Friday News Roundup — October 22, 2021
Compete with China on Climate; Space Norms & Behavior; Digital Tax Agreement; Politics of Immigration
Greetings on a beautiful autumn Friday in Washington. While there are many headlines worth noting this week, as there are every week, we want to take time to reflect on the life and legacy of former Secretary of State and former Chairman of the Joint Chiefs of Staff, General Colin Powell. An icon of leadership and service to his country, his character and integrity are an example for us all. In The Wall Street Journal, CSPC Trustee Ambassador Paula Dobriansky writes of how Powell embodied “the true American dream.” Early in the week, CSPC President & CEO Glenn Nye issued a statement commemorating Powell.
Powell’s “Thirteen Rules of Leadership’’ are excellent maxims for us to remember. Everyone, especially those of us in Washington, should “get mad then get over it” and “avoid having your ego so close to your position that when your position falls, your ego goes with it.”
At CSPC this week, Joshua C. Huminski reviewed David McCloskey’s “Damascus Station” and Sam Dagher’s “Assad or We Burn the Country” for the Diplomatic Courier. He also published two reviews with George Mason University’s National Security Institute SCIF blog: “Russia Upside Down” by Joseph Weisberg and “We March at Midnight” by Ray McPadden. Joshua also looked at how the CIA needs to shift from the War on Terror to strategic competition in The Hill.
Ethan also wrote in The Hill about how talent retention is key for the military post-Afghanistan, while also using John Quincy Adams’s reflections on “monsters abroad” to frame the challenges of the 21st century in Diplomatic Courier.
This week, Dan writes on the false choices in climate and China policy, arguing that we should see climate solutions as another arena for competition with China. Ethan explores norms of behavior in space and precedents to be set as competition in that domain grows. Robert covers the agreement on digital taxation, and CSPC intern Stella Delgado makes her roundup debut with analysis on immigration legislation. As always, we wrap with news you may have missed.
Competing & Cooperating with China, on Climate
This week, a story circulated among China watchers that administration officials — mainly led by former Secretary of State and climate envoy John Kerry — had been pressuring Congressional leadership to hold off on legislation related to Chinese human rights violations. While quickly denied, similar stories surfaced from behind-the-scenes to be rumored and reported last month, it would hardly be surprising given Kerry’s previous remarks about dealing with China and climate vis-a-vis human rights. After all, it was also Kerry, in an interview with Bloomberg, when asked about climate and the issue of the ongoing Uyghur genocide, who replied “life is full of tough choices.”
How we approach China and the issue of climate change is not a tough choice. While dialogue with China may bring about the headlines that the administration may want at a climate summit, the reality of climate change and competition with China means that climate should be seen as an arena for competition with China — one where we can re-emphasize our values and strengths while leading to confront a global challenge.
First, we should be sanguine about how China sees climate change. On one hand, the Chinese leadership recognizes the challenge of climate change. China has sought to achieve leadership in green technologies — and its leadership over renewable solar and wind technology and manufacturing has been made possible by stealing from and undercutting their western competitors. On the other hand, facing a near-term energy crisis, China has boosted coal production across the board, and, in the long-run, even administration officials will admit there is little to be trusted about China’s pledges to cut emissions. Ultimately, Beijing will do what Beijing needs to do on climate — good or ill. With Shanghai, Hong Kong, Shenzhen, Tianjin, and other major coastal cities on vulnerable coastlines, increasingly extreme weather and desertification inland, and crop/resource instability, China has to deal with climate change no matter what agreements are met with Washington or the rest of the world.
The history of bilateral agreements with China has often resulted in deals, often with great fanfare about short-term gains and “confidence building”, that strengthen China while hollowing out U.S. industry and innovation leadership in the long-run. It’s no different when Beijing is rumored to tie our foreign and economic policy to a climate agreement. Any diplomatic or geostrategic approach to address China’s emissions will come about through multilateral pressure — just like many other areas of engagement or competition with China.
Climate leadership should be seen as an avenue for competition with China because green energy innovations — renewables, nuclear, and other tools — will be the foundation of future economic and energy leadership. Investment and innovation is the path to address climate change, using all-of-the-above solutions. A free market rewards the best solutions, but there must also be the impetus for transition. A carbon tax is often seen as the most straightforward way to achieve this — but it must be part of a transition that makes green energy cheap and abundant, while finding innovative solutions for the emissions from agriculture, construction, and transportation. Simply hoping that society can bear the inflationary supply shocks of an energy transition and bureaucratic climate mandates will only further the populist backlash.
Demonstrating leadership on climate will also be important to show that the United States is a partner for the nations of the Global South, as well as showing that democracies have the capacity and capability to tackle pressing global challenges. Sharing in these innovations with our Transatlantic and Indopacific allies and partners will further deepen economic and commercial ties.
Finally, even if we do reach some of the climate and greenhouse emission goals, there will still be the need to mitigate existing emissions and the effects of climate change. When there is talk of mitigating climate change by two degrees instead of four, I believe the best metaphor is that while a fall from a four-storey height may be fatal, you will not walk away happily from a two-storey one. The inevitability of having to also deal with climate mitigation and resilience is an opportunity to lead in the science and industry of climate effects mitigation, climate engineering, mega-engineering projects, and foster physical and societal resilience. This resilience is also important for our national security aims, as the Pentagon and Intelligence Community lay out in their latest NIE.. In contrasting our values, it is important to show how the United States and our allies can innovate and grow, rather than resorting to the command economy methods used by Beijing.
Unlike other competitions — or worse yet, the arms race presaged by this week’s news about Chinese hypersonic capabilities — a race for leadership in climate solutions helps solve this global crisis. Pushing ahead for American leadership, writ large, means that China does not drive our climate policy, nor does climate drive our China policy.
Space Conduct Competition
Now that everyone in the policy community has gotten over the recent infatuation with the label “strategic competition” — suddenly in vogue yet we’ve been using here at the Center for some time now — policy wonks need to recall that our avenues of policy and strategy competition exceed the mere orbital trappings of the globe. Rather, our competition arenas extend much further in all directions, and that includes the space arena, which is a much wider field in which to establish policy aimed at our rivals.
For reference, Space touches just about everything in the DoD panoply, the architecture on which our forces achieve command and control connectivity, primary intelligence collection, and simple freedom of maneuver thanks to the relative openness of the LEO-realm. However, defense leaders in the Space community, such as key space logistics czar Brigadier General John Olson (who closely advises Chief of Space Operations Gen. Jay Raymond) see’s orbital territoriality by Beijing as the next avenue of adversarial aggression. Brig. Gen. Olson was speaking at the National Defense Transportation Association meeting this week, when he said “they [China] believe that the Moon is manifest destiny for them…[part of their] economic and security operations”. It was only a few months ago where I discussed the role of our celestial satellite for military and intelligence significance in the roundup, but Brig. Gen. Olson isn’t precisely fixated on the Moon itself, his concern lies in the superhighway of space actual between there and here.
The thing to remember when we, or anyone, is talking about or actually doing competition things in space, is most of the nations on earth are signatory to the 1967 Outer Space Treaty, which is supposed to prevent the militarization of orbit and beyond, and bans any sovereignty claim to the Moon by any nation on Earth, as well as using space bodies (such as the moon) for weapons testing. Olson see’s our competitors as challenging that established norm in the same manner that they challenge international boundaries in the South China Sea.
Space continues to have an incredible amount of influence over every aspect of our national security strategy, and adversarial behaviors in space have a copacetic impact on those activities. I say adversarial (plural) because while Brig. Gen. Olson directly pointed a finger at Beijing, we must not forget that Moscow, Tehran, and many others are just as likely to be clogging the space highways of today and tomorrow as Beijing. If we concentrate too much on China over other potential adversaries or rivals, we risk pushing them closer together, and space is no different. But despite the Beijing fixation, Brig. Gen. Olson’s point about our conduct remains valid, especially when considering how to establish norms for space operations in the future when our species becomes interstellar.
By not being aggressive in establishing operating norms in space, much in the same way that the International Civil Aviation Organization uses English to standardized flight procedures, we are ceding an advantage in space to Beijing who continue to flaunt their disregard for cooperative uses of non-sovereign domain. Herein lies the long game that China has been employing for decades — gently pushing the boundaries of acceptable behavior without devolving into actual conflict.
So the question — the response and pre-emptive actions more specifically — about what to do about adversary behaviors in space lies in building an open arena that enables activity in the space domain without doing exactly what China is doing. Olson’s comments hinged on a term that encapsulates the vector for U.S. space strategy: a space ‘superhighway’ wherein “we set the standards, we set the doctrine, the governance along the principles that we believe in. [With] space lines of commerce [that] certainly includes the Moon, it absolutely must”. Right in line with many of the efforts we have spent recent years pushing here at the Center, this includes better collaboration between public and private entities in the U.S. and partner nations — cargo movement, cooperative research and tech development that enables freedom of use in space, and ensuring safety for commercial interests, distinct but intertwined with national security space interests.
Part of the problem in commercial entry into the space domain lies in sustaining the architecture — so many small sats and other devices exist in various stages of orbit, yet all are susceptible to eventual erosion and ultimate detritus status. Now, space debris gets a bad rap, and it is enough of an issue that DoD employs entire radar and tracking systems to prevent collisions between active satellites and said debris, but more often than not, the smaller items burn up on re-entry, and it is less of a concern than one might think initially. But the lack of a standard operating procedure, a space conduct doctrine, is precisely the end-game of Olson’s comments to build this “superhighway” in space that coordinates, enables, and ensures safe space activities across Earth-dwellers. Establishing this norm and getting the rest of the globe to follow suit, under American standards, offers the opportunity to further ostracize Beijing and other actors for their untoward behavior in space.
The DoD is already looking at innovative options that continue to push operating norms in space, while also serving as those impetus to promote safe, cooperative conduct in the orbital zones of responsibility. The Air Force Research Lab (AFRL) is cranking out Cooperative Research and Development Agreements (CRADAs, because DoD loves its acronyms), to employ new Mission Extension Vehicles (MEVs) to refuel orbital technology like satellites and other gadgets to prevent the constant flinging of objects into orbit which ultimately become detritus. The U.S. Space Force is leading the space community in venture capital investment for ensuring more efficient, cheaper, durable tech that makes space accessible and safe for all parties, which is the ultimate end state for any space strategy.
So yes, strategic competition continues to gain dictionary definitions, and space is a key part of that. But while competition between the great powers of the 21st century must factor in the things that go bang, the hardware of conflict, and the readiness of the military for war, our space enterprise must consider the myriad of civil and commercial factors that make up a small but utterly critical aspect of the competition age. Winning the competition in space means leading the globe in space behavior, securing the logistics, accessibility, and setting the standard for all aspects of space conduct.
Nations Agree on Taxation for the Digital Age
Robert W. Gerber
On October 8, 136 countries agreed — in principle — to reform international tax rules including the creation of a global 15% minimum tax rate on corporate profits. This was a hard-fought multi-year effort brokered by the OECD group of developed countries with the support of the G20 group of nations. The declaration (not an agreement yet) is timely in the context of the release of the Pandora papers, which spotlighted tax evasion (or tax optimization, depending on your perspective) and global concerns about money laundering. It is a win for the Biden Administration’s effort to raise U.S. corporate tax rates because the compact would reduce incentives for American companies to relocate to lower-tax jurisdictions overseas. But it is also a win for the transatlantic relationship writ large: it signifies that the United States and Europe can work together to solve their differences and to set global norms (Note: even China and Russia signed on to the compact).
The United States and the EU have been at the brink of a trade war over Digital Services Taxes (DSTs), a tax on selected revenue streams to be paid by a digital platform in the jurisdiction where business transactions (like advertising sales) take place. DSTs have popped up in France, Spain, the UK, Austria, Poland, Italy, Canada, and the Czech Republic as well as in draft legislation at the EU level. DSTs have created a double taxation problem for certain companies like Google and Facebook. In June 2020, the U.S. Trade Representative initiated a “Section 301” investigation into DSTs in several European countries, concluding that such laws discriminated against U.S. companies and were therefore sanctionable under the Trade Act of 1974. The Biden Administration delayed implementation of retaliatory tariffs against these countries pending the outcome of the OECD-brokered talks. Pillar One of the October 8 compact states that multinationals with global sales over $20 billion and 10% profitability and in-country revenues over €1 million may be taxed in the jurisdiction where their customers reside regardless of where the company is headquartered. In return, signatories agreed to suspend implementation of DSTs for a period of two years.
The new tax rules would not go into effect until 2022, and parties still need to sort out implementation details before a multilateral convention is signed next year. In addition, some DSTs will have to be removed by governments that don’t want to forgo a new tax source. Nevertheless, the compact is a breakthrough moment. It could create space for meaningful collaboration — dare we say convergence — among the United States, the EU, and like minded countries like Japan on digital trade rules.
To be sure, there continue to be significant roadblocks in the U.S.-EU trade relationship. The United States maintains Trump-era levies on imports of EU-made aluminum and steel, while the EU placed retaliatory tariffs on American whiskey and motorbikes. And an agreement on data flows to replace the U.S.-EU Privacy Shield appears elusive. But these are just skirmishes when compared to the gravity of the battles that loom ahead, including the security of 5G networks, global internet freedom, standards for emerging technologies, and cyber defense. These are matters that are critical to the economic security of the United States, its Allies, and democratic rule-based societies worldwide. The U.S.-EU Trade and Technology Council and the upcoming Summit of Democracies are both excellent opportunities to formalize collaboration among free societies toward these shared challenges.
Biden Immigration Policies Face Legislative, Judicial Challenges
In protest to this week’s announcement that the Biden Administration would be reinstating the Migrant Protection Protocols, a group of immigration advocates staged a virtual walkout during a Zoom meeting with administration senior officials on October 16. During the Trump administration the Migrant Protection Protocols (MPP), more commonly known as the “Remain in Mexico” policy, was one of the cornerstones of President Trump’s immigration policy. The MPP is the result of a deal with Mexico, which requires individuals trying to enter the United States from Mexico to stay in Mexico during their immigration proceedings.
During the election, then Candidate Biden, ran on a platform criticizing the MPP saying that “Trump has effectively closed our country to asylum seekers, forcing them instead to choose between waiting in dangerous situations… or taking a risk to try crossing between the ports of entry. In other words, Trump’s policies are actually encouraging people to cross irregularly, rather than applying in a legal, safe, and orderly manner at the ports.” That is why once in office Biden ended the MPP.
However, the end of the policy created a legal battle with lawsuits by the states Texas and Missouri challenging the decision from the White House. U.S. District Judge Matthew J. Kacsmaryk sided with the states and ordered that the policy be reinstated. After an appeal from the Biden administration arguing repealing the policy fell within Executive power, the Supreme Court ruled in favor of the lower court and the states; thus, affirming that the Biden administration would be required to reinstate the policy.
Then, in late September, many across the country were appalled by images of a confrontation between border patrol agents on horseback and Haitian migrants trying to cross the southern border. This event drew a lot of attention for the increased number of migrants trying to get in to the U.S. Consequentially, earlier this week, protests broke out in Miami in response to the deportation of thousands of Haitian migrants over the last month.
The Biden administration conducted these deportations using a Trump-era policy called Title 42. Title 42 is separate from the Migrant Protection Protocols, therefore the Biden administration does not have the same judicial scrutiny to continue its use; however, they continue to do so anyways as seen in recent events.
Earlier this month Harold Koh, Senior Legal Advisor to the State Department, resigned in protest of the Biden administration’s use of Title 42 to deport arriving Haitian migrants. Koh’s resignation letter cited that he believed that the administration’s use of Title 42 violated the Convention Against Torture Protections, which guarantees that anyone seeking asylum in the United States be allowed to remain in the United States as their request is processed.
In February 2021, the recently inaugurated Biden administration released a fact sheet featuring their plan to address immigration. As part of this fact sheet, they identified one of their main goals, “Restore faith in our legal immigration system and promote integration of new Americans.” At this point in their tenure, it is hard to say if they are on track to accomplishing that goal. Democrats in Congress are currently facing barriers to pass any immigration reform. Last month, Democrats proposed including immigration reform in the budget reconciliation bill, which would have included a path to citizenship for over 8 million undocumented people already living in the United States. By including immigration in reconciliation, the Democratic majority would have been able to pass the reform without any intervention from Republicans, who hold the power of the filibuster and are adamantly opposed. Unfortunately for Democrats, the Senate Parliamentarian advised against including the measure in the bill. Leaving them with few options that are immune to the filibuster. On Tuesday, October 19, Former Senate Majority Leader Harry Reid called for Democrats in Congress to proceed with including immigration into the reconciliation plan, saying that “If my 2010 reelection to the Senate proved anything, it was that Democrats can fight and win on immigration.” With few options for the legislature to pass immigration reform, a lot of the burden of expectations falls onto the executive branch, who is facing its own set of problems with immigration reform.
It is hard to suggest a prognosis for how immigration policy will impact the legacy of this administration. On one hand, by picking and choosing which Trump-era policies to continue, the Biden administration is treating executive power as a light switch. On the other, there is an effort to separate itself from the previous administration, whose immigration policy Biden characterized as inhumane. That becomes a hard task to accomplish when the judicial branch intervenes on behalf of Trump-era policies. On October 19, The Hill reported that a recent poll conducted in states with upcoming competitive Senate races found that 66% of Democratic voters would be upset if there was no immigration reform. This signals that immigration could be a strong factor for Democrats in the House and Senate facing midterms next year. That said, Donald Trump was elected in 2016 on a platform that emphasized protecting America’s borders, and it is likely Republicans will make a major 2022 campaign issue of the increase in migrants that has occurred on Biden’s watch.
News You May Have Missed
Slamming what he sees as the degeneration of western values and further establishing himself as a leader of right-wing populism and “traditional values”, Russian President Vladmir Putin took to the mic at a forum in Sochi. In his remarks, he railed about “sociocultural disturbances” in the West, from which he would steer Russia away. Critics note that the rhetoric is increasingly used to justify an atmosphere of intimidation and repression for human rights activists and the LGBTQ community.
Pro-democracy protests have been ongoing since June in Africa’s last absolute monarchy, formerly known as Swaziland. Security forces used live ammunition on protestors, and thirty nurses were injured in the crackdown. In response, the nursing union has announced that they will refuse to treat injured police.
While the AUKUS deal has been the most-covered affront to France in recent weeks, reports from the fromage front have French cheesemakers turning up their nose. Slicing through the data on French cheese consumption, Fabrice Collier, president of the Syndicat normand des fabricants de camemberts (SNFC), announced that Italian mozzarella was outselling French camembert —though emmental remained the top overall seller. With the report coming from the SNFC’s big cheese himself, some questioned whether this was a ploy to boost cheese sales — is the SNFC a trade group? a cartel? merely a raclette? — while others questioned whether French culinary traditions were melting under the broiler of globalization. Michelin-starred chef Michel Sarran provided an au gratin hot take, stating that mozzarella was “a product he ‘struggles to consider cheese’.”
The views of authors are their own and not that of CSPC.