The first of the Biden administration national security strategy squarely positions China as the main competitor of the United States and describes the commercial, economic and other approaches that the United States will use to manage this competition.
China is “the only contender with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military and technological might to do so,” the strategy says. China, like other autocratic governments, often abuses the global economic order by
weaponizing its interconnectedness and strengths. Examples include the arbitrary raising of costs by
by withholding the circulation of essential goods, leveraging access to its market and control of the global digital infrastructure for coercive purposes, and seeking to make the world more dependent on it while reducing its own dependence towards the world. At the same time, China is “at the center of the global economy and has a significant impact on common challenges”.
To address “China’s emergence as both our most important competitor and one of our biggest trading partners,” as well as other global challenges, the strategy says the United States must adjust their idea of globalization. This means going beyond traditional free trade agreements and long-standing trade rules that “were designed to prioritize corporate mobility over workers and the environment” and “fail to cover the frontiers of the modern economy”.
Instead, the United States is pursuing what National Security Advisor Jake Sullivan has called “a fairer and more nimble set of economic relationships.” These include the Indo-Pacific Economic Framework and the Partnership of the Americas for Economic Prosperity, which aim to “encourage strong trade, combat anti-competitive practices, bring the voice of workers to the decision-making table decision-making and to ensure high labor and environmental standards”. The United States is also working to advance related initiatives, such as a global minimum corporate tax, updated global trade rules, and a partnership to improve infrastructure in low- and middle-income countries, to “ prove that democracies can be useful to their people and to the world”. and “build strong and sustainable supply chains so that countries cannot use economic warfare to coerce others.”
Other trade-related priorities mentioned in the strategy include (1) finding new export opportunities, (2) combating the abuse of non-market economies, (3) enforcing rules against unfair trade and labor (intellectual property theft, forced labor, etc.), (4) modernize and strengthen export control and investment screening mechanisms, and (5) address outward investment in sensitive technologies.
Copyright © 2022 Sandler, Travis & Rosenberg, PA; WorldTrade Interactive, Inc. All rights reserved.