The CSPC Dispatch - Nov. 1st, 2024
Welcome to The Dispatch!
This edition features contributions from CSPC Senior Vice President Peter Sparding on the need for greater international cooperation on economic security measures, a call for a revitalized 5G agenda by Senior Vice President Erica Ngoenha, as well as a book review and podcast from Senior Vice President Joshua Huminski.
We also encourage you to check out CSPC’s new report on “U.S. Geotechnological Policy: Taking Stock and Looking Beyond 2024”.
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The World Bank H Building, located in Washington, DC.
The need for international cooperation on Economic Security
With international stakes rising in the U.S. election, America's allies and competitors alike are closely following the race, seeking insight on how the outcome could impact global security and economic policies in the face of shifting Indo-Pacific dynamics.
For many Americans it is sometimes shocking to realize how closely U.S. elections are being followed in other countries. Media attention in Europe and Asia is extremely high as foreign correspondents are fanning out all over the decisive swing states. And during last week’s International Monetary Fund (IMF) and World Bank meetings in Washington, DC, foreign officials and visitors eagerly quizzed their local counterparts about the latest polling and forecasts. This is not surprising. The stakes for the rest of the world in the outcome of the U.S. elections are extremely high. This is true both for America’s adversaries, but also for its allies and partners. For most of these countries it is a combination of security and economic interests that tie them so closely to the United States. As Washington increasingly turns its attention to the Indo-Pacific and the competition with China, governments across the region but also in Europe are trying to understand how the election will shape U.S. policy and to position themselves accordingly.
For the United States, this presents a great chance. The country’s set of allies and partners remain its biggest comparative advantage vis-à-vis the People’s Republic, which has few if any true international companions. Leveraging these alliances, especially in the economic security realm, would provide the United States with an immense advantage and has the potential to limit some of the unintended consequences and potential negative fallout of measures taken to contain Chinese economic and technological advances. At the moment for example, there is a worry among some that strict U.S. export controls on semiconductors could inflict lop-sided collateral damage on U.S. firms in the sector, as they are shut out of the Chinese market, while international competitors could benefit from their absence. An April 2024 study by the Federal Reserve Bank of New York estimated that total losses in market capitalization across all affected U.S. suppliers following the October 2022 announcement of export controls amounted to $130 billion. As American companies have had to pull out of the Chinese market, losing a major source of revenue, international firms could potentially backfill some of this demand. While the United States has successfully pressured some other governments, such as those of the Netherlands and Japan, to limit exports of tools needed for the production of advanced semiconductors, a more coordinated strategy would be desirable and could offer more benefits in this instance. This way the U.S. could prevent China from accessing technology from international sources while also ensuring that American companies are not unduly disadvantaged. But export controls are just one example.
There have been several proposals suggesting an improved coordination of economic security measures going forward. In a recent Foreign Affairs essay, Professor Aaron L. Friedberg advocated for the creation of a Trade Defense Coalition of market-based economies. Led by the United States, such a coalition would have to “set aside the post-Cold War dream of building a fully integrated, maximally efficient global economy” in order to protect itself from what Friedberg describes as an “intensification of Chinese mercantilism”. Friedberg sees the new coalition modeled loosely on a collective security alliance, which would provide its members “safety in numbers” against Chinese coercion attempts. The group would then protect itself collectively by setting up a system of import tariffs on specific critical product categories.
Other proposals have included recommendations for an overhaul of multilateral export control regimes. A 2023 study by the Center for Strategic and International Studies (CSIS), for example, called for the creation of an “Economic and Technology Security Regime” (ESTR), which would cover export controls, investment screening, and other strategic trade tools. Establishing such a new institution would again entail US leadership and a commitment by Washington to pursue a cooperative path with its allies and partners.
This would require the realization that it will be counterproductive in the long run for the United States to on the one hand ask countries to follow its lead on certain measures while also threatening tariffs on the same countries in other areas. For sure, given its economic might, the fact that many of its partners depend on Washington for their security and the overwhelming importance of America’s consumer and financial markets, the United States could possibly pursue such a go-it-alone or pressure strategy for a while. However, such a strategy would come with unnecessary costs and needlessly cast aside America’s biggest advantage. Over the long run, it seems likely that, as Professor Friedberg notes: “No country alone can forestall or contain the impending second China shock.” No matter the outcome of the elections, the United States and its allies would do well to prepare for this reality and coordinate their efforts.
REVITALIZING THE 5G AGENDA
Amid a shifting focus in Washington's tech policies, the next administration faces a critical challenge: sustaining America's strategic advantage in emerging technologies like AI and 6G to secure long-term innovation leadership against intensifying global competition
As we reach the waning days of the 2024 presidential election, each candidate’s policy priorities have been drawn in sharp relief giving voters and analysts insight into how they would govern. Regardless of the outcome, we can expect that the economic and technology competition between the United States and China will continue to feature as a defining element of U.S. foreign policy. Despite significant differences in governing style and ideological perspectives, both President Trump and President Biden shared a strong commitment to winning the strategic competition with China. Over the course of these administrations, the United States has made tremendous efforts to maintain and secure its technological edge, most notably with the passage of the CHIPS and Science Act, but the next president will be tasked with building on that success and ensuring continued progress.
To effectively do so, the forthcoming administration must ensure a comprehensive approach to critical technologies. While the CHIPS Act was a historic achievement, its passage, both literally and figuratively, placed enormous emphasis on the race to semiconductor supremacy. Now, with the explosion of AI, we see a similar hyperfocus on that technology. These are critically important policy areas for the United States, but like the proverbial kids on a soccer ball, Washington’s priorities, particularly in the legislative arena, shift based on the issue du jour which risks backsliding in other areas of the agenda. America’s approach to 5G and 6G policy provides a clear example of this phenomenon.
As the United States began to launch 5G networks in 2018, the Geotech competition with China was heating up in earnest. As a result, we saw a wave of attention to 5G deployment and implementation as policymakers began to recognize the threat posed by the proliferation of Chinese telecom companies Huawei and ZTE and that America was at risk of falling behind on 5G technology. Congress passed a slew of 5G focused bills to bolster U.S. innovation and ban domestic use of Chinese telecom equipment. The Trump administration began a major diplomatic push to pressure allies and partners to similarly ban Huawei and ZTE from their domestic networks, an effort that was continued by the Biden administration. Despite a slow start and initial diplomatic challenges, the strategic focus on 5G policy paid off. The United States was particularly successful in bringing European allies around to its point of view and made historic investments in 5G and 6G research and development.
With these wins, the focus moved from enactment to implementation and legislative attention shifted elsewhere. In the 116th Congress, which spanned 2019 and 2020, 22 bills were introduced that focused on 5G and at least 5 major pieces of legislation were signed into law. The 117th Congress saw a decline with 14 bills introduced, though this period did see the passage of the CHIPS Act. But since then, the current 118th Congress has seen just 6 bills introduced with only one piece of significant legislation passing, the 5G SALE Act which retroactively provided the Federal Communications Commission the authority to process licenses and permits it had already granted via spectrum auction.
Political momentum and attention on 5G and 6G technology has slowed even as the next phase of policy and technical challenges comes into view. How will our networks cope with the massive increase in data traffic expected from the proliferation of AI and other advanced technology? As we aim for ubiquitous coverage, how will operators incorporate satellite technology alongside terrestrial cell towers to provide seamless coverage for all users? And critically, how can we build more sustainable infrastructure to reduce the burden on our energy systems?
A key lesson from the evolution of cellular technology is that leadership in one generation of networks does not automatically confer advantages as you move to the next. European countries and Japan saw their early success in 2G and 3G, respectively, erode as the United States took the lead in 4G.
Despite tremendous progress, the race to 5G dominance is not over. Rather than the reactionary approach we took in the initial phases of 5G deployment, we must maintain our strategic and proactive focus as we look ahead to 6G which will have an enormous impact on our economy and security.
Semiconductors, AI, and other emerging technology will play key roles in America’s innovation leadership in the years ahead, but without effective and efficient networks, we will hamper our ability to capitalize on our wins in those fields. The next administration, together with Congress, the private sector, and our allies, must be forward-looking and comprehensive in America’s approach to critical technologies.
War, peace, and the future of European security
(Originally published by the Diplomatic Courier on 26 October)
It’s not often that one is asked existential questions at a business lunch.
Yet, on sitting down with Keir Giles at a fashionable restaurant near St. James’ Park in London, he rather directly posed one: “Why do you exist?” I had traveled to meet the Chatham House–based Russia expert in support of research I had undertaken about Russia, Ukraine, and the future of European security. I had read his first book “Moscow Rules” and many of his policy papers, and eager as I was to discuss his expertise, I was unprepared for his pointed though surely well–meaning question.
His query was less about me, specifically (or so I hope) and more about the Center for the Study of the Presidency & Congress where I work. He was seeking to understand where the Center stood on the question of policy towards Russia.
Giles’ bluntness came with no malice but reflected his clarity of vision and indeed purpose, one that has suffused his writings for both NATO and the public. Giles is a firebrand voice of conscience on the threat that Russia poses to the West and the certainty with which it must be dealt a strategic defeat, and he must surely feel vindicated (disappointingly so) in the wake of the February 2022 expanded invasion of Ukraine.
“Who Will Defend Europe?”—Giles latest book—is a manifesto of sorts, a call to arms, and the final volume (at least thus far) in what could be referred to as the ‘Giles trilogy’ of increasingly forceful books on Russia. His book “Moscow Rules” was a detailed accounting of how Russia manipulates the West into accepting the Kremlin’s world views and actions. The second volume of this trilogy, “Russia’s War on Everybody,” detailed how Moscow’s hybrid warfare activities targeted not just governments, but individuals, telling the stories of the Kremlin’s victims well beyond hoodwinked politicians and legislators.
For the full review, click here.