Australian government map of rare earth deposits.

WASHINGTON: The US needs to work with allies and partners to compete with China in high tech, not go it alone, leaders of a bipartisan commission said Thursday.

“I went with the chairman of the seapower committee on HASC, Joe Courtney, the chairman of the Friends of Australia Caucus, to Australia,” recalled Rep. Mike Gallagher, the Republican co-chair of the congressionally chartered Cyberspace Solarium Commission. In particular, they visited western Australia, a major source of rare earth minerals essential to many high-tech products – minerals that, today, the US mostly gets from China.

“Our biggest takeaway,” he told a CNAS webcast Thursday, “was the need to … really enhance our partnership, particularly with our Five Eyes allies” – Australia, Britain, Canada, New Zealand, and the US – “and Japan” – which made major investments in its rare earths supply after China put it under embargo.

“We had a small victory in the National Defense Authorization Act,” Gallagher added. “It was an amendment that Courtney and I authored that would require the SecDef to prioritize the acquisition of strategic and critical minerals from US and allied sources.” (Emphasis ours).

Office of Rep. Mike Gallagher

Rep. Mike Gallagher

Overall, Gallagher said, Congress is taking the Chinese threat seriously and moving out but that isn’t guided by a clear strategy. “I think, in our eagerness to do something about a very real challenge, the United States has leapt without a plan of action,” he said. “We’ve had some positive developments … like the American Foundries Act, the CHIPS Act, the Telecoms Act. But we need a broader strategic effort to shore up our ICT [information and communications technologies] supply chains.”

The commission’s goal is to provide some of that strategic forethought.

All too often, the commission’s executive director, retired Rear Adm. Mark Montgomery said,  “we almost immediately turn every issue to a national security issue and quickly look for a US-based solution…We at the commission tried hard not to do that. I’m kind excited about the opportunities we have in rare earth elements” in particular, he said. “I fear trying to either legislate – or through the executive branch, direct – a US-only solution.”

The commission studied strategic minerals from relatively common ones like silicon and germanium, to esoteric rare earths, Montgomery explained. “We used to be a leading extraction, mining, and refining country, but it is a very messy process,” he said. The high costs of both environmental protection and American labor have repeatedly scuppered attempts to revive domestic production of strategic minerals, he said.

While some US mines are still in production, limited refinery capacity means that “the reality is what we mine right now already gets sent back to China,” he said. “China has too much of an advantage  for us to compete. It would just be putting a lot of money down a hole.”

But “there are allies and partners that can do this,” Montgomery emphasized. “Rare earth elements is one of those great opportunities to identify allies and partners that we can rely on to either to mine … or do the refining.”

Rare earths aren’t the only area where cooperation with allies works better than going it alone, added the executive VP of the Intelligence Community’s venture capital arm, In-Q-Tel, who, while not a part of the commission, praised its work.

via CNAS

Sarah Sewall

“There’s a bit of a bias … to want to own and to protect physically the supply chain,” said In-Q-Tel’s Sarah Sewall. “And that’s really important, and the [Solarium] white paper has some great recommendations on how to do that, and there’s a lot of momentum now in Congress.

“But… as the commission points out, you can’t onshore everything. We live in a globalized world, we have a globalized supply chain,” she said. “You have to figure out what’s the minimum required amount that you need to be able to produce at home. You also have to accept the fact that you’re going to still rely on external components in some cases.

“We also have to recognize that what’s allowed us to be leaders in these technologies overall has not been the reliability of our supplies and the ability to make them on American territory,” Sewall cautioned. “It’s been our ability to innovate” – and innovation requires being open to the world. Rather than treating foreign students with suspicion, she said, “we need to welcome talent.”

Australia is a particularly useful partner in this area as well. “The Australians have really extraordinary quantum talent,” said Sewall, who as part of the Intelligence Community’s investment arm is keenly interested in the ability of quantum sensing and computing to pierce present-day security measures. “The US and Australian firms like to share talent and some of our export regs even seem to [hinder] the movement of persons and their ability to come to an American firm. We’re going to have to look at all of that miasma that gets in the way [of] the need to really build a democratic coalition of trusted partners,” Sewall said. “We’re going to have to really pool our intellectual learning together.”

That openness, she added, seems to be “congruent with President Biden’s mentality of what it means to open America to a global world.”

Rep. Gallagher, a Republican didn’t outright endorse the incoming Democratic administration. But he was optimistic about the possibility for bipartisan cooperation – even on industrial policy, a topic that was historically toxic for the GOP.

“It was amazing to me how many of the Republican commissioners, both legislators and outside experts, were willing to utter the dirty ‘i-word’ from the start of our discussions,” Gallagher said. Whether you want to call it “industrial policy” or “industrial base strategy,” he said, “we do believe that’s an area where the federal government needs to be more proactive, a little bit more prescriptive.”

Overall, when he looks ahead to what can be accomplished, “I’m very excited,” Gallagher said. “I have engaged with the incoming Biden national security team. I am , let’s say, cautiously optimistic about some of the personalities they may be considering for key cyber-related positions…. I will look forward to working with them the same ways I worked with the previous administration.”

“At a time when we’re obviously seeing divisions and political tribalism front and center, and manifested in some very dark and ugly ways, I just want to show you that, as a member of Congress, work like this is exceptionally bipartisan,” said Gallagher, a moderate who publicly urged his GOP colleagues to certify Biden’s electoral college victory. “There’s just a huge opportunity to build upon it, and it’s so critically important.”