collection and delivery of such data was not practical or possible within a certain time frame.
- Consensus on Key Facts. Notwithstanding the quantitative nature of the BIS’s disclosure, key facts are so limited as to be subject to reasonable differences in interpretation. BIS stated: “The existence of approved licenses to Huawei . . . is not, by itself, sufficient to draw accurate conclusions about the effectiveness of BIS’s licensing policy or to derive meaningful insight into the exports going” to Huawei. However, the agency did not provide additional insights to explain the meaning of the figures it provided. Requesting additional information, Chairman McCaul characterized the BIS’s Huawei licensing data as showing that “BIS approved $100 billion worth of license applications and denied less than 1 percent” over a six-month period. This reading of the BIS’s disclosure can be disputed if the percentage of shown denials does not account for all actual denials, such as those preceding formal agency decisions or those applications the agency declined to review. Face value of the approved licenses can be similarly misleading.
- A written product. Chairman McCaul’s inquiries have not yet resulted in a report with findings of facts and evidence-based recommendations.
- Ability to attract attention. The inquiry attracted attention from policymakers, academics, and the public, changing the image of Huawei from a barely known company in 2018 to an illustrative example of U.S.-China technology competition.
The overall quality of investigation would have been high, primarily due to the issue prominence the inquiry attained, but investigative design needed significant improvement in narrowly tailoring information requests to the agency.
- Bipartisanship
The effectiveness of Chairman McCaul’s inquiry to date has been negatively impacted by the lack of bipartisan interest in Congress, as evidenced by the lack of members from another party signing on to his information requests to BIS. Finding common language and a way to involve a member of the other Party would have helped Chairman McCaul to increase the effectiveness of the inquiry, as well as to raise the stakes for BIS if the agency declined to provide a thorough response.
- Credibility
Public credibility of Chairman McCaul’s inquiries suffered significantly because of the lack of bipartisanship. Defense News, like other news outlets, characterized the inquiries as attempts by the Republican party to use its “brand-new House majority” to pressure the Biden Administration.
At the same time, BIS’s years-long delay and incomplete response to the Chairman of the Committee with oversight jurisdiction did not portray the agency in the most favorable light.
- Policy Impact
In the absence of a formal report, Chairman McCaul’s inquiries have not led to a set of policy recommendations. This said, BIS recently expanded export restrictions on Chinese companies, which might contribute to the desired outcome of the House Foreign Affairs leadership. Accordingly, Congressional oversight efforts seem to have led to a greater alignment between legislative and executive perspectives, at least on a general policy approach to export controls to companies located in certain destinations. Although a tangible policy impact of the oversight activities on agency regulations of a specific company cannot be measured at this time, it may become evident in the future.
Recommendations
Application of the Levin-Bean framework suggests that congressional oversight activities of the BIS’s licensing policy towards Huawei can be effective and ineffective at once. On the one hand, the effectiveness of the investigation led by the Chairman of the Committee with oversight authority was aided by the high profile and public significance of the issue, despite the frequent and broad information requests. On the other hand, the effectiveness of the Chairman’s inquiries was diminished by the lack of bipartisan support and agency responsiveness. Nonetheless, the investigation efforts produced significant policy impact, if not on export controls regarding a certain Chinese company, but evidenced by a greater alignment between executive and legislative approaches to policies regarding a broader range of exports to China. Building inter- and intra-branch dialogue is essential for effective oversight and better outcomes for U.S. foreign policy and technological leadership.