Please join the New American Engagement Initiative on Wednesday, January 19, 2022 at noon EDT for a virtual discussion featuring former president of the World Bank and author of “America in the World,” Ambassador Robert Zoellick. The conversation will focus on the role of economic statecraft in US foreign policy.

Economic policy is often overlooked, but trade and economic ties represent a significant portion of US power and hold great potential for expanding US global engagement and enhancing US leadership. How can the United States better leverage its economic might to those ends? Could a better-integrated North America have a competitive edge in the world?

The Future Foreign Policy series features new perspectives to expand the US toolkit to address traditional threats, confront emerging challenges, and enable greater and more robust global engagement with allies and partners. To this end, our invitees bring much-needed diversity into the national security dialogue. The speakers include not only those from traditionally underrepresented groups in Washington foreign policy circles, but also those who represent a range of viewpoints.


Robert Zoellick

Ambassador Robert Zoellick
11th President of the World Bank

Moderated by

Susan Glasser

Staff Writer, The New Yorker


Q&A and closing remarks

Excerpt of Remarks

The following are remarks by Amb. Zoellick. They have been edited for clarity and length.

Trade and US economic power

“[Sanctions] tend to be most effective as a tool when they’re narrowly focused, for example…export controls and limits with a set of technology.”

“People often apply [sanctions] because they’re not sure what else they are ready to do, either in terms of military or other action, but they want to signal their displeasure….In that sense, I don’t think [sanctions] should always be the sole reliance.”

“Strategically, it’s not only a question of [individual] trade agreements or market openings, it’s also a question of who’s developing the rules of the future. I believe you could put together a digital agreement that avoids some of the political problems that the traditional trade agreements have, but also signals United States’ leadership.”

“One challenge for the Biden administration has been that it tends to be reactive in policies, as opposed to trying to take initiatives that are not only good in and of themselves, but that will also give [the United States] additional leverage globally.”

“When the US withdrew from Afghanistan, I would’ve combined it with a huge sort of PEPFAR initiative that would’ve helped demonstrate soft power. It would have been a big effect in Africa and other parts of the world, and we can be pretty good at it. I’m just using these as examples to broaden the notion of tools or economic policy or others so that one doesn’t just see them…as kind of a negative sanctions policy.”

“The phenomena of globalization have not gone away. I mean, if we consider biological security and pandemics, that looks pretty global to me. Climate change issues, international economic issues,…we’re going through probably a huge energy transition, as well as movement away from some extraordinary monetary and fiscal policies that have their uncertainties. So, globalization is here with us.”

“When it comes to the broader question of globalization, the United States, if there’s any country, should be well-positioned to pull the levers of this.”

“The Chicago Council on Global Affairs’ recent polls show about 75 percent of Americans believe trade is good for the United States. On globalization, it was like 68 percent (not 75 percent, but a heck of a lot better than the president’s numbers…).

“But what you see dominating the debate are the fringes. You have a progressive protectionist group and…a reactionary economic isolationist group on the right…but it doesn’t seem to be where the American public is. In fact on a lot of these issues…the numbers have been on the rise…. If you think about it generationally,…most young Americans understand the interconnectedness of what is going on in the world.”

“I think that the United States’ capacities remain enormous,…but let’s play to our strengths: our openness [and] our innovation, as opposed to trying to pull back and rely on walls and barriers. That’s also…the strength of our soft power; that’s the appeal of American society versus authoritarian systems such as China. But you also have to be practical about matching means to ends. This is the tension between having ideals of what you’d like to achieve, and how you can practically achieve them…”

“And this is where I’ll connect the economic piece: the economic foundation is often the heart of that. A, it’s the foundation of America’s strengths. B, it’s the connection with our key allies in Asia and in Europe. Remember the Marshall plan, the economic connection of Europe and integration. Similarly, the rise of Japan and Korea in Southeast Asia. But third, it’s also the way we connect our private sector…it’s not just mercantilism, it’s the notion of private sector innovation or transnational actors. So, it’s important to have some sense of design, but also practically, what can you get done that will further that design?”

[My advice to policymakers is to] “keep your eye on trying to address the practical problems. [Ask] how do you pull together the politics, the diplomacy, the leverage? How do you…use (deal-making or negotiations) to build … confidence in the United States, both at home and abroad?”

On the crisis with Russia over Ukraine, and US-Russia relations

“With Ukraine today, one of my concerns is that Putin has the initiative, Putin is the one who’s defining the problem, and the US and the West are basically in a reactive mode. We signal…we might be able to [impose] sanctions if he takes aggressive action, we’ll really try to penalize him. But even there, there are questions with the coherence with the United States and Europe, and particularly Germany on some of the issues.

“So,…if you’re going to negotiate, it helps to have leverage, and it also helps that you can take the initiative. So one idea which I haven’t heard discussed, but actually the predicate might have been played by the visit of the senators to Kiev over the weekend, would be for the US to work with Canada, which has a large Ukrainian immigrant population, as well as Europe, and to go to the Ukrainians and say “the key to your success, your independence, and your democracy will be to have effective governance and economy,” which they frankly struggle with…and to emphasize that Ukrainians are going to have to come together. If they do, … the United States and its allies will be willing to invest rather significant sums to make sure that Ukrainian democracy works… 

“This has another benefit: it sends the message to Putin, without necessarily applying US military force, that the United States and Europe will back Ukraine…If Ukraine is attacked, Ukraine will get economic support, and this will be a long term struggle to try to overcome Ukraine, which is frankly increasingly anti-Russian.

“I’d combine it with another point of leverage…we should make sure that Ukrainians have the weapons to defend themselves. I don’t believe that the United States [is] willing to go to war over Ukraine. We have to be careful about making threats that we’re unwilling to follow through on. But I do think that we can supply Ukrainians with the weapons (e.g. anti-tank missiles and radars) to warn Putin that this would be a dangerous exercise.

“Now, having said that, I believe you should combine it with the type of offer that the [Biden] administration seems to be providing. [They have said, in effect,]…we are willing to negotiate conventional force limits…we’re willing to discuss nuclear weapons and missiles, which was also done at the end of the Cold War. We’re willing to discuss notifications and exercises, as was done with [Conference on Security and Co-operation in Europe] (CSCE) and [the Organization for Security and Co-operation in Europe] (OSCE). 

“And frankly, our strategic view is that Ukraine should have a constructive relationship with the West as well as Russia…but it has to be done in a negotiated way and give Ukraine some additional basis of strength. What I’ve done…is to suggest how you could use economic policy both to signal and to strengthen Ukraine, as opposed to being in a position where each day we open up the newspaper and see what new move Russia has made.”

The Biden administration’s approach to China

“What has been really missing [from Biden’s China strategy] is an economic initiative, and this is so ironic in East Asia where economics is the coin of the realm.” 

“People in the region recognize that if the United States is not going to signal its economic engagement, then the economic gravity of China will be more influential.” 

“One way [to change the dynamic] would be to rejoin the Transpacific Partnership [TPP], which Obama negotiated….Politically, most people consider that to be a non-starter. Maybe that’s so. But given the anti-Chinese momentum, you might be able to reframe TPP, but this goes to taking the initiative…”

“One of the unfortunate legacies of the Trump era, which Biden has continued a little bit, is that we’re not going to succeed in this competition by imitating China. In other words, we’re not going to succeed by closing ourselves off. America’s strength is its openness: to goods, to ideas, to people, to capital. That’s what makes us both strong and appealing as a society, and…that’s not what we’re doing in our trade policy or our immigration policy…that’s the strength that helped the United States succeed in the Cold War and before the Cold War.”

“Unless you expect regime change in China, you’re going to have to figure out how to work with these parties.”

“We seem to have only one reference point for thinking of how to deal with big authoritarian powers, which is the Cold War. So, people come back with the idea of we have to contain China. Well good luck containing China, and none of your allies are going to agree with you.”

“We’ve learned, over time, that we are best able to defend ourselves and advance [US] interests globally if we can work in partnership with others…

“There’s sometimes a view in the United States that the US can just snap its fingers, and tell people to do this, that, or the other thing. It doesn’t quite work that way. That’s the nature of diplomacy. You want to create an open environment [and] encourage others to move toward that system. Be realistic about the fact that institutional, cultural changes, [and] breakdown of societies, these are not easy issues to overcome.”

“I think the United States is making a mistake…We clearly are frustrated with [aspects of] the Chinese economy….Sometimes we act like we want to break the Chinese economy, sometimes we act like we are worried that it’s going to collapse, sometimes we think we want to push to open it for us. We don’t have a consistent view on this. I think that the Trump approach, which was basically a managed trade purchasing arrangement, went exactly the wrong direction, because it strengthened the state power. And by the way, it fell about 40 percent short of what its goals would be. 

“So, what does that mean? It means that you do need to have a type of relationship with China where you can talk about problems, whether to manage them or sometimes to improve them.”

Multilateral institutions and US power

“Globalization is [still] here with us. The governance of globalization has fragmented and frayed, whether it’s trading regimes, cooperation among major economies or other issues. That…raises the question: when the US thinks about economic policy, or transnational issues such as climate or pandemics, it needs to figure out how it can take initiatives with alliances, coalition partners, the role of the World Bank and the IMF.”

“[Speaking] as a former head of the World Bank, [it’s strange that] US policymakers rarely think about how to draw the World Bank into their policy system, even though we’re supposed to be the ones who have the greatest control and influence.

“Sometimes this debate is framed as multilateralism versus nationalism. I think that is a false distinction: the United States is most effective as a national power through our alliance arrangements, and the economic arrangements. We extend our influence through [these] mechanisms. [But when] we don’t use [them],…or close ourselves off from these institutions, we’re undermining the very instruments of power that we helped to create….The most successful American leaders have recognized that nationalism and internationalism are two sides of the same coin.”

“You’re going to need these institutions. So, the United States ought to try to think about how it can leverage them in a way that supports national as well as systemic interests.”

“You need to be thinking about how the United States can advance systems of rules that serve its security, [as well as its] economic and political interests, but in a very practical way. And I’m not trying to be overly idealistic about what can be accomplished overnight.”

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