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11. US-India Economic Ties: To the Next Level and Beyond

Author:
Aparna Pande
Publication Date:
10-2024
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
This executive summary outlines the key recommendations for policymakers that emerged from deliberations at the Takshashila Institution–Hudson Institute roundtable series “US-India Economic Ties: To the Next Level and Beyond.” Its recommendations are divided into four proposed areas for collaboration between India and the United States: trade and investment, ideas and human capital, technology, and methods and mechanisms.
Topic:
Economics, Science and Technology, Bilateral Relations, Investment, and Trade
Political Geography:
South Asia, India, North America, and United States of America

12. Unsealed Indictment Shows Iranian Agents Acquired Controlled Camera with Nuclear Weapons Application from United States

Author:
Sarah Burkhard, Chloe DeVere, and Kendall Roach
Publication Date:
08-2024
Content Type:
Special Report
Institution:
Institute for Security and International Studies (ISIS)
Abstract:
In the spring of 2023, the U.S. Justice Department unsealed an indictment from 2012, which shows that in addition to the previously known high-speed cameras Iran purchased from Russia, brokered by Mohsen Vanaki, 2 Iran also acquired another camera with applications in nuclear and ballistic missile testing at the same time from the United States. 3 From 2006 to 2009, five agents residing in Iran, Azerbaijan, the United Arab Emirates (UAE), and Canada worked together to purchase the camera, which required an export license, from a U.S. company. They then shipped the camera via Canada and the UAE to an Iranian customer with known ties to Iran’s nuclear and ballistic missile program. While a first attempt to purchase the camera failed, a second attempt succeeded, requiring an elaborate scheme with multiple transshipment points, front companies, and falsified end-user information. Ironically, the Iranian end user experienced multiple technical issues with the camera post-shipment, requiring prolonged back-and-forth communication among the network and with the manufacturer. Despite efforts taken by the multiple agents to ship the camera and conceal its end use, this case reveals red flags and missed opportunities to stop the initial shipment or the repair and technical consultations post-shipment. While it is difficult to determine in what way the camera could have contributed to Iran’s nuclear weapons efforts, there are several indications that Iran was continuing nuclear weapons related activities previously conducted under the Amad plan during that time frame, and multiple governments agreed at the time that Iran’s nuclear weapons program was likely ongoing. The case highlights that Iran seeks controlled high-speed cameras for nuclear and military applications. It also serves as an important reminder that Iran does have the type of sophisticated equipment needed to conduct various aspects of nuclear weapons development, then and today. Additionally, this case again shows the value of dual-national and other Iranian procurement agents located outside of Iran, especially in Western countries. Moreover, if they are arrested and prosecuted, Iran has effectively developed a strategy of trading them for innocent Western hostages it has arbitrarily seized inside Iran.
Topic:
Nuclear Weapons, Sanctions, Weapons, and Trade
Political Geography:
Iran, Middle East, North America, and United States of America

13. Disorderly Conduct: How U.S.-China Competition Upended the International Economic Order & What the U.S. Can Do to Fix It

Author:
Emily Kilcrease and Adam Tong
Publication Date:
06-2024
Content Type:
Special Report
Institution:
Center for a New American Security (CNAS)
Abstract:
To gauge the health of the U.S.-China economic relationship, one can turn to the words of Chinese Foreign Minister Wang Yi, who remarked in March 2024 that U.S. “tactics to suppress China . . . [were] reaching a bewildering level of unfathomable absurdity.”1 Rhetorical flourishes may be the one bright spot in the relationship. As tensions rise over economic restrictions and policies on both sides, economic relations have become a worrisome source of instability in the overall geopolitical relationship. The economic relationship has become increasingly dominated by security concerns, and integration is seen as not an opportunity but a risk to U.S. interests and values. The United States must develop a strong, pragmatic strategy for advancing its economic and security interests within the U.S.-China economic relationship, accounting for the fact that the security competition is now playing out across the economic landscape. To inform the development of an effective U.S. strategy for the economic relationship with China in the context of rising securitization, the United States must learn from its past attempts to advance its economic and security interests in the relationship. The first section of this report, “Where have we been?” examines past U.S. approaches, along with the challenges of pursuing similar policies in today’s geopolitical context. The second section, “Where are we going?” distills lessons from these past approaches and defines a new strategy for the United States, offering recommendations to implement it. Broadly speaking, prior U.S. strategies can be divided into two camps. First, the United States sought to bring the People’s Republic of China (PRC) into the rules-based order and incentivize it to be a responsible stakeholder.* When that failed, U.S. strategy pivoted to one of imposing costs on the PRC and taking actions to constrain behaviors that threatened U.S. economic security interests. Within those broad strategies, U.S. policymakers have pursued four main approaches, in differing combinations and intensity, all of which involve associated challenges. They are: Play by the rules: The intention of bringing the PRC into the rules-based international system was to create external pressure that would align PRC actions with U.S. economic and security interests. Key efforts under this approach included the U.S. support for the PRC’s accession to the World Trade Organization (WTO) and the later U.S. attempts to negotiate a bilateral investment treaty. Challenges for the approach include the fact that rules have a weak ability to constrain state behavior in a geopolitically contested environment where national security risks arise from economic integration. We need to talk: In light of increasing complexity in the bilateral relationship, U.S.-PRC dialogues were intended to identify and advance mutual interests while providing a regular forum to attempt to resolve disputes. This is seen in the Strategic Economic Dialogue (SED) in the Bush administration and the Strategic and Economic Dialogue (S&ED) in the Obama administration. In other contexts, such as ongoing talks under the Biden administration, dialogues have served primarily to communicate the rationale for U.S. policy actions in an attempt to put a floor under the bilateral relationship.2 Challenges to this approach include that commitments made in a dialogue process may not be enforceable, the meeting can become the deliverable, and the dialogue process cannot alter underlying geopolitical shifts. Defense is the best offense: Defensive approaches relied on domestic U.S. authorities to counter specific harms created by PRC practices and policies. The United States has a wide range of economic tools (e.g., tariffs and trade remedies) as well as national security–based tools (export controls and the Committee on Foreign Investment in the United States [CFIUS] process for conducting national security reviews of foreign investments), all of which have been used with greater frequency over the past decade. Challenges when using these tools include the disruptive and potentially escalatory nature of defensive approaches, and the lack of clear frameworks to assess the effectiveness of defensive policies. Additionally, relying on unilateral approaches can create friction within potential economic alliances. In the United States, defensive approaches have often suffered from a blending of economic, national security, and values concerns, eroding the legitimacy of the national security argument. Have more friends: These strategies centered on efforts to shape the PRC’s external environment through the negotiation of ambitious trade and investment agreements with major trading partners, with the goal of increasing economic integration with close partners, creating indirect pressure on the PRC to level up to higher standards, and developing common approaches to address concerns with nonmarket economies. Such an approach is challenging because traditional ways of shaping the external environment have not directly addressed securitization of the U.S.-China economic relationship. U.S. domestic political realities impose a considerable constraint on the use of trade policy as a strategic tool.
Topic:
Economics, Bilateral Relations, Trade, Strategic Competition, and International Order
Political Geography:
China, Asia, North America, and United States of America

14. Did Supply Chains Deliver Pandemic-Era Inflation?

Author:
Phil Levy
Publication Date:
10-2024
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
This Policy Brief argues that supply chain breakdowns were not a principal cause of pandemic-era inflation. Levy focuses on US trade in containerized goods and shows that, within months of the pandemic’s onset, the quantities of goods delivered in fact increased significantly. The sharp increases in inflation and shipping prices and the accompanying delays and empty shelves in the presence of significantly increased quantities suggest, instead, a large positive demand shock. Goods consumption levels rose sharply and remained elevated into 2023 and beyond, even as shipping delays and price hikes dissipated. The author concludes that, while it may be worthwhile to make supply chains more efficient and aim for increased elasticity of supply, the goal of avoiding inflation and shortages is likely better met through improved demand management.
Topic:
Inflation, Trade, COVID-19, Shipping, and Supply Chains
Political Geography:
North America and United States of America

15. Is the World Trade Organization Still Relevant?

Author:
Alan Wm. Wolff
Publication Date:
12-2024
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
There has been a profound shift in American foreign economic policy. The United States has abandoned promotion of a rules-based open international trading system and no longer supports the World Trade Organization (WTO). The United States and its allies created the current world trading system as an essential part of the liberal world order, a series of rules-based international organizations and agreements to help rebuild the global economy and foster peaceful cooperation after World War II. Today, rising populism, heightened geopolitical tensions, and persistent inequality are threatening this order. Wolff emphasizes that the WTO is still relevant to the liberal international order, and it is in the core interest of the United States and other countries to continue to support that order. But he cautions that the WTO needs major reforms if it is to survive as an effective force governing world trade. WTO members must engage in serious negotiations to find acceptable solutions to shared problems. The resulting agreements can be political commitments or adoption of binding rules. Regressing to a lack of accountability for one’s trade policy measures, however, would be unacceptably damaging.
Topic:
Economic Policy, Trade, WTO, and International Order
Political Geography:
North America and United States of America

16. Balance of Trade, Balance of Power: How the Trade Deficit Reflects U.S. Influence in the World

Author:
Daniel Griswold and Andreas Freytag
Publication Date:
04-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
The U.S. trade deficit is a misunderstood symbol of U.S. economic strength and influence in the world. The deficit is not driven by unfair trade abroad or industrial weakness at home and, as the Trump years show, cannot be “fixed” through higher tariffs. Instead, the trade deficit is driven by a persistent net inflow of foreign capital, which reduces interest rates and fuels economic output. Contrary to myth, the trade deficit is not a cause of deindustrialization or a loss of manufacturing jobs. In fact, the current balance of trade points to America’s continuing influence in global affairs—as a haven for global investment, as a robust producer and buyer of global goods and services, and as the provider of a strong dollar that remains at the center of the global economy. Policymakers should reject measures that restrict trade and foreign investment and instead seek to expand America’s commercial ties to the rest of the world.
Topic:
Foreign Policy, Economy, Trade, and Trade Deficit
Political Geography:
North America and United States of America

17. Course Correction: Charting a More Effective Approach to U.S.-China Trade

Author:
Clark Packard and Scott Lincicome
Publication Date:
05-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Over the past several years the U.S.-China economic relationship has soured and become subordinated to broader concerns about national security and geopolitics. After a decades‐​long reform agenda in China that lifted hundreds of millions out of grinding poverty, Chinese president Xi Jinping has increasingly turned inward—reembracing Maoist socialism and heavy‐​handed central planning. Washington’s response to these worrisome developments has been reflexively hawkish economically, scattershot, and woefully inadequate for the economic challenge that China presents.
Topic:
National Security, Bilateral Relations, Economy, and Trade
Political Geography:
China, Asia, North America, and United States of America

18. ASEAN's medium- to long-term trade strategies and the direction of RoK-ASEAN cooperation

Author:
Sungil Kwak, Seungjin Cho, Jaewan Cheong, Jaeho Lee, Mingeum Shin, Nayoun Park, and So Eun Kim
Publication Date:
03-2023
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
In recent years, the U.S.-China hegemony competition has intensified, dividing the world into two blocs. ASEAN has long culti-vated its position on the international stage by maintaining a certain distance between the United States and China. In that sense, ASEAN is the best partner for Korea to ef-fectively respond to the divided world. Therefore, this study seeks the directions of cooperation with ASEAN in supply chain, digital trade, climate change response, and health and development cooperation in line with changes in the international order.
Topic:
Climate Change, Development, Economics, International Cooperation, Trade, and ASEAN
Political Geography:
China, Asia, North America, and United States of America

19. The Quad's Next Chapter

Author:
Karl Friedhoff
Publication Date:
09-2023
Content Type:
Special Report
Institution:
Chicago Council on Global Affairs
Abstract:
Advancing the group's pillars of prosperity and development will be at the very heart of competition with China in the coming decade. The Quad—the country grouping including the United States, Japan, Australia, and India—now stands at a crossroads as it enters its third phase. The Quad 3.0 comes as the grouping has established the dialogue as a meeting place for leaders of the four countries but must now decide what shape competition with China will take and how to best address that competition. Thus far the Quad has struggled to find function for its form. Statements issued by Quad leaders stress the importance of “development, stability, and prosperity” in an effort to roll back China’s influence across the Indo-Pacific. However, its most high-profile activities focus on stability via high-profile military exercises. Closer internal coordination along the security axis serves to highlight the lack of visible progress on the external delivery of development and prosperity to countries outside the Quad. Efforts to deliver development and prosperity are hemmed in by the Quad itself. Neither the United States or India are party to either of the major regional trade agreements—the CPTPP and RCEP. The Indo-Pacific Economic Framework (IPEF), held up by the Biden administration as America’s economic engagement with Asia, remains a mirage. Meanwhile, as the United States de-risks its economic relationship with China, it is effectively warning that doing business with Beijing may come at a cost to relations with Washington—an unpopular message across much of the Indo-Pacific. Additionally, any hint of security cooperation with China by smaller countries in the region creates a flurry of diplomatic reaction from the United States. To move forward, the Quad needs to better balance its portfolio and how it messages that portfolio. The overt promotion of the security agenda is actively undermining perceptions of the Quad’s ability to engage on development and prosperity. A first corrective step is to balance the group’s internal goal of improved security coordination and cohesion with the Quad’s external goal of delivering development and prosperity to countries in the region. Committing to an agenda that brings the people of the region, not its seas, to the fore of the Quad mission should be a top priority. This means rejecting the dogma that every China initiative in the region needs a Quad alternative. Instead, advancing Quad goals requires identifying China’s activities that can be co-opted for Quad purposes. This will mean working around, and sometimes with, China’s initiatives to better serve not only the Quad’s goals in prosperity and development but also the people of the region.
Topic:
Foreign Policy, Development, Geopolitics, Trade, Strategic Competition, and Quad Alliance
Political Geography:
Japan, China, South Asia, India, East Asia, Australia, North America, United States of America, and Oceania

20. The US-EU Trade and Technology Council: Assessing the record on data and technology issues

Author:
Juan Carlos Fernández-Rodríguez and Frances G. Burwell
Publication Date:
04-2023
Content Type:
Working Paper
Institution:
European Policy Centre (EPC)
Abstract:
Since its creation, the Trade and Technology Council (TTC) has endorsed a Declaration for the Future of the Internet (DFI), designed a Joint Roadmap for transatlantic cooperation on artificial intelligence (AI) and identified quantum technology as a high priority. While these achievements can be considered success stories, this Discussion Paper argues that the TTC is now facing a dilemma. Different approaches to technology and digital governance and the lack of regulatory autonomy make the TTC best suited to address emerging issues that do not require changes in legislation. Yet, this is precisely what stakeholders want it to address. So, how can the TTC ensure its continuity without regulatory authority? The Paper offers five key recommendations: Make AI a test case and build from the lessons of the Joint AI Roadmap; Engage in issues where there is an initial strong value alignment and no regulation; Work on moonshot ideas such as the “metaverse” or low-earth orbit governance; Take oversight over the special task forces it has created to tackle critical issues such as the US Inflation Reduction Act (IRA); Think more actively about how to push its efforts into multilateral forums with like-minded partners.
Topic:
Science and Technology, European Union, Trade, and Data
Political Geography:
Europe, North America, and United States of America