Day of Security 2022
Ministry of Interior and Federation of German Industry (BDI)
October 11, 2022
Thank you, Tina Hermes,
Dear Members of Parliament, Excellencies
Dear Ms. Ploeger,
Ladies and gentlemen,
This past year has demonstrated a powerful truth: the essential connection of security to economic stability and prosperity, and in turn to democracy and human rights.
This past year also has demonstrated other more brutal truths: if we fail to match climate rhetoric with climate actions, we condemn ourselves to a hotter, more volatile earth, with worsening disasters and mass displacement.
If we fail to vaccinate the vast majority of people, we give rise to new variants that spread across borders and bring daily life and economies to a grinding halt.
If we waver in our resolve to support Ukraine against Russia’s brutal, unprovoked war, we put our own peace and security at risk.
And if we fail to stand up to the accelerating global challenges posed by state-sponsored, criminal cyberattacks against our governments and economies we weaken our economic resilience and prosperity worldwide.
But I am not going to dwell on what we could do wrong, but on how we can succeed. We succeed when we recognize and activate the powerful link between the strategic security and economic security of our nations. Germany’s political influence and economic presence in Europe and across the globe make it an indispensable partner in acting on this powerful linkage and addressing these global challenges.
The strength of both the U.S.-German strategic partnership, and our economic relationship, are immensely valuable – and we should maximize that value. Germany is one of the United States’ most important trading partners. It is second in the world in foreign direct investment in the United States – that has recently risen from third in the world. Our bilateral investments are mutually beneficial. In 2020, U.S. firms provided the largest source of foreign direct investment in Germany, providing 675,000 jobs to Germans.
For decades, our countries have enjoyed unprecedented peace and increasing prosperity built on cooperation, innovation, and investment that advance basic democratic values: individual freedom, the rule of law, human rights, and democratic sovereignty. These values are increasingly coming under attack, both domestically and worldwide. Nowhere is that more obvious than in Ukraine.
Russia’s unprovoked invasion of Ukraine is as brutal as it is illegal. The war against Ukraine blatantly disregards the democratic sovereignty and territorial integrity of nations, individual human rights, energy and food security, and, perhaps most fundamentally, a rules-based international order, upon which every nation’s citizens depend. Putin’s actions have refocused global attention on the importance of economic resilience and the interdependence of allies. One thing is certain: when we help Ukraine defend itself against Putin’s aggression, we are also defending our own peace, security, and prosperity.
Make no mistake, and I can’t say this more clearly: we are not advocating de-coupling from the PRC – it is not possible and not desirable. The United States welcomes commerce with the PRC on a level playing field – as long as doing business does not undermine our national security, our economic future, or our fundamental values.
The PRC is the only country on earth with both the intent to reshape the international order and the economic, diplomatic, military, and technological power to do so. “Beijing’s vision” as Secretary Antony Blinken observes “would move us away from the universal values that have sustained so much of the world’s progress over the last 75 years.”
Beijing has made its goal abundantly clear. It aims to reduce PRC dependence on foreign companies and develop PRC alternatives to replace them, both at home and in global markets. The PRC won’t do that instantaneously, but that is its specific goal. Specific targets to achieve this goal in a range of “strategic” sectors have been set, using a familiar template:
· First, bring in foreign companies.
· Then use the presence of these companies to help local firms replicate foreign products and services, to include putting PRC managers in charge of subsidiaries.
· At the same time, shower the PRC firms with subsidies, preferential financing, and other benefits.
· And finally, once the local firms are ready, lock the foreign companies out, and ramp up State support even more to help the new domestic champions grab domestic and global market share.
This pattern obviously varies across sectors. Some U.S. and German businesses are currently very profitable in China; and many of our brands are very popular there. We must not let this distract us from the PRC’s stated goals and global ambitions. And again, just to reiterate, we are not advocating decoupling. To paraphrase what Secretary Biden said about our approach to the PRC: We will be competitive when we should be, collaborative when we can be, and adversarial when we must be.
As we have learned recently with Russia – and shame on us if we do not learn, but we are learners after all – we cannot allow authoritarian regimes to use their market position in key raw materials, critical technologies, or essential products to disrupt our economies or to exercise nefarious geopolitical leverage.
The PRC has directed significant resources to establishing a dominant position in the manufacturing of certain advanced technologies, including semiconductors and telecommunications equipment. It has also employed a range of unfair trade practices, including economic coercion, to achieve this position. This is an example of how Beijing deploys a broad range of industrial policies to boost PRC firms over their competitors. It is a global issue.
Many nations are waking up to the risks associated with economic over-dependence on the PRC. What can we do about it? Here are a few practical steps we can take together: diversify critical supply chains; ensure critical infrastructure is free from untrusted suppliers; and develop more robust options for infrastructure finance.
On the supply chain front, the Biden Administration is taking action to build more production capacity at home, and we are also working with allied markets like Germany to encourage similar investments in semiconductors, in critical minerals, in batteries, in medical supplies, and in pharmaceuticals.
And I will give you a great example that is not directed toward independence from the PRC, but instead focuses on the U.S.-Germany alliance. This example comes from my prior position at the University of Pennsylvania. U.S. government-supported research at Penn led to the development of crucial modified mRNA technology in partnership with a start-up firm in Mainz, Germany, BioNTech. BioNTech then went on to partner with U.S. multinational firm Pfizer to provide an effective COVID vaccine. This demonstrates a virtuous cycle of investing and partnering across alliances and the public-private sphere.
The United States has taken a giant step to increase economic resilience by passing the CHIPS and Science Act, signed into law in August. CHIPS will boost semiconductor research, development, and production. It will help ensure U.S. leadership in the technology that is the basis of everything from automobiles to household appliances to defense systems.
It authorizes boosting research and development funding to almost one percent of GDP. This is the fastest single-year percentage increase in 70 years. The CHIPS act will also unlock hundreds of billions of dollars in private sector semiconductor investment across the country, and I would be willing to be there are avenues through which German and the United States will benefit together as well, just like with BioNTech/Pfizer.
These funding opportunities come with strong guardrails. For example, recipients are not permitted to build certain facilities in China or other countries of concern. This is what we call “friend-shoring” – working with allies and partners to strengthen combined economic resilience and integration.
We are committed to investing in our innovation ecosystems, and also to acting with common purpose and in common cause with our allies and partners. Working together, I have no doubt we can – and we will – lead and win a race to the top on tech, on climate, infrastructure, global health, and inclusive economic growth.
Another important step we have taken together is the establishment of the U.S.-EU Trade and Technology Council, or TTC. The TTC is designed to maintain and strengthen our edge in innovation and technology; to set the norms and standards for emerging technologies; and to impose costs on those who break international rules.
October is officially the U.S. government’s Cybersecurity Awareness Month. Cybersecurity is a national security and economic security imperative for our Administration. Public and private sector entities here in Germany and in the U.S. increasingly face sophisticated, malicious cyber activity including state sponsored cyberattacks.
Cybersecurity threats and incidents affect businesses of all sizes, small towns and cities in every corner of our two countries. This threatens the pocketbooks of middle-class families, and cyber incidents – and you know this, but it needs to be emphasized – hit the bottom line of German business, to the tune of $263 billion from 2020-2021.
To secure critical infrastructure, the Biden Administration has launched a surge effort to improve cybersecurity across the electric and pipelines sectors. Over 150 utilities, serving 90 million Americans, have committed to deploy of cybersecurity technologies. We are working with other critical sectors on similar action plans.
A National Security Memorandum establishing voluntary cybersecurity goals clearly outlines our expectations for owners and operators of critical infrastructure. We are working closely with the private sector on the importance of prioritizing cybersecurity as a central part of our mutual efforts to maintain business security and business continuity.
The Biden Administration has also rallied G7 countries to hold the nations that harbor ransomware criminals accountable. We brought together more than 30 allies and partners, including Germany, to accelerate cooperation in combatting cybercrime, improve law enforcement collaboration, and stem the illicit use of cryptocurrency. For the first time in seven years, NATO cyber policy has been updated.
In July, Germany and the United States reaffirmed our close partnership on cybersecurity issues through a bilateral cyber dialogue in Berlin, and it was immensely productive.
Our two countries, along with like-minded partners, have a major stake in shaping the ongoing digital revolution. How can we constructively do so? First, we must make sure that it serves our people and upholds our values. Second, we must do our utmost to prevent cyberattacks that threaten our people, our networks, our companies, and critical infrastructure. Third, we must make sure the internet remains a transformative force for learning and economic growth – not a tool of repression. Finally, we must shape the standards that govern new technology, so they ensure quality, facilitate trade, protect consumer health and safety, and respect people’s rights.
When we fight back against disinformation, when we stand up for internet freedom, and when we reduce the misuse of surveillance technology, then can we make sure that emerging technologies enhance our security rather than threaten it. And finally, as Secretary Blinken emphasizes, “We want to promote cooperation, advancing this agenda, tech by tech, issue by issue, with democratic partners by our side.” We cannot do this alone.
Our strong commitment to work together with our German partners and other allies extends far beyond cyber-security. Around the world, we are working together with allies to build resilient economies and societies that reduce dependence on authoritarian regimes that oppress their people and seek to use their market position for geopolitical leverage.
During the second half of the 20th century, the U.S., Germany, and our allies set an example for the world, as we worked together to promote freedom and democracy. The world now faces enormous challenges. The contours of global security and trade are being re-shaped as we speak; and the choices we make will be more consequential than ever.
How to sum up our choices? President Biden said it best, speaking at the UN last month: “The United States will be unabashed in promoting our vision of a free, open, secure, and prosperous world and what we have to offer to communities of nations: investments that are designed not to foster dependency, but to alleviate burdens and help nations become self-sufficient; partnerships not to create political obligation, but because we know our own success is increased when other nations succeed as well… increasing peace and security for everyone, everywhere.” I know that the German government and BDI and German industry stand together with us as strong allies in this historic cause. And for that – and much, much more – I thank you.