The vogue in efforts to better regulate the new national security economy is scrutiny of domestic investment to prevent rivals and competitors from buying critical technologies.
Now, the U.S. is contemplating measures that would block the flow of capital out of the country to impede transfer of those technologies. It’s a bold move, one with the potential to upend a pillar of the international economic order.
Historically, the West — the United States, its allies and partners — relied on strategic trade controls to keep key technology out of the hands of adversaries. Those measures focused on stuff that could be used to hone or improve military capabilities. Multilateral organizations were set up to promulgate and enforce those restrictions — what good is cutting access to U.S. equipment when it’s available from other sources? — and even included potential rivals, like China and Russia. After all, those governments could also be threatened by rogue states or terrorist groups.