National Security Advisor Sullivan Argues For Integrating Economic And Security Agendas

Jake Sullivan, the president’s National Security Advisor, ventured beyond his daily routine last week, delivering an ambitious and thoughtful address advocating the integration of U.S. domestic economic policies with the country’s global security agenda. Sullivan, a former top aide to then-Secretary of State Hillary Clinton during the Obama administration, harkened back to the post-World War II era, when the U.S. led the shaping of a new international order. The economic relationships the U.S. helped build, he said, “lifted hundreds of millions of people out of poverty,…sustained thrilling technological revolutions, and...helped the United States and many other nations around the world achieve new levels of prosperity.”

Sullivan called for a “new Washington consensus,” one aimed at addressing four contemporary challenges. First is the hollowing out of America’s industrial base and the massive outsourcing of production to global supply chains. Second is a failure to adapt to new geopolitical and security competition based on the mistaken assumption that global economic integration would make China and Russia more responsible and committed to the rule of law. Third is the climate crisis and the need for a just and efficient energy transition. Fourth is what Sullivan calls “inequality and its damage to democracy.”

Sullivan underscored progress that already is underway, such as large-scale U.S. investments in semiconductor and clean-energy production, which have surged 20-fold since 2019, fueled in part by the bipartisan CHIPS and Science Act, signed by President Biden in August 2022. He also outlined the Biden administration’s desire to mobilize greater U.S. and international economic support for less developed countries around the world.

Consistent with Sullivan’s framework, there are three areas where the Biden administration can and should do more. The first is to press U.S.-based companies to help ensure the safe and reliable mining and processing of critical minerals like cobalt, which Sullivan calls the “backbone of the clean energy future.” Cobalt is a key ingredient in the lithium-ion batteries that power most electric vehicles. Seventy percent of the world’s cobalt is in the Democratic Republic of Congo. As much as 30% of that total comes from informal or artisanal mines, where more than 200,000 people toil, often in unsafe conditions. That workforce includes an estimated 25,000 children.

U.S.-based companies, including automakers like Tesla, are beneficiaries of this system. Most pretend that they can avoid artisanal-mined cobalt, which is a fallacy. Instead, they need to accept responsibility and work together to “formalize" those mine sites, meaning acknowledging that artisanal sites are part of their supply chains, securing the perimeters of those sites, and applying human rights and mine safety standards. The Biden administration should use its convening power to bring together the largest U.S. buyers— automakers and electronics firms—and push them to work cooperatively with the government of the DRC to formalize artisanal mines.

Second, as Sullivan proposed, we need to “ensure that the supply chains of the future are resilient, secure, and reflective of our values.” Consistent with this commitment, the Biden administration needs to address the fraught supply chain for solar panels, also key to our clean energy future. Though the U.S. developed the technology for solar panels years ago, today they are mostly produced in China. In fact, 98% of the silicon ingots and wafers, essential components in solar panels, come from Xinjiang province in China. More than one million ethnic Uyghurs are being detained in Xinjiang, and forced labor in that area is endemic.

Last year, Congress overwhelmingly passed, and the president signed into law the Uyghur Forced Labor Prevention Act (UFLPA). It prohibits the import of any products made in Xinjiang or with components from that region absent a showing that there was no forced labor. Because the Chinese government prohibits any independent monitoring there, U.S. law now effectively bars all products coming from Xinjiang, including solar panels. U.S. officials are scrambling to help promote alternative venues for mineral production in South Korea, Australia or Vietnam that could supply manufacturing in the U.S. Developing these alternatives will take time. To comply with the law now and at the same time to incentivize this transition, the administration should seek from Congress a three-year national security waiver to the UFLPA, while pursuing other avenues to challenge China’s abuses of the Uyghurs. This would allow the importation of solar panels while the U.S. seeks to foster new mining and production capacity.

With respect to Sullivan’s fourth challenge, addressing economic inequality, there is much more the administration can do, especially by increasing attention to the rights of workers in global supply chains. This year, the German government began to pave the way, enacting a new global supply chain law, which requires large German companies and others doing significant business there to ensure that labor rights are protected throughout their global supply chains. Other European governments are enacting similar “mandatory due diligence” laws, as they will soon be required to do by the European Union.

The U.S. should follow suit. As a first step, the Security and Exchange Commission should promulgate a reporting requirement on “human capital” that extends to the global supply chain, and requires a full accounting of employment and compensation. In 2021, SEC Chairman Gary Gensler promised to release a draft rule on this topic for comment by 2022. It has been delayed, undoubtedly because a companion rule requiring corporate reporting on carbon emissions was met with massive corporate resistance.

Sullivan’s broad framework makes sense, linking domestic and global policies, and economic and security concerns, to reflect today’s political realities. The administration now needs to apply this framework and to lead by example.