from Net Politics and Digital and Cyberspace Policy Program

U.S.-China Cyber Deal Takes Norm Against Economic Espionage Global

September 28, 2015

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For years, the United States has argued that economic espionage by governments is wrong and should stop. The U.S. government became more vocal about this position as the Internet provided means for governments to engage in economic espionage on an unprecedented scale. But, among allies and adversaries, the United States made no headway on its international norm—until last Friday, when the White House announced the U.S. and Chinese governments agreed not to engage in or support economic espionage and to cooperate in implementing this commitment.

As CFR’s Rob Knake and others have said, this gobsmacking development is important, particularly as a breakthrough in Sino-American cyber relations. Even thoughtful skepticism underscores the need to come to grips with its implications. Appropriately, attention has focused on the deal’s impact on the U.S.-China relationship, but it also has significance because it gives the U.S.-supported norm against economic espionage global potential it never had before.

To grasp this change, recall the difficulties the United States had as evidence of economic cyber espionage by China mounted during the Obama administration. The Mandiant report released in February 2013 on Chinese economic cyber espionage galvanized concerns previously expressed by executive branch and congressional officials and led quickly to a new strategy on the theft of U.S. trade secrets. However, U.S. efforts to advance an international norm against economic espionage did not produce much, if any, support from other countries.

At this time, the normative case against economic espionage confronted the problem that neither binding international law nor “soft law” contained indications that states recognized this norm. International law contained no serious restrictions on espionage and did not distinguish between traditional and economic espionage. This problem led to attempts to find footholds in other areas of international law, such as the principle of non-intervention and World Trade Organization agreements, but these efforts—whatever the merits of their legal analyses—did not change state practice.

Part of the new U.S. strategy on protecting trade secrets included advancing the norm against economic espionage in U.S. diplomacy, including in negotiations for trade agreements. Snowden’s disclosures, which started in June 2013, damaged this project. The disclosures tarnished U.S. credibility, revealed U.S. intelligence collection against foreign companies and commercial sectors to inform diplomatic and trade negotiations, and gave China ammunition against U.S. complaints about its cyber behavior.

The U.S. effort to distinguish between permitted and prohibited types of espionage became more difficult, even while the U.S. government and private cybersecurity companies believed Chinese economic cyber espionage continued unabated, if not actually intensified. Continued U.S. attempts to emphasize its norm, such as through indicting Chinese military personnel in May 2014, failed to gain international traction.

This background illuminates why the agreement on economic espionage announced last week is politically surprising and normatively important. Initial reactions often focused on why China seemed to accept the U.S. position despite not previously recognizing the validity of the U.S. stance on economic espionage. Experts frequently commented on the potential impact of the U.S. decision to impose sanctions on Chinese companies that benefit from economic espionage. The release of more information and further analysis might reveal a more complex explanation. But what happened is equally important as why it happened.

Now, the United States is no longer the lone normative voice in the economic espionage wilderness. The leaders of the world’s two biggest political and economic powers have agreed to act together against economic espionage. The agreement is not binding international law, but it opens space for advancing the norm against economic espionage globally that the United States, even before Snowden, did not create on its own. This development gives the United States leverage in raising the norm against economic espionage in other diplomatic contexts, including trade negotiations, regional and bilateral cooperation on cybersecurity, and further UN talks about norms of state behavior in cyberspace. This leverage gives the United States an opportunity to push more credibly for countries to accept this norm and anchor it in international law, which potentially creates a rare moment in which international legal restrictions on espionage are even conceivable.

Yes, the deal might be, or prove to be, less than what its text contains. Although not a legal document, the agreement might well be “lawyered” by both sides to suit their interests, raising questions whether the two governments are reading the same words. The implementation mechanisms might prove ineffective, or be used tactically in Sino-American disputes about other issues. Great power politics often prove the graveyard for international norms. But, for the moment, the agreement ensures that what happens next on economic espionage will unfold in a different normative context, and that is a remarkable result of cyber statesmanship by Presidents Obama and Xi.