First Reply INEach one of the three kinds of trade agreements is

First Reply IN
Each one of the three kinds of trade agreements is evenly
significant to the United States. First, a consensual
understanding is a trade agreement between two countries (Zeng
2012). For instance, when the United States and China arrived
at a trade agreement (Zeng 2012). A consensual trade agreement
is vital to the United States because it helps individuals operate
in distinct businesses that engage the two countries. For
instance, the United States prohibited Huawei from working
here, several individuals in the United States and China
suffered (Campion 2020). Thus, there are individuals in both
countries that lost their occupations. A bilateral trade agreement
would have protected such disciplines and warranted that the
salary and profits of thousands of individuals are
guarded (Campion 2020).
A regional trade agreement is a commercial agreement that
engages nations in a particular area (Labonté, Gleeson and
McNamara 2020). An exceptional illustration of a regional trade
agreement is the U.S. – Canada – Mexico agreement that
superseded NAFTA (North Atlantic Trade Agreement). This
trade agreement permits individuals from both nations to
transfer and exchange supplies, commodities. It produces among
the three countries without forfeiting unnecessary tariffs and
tolls that individuals from other countries would have to
lose (Labonté, Gleeson and McNamara 2020). Such profits are
vital to the U.S. because it permits American manufacturers to
multiply their markets further than the borders of the United
States.
An international trade agreement is an understanding that
implicates the majority, if not all, nations worldwide. An
example of a global trade agreement is the World Trade
Organization Agreement. The World Trade Organization
establishes commerce and business strategies that nations
worldwide follow to ensure that marketing and business

are directed and overseen effortlessly and efficiently (Zeng
2012). Suppose the World Trade Organization did not exist. In
that case, many nations may begin seizing the benefit of their
financial authority and influence to obtain additional power
when negotiating and exchanging with other countries.
Nevertheless, the World Trade Organization is inexistent to
make sure that there is impartiality and fairmindedness. This
objectivity likewise clearly impacts the United States.
Free trade is as significant as a democracy to the wellbeing of
world stability; free trade is essential (Mead 2021). It has
accomplished much more than all of the global foreign relief
bureaucrats to enhance living norms and means and amplify
chances for individuals in developing markets. In contributing
to poor and productive countries a mutual interest in peacetime
and solidity of the international structure, free trade achieves
greater than NGOs and advocates to endorse peace (Mead
2021). The reason for free trade is presently obsolete, and
forming a trade outline for the 21st century will be
difficult (Mead 2021). Yet, international wealth, American
dominance, and world peace continue to be reliant on free trade.
The dangers of the global trade structure ought to concern each
of us.
Indira
References
Campion, Andrew Stephen. "From CNOOC to Huawei:
Securitization, the China threat, and critical
infrastructure." Asian Journal of Political Science, 2020: 47-66.
Labonté, Ronald, Deborah Gleeson, and Courtney L.
McNamara. "USMCA 2.0: a few improvements but far from
"healthy" trade treaty." May 06, 2020: 40-43.
Mead, Walter Russell. "Global Free Trade Is in
Crisis." WSJ. November 19, 2021.
https://www.wsj.com/articles/the-world-free-trade-system-is-in-
crisis-organization-meeting-omicron-tariffs-sanctions-
11638220676?st=chy6wowfu3cec6g&reflink=desktopwebshare_
permalink (accessed November 30, 2021).

Zeng, Ka. "high Stakes: United States- China trade disputes
under the World Trade Organization." International Relations of
the Asia-Pacific, 2012 : 33-63.
Reoly2Tas
The United States is currently the leader of a global economic
system of the post-WWII world. Through its leadership the U.S.
helped to establish the Bretton Woods System that lifted
countless nations out of poverty through loans and grants for
building essential infrastructure. One of the primary institutions
of the system, the World Trade Organization (WTO), currently
plays a crucial role in solving trade disputes.[1] Under the
globalized economic system, it is crucial for the United States,
as the sole hegemon in the current unipolar order, to establish
trade relations to ensure its economic prosperity With the
resurgence of Russia, growth of China, and the creation of the
European Union, these state entities pose themselves as
potential economic rivals to the United States. In the case of
Russia and China, potential military adversaries.[2] As the
United States’ economic primacy is being challenged on the
global stage, it is perhaps time to turn inwards in the pursuit of
beneficial trade agreements for its best national interest.
Under these conditions, bilateral trade agreements may prove to
be a viable solution. But this is also not enough with the

adversarial relationships between Russia and China as well
other global commitments stretching the capabilities of the U.S.
to exert its power economically. Regional trade agreements
have uneven level of acceptance in the American mindset,
especially with President Trump’s antagonistic views of
NAFTA and TPP as some of the worst in U.S.
history.[3] However, regional trade agreements may have its
advantages for the United States under current circumstances.
The new NAFTA (USMCA) agreements have proven itself to be
a viable blueprint for future regional trade agreements by
equalizing the trade imbalances between parties and creating a
free trade zone through North Americas among the three
member states.[4] U.S. policymakers should be more ambitious
in this regard and expand NAFTA or create an all new
agreement with a wider scope. It would encompass an even
closer equal relationship of all parties involved. Furthermore,
members should not be sought solely on the North American
continent but should bring into the fold South American
members as well as Australia and New Zealand. Under this type
of agreement member states voluntarily commit themselves to
economic development and stability of its fellow
members.[5] Another benefit to the agreement would be to
create a trans-Pacific-Americana free trade zone between
members through removal of tariff barriers that helps drive
down production expenditures and costs to the consumer.
Regional agreements as such also has a geopolitical significance
as it links the two American continents along with pacific
western nations of Australia and New Zealand to close
economic ties that foster growth and organically creates an
alliance structure based on common interest and mutual respect
centered on shared western culture.[6] Its prospects provide a
possible regional agreement option to counterbalance any loses
economically the United States might suffer on the global stage.

References:
Hastedt, Glenn P. American Foreign Policy: Past, Present, and
Future. Rowman & Littlefield, 2020.
Huntington, Samuel P. The Clash of Civilizations and the
Remaking of World Order. New York, NY: Simon & Schuster
Paperbacks, 2011.
Summer by-Murray, Robert. “Trump, Canada and NAFTA:
Trading Protection or Protecting Trade?” The Round Table 106,
no. 2 (2017): 217–19.
https://doi.org/10.1080/00358533.2017.1299463.
“United States–Mexico–Canada Trade Fact Sheet Strengthening
North American Trade in Agriculture.” United States Trade
Representative. Accessed December 3, 2021.
https://ustr.gov/trade-agreements/free-trade-agreements/united-
states-mexico-canada-agreement/fact-sheets/strengthening.
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10
Watch: Economic Statecraft
Battle for the US global influence. Secretary Kerry will take the
reins as free market matchmaker. Money talks. Next on great
decisions. In a democracy agreement is not essential, but
participation and join us as we explore today's most critical
global issues. Join us, are great decision. Great decisions is
produced by the foreign policy association in association with
Reuters television. Sponsorship. Great decisions is provided by
Yan'an, the Hartford Foundation and PricewaterhouseCoopers
LLP. Hello and welcome to Great Decisions. I'm your host
David Rohde. More and more foreign policy as being one by
business acumen rather than military might. The United States
is trying to use economic tools to promote the benefits of
democracy and the free market. Because a free market means
more American exports and capital to invest in American
businesses. Here with me today to discuss the role economic
statecraft in global politics is Eric Schmidt. Thank you for
joining me. Thank you, David. So this, There's this term which
we've just introduced, economic statecraft. The traditional
meaning of it is something that actually former Secretary of
State Hillary Clinton talked about. The State Department trying
to sort of boost American exports, create free trade agreements.
As a business executive, can the government play a role in
terms of economic statecraft and boosting exports? Well, of
course they can. And American products are in demand all
around the world. We need even more aggressive and
enforcement of free trade agreements and open borders and so
forth. I worry that countries for one reason or another, wil l
come up with all sorts of ways of restricting trade. But the fact

of the matter is that Americans, America's global businesses,
are providing a lot of economic growth and job growth. For
many, many of us we all benefit from this. So part of economic
statecraft is developing a more skilled workforce here. It's not
simply as Secretary Clinton negotiating free trade agreements.
How do you create a more skilled American workforce? Well, it
obviously starts with education, and we have largely education
monopolies in America, government provided typically. And we
need more competition. There are hundreds of new ideas for
education of one kind or another. And now with the Internet, we
can actually measure outcomes. We can actually see does this
approach for education, work orders, this other newer approach
work can do the tests. We've never really been able to do that
on scale and we can actually see what works best. Then we'll
figure out how to change the appropriate incumbency is to
actually do the best. And I think the educators should lead that.
I don't think people like myself should make, to make solutions
up, but they should encourage competition among these
different choices, and they should figure out what works.
There's many conservatives who say, the problem is the
government when it comes to economic growth, the core
problem in economics is now ultimately going to be jobs. All of
the mature economies in the world are having various forms of
growth and job problems. They're extreme in Europe, they're
extreme in Japan, they're pretty bad in the US. Just ask a young
Greek person, two-thirds of them out of work, a young Spanish
person, half of them out of work. Aggregating unemployment.
American employment is one of the lowest numbers it's been in,
in, in decades as a percentage, even though we're doing
relatively well, the jobs are not being created fast enough. You
need a public policy that addresses that. How do you do it?
Focused on entrepreneurship, focus on education. By the way,
many of these companies can't get started because the
regulations were written by incumbents, and they don't allow
for new entrance. So, creating a model where new entrants can
come in, they can be disruptive. So imagine a perfectly planned

economy. Let's think about Europe. So many levels of
government, it's impossible to make really major changes. It
takes too many people, very difficult to bring out some new
disruptive, but ultimately life positive and life-changing
experience. And you're not fitting instead of either a traditi onal
conservative or liberal box here, because you're, you want less
regulation and less layers of government. But she say there is a
sort of positive role for government. Government is a large
factor in economics in many ways. But the fact of the matter i s
that, that mature democracies tend up overregulating. So in that
sense they're Republicans are right. But if you look in many of
the cases, the republican side of the industries are on the
regulation side because they benefit from it, right? The
Democratic side, similar roles or incumbency is for labor, for
example, which again have rules which do not particularly favor
in innovation. For those reasons because their change resistant.
You've got to come up if you want to solve this problem of
economic growth with a compromise that allows jobs to get
created by companies. Just remember, jobs are created in the
private sector by strong-willed people, men and women, who've
got some access to capital, they need access to capital. Their
countries, by the way, where business failure you go to jail. It's
a pretty big reason not do a startup in America. Thank goodness
if you look, many of the startups that we've seen are in fact by
people who failed at a previous startup. They learned a lot. And
one interesting thing you mentioned here was that government
should be promoting entrepreneurship. Again, how can
government do that in our sort of rigid ideologies and in our
political spectrum, the American political system is now
landlocked between these two not particularly representative
views of the average American. And we can debate that
separately. And it's an artifact of gerrymandering the political
system, the strength of the Senate versus the scale of the house
and so forth and so on. But the fact of the matter is this is the
system that we have American businesses doing very well,
given the rules, American business is really growing out. If you

look at the rate at which an American businesses investing in
things, right, it's doing very well. The problem is this jobs
issue. In fact, the American story is very strong with respect to
research and entrepreneurship. We have 18 of the top research
universities in the world. There's a series of new inventions in.
Now if you look at energy, if you look at materials, whole
bunch of new things coming which are just on the cusp of
becoming global industries. This is where the jobs will come
from for America and should there be more government funding
of R and D, that that is an issue in Washington, the government
should always try to fund universities and basic research
because they don't have other sources of that. The government
should probably not become a venture capitalist because of the
way government works, the way the decision-making, where the
politics work don't necessarily make the right business decision.
That's where the line I think should be driven. But almost
everything that you use today was invented by some form of
government program that was invented roughly after World War
2. A series of very, very far sighted people afterward said, let's
take a chunk of all that money that was going into the military
system. And let's put it into this basic R&D, including Google,
including ultimately, in terms of the web. If a young American
is thinking about how to be an entrepreneur and how to create
jobs and a growing company. Should it be looking overseas?
Should they be trying to sell to the Chinese middle-class, not
the American market? If you follow my model, you're not going
to be able to build moats around your country. So you're better
off in a globalized world being globally competitive. That
means having ridiculously inexpensive prices, broad reach, and
scale. That's how you build one of these fast-growing
companies. You just come in with a better product, faster,
cheaper. At a global market level. If you do that, you will be
competitive in these countries. What typically happens in
technology as you prove the technology in the US, and then it's
relatively straightforward to expand it. For things which are not
particularly innovative in the US cents, they can still have

significant roles in developing countries, the problem is now
competing with the local domestic providers who may have
business preference from the government. China, for example,
has a mercantilist policy which has always had where basically
all the companies that try in the US try to operate in China have
to have a 50 percent ownership from local Chinese people for
that reason. And, or their tariff issue. Still, the biggest tariff
issue is corruption. And because of the Foreign Corrupt
Practices Act, american firms are sometimes not competitive
with the bribes that are being paid by foreign competitors. This
is a good thing, by the way, not a, not a bad thing. So most
people will say that the tariff issue is not as bad as this sort of
endemic problems of operating in those countries. But some
would say we're at a disadvantage. China is bribing in Africa as
it expands there, some European companies are said to do it.
Isn't it naive that we have the Foreign Corrupt Practices Act and
it's an example of bad economic statecraft. It's better to lead
with principle than succumb to bad practice. It's a matter of
honor. It's a matter of principle. Human organizations don't just
go after money. And if you can represent to your firm that we
lost that bow, we lost that battle. We have the best product, but
we lost it because we were honorable. That keeps a good
employee, it keeps everybody motivated. I think we want to
keep those kinds of rules is if you look at the countries that are
screwed up in that way, they all aspire to be America. If you
look on a per GDP basis, if you look at economic growth,
innovation, they want our creativity, they want our model. They
really wish they had our system. We forget that here. According
to the State Department, the power of a nation is now measured
more by the dollar and its coffers than the number of soldiers
and its armies. So the US is emphasizing new economic tools
and its diplomacy while also strengthening the economy at
home. The State Department has an ambitious plan to put its
270 American embassies and consulates to work on a sort of
global advertising campaign in American industry. The goal
double US exports in the next five years. Washington also plans

to push countries like India and China for a more level playing
field. Right now, trade regulations in those nations hamper
American access to millions of potential customers. In the view
of many developing countries and sort of the bric nations, they
are impressed with the Chinese model. Will China continue to
rise? China can be understood as a relatively well-run business.
There you can, their revenue growth is strong. They manage
their expenses so that they don't lose money. They don't have
deficits, and they carry cash right there. Assemble cash. It's not
a particularly effective democracy and they squelch their
opponents, they've censored us to death. We actually moved to
Hong Kong, as you know, but it's well-run from a business
perspective. To me the question is, how long can you run a
country like a business? Can you essentially have economic
growth be the only aspects of the culture of a country. And I
think it's, it's not appropriate for Americans who don't live there
and aren't status. I don't really understand the culture of the
Confucian culture of China. To sort of really say that they know
China has defied it's many critics for a very long time, we
benefit from China's economic growth because the development
of a middle-class in China will put enormous pressure on a one-
party state. If you look at political history around the world, it's
the development of the middle-class that doesn't want to be
mistreated by the autocracy. That then creates the next
revolution, hopefully a peaceful one. We look at the Middle
East, there's, there's talk of the administration pivot to Asia, a
free trade agreement in the Pacific. But we keep being drawn
into the Middle East. You've spent a lot of time there. First and
economic question, is there any way to promote economic
growth more effectively across the Middle East? Is there more
the US could do or World Bank? Each country is different. And
the strongest thing that we can do is promote the openness of
the internet in those countries. Because the openness of the
internet will bring Western ideas modernizing the state
essentially from essentially a religious or autocratic one-party
systems that will lead to all sorts of problems such as we've

seen in Egypt where it's back and forth and back and forth. But
the core thing that's going on is that the Internet, which is
essentially not controllable in the way that television wasn't.
These countries is raising the expectations of the citizens. And
the citizens say this is not a reasonable way of running. It also
obviously empowers extremist groups which are very dangerous
and so forth. I think, I think that the Arab world and course, you
know, a great deal about it, had become much more dangerous
since the loss of the two-party system. Now, each of these is
locked in, in conflict. If you look at, for example, violence in
Kenya, right? Violence in Syria, they're all fundamentally local
violences with extremist groups. And almost every one of the
countries that's in trouble has an internal group that they have
an internal fight on that we in America would never accept.
Early on. In Egypt, the US was trying to get Coca-Cola and
other large American firms to come in there and help stabilize
the situation economically? Or are there places where the
government just really can't do anything and there's no way to
get foreign direct investment. Your choices to military action or
financial action, you better off giving them the money that and
then having a war with them. So on a purely economic basis, I'd
rather since send them that money. But I think the reality is the
likelihood of that money ending up being in the way that you
send it is probably not so high. I think it's better to focus as a
matter of public policy on informing and empowering the
citizens of this country. Information, empowering those
citizens, the expectation. It's impossible now, with the
exception of North Korea, which is a closed country, to
essentially run these countries the way old dictators use and
just, just destroy the countries. You just can't do it anymore.
And that's an example of this rising expectations. The best
foreign policy of America, in my view is information. And then
having American companies operate in those countries. When
American companies operate in those countries, they bring
American values, right? So we, when we operate in those
countries, treat women really well, right? In the same way we

treat men, right? That's a foreign concept to many of these
countries. To over and over again, or private education and so
forth. I think American companies do a good job there and we
should do more of it. You're the chairman of the board of the
New America Foundation. There's a grant that the foundation
has received to help developed ways to overcome censorship,
particularly in the Middle East. How do you stop the Irani an
government, for instance, from blocking access to the web? Do
you see technologically that that's possible? At the moment, the
most dangerous of such technology is the technology that was
invented by China, which is active censorship. And they, with a
turn of a dial can decide this is the kind of speech we allow.
This is the kind of speech we don't wow, the discussion of their
censorship program is illegal. It's a state secret and it's
administered by a special office. We of course, moved to Hong
Kong for those reasons because we didn't want to be subject to
that. If that kind of technology gets exported to the 40 or 50
other countries of the 200 plus that exist that are engaged in
currently passive censorship. And we've got a real problem.
Because then you don't see a coherent Internet. You only see a
half that there are many, many countries are likely to create
their own version of the Internet. It's a terrible disservice to the
citizens, to the government's into the other countries. Is it
technically possible? Yes, the governments have control over
the name service of the unmet. And they can actually just delete
sites every once while in China we would find ourselves
replaced by our competitor. You go to us but you'd come to
your competitor. They can do that sort of thing. It's important
with those countries to understand that when they do that, they
pay a heavy cost because there are then no longer connected to
the global economic system and the right way. They don't have
access to the banking systems and the free flow, maybe they
don't care, maybe they don't understand it, but it's a big cost.
But firewalls can work. There are people working on technology
that will route around, if you will, those. But for most Internet
capability, it is certainly possible for the government to censor

it actively if they wish. Thank goodness, most of them are not
doing it. One of the keys to economic statecraft is free trade.
Less restriction means more money to invest in American
company. Free-trade agreements are often secured through the
World Trade Organization and the World Bank. Multilateral
organizations that use economic muscle, they take ground,
moves on the global playing field. But both these institutions
were created in the wake of World War Two. And developing
economic powers have cried foul saying thereby laws unfairly
benefit Western nations. As a result, Brazil, Russia, India,
China, and South Africa, collectively known as BRICS nations,
announced plans and 20 2013 to launch their own development.
With an initial fund worth $10 billion. The new bank may tip
the scales of economic power away from the US and its Western
allies. So the State Department has begun negotiations for two
different mega trade agreements with Asia and Europe. I'll also
looking toward regions of developing nations like Africa, which
is home to seven of the world's 10 fastest growing economies,
or Central Asia. For a network of trade pipelines dub, the New
Silk Road is ushering in economic renaissance. There's an E
government project that Google's involvement in Myanmar. I
mean, how does that work? What's interesting, Myanmar that
It's such a closed country. And of course, we were there earlier
this year that they're just learning some basics. So for example,
SIM cards were $5 thousand to know only the elite the generals
could afford them. They lower the price to $20, so everyone got
SIM cards, but then this phone system collapsed because it was
overloaded. So they're just beginning to develop the
infrastructure that new. There's essentially no internet
penetration and very few cell phones. So if you can, for, in our
case, if you can sponsor legitimate political discussion, get all
the candidates. This is a new concept for people in Burma.
Myanmar. Get all the candidates statements on the record.
Actually have people debate them and have them learn and free
speech is often for a frightening country like Myanmar, you
have religious groups that had been pitted against each other

really quite violently for a very long time. When we were there,
there was a terrible event at a town above where we were. And
it turns out you would like to think that the internet was used to
help squash that the rebellion. You'd like to think that call
mines enter the Internet and they somehow said, Oh, would you
guys stop it? But in fact, the Internet was a place of
misstatements and further amplification of that. And indeed the
government got very worried about that. So you have to learn
about free speech. You have to learn that it's okay that other
people have opinions. You have to learn that sometimes what
they say is not true for countries that have never had that. This
is a new lesson and a difficult one. You can put up false
information. All right, no limit loosely. So how do you, how
does that, how does the web not become destructive in that
sense? It has to do with your view of free speech. If you
fundamentally believe that the correct answer to hate speech
and bad speech is more speech, which I think is the American
view and our view for sure, then you think that people will
adapt. The fact of the matter is that not everything you read
online or in the newspaper or on television is true, that people
are being paid to manipulate you and the internet. It's possible,
for example, for an evil corporation, certainly not, not ours to,
you know, to try to sort of pay for particular story. So when I
hear that I suspect someone's trying to manipulate me and I go
check and I kind of form my own opinion and I think that's the
right behavior going forward. And people will do that, that
individuals will read the web and get more and more skilled at
sorting out accurate infinitely, if their education system
encourages them, if the culture allows that. What you don't want
is the Internet to become a way where people are not curi ous,
but they're not naturally questioning. And it's used to sort of
further radicalized them. The core problem of terrorism and
violence around the world is what do you do with sort of
unemployed male teenagers who have been radicalized through
some religious or other thing. You know, they're, they're not old
enough to have a stake in society, but they're old enough to

cause some serious damage. If you look, for example, at the
protestant Catholics, right? Go back and look at where the
violence from young, young man, look at Palestine, young men.
That problem is solved by getting them online, showing them
alternative points of view. Getting them to say, Hey, you know,
there's another choice. Think about it. You're talking about a
very nuanced view of economic statecraft on American
government that pushes for exports and free trade agreement.
That has an excellent education system in the United States in
terms of building skills that's piercing the efforts to censor in
China and funding that we can agree on virtually anything in
Washington. It seems. The status of our political debate make
you wonder if there can be an effective American approach to
economic statecraft? Well, I would, I would begin the
observation by saying that America is a democracy and ever y
one of these people was elected by us. So we are responsible for
the government that we have. We chose them through our
process so we can complain as much as we want. But the fact of
the matter is, there's another election coming in. It's a free and
fair election that's great about America. So maybe we should try
to elect political leaders on both sides that have a somewhat
more nuanced view of how they're going to get out of the
current mass and how they're going to push the government
forward. There are lots of, lots of reasons to be optimistic and
pessimistic about that. Fact of the matter is that meanwhile, the
private sector, the NGO sector and so forth, they've been doing
a very good job of getting America as innovation messaging and
so forth. There's lots of reasons to be optimistic to be an
American. And especially when you compare that to the
demographics and other issues of the other mature democracies
I've already named Japan, all of yours, so forth. So, but until
over on the long-term, you are optimistic that there will be
absolutely, that will be a consensus in Washington and a new
view of government's role. I'm sorry, I'm not sure. I'm not
suggesting that there will be consensus in Washington and the
citizens of the country May drag our government along by

virtue of this. But the fact of the matter is, we now know how to
solve these problems by creating new jobs, by investing these
new technologies, we create export oriented businesses that
shine in America. They by the way, provide lots of taxes to fund
the things that government needs. And on and on and on. We
want this, we need, this is part of the solution to America's
greatness. And globalization doesn't necessarily mean our
decline less jobs. But again, what's the choice, right? The
alternative is put a ring around america, make us uncompetitive,
wait 20 years, And then you're really not going to grow. You're
much better off dealing with this stuff. Now, the fact of the
matter, as I mentioned, is that many of the things that people
are concerned about, about globalization have already moved
away, right? Google recently announced bringing a series of
smartphone manufacturing plants back to America. Because of
changes in the way manufacturing is going. If you look at job
shortages, where are they in America? Area in healthcare, there,
in advanced engineering, there in accounting because of all the
changes and regulations. And they're in various forms of
science, technology, programming and so forth. These are, these
are skills that are taught in America. You can go to school, you
can learn them. They're available online. We can do this. So
technology helps. Very much so well. Thank you so much for
joining us. It's great to have a optimize for you. They include
Hayward, Thank you so much. Come back for more on the great
decisions that make our foreign policy. I'm David road. Thank
you. And the battle for economic influence, the United States
has a two front strategy, like the military, the State Department
has declared a quote, pivot to Asia, welcoming a new era of free
trade deals in the East. The treaties could mean big revenues for
American companies. But they are not without. Some have
criticized the deep secrecy that a shrouded than the others at
point that to harsh changes in laws dealing with the intellectual
property in an online piracy issues. On the other ocean,
American leaders are working to finalize the Transatlantic
Trade and Investment Partnership. But the harsh economic as

prompted some European businesses to protest any new
regulations. However, these New Deal shakeout, it's clear the
US is making economic statecraft re-ordering. Because business
accurate rather than military mind. We'll define the new
generation of global superpowers. To learn more about topics
discussed on great decisions and foreign policy. Visit our
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US foreign policy in your community. Find out how at www dot
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LLP. This battle for the US global influence. Secretary Kerry
will take the reins as free market matchmaker. Money talks.
Next on great decisions. In a democracy agreement is not
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decisions is produced by the foreign policy association in
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decisions is provided by Yan'an, the Hartford Foundation and
PricewaterhouseCoopers LLP. Hello and welcome to Great
Decisions. I'm your host David Rohde. More and more foreign
policy as being one by business acumen rather than military
might. The United States is trying to use economic tools to
promote the benefits of democracy and the free market. Because
a free market means more. Secretary Clinton negotiating free
trade agreements. How do you create a more skilled American
workforce? Obviously starts with education, and we have
largely education monopolies in America, government provided
typically. And we need more competition. There are hundreds of
new ideas for education of one kind or another. And now with
the Internet, we can actually measure outcomes. We can
actually see does this approach for education, work orders, this
other newer approach work. We can do the tests. We've never
really been able to do that on scale and we can actually see what
works best. Then we'll figure out how to change the appropriate

incumbency is to actually do the best. And I think the educators
should lead that. I don't think people like myself should make,
to make solutions up. They should encourage competition
among these different choices and they should figure out what
works. There's many conservatives who say, the problem is the
government when it comes to economic growth, the core
problem in economics is now ultimately going to be jobs. All of
the mature economies in the world are having various forms of
growth and job problems. They're extreme. You want less
regulation and less layers of government. But she say there is a
sort of positive role for government. Government is a large
factor in economics in many ways. But the fact of the matter is
that, that mature democracies tend up overregulating. So in that
sense they're Republicans are right. But if you look in many of
the cases, the republican side of the industry is, are on the
regulation side because they benefit from it, right? Democratic
side, similar roles or incumbency is for labor, for example,
which again have rules which do not particularly favor in
innovation. For those reasons because their change resistant.
You've got to come up if you want to solve this problem of
economic growth with a compromise that allows jobs to get
created by companies. Just remember, jobs are created in the
private sector. Strong-willed people, men and women who've
got some access to capital, they need access to capital. Their
countries, by the way, where business failure you go to jail. It's
a pretty big reason not do a startup in America. Thank goodness
if you look, many of the startups that we've seen are in fact by
people who failed at a premium Europe, they're extreme in
Japan. They're pretty bad in the US. Just ask a young Greek
person, two-thirds of them out of work. A young Spanish
person, half of them out of work. Aggregating unemployment.
American employment is one of the lowest numbers it's been in,
in, in decades as a percentage, even though we're doing
relatively well, the jobs are not being created fast enough. You
need a public policy that addresses that. You do it focused on
entrepreneurship, focus on education. By the way, many of

these companies can't get started because the regulations were
written by incumbents and they don't allow for new entrance. So
creating a model where new entrants can come in, they can be
disruptive. So imagine a perfectly planned economy. Let's think
about Europe, so many levels of government, it's impossible to
make really major changes. It takes too many people, very
difficult to bring out some new disruptive, but ultimately life
positive and life-changing experience. You're not fitting in sort
of either a traditional conservative or liberal box here, because
you're back and exports and capital to invest in American
businesses. Here with me today to discuss the role of economic
statecraft in global politics. Is Eric Schmidt. Thank you for
joining me. Thank you, David. So this, There's this term which
we've just introduced, economic statecraft. The traditional
meaning of it is something that actually former Secretary of
State Hillary Clinton talked about. The State Department trying
to sort of boost American exports, create free trade agreements.
As a business executive, can the government play a role in
terms of economic statecraft and boosting exports? Well, of
course they can. And American products are in demand all
around the world. We need even more aggressive and
enforcement of free trade agreements and open borders and so
forth. I worry that countries for one reason or another, will
come up with all sorts of ways of restricting trade. But the fact
of the matter is that Americans, America's global businesses,
are providing a lot of economic growth and job growth. For
many, many of us we all benefit from this. So part of economic
statecraft is developing a more skilled workforce here. It's not
simply.
Watch: 'War by Other Means: Geoeconomics and Statecraft'
Good evening, everyone. Welcome to tonight's Council on
Foreign Relations meeting. I am Jim Lindsay, senior vice
president, director studies here at the Council on Foreign
Relations. I also want to welcome everyone who is joining us
via the wonders of the internet as we live stream tonight. Lively

in timely discussion. It is my great pleasure and honor to
introduce tonight's guess. I think you're going to learn they are
both terrific towns. And I'm very proud to be their colleague.
First to my immediate right is Ambassador Robert Blackwell.
He is the Henry a Kissinger Senior Fellow for US foreign
policy. Now Bob has had an illustrious career in public service,
having held numerous, and I will say distinguished foreign
policy posts over the years. I am they buy part. Bob, not going
to go through all of the purse you had. Let me just hit a couple
of the highlights. Bob is served four, are under five presidents.
He was US Ambassador to India from 2001 to 2003. He did
multiple stints on the staff of the National Security Council,
including as Deputy Assistant to the President and Deputy
National Security Adviser for Strategic Planning under George
W Bush. Between his garments dense. Bob was on the faculty at
Harvard Kennedy School of Government for a dozen years. He
wrote a lot by my county is written, co-written, coedited 10
books. One of them being the best-selling book with Graham
Allison, Lee Kuan Yew, the grandmasters insights on China, the
United States in the world. And just this year, the Indian
government honored Bob with the 2016 Padma Bhushan Award
for distinguished service of a high-order. So congratulations
Bob. Our other guest is Jennifer Harris, Genesis senior fellow
here at the Council. Before joining the David Rockefeller
studies program, Jen served on the staff of the National
Intelligence Council in on the policy planning staff of the US
State Department, where she was he lead architect of Secretary
Clinton's economic statecraft agenda. Jen is both a Truman and
a Rhodes Scholar, quite an accomplishment. In tonight.
However, we're not here to sing their past praises. We're here to
talk about the publication of their terrific new book, war by
other means, geo-economics and statecraft. Please join me
welcoming Bob and Jack. Rachel, I should Bob, congratulations
Jenn on the publication of the book you, I will note that the
weekly standard called it readable and loose it better than the
alternative. I take it that's pretty good. And reviewer in the

Indian Express was so taken with the book that he urged Indian
diplomats and strategists to read it because it was relevant to
what they do. Let's begin with the basics. Look at the subtitle of
the book. It contains a word that many people either may not be
familiar with or have heard and a variety of different contexts.
And that's the word geo-economics. So it should you first, Bob,
what do you mean by geo-economics? Well, that turned out to
be a question that Jen and I worked hard on in the early stages
of our research. If you to our surprise, look in the literature
exhaustively. You find constant use of the term without any
definition. And people, scholars and public policy practitioners
using the term without ever defining what they think it is. So we
thought hard about it and came up with the definition which we
think distinguishes this particular discipline from others, which
is that geo-economics is using economic tools for geopolitical
purposes. So it's not using economic tools for economic
purposes, although those are fine, notable objectives. It's using
these economic tools to advance a government, a nation's
geopolitical interests. And the book is organized around that
definition. And we look at which countries are skillful at using
those instruments for geopolitical objectives and which ones are
less apt. So geo-economics is a subset of geopolitics rather than
something different from July, I would say it's parallel to
geopolitics. Most Jen would chime in, we'll see if we even
agree. But if you look at geopolitics and you go back to the 19th
century and Mackinder and all of that, you discover that it has a
very strong geographic orientation and a geographic orientation
based on security K. And this is a different motion, both
because technology of course is erased many of those
boundaries. But also the great strategists from Sue and Sue
forward don't usually talk about economics as a means to
geopolitical objectives. And without giving you the punchline,
the United States, for most of its history, understood the utility
of these economic instruments for geopolitical purposes from
the Louisiana Purchase to the Marshall Plan. Both of which of
course, were dominated by geopolitical considerations. But in

more recent decades, have forgotten that historical legacy. Did
you want to jump in here, Jimmy Stewart? In practice, a lot of
people know what geopolitics looks like when they see it. It's
more or less the way in which states are struggling for control
over territory. Often by reference to a set of geographic factors,
right? Population, military, including a certain economic
factors. But where what we're really trying to describe is how
states are pursuing those same aims. But rather than reaching
for traditional diplomatic or military tools, they are reaching
powerful host of economic tools can take the form of everything
from trade and investment policies that are wielded. More,
again, in pursuit of certain JPL claims or certain aspects of a
cyber domain. The way in which countries to fight cyber is part
of geo-economics. Some of it, some of it's certainly some, some
cyber attacks that have been spate, state-sponsored and the
goings on in various nuclear facilities. We don't consider that
within the realm of what we're talking about, but where we see
states taking to cyber attacks against the banking sectors of
other countries to vent a geopolitical greed. And like we saw in
the early days, Russia, Georgia conflict in 2008, where that's an
impressive opening shots where cyber attacks aimed at the joint
and banking sector. That is very much within the realm of what
we're looking at it. I take it from your opening remarks, Bob,
that you came to the conclusion that some states are good at
geo-economics in some states aren't. Who's really good at
China? You'd have to start with China. And as we discussed in
the book at some length, this isn't a perfect score card. China
doesn't always do it well. But for two decades or so, as China
became more powerful, they had began, began quite
systematically to use incentives, interest-free loans, and
disincentives, coercive measures to affect the, the geopolitical
positions of other nations. Lee Kuan Yew put it like this, which
is vivid. He said, The Chinese say, publicly, all states are equal.
But when we do something that they don't, like, they say, Have
you notice the size of our market? And know your place. Don't
offend 1.2 billion Chinese. So they calibrate this. If Jeff Japan

does something geopolitically, they don't like Japanese imports
of automobiles to China diminish. If the Philippines don't act in
ways in the South China Sea, that Beijing doesn't like.
Philippine fruits and vegetables rod on the, on the docks of
Chinese ports and so forth. So I think they, with this enormous
wealth they now have to use, have been the most skillful, not
perfect, but skillful in reminding other countries that there's an
economic price to pay for geopolitical behavior that China
doesn't like. So Jen, who else makes the list of countries that
are good at geo-economics? Certainly, as Bob mentioned, tank
tops that list advertise, I look at Russia as pipeline politics, I'm
sure as well-known to all of you, but we also see Russia
slapping vary. Questionable sanctions on Ukrainian chocolates
that happened to be owned by Petro for Chienco months. In fact,
before we saw protesters really filled and the mite on square.
And we also see this, you know, the Gulf countries in 2015
alone spend some $12 billion in the contest for favor with the
new Egypt. Just sweat last week we saw the Saudis threatened
to dump US Treasury bills if in fact Congress goes through with
pinning liability for 9, 11 on the Saudis. So certainly, you
know, China's leading practitioner, but by no means all there is,
there's, there's ample examples from, from India. There's a line
through as well Towards I haven't heard United States. So is
that because United States is just mediocre at the practice of
geo-economics? Or is it bad at it? Well, I think it's brilliant of
forgotten or a lost art in American statecraft. In digging back
through the history. What actually with some of my favorite
research for the book as someone who ran from history and in
grad school and college, that sort of cosmic irony that this
would prove to be some of the most interesting anecdote filled
pieces of the project. But you really see for about the first 200
years of American history, US leaders quite comfortable flexing
SS Economic muscle in pursuit of explicitly geopolitical aims.
There, there certainly were about the high watermarks are pretty
well known to all of us, the Marshall Plan. But even things like
the Louisiana Purchase at as much as Jefferson liked a good

deal, his main motivation was keeping the French from gaining
a foothold in on the American continent and potentially setting
a pretty young and exhausted US Army up for a confrontation
with Napoleon scripts it'll probably wouldn't win. Even in some
of the pieces that are, in some ways familiar but yet not of us
geo-economic say craft, when we comes to mind, Churchill once
called this said, declaration of economic war. Except it was
when he felt was aimed as much in Britain as Berlin. And he
wasn't founded in this in terms of what was really about $660
billion worth of american a that we were lending to our allies in
World War II came that sometimes we were unilaterally
controlling the level of British gold and controlling first exports
and seeking to rewrite the terms of the post-war order with US
interests at the center. And none of this was lost on the finished.
I think a lot of people that I just chime in one more sense, the
British are up, are at issue here. Two more. One, during the
American Civil War, when the British were attempted to be
sympathetic to the Confederacy because of their upended
dependence on Southern cotton. The government, the US
government, the Lincoln government, told them that if they
wish to have all of their assets in the United States
expropriated. This would be a good way to do it. And then of
course, Suez comes to mind in which the United States, the
Eisenhower administration, so appalled by the British French
invasion of Suez, threatened basically to destroy the British
pound if they proceeded. And that was the end of the
intervention that the British were. It wasn't Eisenhower and
Dulles as general opposition to this. It was that Harold
Macmillan, who was at number 11, he was the finance minister
to Anthony, said they can do it and they'll do it. And
Eisenhower would have done it because Ben-Gurion lied to him
and writing about the Israeli involvement in this. So we used to
know how to do it and then it, these are things that we can
imagine. Our, our friends in the administration iv on either side
of the aisle, Republican or Democrat, really contemplating with
any seriousness today. But I would imagine a lot of people

hearing the story would say, well, wait a second, the United
States resorts to financial sanctions, trade sanctions quite
regularly. They were used to try to bring the Iranians
negotiating table. We applied them against Russia in the wake
of the Russian seizure of Crimea. Show you those not count is
geo-economics or is a geo-economics done badly? So we try to
be pretty upfront in the bucket. We see sanctions as kind of the
exception that proves the rule. Right now, the Obama
administration has 30 sanctions programs in place, which is
more than any other president in history. I think more than
several combined. And it's not just a story about innovation and
quantity. This, and these are really functions that are different
in kind. But even as you have seen, a real Progress made and
the sanctions realm. You don't see it encased within a broader
diplomatic strategy that, for instance, managed to get the French
to turn off military shipments to Russia sooner than the seven
months of long hard conversations that it, that it took or
conversations within nato about what are the proper
responsibilities and shared understandings are around what is
owed to military allies and when it comes to economic coercion,
What about something like the Trans-Pacific Partnership has
been a lot of talk about TPP not being solely about trade, but
about trying to set the geopolitical order in East Asia. Is this an
indication of geo-economics getting back on the US agenda? Or
you think it's more symbolism then? Well, it isn't symbolism,
but it's a matter of sequence. And we go into the book in some
detail, our analysis. And there's lots of documentation available
which supports this is that we do not negotiate trade agreements
with geopolitical objectives in mind. We simply don't. These are
trade agreements negotiated by our experts on trade, which of
course are seeking to reinforce US national interests and make
america wealthier and open up the global economy and so forth.
But they are negotiated solely on trade criteria after they are
agreed. And when administrations have to sell these agreements
to the US Congress, they suddenly recognize and assert their
geopolitical importance. Ash Carter says that the TPP is worth

one aircraft carrier, okay? Colin Powell made similar comments
about nafta. These are all made after the fact. When we're trying
to persuade the congress administrations are trying to persuade
the congress to, to approve them. To put it differently. If you
did. Imagine that there should be GIL, political objectives in the
TPP, in the agreement. Of course, you would address Chinese
coercive pressure on the nations of Asia. Of course, you would
have that in the agreement because it's persistent and it's banned
relatively effective in many cases. There's not a word about that
in, and what it demonstrates, at least in our view, is that these
Abel, dedicated trained people don't consider that as an
important element in their negotiation. And there's no one there
who makes that case. And then we do, just to finish, we look at
the history of the bureaucratic politics of this and the story
which Jan who was in our chairman said the Clinton
administration. The Obama administration for Hillary Clinton
working at the State Department. The bureaucratic politics over
these decades has reduced the role of the State Department in
these trade negotiations. Partly on, at the insistence of the
Congress. So there are basically four at the margin of this
today. So SAP negotiate them with no geo-economic content
and sell them with a geo, economic geopolitical argument is the
history of these agreements. So John, I take it that clock is
running down on the administration you worked. Next January,
we're going to get a new president, leaving aside whoever who's
going to win the race from your vantage point. What should the
next administration do if it were serious about geo-economics,
what would that look like? So Bob and I sketch out a 20 point
prescription agenda and then the final chapters of the book,
which I will not recount right now. In part because I would hope
that all of you agree with us, but reasonable minds can and
should and will differ on, on that particular tax to take. And a
lot of this is going to be fact found. Our project is really less
too. You a case for what to think about these tools and more to
lay out a framework for how to think about them. And so to me,
any prescriptive agenda would have whatever the the the

particulars of it would have four basic ingredients. One, I think
you do need a common reference point, a common conceptual
framework, with a clear definition that allows us to be clear
with ourselves bureaucratically and clear with our allies. In
order to call out Jew economic coercion. When it's happening to
our allies in Asia, we need to know what it looks like. And so I
think that's, that's 0.1. At 0.2, it would be to really begin to
work this into the bloodstream of some of our alliances are our
relationship with Europe is a great example. Nato is the closest
military alliance, probably in the modern world has ever known.
And yet we remain one of four or five countries that has not
moved beyond very basic Most Favored Nation status with the
EU. And in trade terms, we lack any economic counterpart for
what nato represents on the security side, even as it's very clear
that when Russia wants to flex geopolitical muscle is reaching
for his economic tools as we've been put on pretty clear display
in Ukraine. So I wouldn't want to see us begin to prioritize
certain geo-economic responses within some of our closest to
him, sort of security relationships. Third, resources. This is in
part a and part of dollars and cents issue at 713 million dollars.
One of my favorite numbers that I've, I've been quoting a lot
these days, Monday through Wednesday in Afghanistan. And so
when it comes to arguing for what we could do for Ukraine,
hundreds of getting that country a viable economic foundation,
or how we might begin to steal our allies in Asia against the
kind of geo-economic coercion that Bob was talking about. Our
entire eight envelope for Ukraine last year, I believe was about
$340 million, less than half of Monday through Wednesday in
Afghanistan. So it is, it is in part a $0.$1. It's you, but it's also
about how this money has authorized. When I was in the State
Department, we actually put out a pretty good Jew economic
theory of the case in the President's. Firstly, we've only
response to the Arab Spring, his May 2011 address, which really
took full on the, the revolutions across the Middle East For did
a pretty economic through the case. It was loan guarantees. It
was a $1 billion debt swap for Egypt. It was instead of

enterprise fund for Tunisia, Egypt that were modeled after what
we've done pretty successfully after the Soviet Union. Three
years later, when I left the State Department, those enterprise
funds had yet to cut their first check. We were still arguing with
ourselves as an administration about how to spend this $1
billion debt swap. And even as our adjust your counterparts in
terms of who we're negotiating with had since become the roles
revolve and events basically just outpaced us. So we, you know ,
we need the ability that were thought from Congress to be able
to move a little bit more quickly in how we spend this money,
separate, apart from how much money we have spent. Well,
have anything you wanna add to that in terms of guidance to the
next? I guess. They're not they're not calling me all that often to
ask, but I just make 1, which Jen and I emphasize in the book,
which is that beginning to use these economic tools for
geopolitical purposes is not a replacement for American
military might, which has to remain the most stabilizing force in
world order. In my opinion. However, what we do argue is that
we've become too instinctively dependent on that instrument.
And one example of that, and I don't know if there's anybody
here who works on the Hill or watching it works on the hill. But
have a look at what the hearings are on the hill and try to find a
hearing that looks at economic issues in the Foreign Relations
Committee. They look at millet almost solely security
questions. This is not to argue, of course they shouldn't be
looking at security questions, but they don't think of economic
means worth exploring and public hearings to accomplish some
of our strategic objectives in the Middle East. Other than, as
you said, German sanctions. We understand what sanctions do.
We're very good at it in many ways. But beyond sanctions, they
simply don't think in that way. And what you mentioned the
next administration. What we would like the next administration
to do is address this american at asset, where you have the
biggest economy in the world, but there's enormous economic
power. Address this asset systematically and think internally.
How did they organize themselves? That in NSC meetings,

which we've all been in up here, that it actually comes up
because usually the people who might address that aren't in the
room, aren't in the room. So that's our dream, I guess is the
word. Okay. Well, fair enough. I want I want to do now is bring
our members into the conversation. Let me remind everybody
that this meeting is on the record. I lost ask you to wait for the
microphone and speak directly into it. I would also ask that you
please stand, state your name and affiliation. And if people
would keep their questions concise, we need everybody a
chance to talk on this provocative topic. We'll do that. Let's
start over here. And Sam is going to come up with a microphone
right behind you, but you're here. Okay. Look up Monday. By
John Solomon with George Mason University, formally with the
Center for International private enterprise. Do you include US
foreign assistance in your range of instruments that you look at?
It would seem to be logical to do it. Not that US foreign
assistance is often used strategically, but it could be sort of
head, yes, we do both economic and military militaries. Among
the least interesting of the bunch, only there because money is
fungible. So military assistance that we are giving is freeing up
budget space for the Egyptians are others that they put two
other ends. And I think we do need to have a real conversation
about the use of economic assistance as a foreign policy tool
and what constitutes an acceptable versus unacceptable use of
usaid. We also need to have a conversation about how the world
is changed and what new tools and the assistant space we should
be considering. I for one would like to see the US began to look
at instruments that would allow for things like opec to take
equity positions in addition to debt. That is it seen as pretty
routine and it happened There's a regular course across our
European counterparts, not to mention the likes of what the
Chinese state, when policy banks are, are throwing out at, you
know, they're going out strategies across Latin America and
Africa. Something can I just chime in and say, as I mentioned
Egypt earlier? I like this question because allows me to give
you this, this one which is not rhetorical. So what would you

think will have the biggest influence on the future of the Middle
East, the war in Yemen, or the future of the Egyptian economy.
And I think most of us would know the answer to that. And yet
we do pitifully little on the future of the Egyptian economy.
Now this isn't to suggest that economies are responsibility or
that week we can fix it. But imagine a NSC meeting in which
the subject was, how can we use American economic tools
comprehensively to bolster the economic future of Egypt? And I
posit that that economic future will be more decisive regarding
American vital national interests than most of what preoccupies
the administration and its predecessors and the media covering.
It refers to Hopfield. Jim hollow filled this year at the Wilson
Center, normally in the tower center and SMU Dallas. How do
you take into account sort of conventional macroeconomic
policy, exchange rate policy, interest rate policy. I mean, the
US does control the world's reserve currency. So how do you
think about Bretton Woods? And secondly, if we have stopped
doing this, I think we, we did it certainly in the fifties and
sixties. Adopt doing this. Why did we stop doing it? I think the
question I'm going to turn this over to Jan. about because it's I
think it's a terrific question. The back half, we really have
struggled a lot with about what we think we know what
happened. Why did it happen? And we got into this a little bit
on the trade side saying that the Congress and successive
administrations a basically took any strategic perspective out of
the trade negotiations through bureaucratic politics by having a
trade representative taking it out of the State Department and so
forth. But over to jam. And it's almost ever determinants. So we
trace this story about when the US band and geo-economics as a
first resort and why to about the end of the Cold War around
Vietnam, couple of things were going on at that time, right at
one, there are, there are some very proud of politics as Bob
mentioned, USTR being pulled out of the State Department and
given its own independent mandate. It's also the first generation
of economic insecurity the country had experienced since the
Great Depression. No longer clear that we had economic carrots

to be spending about on our geopolitical agenda, as it was also,
the rise of the multinational corporation could equate with the
lobbying friends here in Washington that began to change some
of the discourse in Congress. And you see that line up very well
in terms of the congressional record. But to be a little
provocative, I think 11 theory about a lesser appreciated factor
has more to do actually with what's going on in the discipline of
economics then foreign policy. Namely, it was the need to sort
of write the moment where Keynes was going out of fashion and
Milton Friedman was coming into fashion. And that we happen
to be up against an adversary in the Soviet Union. He made no
particular love of markets and had no particular use it for trade
until every win for the United States in terms of freeing trade
and liberalizing markets was also a win for us in geopolitical
terms. And so perhaps it was no accident actually that you saw
this happy convergence between the US's geopolitical interests
and they had the neoliberal economic orthodoxy that we began
seeing and of rising toward its own. But that worked really well
for awhile. I think IBM in the early years after the Cold War,
we face no great adversary that required us to rethink whether
this happy alignment still exists. But now we're up against that.
Countries like China and Russia that once again appear to have
no particular distinctions between state and market and are
pretty comfortable exercising power in economic terms. And I
think maybe it's time to ask whether this happy alignment of
our, of our security and our economic orthodoxies still exists. It
is. There will be a micro Avis Bolen, retired Foreign Service
Officer, former sometime colleague, Robert. I just I had a few
skeptical thoughts and good reaction to what you said and also
question. The first I think Jen, you you already answered. I was
going to say that it's, it's so much in our ideology about free
markets and on interference. And I would also add another point
that the US government has a lot less control over the US
economy than a country like China does over its economy. So it
just wasn't then our thinking and not just since Milton Friedman
them and you know, we've been pushing free trade since the

Marshall Plan. Those you, as you mentioned. So I really
question whether we're, you know, what's the word
ideologically set-up, set-up to, to, to do this or, or materially set
up to do it. Second is the valence of our interests. You
mentioned the example of the French not being willing to give
up selling the boats to Russia. Well, I mean, come on, that was
terrorism. The French are always tire surface, we know, but
they are very important ally, we're going to unleash the full
power of the United States economy to achieve this. I mean, I
think there is always a balance of interests and we have a lot of
interests around the world which are going to really preclude
this. Third is I saying, Why don't I miss I told you there's like
let them are a chance to answer me of a lot of questions on the
line, so I want to get it. Yeah. Okay. I just mentioned that I
think US AID has always been a political instrument and I saw
it and Eastern Europe And then I, I got you. Nice to see you.
For those of you who don't know. Avis is one of the premier
experts on how tiresome the French. Day by day by day, normal
patients. So on her part, we don't suggest in the book that these
instruments be used crudely in every case. But what we do say
is that administrations and the kinds of meetings that you used
to routinely go to when you were here and policy positions is
that they be at least raise to see if they have potential. So we
don't want to hit an ant with a sledgehammer. But we want to
use these economic instruments the way we routinely, routinely
use security coercion or at least in preparation. So that's that.
But the second is more broadly. We use to have a chapter in the
book on the history of American use of this. We used to do this
with the people in the room. The counterparts of the current
cabinet members who just as a matter of course, thought this
way. And among, and I won't mention names, names here. But
among those who resist our policy prescriptions are former
Secretaries of the Treasury. Because as those of us who've
worked in government, No, they tend to think of their business
as two important for foreign policy considerations. Or the trade
rap. I'm not speaking now about any particular one of them who

tend to think. And the Congress in particular tends to 0. I know
what these people at the State Department or thinking they want
to trade away American jobs for geopolitical purposes. And so
we used to know how to do this. It wasn't question that this was
these were effective tools. Sometimes I could use be used badly,
but that they were available. And that's at least in our
experience, which covers certainly the period since the end of
the Cold War. Not the case. I'll give you one other example
which you'll be very familiar with. What's a primary
geopolitical action, successful action. In the 990s. It's Helmut
Kohl going to Russia and writing a check for German
unification. That what better example of the use of an economic
instrument to pay for the departure of the Red Army from East
Germany and for the apartments that were built for them and
they're beautiful, beautiful example. Meanwhile, we were doing,
trying to do enterprise funds for I was in the administration and
the White House for Eastern European transformation. And we
had no money. It's basically as we had no money. So we used to
know how to do it and we hope we'll learn how to do it again.
Mr. pairs, like former military, his fellow, and currently a
London-based analysts. Just quickly on Egypt, of course, the
Egyptian economy is important, but be nice if we could help
them keep their planes from falling out of the sky. Gods that
really impacts on their tourism. But my question is on China.
China seems to have a good, a good deal going in Africa, for
instance, they get a military base in Djibouti when they put in
$12 billion of infrastructure in Ethiopia in Djibouti. And where
do we get stuck? Where we get stuck with doing all of this
counter terrorism against Boko Haram and Molly. So maybe the
problem is they're getting a free ride on the counter terrorism.
And they get to get these chits building ports, and then they get
a whole bunch of security. Bennett benefits from mother
infrastructure. Thank Jan leaves for China tonight. So maybe
speak to that. I think you're absolutely right. And I think we're
beginning to see strains of this up in the context of the US or in
an election. It's not too dissimilar from some of the noises that

add on Trump's certainly has made and questioning whether our
allies are free writing. And China has been masterful and its
ability to parlay either the present reality of its economic power
or the projections of future growth, which probably matter just
as much into its geopolitical throw away and we cannot agree
more. I think this is that Britain as a project to try to force
Washington to begin to wake up and confront what are not easy
questions. Absolutely. Tools are, again, not to me is lightly, nor
are they without controversy or costs. And we tried to quite
clear about that problem as well, but they cost something, of
course the cost will be, but so too, do every other formats,
especially arbitrary. And I'd say I just think it's a good guy by
the Chinese in Africa. They use the construction of soccer
stadiums as a geopolitical instrument. And if you I think are
now, they built over 30 of them. And they are coincidentally in
proximity to the home villages of the president of the country.
So this is pretty micro, but exactly what you say. Now they can
make mistakes, they can overdo it or so forth. But look, look at
the at which we do in the book, the connection between Chinese
economic assistance to Africa and African votes at the UN on
issues we care about. And I'm actually isn't a Taiwan Thorpe.
Yes. So so or recognition of Taiwan where there's a direct
correlation so that using assistance for their geopolitical goals
is is routine for them. Go back of the room. Yes. I think you get
the name is mercedes fidget with the Department of Defense.
Back in 2003 after the Iraq invasion, where we were building
the whole coalition effort. We actually use the over $18 billion
in US reconstruction projects as, as a stick and the carrot for
increasing the number of countries. And, and I recall there was
a huge battle with France in terms of them being able to bid on
contracts that they weren't part of the coalition. But did you all
happened to take a look at what we did with that with that tool
in terms of growing the coalition. In your book as a case study
that I was the presidential envoy to Iraq when you were you're
working those which Doesn't entirely explain our failure they
are, but it's a major part of it. Let me make this distinction. And

you were involved in it. So you'll have much more details and
maybe a definitive thought different from mine. When we were
and I was the White House. We're working our way through
this. We didn't think of those reconstruction efforts. First of all,
it's course total chaos as you know, and and very little
systematic thinking of any kind in any case. But insofar as we
did think about it, we did not think about the long-term future
of rock and how we might spend this money. Most of the
recommendations that came in that we spent money in Iraq were
from our military commanders who were trying. And of course
it was important that they try to stabilize wherever they were in
the Western desert, up north and in the south near Basra. So we
didn't think about it in the kind of geo-economic terms that Jan
and I discussed in the book. Secondly, now, I will display a
prejudice. Our geo-economic thinking was infected by the virus
of one man and woman, one vote. And quote, election
objectives in both Afghanistan and Iraq. And we became
mesmerized by these election processes at the expense of geo-
economic thinking. So summing up, we spent our money, that
money very badly in obviously impulse those countries very
badly. And I think one of the reasons was that we didn't, as Jan
was urging and as we urge in the book, we didn't think of these
as tools beyond the, either pure development in micro area or
tools beyond bringing these people to democracy, which as
we've seen, would have meant, since it failed, of course
completely, would have meant changing their entire culture and
political sociology. So we didn't just, just one post script of
optimism. Have afternoon. This is that it's also true though that
we find that a lot of US military leaders are some of the most
powerful surrogates and champions for exactly the argument
that we're pushing. As we described in the book. When I was in
the early tough stages of thinking through Secretary Clinton's
economic statecraft agenda. I sat down with Admiral Mike
Mullen and heard him riff on, on some of this and that he gave
more powerful expression to some of these realities than
anybody I had met before. A sense. He said, you know, compare

the man hours, woman hours. We, the US military, I've spent
thinking through the size and composition of the Afghan
national security forces to the man, woman hours we have spent
thinking through a viable economic blueprint for that country's
future. In the end, until we get that balance closer to where it
should be. I think we should expect to continue paying for it
and influence fungi. And Bob Gates, as you know, in his book
and in his public speeches, urges much more funds for the State
Department for essentially geo-economic objectives. And
certainly on Pineda did the same, and Ash Carter does the same.
So far, essentially to deaf ears and the Congress. Okay, We
have time for one more question. Before I take it, I want to
remind everybody in the room. This conversation has been on
the record. A loss. Let people know that copies of lobbying
against book are available for sale at the back of the room,
those joining us an Internet. So a lot of doors. I always go on
Amazon.com and other retailers. With that said, Sir, you have
the last question. Thanks very much. Karen Bahia with General
Electric. I was wondering if you could comment on a thesis that
I think maybe a corollary to what you're talking about, which is
that the intentions, the ultimate objectives of a number of these
other countries you referred to are in fact more economic in
their course. So you look at One Belt, One Road, for instance,
in China, or you look at the position that a number of European
countries have taken on sanctions. At the end of the day. You
sort of look at those and you say, yeah, there's a core, strong
economic element to it advancing their economic interests.
Whereas in the United States, we tend not to think about foreign
policy and those kinds of terms. Would you agree with that? Is
that is that a notion that's sort of Sits well alongside the thesis
of your book. How do you see that, that idea? Well, I think that
I'm sorry. I got to hold that for another meeting. I'm going to
get Bob and Jan an opportunity to wrap up and why One Belt
One Road? Well, we don't know for sure since the Chinese
government systematically lies about its strategic objectives as
we know. So we don't know for sure. But I do think it has a

strong economic core, but I think at its base, its geopolitical.
That is to say, if you look at the behavior in the last 20 years,
they systematically build up in dependencies which they use for
their geopolitical purposes. And they do it again and again and
again. And they remind people of these dependencies, nations
when it matters. So, so it's both. So it's both. But I think if you
believe it's only, which is what the Chinese of course say,
Which is One Belt, One Road is only for the benefit of the
people of Asia, period. What are the hands that dimension if it
produces wealth and jobs and so forth. But I can tell you I spent
quite a bit of time in Central Asia. And they, the people in
Central Asia Do not take at face value that there are no
geopolitical Chinese objectives in this, in this policy. Any final
words yet? So I think you're kind of you're getting to when and
what was the hardest questions for us? Which is, how do you
know when you see it? Countries rarely, sometimes they do
helpfully signposts pretty explicitly like the Saudis did last
week or as the Chinese have done in explicitly conditioning
certain investments by southern wealth funds on Costa Rica as
disavowal of Taiwan are pretty smoking gun cases, but more
often and usually in the cases where it's most effective, It's
much more of the stuff of correlation than direct causation. And
so, but it's also the case that just because there is some
economic presence of economic rationale doesn't negate. Also
the presence of geopolitical rationale. You know, all the better
if there are two version, three for, as I think for the Chinese.
But there are certain cases where ad deals just don't make
economic sense and yet they happen anyway. And even in some
of the IPOs that Chinese state-owned enterprises have, have
come into New York and enlisted on our cyclic changes when
you actually go through and read the securities. Finally, if I've
done that, I'm not the most fun weekend I've ever spent, but
they're very up front about the fact that, that these are
companies that are owned by the Chinese government, that there
are certain objectives that are political, that will occasionally
Trump and it's all kind of they're black and white when you sort

of know what you're looking for. So I think that there there are
certain cases where you are going to just have to initiate some
kind of a smell test. But just the sheer presence of economic
motivation doesn't negate the co-presence of geopolitical
rationale. I just wanted to also add, I will, I will give the added
acid or the other one lies on which we can. Another good
example from China, which is in category agenda, was
mentioning notice the IRI coincidence that in the in the
preliminaries to the visit of a Chinese president to the United
States. For a summit with our President. Notice the IRI
coincidence of major Chinese purchases a Boeing aircraft. They
just do this routinely and it's not just boring, It's Brazilian
aircraft. We go into lots of examples. And I can assure you that
in our, in the deliberations of our highest councils of
government, these sorts of notions and of course, the private
sector for us. So it's not completely analogous. But just thinking
through, what do we, what economic instruments do we have in
order to deal with the rise of Chinese power or to deal with
China, sorry, Russia and their use of coercive pipeline politics,
or to help foster our national interests in the Middle East. What
are they? And they just don't come up in the conversation. That
is going to have to be the final word on a very complex, timely
in deep subject. However, the good news for everybody in the
room is that you can talk to Jen and Bob as we wrap up. And of
course, all of you are more than welcome and encouraged to buy
a copy of war by other means. So please join me in thanking
Bob magenta.
Watch: The Future of Global Trade
My name is Matthew Goodman. I work on international
economic policy here at CASIS. And I'm delighted to welcome
you on behalf of CSS and assignment chair. This is part of a
series that we do called the economic statecraft speaker series.
And it's generously supported by Alcoa Foundation, and we
appreciate that support. We do a lot of things under this series,
but today we thought it would be quite topical to talk about the

subject of trade which has been in the news if you hadn't
noticed recently. And so we're going to have a, we've got a
dream team up here that I'm going to introduce in a minute to
talk about this and Mike from an after that from 1130. But let
me first make a couple of administrative announcements. First
of all, in the case of some sort of security event, basically
follow me is the bottom-line instruction. If they're exits behind
here that go down there, stairs down to the alley, or you can go
out fraud and there's a little park across the street where we
assemble. So that's point 1. Point 2 is we're going to do a break
from 1115 to 1130 and there'll be coffee up on the SAM. Non-
terrorists. There are restrooms basically behind me here that
you can get to around this way. And finally, if you have any
phones or other noise makers, if you could set those on stun or
otherwise silence them. We'd appreciate that. So, with that, let
me just say that, you know, I've been watching trade like many
people for decades. And there have been some heated debates
along that road, but I don't think it's ever been like this. I don't
remember a time when it's been this heated and there has been
as much controversy around the topic of trade and trade policy.
And there are some underlying trends that are worrisome in
trade itself. Global trade, the last three or four years has been
growing more slowly than global GDP and that's historically an
anomaly. It's always grown faster than the global economy.
Protectionism in not in massive 1930s ways, but in small ways,
has been rising. And the WTO and independent groups have,
have sort of catalogued all of that and it's quite worried. Global
trade negotiations had been stalled. Doha Round is effectively
dead. Multilateral negotiations are focused on some specific
areas, but even those are not moving as fast as they could or
should. Mega regional agreements like TPP, the Trans-Pacific
Partnership, TTIP, the Transatlantic Trade and Investment
Partnership. Even the regional comprehensive economic
partnership, which is another Asian arrangement, is not moving
very far, very fast. And then of course you have all this anti
trade and anti-globalization rhetoric and positions being taken

by presidential candidates on both sides of the aisle. Against
trade, which is, again first, as far as I know with so much ansi
trade rhetoric from both sides of the aisle. I mean, I will say
that the election, I think I learned some things from that debate
and the election results about trade. I think we, you know,
there's obviously a lot of anxiety about trade and, and economic
change in other ways, technology, and other changes in the
economy. And I think a sense that we folks in this room and in
Washington don't understand those anxieties and certainly
you're not delivering the solutions to those problems. And
whether it's looking at policies like adjustment assistance or
retraining and education, more wage and income support of
some kind. We're not delivering things that people want. And I
think we all need to listen more and, and, and understand what
those anxieties are and what the solutions may be to these
issues. And the Simon chair is going to be doing more work.
We're already starting to do more. Looking at those, those
questions which we haven't done as much on in the past. But I
also think, and I think most people on this panel and in this
ROM agree that trade is kind of also getting a bit of a bummer
app. It's being, it's become a poster child for a lot of anxieties
that aren't directly related to trade. I mean, trade is provided
broad benefits for our economy, for the global economy. If they
understood it, I think 600 million Chinese would agree that the
trade and globalization have been a good thing for them. And so
I think part of the problem here is that we're not doing a good
enough job explaining trade. And that's the purpose of today, is
to help try to explain things in a specific way. Not just say it's
good for the economy or it's, there's broad benefits. But to look
specifically what's at stake and what some of the areas of trade
policy are important for the US economic and in some cases
strategic interests. So we have, as I say, a dream team up here
to help do this. I think there are probably all familiar to all of
you. I've had the pleasure of working with, with everybody up
here. In fact, when I was young, I wanted to grow up to be these
folks. So delighted to have go down in order here, Victoria,

Victoria S been out who is President and CEO of BSA, the
Software Alliance. She's worked for both Democratic and
Republican. The White House's including the Obama White
House, where we had the pleasure of working together when she
was IP intellectual property enforcement coordinator. And so
delighted to have Victoria Here. You have more background on
her. In the biographical information. Next to her is Peter all
Guyer who again, I'm sure is very familiar to people in this
room. He's President of Global LLC, a consulting firm, but I
think you all know him as former deputy US Trade
Representative, former president of the Coalition of services
industries. And so it's just the thrilled to have Peter here with us
as well. Thank you, Peter. And at the end, another familiar
figure, bill ranch, who is Senior International Trade and
Government Relations advisor at Kelly dry law firm here in
town. But again, I think probably better known to most of you
here as long-time president of the National Foreign Trade
Council. And before that he was a, he was under Secretary of
Commerce for Export Administration. And he is a friend and
mentor and has taught me a lot about this subject. So I very
much appreciate his willingness to join us here today. So I have
talked a lot. I now want to let you talk. And the first thing I'm
going to do before we delve into individual areas that you each
have a lot of expertise and knowledge about. I want to ask each
of you and I maybe we'll start with Peter because you've been
doing sort of trade policy at USTR for a long time. So what
your diagnosis is? The point we're at in trade and trade policy.
You can disagree with aspects of what I said or enhance that
and add, add other points. But what do you think is going on?
How did we get here? Okay. Well, thanks, Matt. Well, as you as
you pointed out, there is a lot of disenchantment are really
widespread opposition to trade and to trade agreements.
Certainly here in the United States, but we're also seeing it in
Europe and in other developed countries primarily. And a big
part of it in the United States obviously is the concern about
manufacturing and what has happened to our manufacturing

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