Biden Admin Should Push for Multilateral Investment Agreement on China, Former Trump Adviser Says
The U.S. and its allies should come to an international agreement on reviewing incoming and outgoing Chinese investment to make sure those deals are not enabling human rights abuses or funding Chinese military and technological advances, said H.R. McMaster, President Donald Trump’s former national security adviser. The Joe Biden administration will have a chance to secure such an agreement if it pursues more multilateral cooperation with allies, McMaster said.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
“I think an international agreement about that” with “10 democratically governed countries that have advanced technological and scientific programs, I think that's a really good initiative,” McMaster, a board director for the Atlantic Council, said during a Nov. 24 event hosted by the think tank. “We ought to also agree that we're not investing in Chinese businesses in industries that gives them a differential advantage” or that helps China’s “effort to overmatch our militaries.”
The U.S. earlier this year expanded the jurisdiction of the Committee on Foreign Investment in the U.S. (see 2001140060), which has partly contributed to a drop in foreign direct investment from China (see 2005110008). Other nations also have introduced or strengthened investment screening mechanisms, including Japan and the European Union (see 2010090016 and 2002260042). McMaster said those countries should jointly agree to not allow Chinese investments that may harm security or human rights interests. “We need to make sure we are not helping the Chinese Communist Party stifle human freedom internally and perfect this technologically enabled and Orwellian surveillance police state,” he said.
That agreement could be feasible because America’s allies are becoming more aligned against China’s harmful trade and economic practices, McMaster said. He said Japan, India, Australia and the EU countries are increasingly aware of national security threats imposed by China, such as the potential risks of using Huawei equipment. McMaster said he thinks more countries will soon ban Huawei products.
“Our European allies are much more cognizant now in a post-COVID period of the threat from the Chinese Communist Party,” he said, adding that the Biden administration should capitalize on the opportunity. “I think this is a positive time to come in and to reinvigorate multilateral efforts to overcome the challenges we're facing, using China as one example.”
McMaster also urged the Biden administration to not immediately remove U.S. sanctions on Iran or rejoin the Joint Comprehensive Plan of Action, which he said could reopen a financial lifeline for the Iranian regime. Experts believe Biden will likely reduce some sanctions on Iran and eventually try to negotiate a new nuclear deal (see 2011200035 and 2010160039).
“You really see the failure of multiple approaches toward Iran that were based on the idea that conciliation with Iran would lead to a change in the nature of that government,” McMaster said of past administrations. “I would just encourage the Biden administration to really take a hard look at the ideology, the emotions, the aspirations that drive the Iranian regime.”