Snowden leaks unlikely to sway cyber theft negotiations with China, expert says

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Lewis, from the Center for Strategic and International Studies, told the oversight arm of the House Energy and Commerce Committee that Chinese officials will test how much advantage over the U.S. they can get from former government contractor Edward Snowden's revelations.

"They are unlikely to get much negotiating benefit from his revelation because the U.S. has always told China that military espionage is a two-way street and that it is China’s commercial espionage that creates problems,” he said.

Recent findings that China’s cyber espionage efforts are responsible for the U.S. losing anywhere from $150 billion to $240 billion per year in stolen intellectual property has caught the attention of Congress. A study by the Commission on the Theft of Intellectual Property estimated that 2.2 million jobs are lost every year in the U.S. due to intellectual property theft.

“If our IP is being targeted, U.S. jobs are being targeted, and this must stop,” said Rep. Fred Upton (R-Mich).

Republican and Democrats on the House panel expressed doubts that the Cyber Intelligence Sharing and Protection Act (CISPA), which is awaiting a vote in the Senate, would be strong enough to protect companies from cyber espionage.

“Cyber espionage damages our economy and puts national security at risk. Numerous reports have noted that the Chinese government is the chief sponsor of hacking activity directed at sensitive U.S. military information and lucrative corporate trade secrets,” said ranking member Henry Waxman (D-Calif.) in his opening statement.

“But the administration needs Congress’s help. And we are not giving it.”

Waxman called CISPA a “flawed bill,” because it does not set mandatory standards for the private sector to protect companies from threats such as economic espionage.

Blocking trade from companies that participate in cyber theft and increasing the ability of law enforcement agencies to hunt down cyber thieves were among the suggestions given by cybersecurity experts to the House panel. A group of bipartisan senators introduced the Deter Cyber Theft Act in May, which would require the Director of National Intelligence to take an annual tally of foreign countries that are the “worst offenders” of economic espionage, the technology and information these countries target and the items that go on to be produced.

“My experience with China is that they will steal and reverse-engineer anything they can get their hands on,” said Larry M. Wortzel of the U.S. China Economic and Security Review Commission. Wortzel suggested that the president declare the issue of cyber-intellectual property theft “an extraordinary threat to national security ... or the economy of the United States,” which under current law would allow him greater powers.

“Under this declaration, the president, in consultation with Congress, may investigate, regulate, and freeze transactions and assets, as well as block imports and exports in order to address the threat of cyber theft and espionage,” said Wortzel.

The Government Accountability Office (GAO) said on Tuesday that there were reasons to doubt current estimates that the U.S. is losing $300 billion a year to intellectual property theft. A report released by the agency details the numerous factors that make estimating the economic impact of intellectual property theft difficult.

“The estimate that has gained currency in discussion is in our view, not creditable,” said Susan Offut of the GAO on Tuesday when questioned by lawmakers.