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National Security Strategy Includes Trade and Economic Components

Thursday, December 21, 2017
Sandler, Travis & Rosenberg Trade Report

Promoting U.S. prosperity, including by encouraging free, fair, and reciprocal trade relationships, is one of the four pillars of a national security strategy announced this week by President Trump.

The strategy identifies China and Russia as specific challenges to U.S. interests and accuses them of attempting to erode U.S. security and prosperity. These competitions “are not passing trends or momentary problems,” the strategy states, and so require the U.S. to “rethink the policies of the past two decades,” which were “based on the assumption that engagement with rivals and their inclusion in international institutions and global commerce would turn them into benign actors and trustworthy partners.” However, experience shows that these countries “distorted

and undermined” these institutions “without undertaking significant reform of their economies or politics.”

The strategy also blames previous administrations for negotiating “disastrous trade deals” and allowing the growth of unfair trading practices by foreign countries such as dumping, discriminatory non-tariff barriers, forced technology transfers, non-economic capacity, industrial subsidies, and other support from governments and state-owned enterprises to gain economic advantages.

In response to these challenges, the strategy sets forth the following priority actions on economic and trade issues.

- Federal departments and agencies will eliminate unnecessary regulations that stifle growth, drive up costs for U.S. businesses, impede research and development, discourage hiring, and incentivize domestic businesses to move overseas.

- A simpler, fairer, and pro-growth tax code will lower business tax rates and establish a territorial system for foreign subsidiary earnings that will improve the competitiveness of U.S. companies and encourage their return to the U.S.

- Federal, state, and local governments will work together with private industry to improve U.S. airports, seaports and waterways, roads and railways, transit systems, and telecommunications. In addition, the U.S. digital infrastructure will be improved by deploying a secure 5G Internet capability nationwide.

- The U.S. will pursue bilateral trade and investment agreements with countries that commit to fair and reciprocal trade and will modernize existing agreements to ensure they are consistent with those principles. Agreements must adhere to high standards in intellectual property, digital trade, agriculture, labor, and the environment.

- The U.S. will counter all unfair trade practices that distort markets using all appropriate means, from dialogue to enforcement tools.

- Using its economic and diplomatic tools the U.S. will continue to target corrupt foreign officials and work with countries to improve their ability to fight corruption.

- The U.S. will work with like-minded partners to preserve and modernize the rules of a fair and reciprocal economic order, emphasizing fair trade enforcement actions when necessary as well as multinational efforts to ensure transparency and adherence to international standards within trade and investment projects.

- The U.S. will partner with countries as they build their export markets, promote free market competition, and incentivize private sector growth.

- The U.S. will reduce the illicit appropriation of its public and private sector technology and technical knowledge by hostile foreign competitors, including by working work with Congress to strengthen the Committee on Foreign Investment in the U.S. to ensure it addresses current and future national security risks.

- The U.S. will prioritize counterintelligence and law enforcement activities to curtail intellectual

property theft by all sources and will explore new legal and regulatory mechanisms to prevent and prosecute violations.

- The U.S. will promote exports of its energy resources, technologies, and services and expand its export capacity through the continued support of private sector development of coastal terminals.

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