The deliverables announced today (“U.S.-China Joint Commission on Commerce and Trade”, 10/29/2009) from the US-China Joint Commission on Commerce and Trade (JCCT) address several issues of importance to the US software and digital content industries.

The pressure was on, given this was the first JCCT taking place under President Obama and before his first trip in November. Today’s outcomes, following on the heels of this summer’s Strategic & Economic Dialogue (S&ED), are welcome advancements in the US-China relationship.

Among the key outcomes for our industries:

Information Security.   The JCCT outcomes continue to recognize the importance of this issue for our bi-lateral trade and investment relationship. Even with the major scaling back of the 13 information security regulations last April (“Ambassador Kirk makes statement on China’s action to modify Information Security Testing rules”, April 29, 2009), the scope of the regulations – and other related issues – continue to present challenges and are out of the global norm.

The dialogue on trade in info sec products called for in the outcomes is critical to working with China to engage in global approaches on this critical issue. And the confirmation that the information security regulations do not cover State Owned Enterprises (SOEs) – and apply only to products procured by Chinese government agencies — is an important step.

While much work remains to be done on these regulations, as well as related areas of Multi-Level Protection Schemes and implementation of China’s encryption regulations, these outcomes continue to move the ball forward in an important way.

Government Procurement Agreement (GPA).   The US Government has demonstrated strong leadership engaging China to join the GPA.

The JCCT outcome that establishes a new offer from China “as early as possible” next year is particularly welcomed, and indicates that 2010 will be a busy year to make sure that China provides a meaningful and comprehensive undertaking of its commitment to joining to the WTO.

SIIA commends the outcome that products produced in China by foreign invested enterprises (FIEs) will be treated as domestic products, which will be addressed in rules to be issued in this regard. And SIIA looks forward to working with the US and Chinese governments once they “establish a multi-agency working group to regularly conduct discussions on issues involving government procurement and purchases by state-affiliated enterprises and organizations and private parties that make purchases in accordance with national strategic objectives.”

Intellectual Property (IP) Enforcement and Protection. Continued progress by China to become a full partner in the global economic community depends on meaningful enforcement of existing IP laws, and ensuring that IP laws on the books in China reflect global standards.

The JCCT outcomes recognize this, and SIIA is pleased to see focus on enforcement as a priority, especially with regard to Internet piracy and the further promotion of legalized software, and the recognition that infringement by state-run libraries is area to be addressed.

In one of the most forward-looking speeches on export controls delivered by a Secretary of Commerce in more than a decade, Secretary Gary Locke, on October 1, laid out a fresh vision of how our export licensing system is not merely adversely affecting our nation’s competitiveness – but also how it is critically affecting our nation’s ability to preserve our national security. See Remarks at Bureau of Industry and Security Update Conference on Export Controls.

The effects of our country’s export control regime – rooted in the 1950’s Cold War threat scenario when the U.S. dominated key technology and know-how – has long been known to impinge on the ability of U.S. companies to compete, and Secretary Locke’s speech provided some excellent examples drawn out of mainstream commerce – and far from isolated cases.

What is significant about his speech (which received remarkably little coverage, beyond snippets in the so-called trade press) is that it also laid out the implications for our national security as well – to the detriment of the goal that underpinned the current regime when it was created more than 4 decades ago.

He cited the in-depth study produced earlier this year, BEYOND FORTRESS AMERICA: NATIONAL SECURITY CONTROLS ON SCIENCE AND TECHNOLOGY IN A GLOBALIZED WORLD, which was prepared by a Committee that included luminaries such as Brent Scowcroft, Bobby Inman, Anita Jones and John Hennessey, which concluded, among other things, that “the national security controls on science and technology are broken.”

Secretary Locke’s speech comes at a propitious time. Yes, there have been other calls for ‘reviews’ in past Administrations – they occurred in both Bush Administrations, as well as under President Clinton. This time, however, there appears to be a real and serious effort among the key principals involved in this – in addition to Secretary Locke, Defense Secretary Robert Gates and Secretary of State Hillary Clinton – to work, at the very highest levels to take advantage of this alignment of US Government Interests.

This Executive Branch engagement also corresponds with renewed Congressional interest in looking at what statutory impediments may exist in this area.

Our nation’s innovation system, our economy and our national security all have high hopes for their efforts.

In the meantime, Locke has asked the Bureau of Industry and Security (BIS) to initiate the following actions:

• First, consider eliminating certain dual-use export license requirements for allies and partner nations—consistent with statutory and international obligations. Sec. Locke said this would be a low-risk, high-impact change for American companies.

• Second, explore implementing a fast-track process for the review of dual-use export licenses for other key countries that do not pose a significant threat and have a strong history of export control compliance.

Watch this important space in the months to come.

On Thursday, July 16th, the Health IT (HIT) Policy Committee will meet to review the public comments on the “Meaningful Use” of an electronic health record, and to discuss the Committee recommendations in this area.  The parameters of what is “meaningful use” will determine whether many of the critical objectives of Health IT implementation can be achieved.

On June 26th SIIA submitted comments to the HIT Policy Committee, making recommendations to expand the definition.  In the comments, SIIA recommended that the definition of “meaningful use” of an electronic health record include: 1) improving care, 2) improving efficiency, 3) enabling cost transparency/clarity, and 4) contributing to cost control.

The conceptual framework for the definition of “meaningful use” of HIT, as reflected in the Recommendations from the Meaningful Use Workgroup on June 16, 2009 (the materials included work, as a preamble and a matrix) is focused too narrowly.  That is, the conceptual framework does not address a meaningful approach to applying technology to the critical objective of healthcare administration and cost containment, among other potential relevant items.  Nor does the current framework provide for the routine collection, aggregation, and analysis of health information to greatly improve accuracy and efficiency of the healthcare system.

By focusing solely on the care side of the equation, the concept of “meaningful use” fails to currently capitalize on the enormous value of information technology for the modernization and automation of records associated with those healthcare activities that significantly bog-down medical practitioners and patients alike, ensnarling them in a morass of endless and confusing paperwork, bills and records, which often can be neither understood nor reconciled.

Ultimately, health IT’s successful adoption will, to some extent, be dependent on the success of broader health care reforms, including healthcare administration and cost containment.  Therefore, it is critical that the definition of “meaningful use” be expanded to include the element of administrative efficiency and cost transparency and clarity.  Further, to ensure the establishment of a robust health data system, it is critical that the definition include the collection, aggregation and analysis of electronic records.

Hopefully, the HIT Policy Committee will reflect these needs in pending revisions to the definition of “meaningful use.”