“Clean Network” Initiative Risks Undermining U.S. Digital Trade

Daniel Castro Nigel Cory August 31, 2020
August 31, 2020

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The Trump administration this April announced the “Clean Path” initiative, a program designed to ensure that all 5G network traffic between U.S. diplomatic facilities and military facilities only traverse network equipment from trusted providers. In particular, the goal of this initiative was to limit the ability of companies like Huawei or ZTE from potentially undermining the privacy or security of U.S. communications at the behest of the Chinese government. This move balanced national security interests and economic interests and provided a model for many other countries that similarly only wanted to allow equipment from trusted vendors to develop their 5G infrastructure.

But in early August Secretary Pompeo announced the administration was establishing a significantly expanded “Clean Network” program that would include five new priorities. While some of these new priorities are legitimate—such as data privacy and security—others model the type of protectionist policies that the United States has traditionally opposed.

Two of the initiatives could be reasonable expansions of the “Clean Path” initiative. The “Clean Carrier” program would ensure no Chinese carriers provide international telecommunications services between the United States and foreign destinations, and the “Clean Cable” program would prevent China from gathering intelligence from undersea cables. While the administration has not provided details on how these programs would work, the basic idea—to minimize opportunities for China to subvert network communications—seems prudent.

However, the other three proposals that are part of the Clean Network program do not stand up to scrutiny.

First, the “Clean Store” program calls for removing “untrusted” Chinese applications from U.S. mobile app stores. Essentially, apps could be banned simply because of the nationality of their ownership, instead of as a result of concrete evidence of harm or malfeasance. The administration’s recent executive orders to ban the Chinese-owned mobile apps TikTok and WeChat without providing evidence of a clear security threat sets a troubling precedent for other countries to use against U.S. apps. Doubling down and potentially expanding this ban to more Chinese-owned apps is even more troubling as it sends a clear signal that the U.S. government can arbitrarily ban foreign apps from U.S. app stores. It is important to note that U.S. actions against Huawei came after the U.S. Department of Justice indicted the company for stealing U.S. technology and helping Iran evade sanctions. Bans should not occur without evidence and a fair process.

Second, the “Clean Apps” program calls for removing trusted U.S. apps from Chinese mobile app store based on China’s appalling human rights record. Taken to its logical conclusion, this type of moral virtue signaling would essentially lead to complete decoupling of U.S.-China trade. But taking U.S. apps out of Chinese mobile app stores only hurts U.S. companies that would be ceding that market to foreign competitors, including Chinese ones. The administration should be working to increase foreign market access for U.S. companies, not closing doors. Nor would it change China’s approach to human rights. The Chinese government will hardly be swayed from its domestic policies if it becomes harder for American firms to sell in China. The onus should be on the U.S. government, not U.S. firms, to confront China on human rights issues. 

Third, the “Clean Cloud” program calls for U.S. companies not to store sensitive personal data or business data with Chinese cloud providers. Generally, U.S. companies should be free to manage the risks of deciding where to store data based on multiple factors, including the risk of forced government access. Many U.S. companies choose alternatives to Chinese cloud providers. But sometimes a Chinese cloud provider may be the best or only option—such as when providing services in the Chinese market, due to China’s restrictive licensing and data localization requirements—and if the U.S. company maintains exclusive control of the encryption keys used to secure any sensitive data, then using these providers may pose little to no risk.

Banning apps, cloud providers, and app stores without the use of clear legal criteria and due process is exactly the type of arbitrary and unfair action that the United States decries in China and elsewhere when applied to U.S. companies. It is also exactly the type of action the U.S. digital trade policy is designed to prohibit in trade negotiations with Australia, Brazil, Canada, Kenya, Mexico, Japan, and at the World Trade Organization. The ultimate objective for U.S. digital trade policy is to develop new global norms and rules that explicitly prevent the spread of Chinese digital protectionism.

It is good that the Trump administration is taking concrete steps to secure U.S. networks and data and not ignoring the harmful, mercantilist actions China takes that threaten U.S. national and economic security. But the United States has gone too far in the other direction. Upon announcing the “Clean Network” program, Secretary Pompeo said, “Building a clean fortress around our citizens’ data will ensure all of our nations’ security.” Even the terminology mimics the protectionist-based calls for cyber and digital sovereignty in Europe, China, and Russia. The goal should not be to build a secure digital fortress, it should be to build an open, rules-based, and secure digital market. This is more aligned with Japanese Prime Minister Abe’s initiative for “data free flow with trust.” Digital trade is still the future, and that means working with the likeminded members of the global community to build secure networks to deliver secure services using secure standards, whatever the nationality of the firms involved.