Cyber Espionage and Trade Secrets — U.S. Strategy and Global Action.

The Obama administration has launched a new comprehensive strategy concerning global theft of U.S. trade secrets, especially when state-sponsored.
The new report released this week  considers “trade-secret theft” as a major issue in the context of economic and national security. It also views it as a major issue in global trade relations.  The report contends that trade secret theft by foreign corporations and state-supported entities (China among others) diminishes  U.S. export prospects and puts the U.S. economy at risk.
The report  proposes among other actions: (i) diplomatic efforts to protect trade secrets overseas; (ii) enhance domestic law enforcement; (iii) improve domestic legislation.
In particular, the report and the Obama administration proposes sustained and coordinated international engagement with trading partners. This includes utilizing trade policy tools to increase international enforcement. This means utilizing the Special §301 process, raising the issue in trade agreement negotiations (such as in the Trans Pacific Partnership), and in all other international trade discussions including TRIPS. (This also includes filing possible legal actions in the WTO under the TRIPS agreement.)
 The new strategy calls for greater international law enforcement and more cooperation with international organizations. It also calls for  greater coordination between the Dept. of Justice, the FBI and the Dept. of Commerce. It  wants enhanced information-sharing by the intelligence and defense communities with the private sector. It concludes with a call for improving domestic legislation. It notes two recent pieces of legislation signed by President Obama — The 2012 Theft of Trade Secret Clarification Act  and The 2012 Foreign and Economic Espionage Enhancement Act. This was a start.
This new strategy is a good beginning, but only a beginning in dealing with the impact of  global theft of trade secrets on U.S. economic competitiveness. The cyber intrusion usually results in theft not destruction of data. It impacts the  trade and national security interests of the U.S. generally. Foreign cyber espionage for commercial gain is only one aspect in the rise of cyber issues in international relations. These issues impact the U.S. military and civilian sectors as well of those of countries around the world.
Tom Donilon, the National Security Advisor to President Obama recently stated, “(Cyber espionage) is not solely a national security concern or a concern of the U.S. government. Increasingly, U.S. businesses are speaking out about their serious concerns about sophisticated, targeted theft of confidential business information and proprietary technologies through cyber intrusions …. (W)e need a recognition of the urgency and scope of this problem and the risk it poses—to international trade …  (W)e need China to engage with us in a constructive direct dialogue to establish acceptable norms of behavior in cyberspace.”
Yes, a new national and global legal architecture is needed to counter cross-border cyber espionage aimed at the private sector and its trade secrets. The real work is yet to be done. This is critical to national security and international trade relations today.
….  Presidential Report — Administration Strategy on Mitigating the Theft of U.S. Trade Secrets. (White House) (February 2013).
….. Brzezinski, “The World Needs New Rules of War for Its Cyber Age.” Financial Times (February 25, 2013).
…. Tom Donilion, “U.S. and Asia – Pacific  in 2013.” (White House March 12, 2013).
…. “Cyber-Spying and U.S. Economic Competitiveness.” Washington Post (Feb. 11, 2013).


Cyber Hackers

About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (Schar School of Public Policy).
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