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This was my second visit to the MSC and first for Chamber CEO Thomas Donohue. The annual MSC is the World’s premier global security forum and is attended by Heads of State, Ministers, Corporate executives, think tanks and thought leaders from around the world. Key themes from this year’s conference included a series of discussion on cyber security, 5G, China, Russia and diminishing trans-Atlantic trust.
A focal point of the trip included a series of bilateral meetings with Ministers, corporate leaders, government officials including the Secretary of Defense, Secretary of Energy, Assistant Attorney General, members of Congress, our Military Commanders and a Special Assistant to the President for International Telecommunications Policy. Not surprisingly, our foreign interlocutors were interested in our views on the political and economic climate in Washington, and in the broader United States.
We emphasized the positive, growth-oriented, actions that the administration has taken in advancing tax and regulatory reform. But we did not fail to identify the differences we have with key elements of the administration’s trade policy, which we believe could negatively impact growth, in particular with respect to Europe. Having just hosted the B7 Summit prior to attending the MSC, I was able to amplify key discussion points specific to the negative effects in Europe of over regulation and taxation. There is an urgent need to partner across the Atlantic to help Europe restore economic prosperity which in turn will allow more investment in national security, infrastructure and environmental programs.
While at the MSC, the following objectives were accomplished:
- Ensure our trans-Atlantic political and corporate partners understand where the U.S. business community’s interests align with the U.S. Government’s, and where they diverge.
- Demonstrate the U.S. Chamber’s continued leadership as the convening voice of the U.S. private sector.
- Amplify that the Chamber works hard to nurture the partnerships that we have today while seeking ways to create new partnerships that will enhance our influence and continued success.
Shortly after landing in Munich, Tom hosted a foreign policy discussion attended by the Atlantic Council, Center for Strategic and International Studies, Jones Group International, Center for European Policy Analysis, and the U.S. Russia Foundation. We discussed key conference themes including Russia, China, Europe, Iran, migration, cyber and the coronavirus pandemic.
In all engagements we emphasized where the Chamber is aligned with Administration policy and where we diverge; that fundamentally trade wars and tariffs are not helpful; that trade agreements help promote peace and stability, they enhance national security – including ours – and they provide an environment for increased cooperation between governments in areas such as the fight against transnational crime, international terrorism, and a host of other threats to the rules-based economic system.
We also amplified the need for Europe to get its economy back on track, Germany in particular, by rolling back regulation and reducing taxation. And if they succeed in doing so, they will see economic benefit that will then allow greater investments in national and regional security, infrastructure and environmental programs. But with their current path, national and regional security goals will not be met and green aspirations will go unfulfilled.
Meetings included private discussions with regional leaders, including Norway’s Minister of Defense Frank Bakke-Jensen; Secretary of Defense Mark Esper, and Assistant Attorney General of the National Security Division John Demers. We met with several Chief Executive Officers representing select companies that will benefit from Chamber membership.
Finally, we participated in numerous intimate discussion groups covering such issues as cyber security, China, the future of U.S German relations and the three seas energy and infrastructure initiative in Eastern Europe that our government has pledged millions in funding to launch which will provide U.S. businesses an opportunity in the region that might otherwise be difficult to pursue.
Key Takeaways and Messages
The Great Power Competition: China is a polarizing issue. We stand to lose the national security race with China if we fall to invest; we are losing the space race unless we invest; China portrays itself as Europe’s true friend and the U.S. as an unreliable and selfish partner; and Europe continues to struggle with needing China economically while struggling to address the national security risk China poses. Today, economic considerations are in the lead and security is taking a back seat.
The European Union is trying to further close the door on U.S. industry: We heard concerns about the European Defense Fund and the potential for fewer U.S. industry opportunities to sell. In our discussion we made clear the advantages of partnering with U.S. industries, especially with respect to security, highlighting a host of program successes. What we heard from Defense Ministers especially, is that as sovereign members of the EU, they will not allow Brussels to drive their acquisition decisions.
Trans-Atlantic Trade Concerns: There was strong consensus among those we met that trade wars and tariffs enacted by the U.S. would suppress business opportunities while further antagonizing EU U.S. relations. EU based CEOs noted the rising anti-U.S. sentiment and the negative implications for their businesses. Corporations and politicians in Europe understand the need to protect the relationship with the U.S., however, both are failing to convince their citizens.
A state of global insecurity: We are witnessing an increasingly destructive trend in international cooperation. Climate insecurity, economic divergence, political and ideological divides, and now a global health crisis. It cannot be assumed that all want to see a unified Europe and we continue to see more nations pursuing their own unilateral objectives. As these insecurities gain momentum, assuming they do, there is general concern with the consequences for businesses both in Europe and the U.S.
China Trade Practices: Several regional business and political leaders echoed criticism recently expressed by the U.S. Government over Chinese trade practices. We indicated that the U.S. private sector shares many of the same concerns when it comes to trade-distorting Chinese behavior such as theft of intellectual property and forced tech transfer, though we made clear our opposition to the U.S. imposing sweeping tariffs to address the problem.