January 25, 2022

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Secretary Antony J. Blinken With Thorold Barker of The Wall Street Journal CEO Council Summit

28 min read

Antony J. Blinken, Secretary of State

Washington, D.C.

Four Seasons Hotel

MR BARKER:  (In progress) at this somewhat busy time.  So we need to start, I think, on the tensions between Russia and Ukraine.  Presidents Biden and Putin have just finished a virtual call.  You’ve talked in the past about your deep concerns about Russia’s renewed plans for aggression in Ukraine with obviously a lot of troops massed at the border.

After this call, are you more or less concerned about the chance that this escalates into conflict?

SECRETARY BLINKEN:  Well, first, it’s great to be here.  Thanks for having me today.  Good to be with all of you.

There’s no substitute for the President speaking directly to President Putin.  At the end of the day, in Russia especially, President Putin is the decision-maker.  And it was very important for him to hear directly, straightforwardly, candidly from President Biden about, yes, the deep concerns that we have about the accumulation of Russian forces on the border with Ukraine, other plans that they seem to have to pursue possible renewed aggression against Ukraine – to hear directly about those concerns, but also to hear directly about the consequences that would flow from any renewed acts of aggression on Ukraine as well as the alternative to going down that path, which is diplomacy.

So the President laid that out, again, very straightforwardly, directly.  President Putin – and I don’t want to characterize in detail what he said – shared his perspective, some of his concerns as well.  And my hope would be that based on this conversation and hearing directly and clearly from the President that that will affect President Putin’s calculus going forward.

MR BARKER:  And is there anything that he said or came from the call that would give you reason to believe that?

SECRETARY BLINKEN:  I think we’ll see with actual developments in the days and weeks ahead.  The President said that in the first instance, de-escalating the current situation would be important, so we hope to see Russia take no additional aggressive steps toward Ukraine.  In addition, we’ll be talking closely with all of our partners and allies.  In fact, the President after the call with President Putin was immediately on the phone with the presidents – and then prime ministers, as the case may be – of the United Kingdom, of France, of Germany, of Italy to debrief them.  He’ll be speaking to President Zelenskyy of Ukraine in the coming 20 – day or so.  I spoke to him just yesterday.  And we will see how Russia chooses to respond.

But I think the clarity with which the President laid out not just our concerns but the consequences, and also this better path forward, should resonate with President Putin.

MR BARKER:  So if he was very detailed about the consequences, is cutting the – Russia out of the dollar banking system on the table as a response to this?

SECRETARY BLINKEN:  Well, I’m not going to get into the details of possible responses except to say that, as the President made clear and as we’ve said before, there are high-impact economic measures that would be part of what we would look at doing.  I think Russia is well aware of the universe of the possible, or even probable, if they went down the path of renewed aggression, and they have to factor that into their thinking about their plans.

MR BARKER:  Okay.  And can you give a sense of whether the U.S. is willing to provide weaponry to the Ukrainian army at this point?

SECRETARY BLINKEN:  We have, for some period —

MR BARKER:  Or more weaponry?

SECRETARY BLINKEN:  For some period of time, we and others have provided defensive assistance to Ukraine.  I think the President made clear that depending on what Russia does or doesn’t do in terms of continuing to escalate, in terms of actually pitting new acts of aggression against Ukraine, further assistance would no doubt follow, as well as, depending on what Russia chooses to do, further bolstering the security of NATO countries, including those closest to Russia.

MR BARKER:  So having massed so many troops on the border and put so much equipment on the border, is Putin going to need something to de-escalate this?  And is his desire for some form of guarantee around Ukraine joining NATO something that is at all on the table for you?

SECRETARY BLINKEN:  We have been very clear that NATO’s door remains open, will remain open to those who aspire to membership and who can meet the criteria.  And in a way, this gets at the point that there’s something bigger even than Ukraine that’s at stake here, and it really goes to some basic principles of the way the international system functions or should function.

And so for example, we’ve made very clear that one country trying to tell another what its choices should be, including with whom it associates, that’s not an acceptable proposition.  Changing the borders of another country by force, that’s not an acceptable proposition, because what that does is it undermines the entire international system, the rules-based order that we have invested in, we’ve been living by, and we think has done much to promote peace and security.  And so if those basic principles go challenged and are allowed to happen with impunity, that’s going to undermine the entire system.  That’s why this is bigger than – bigger even than Ukraine.

MR BARKER:  And do we – and but will he need something to reverse course, do you think?

SECRETARY BLINKEN:  We can —

MR BARKER:  Is there something you can give him to reverse course?

SECRETARY BLINKEN:  It’s not a question of giving President Putin or Russia anything.

MR BARKER:  Okay.

SECRETARY BLINKEN:  But if Russia has security concerns, they are always free to express them, and we’re always prepared to talk about them.

MR BARKER:  Okay.

SECRETARY BLINKEN:  And I think our allies and partners feel the same way.  We have a NATO-Russia Council.  That’s been a good vehicle for sharing concerns.  Unfortunately, Russia has pulled back from that.  We have the OSCE and other institutions where we can talk about both common challenges but also concerns.  If Russia is willing to engage in those kinds of institutions, I think that’s an important path.

Similarly, the Minsk agreements – the best way forward in terms of dealing with the crisis in eastern Ukraine and the Donbas is to actually implement those agreements.  They were signed by both Russia and Ukraine in 2014 and then again 2015.  They haven’t been fully implemented by either side, although principally by Russia.  And so if both countries, principally Russia, are actually willing and committed to making good on their obligations under Minsk, that’s certainly a path to resolving what’s happening in eastern Ukraine.

MR BARKER:  Okay.  And at the moment – we’ll go on to China in one – in one second.  But there are three big challenges at the moment.  There’s Ukraine, which you just talked about; there’s China and Taiwan; and there’s Iran.  Is there any sense that you’re being tested by three different countries at the moment partly because of what happened in Afghanistan and that people are really testing the States to see what you as an administration but also the American public is willing to stomach in terms of response to these aggressions?

SECRETARY BLINKEN:  I think each of these things is happening of their own right, so to speak.  I mean, think of it this way:  When Russia invaded Georgia, there were more than 100,000 American troops in Afghanistan and Iraq.  That certainly didn’t stop them from going into Georgia.  And so I think you have to look at each of these situations on their own merits.

It’s also true that in ending America’s longest war and making sure that we’re not sending a third generation of Americans back to fight and die in Afghanistan, that frees up a tremendous amount of resources and focus for other challenges.  And what we certainly know from other countries that may seek to challenge us is that it was not necessarily bad for them we were bogged down in Afghanistan with the prospect of remaining there for another five or ten years.  It’s a very different strategic equation when we have actually ended the longest war and can focus on other things.

MR BARKER:  So if you’re freed up to do that a year into your job, what do you think the appetite of the American people is to re-engage overseas if necessary at this point?

SECRETARY BLINKEN:  Oh, I think the appetite is significant, and there’s a reason for it, and in fact, I think we’ve seen when we disengage what happens, because here’s the challenge that we have.  If we’re not engaged, if we’re not leading, then one of two things: either someone else is likely to be, and probably not in a way that actually advance the interests and the values of the American people; or, maybe just as bad, no one is, and then you have a vacuum that tends to be filled by chaos and law of the jungle before it’s filled by anything else.  So I think Americans understand that and feel that intuitively.  Maybe they can’t speak to it specifically with regard to an individual challenge, but they feel that.

The other thing is this.  I think most of us know, recognize either intuitively or explicitly, that when it comes to the things that are really having an impact on the lives of all of us, like climate change, like COVID, like the impact of emerging technologies on all of our lives, even the United States, as powerful as we are, can’t effectively deal with those challenges alone.  Climate – we’re 15 percent of global emissions.  Even if we get everything right at home, we’ve got to deal with the other 85 percent of emissions.  COVID – it’s trite, it’s a cliché, but it’s powerfully true and we just re-experienced it:  No one is safe until everyone is safe.  Even if everyone were vaccinated in the United States, as long as there are variants out there that are multiplying, it’s going to come back and bite us.  So we have to do what we’re doing, which is to lead on the global COVID effort.  I could go down the list.

But that’s why at the heart of things I think that most Americans want to see us engaged, want to see us leading, want to see us respected around the world.  And that is what we’ve invested in these last 10 months.

MR BARKER:  So we’ll go on to those relationships in one second, but just quickly on China a couple of things.  Number one, the U.S. has been more visible in its support of Taiwan in recent months – at least it seems to be – and it was – for example, it was invited to the virtual conference later, the summit of this week, Summit of Democracy.  But can you just explain how far you’re willing to go to actually defend Taiwan’s independence given China’s stated aims over the longer term?

SECRETARY BLINKEN:  Well, I think the challenge that we’ve seen emerge is that Beijing has clearly decided that it’s not content with the status quo that has long prevailed when it’s come to Taiwan.  And that’s actually been something that over the last 40-plus years we’ve handled well in a way that preserves stability, that’s preserved peace, that has allowed Taiwan to – and Taiwanese to flourish, to be a strong democracy, a strong economy, a strong contributor to the global commons.  And Beijing seems to be now taking a different approach.

We’ve been extremely clear, as we have been for a long time, that in the context of our “one China” policy we will abide by and implement the Taiwan Relations Act – by the way, something that when the President was in the United States Senate he supported and voted for.  And that means making sure that Taiwan has the ability to defend itself.

MR BARKER:  But is that – is that feasible without the U.S. being beside it, ultimately?

SECRETARY BLINKEN:  Our commitment is to making sure that they have the ability to defend themselves.  We are continuing to make sure that that’s the case.

MR BARKER:  Right.  So you’re not explicit as to whether they have to defend themselves alone or whether they would have in the event —

SECRETARY BLINKEN:  What I can say is that if Beijing were to decide to try to change the status quo unilaterally by force, it would be a very serious mistake.

MR BARKER:  Okay.  Just on China as well, you’ve talked about, and I’ll quote:  “It is not our purpose…to try to contain China or…hold China down…we…are trying to do is to uphold the international rules-based order.”

So what does that rules-based order look like, given China’s rapidly increasing power, its very different view on individual freedom, on government involvement in the economy, and other things?  We had General Milley here who was talking about them wanting to change those rules.  So what does it look like, in your view, five years out?

SECRETARY BLINKEN:  Well, I think this is one of the major, if not the major challenges of our time.  In my estimation, China wants a world order.  It benefits from a world order.  The challenge is that the world order that China would prefer is a profoundly illiberal one, as opposed to a liberal one.  And we have a very profound stake in upholding the order, making sure to the best of our ability that countries – whoever they are, wherever they are – actually play by the established rules, the norms, meet the standards.

Now, one of the arguments we hear from Beijing is that this order, this construct, is a Western order, Western construct.  It’s not.  It’s profoundly grounded in the United Nations Charter, in the Universal Declaration on Human Rights, both of which China has signed onto.  And this gets to the point that you’re also making.  Our purpose is not to contain China, to hold it back, to stop trade and investment, to decouple.  That’s not the case.  Our purpose is to uphold the international order, the international system that we’ve benefitted from – and I would actually say that China’s benefitted from – when it’s being challenged.  And if China’s doing the challenging, we’ll stand up.

But in doing that, we are going to be much more effective if we’re doing it in concert with allies and partners who are similarly aggrieved by some of China’s actions.  In the economic sphere, for example – alone, we’re what, 25 percent of world GDP?  If we’re acting in concert with allies and partners in dealing with some of, again, China’s actions that we object to, we might be 40 or 50 percent of world GDP.  That’s a much heavier weight and is likely to have more impact.

MR BARKER:  But if you’re supporting your world order – or the world order that exists, and China has a very different view of that – are we not destined for some form of decoupling to occur, whether you want it or not?  That – how does that reconcile without that?  We’ve seen today, for example, we read a story in the paper about China sharing less data, less academic connections.  I mean, aren’t we beginning to see that happen anyway?

SECRETARY BLINKEN:  Look, I think there are aspects of that, but we also have to put this in a larger context.  I don’t think there’s a simple bumper sticker that sums up the relationship or the direction in which it’s heading.  Because as we’re looking at it, we see that it has, clearly, strong competitive aspects – which is fine as long as we have a roughly level playing field to compete.  It still has and needs to have cooperative aspects, because there are problems that affect all of us that China needs to be in on solving, not staying on the sidelines, like climate.  And it has increasingly adversarial aspects.  And in each of these areas – whether it’s competitive, whether it’s cooperative, whether it’s more adversarial – if we’re fully aligned with other countries and partners, we’re going to be much more effective in dealing with it.

There’s another aspect to this that’s so critical and that we’ve focused on these first 10 months.  And, again, this goes to how we can most effectively deal with whatever challenges China poses: making the investments in ourselves, in our own competitiveness.  For many years —

MR BARKER:  So just – just – we’ve got a bunch of CEOs in this audience.  Should they be pulling their supply chains back from China?  Should they be not investing so much and being so reliant on China, given the changes that are happening?

SECRETARY BLINKEN:  We have to be – we have to be smart about supply chains.  We – and here’s what I mean, and this also goes back to what I said a minute ago.  Again, our purpose is not to decouple.  It’s also not to say, whether to allies and partners or to ourselves, that trade and investment is a bad thing.  It’s not.  It’s a good thing – again, if it’s basically done on a level playing field.  But there are very specific critical areas that have strategic importance, security importance, where we have to be on guard.  And why is that?  Because, for example, when it comes to Chinese investment, there is no distinction between a so-called private enterprise and the state.  If a private Chinese enterprise makes the investment, the state has access to whatever that enterprise has access to.

And so in particular areas, we have to be on guard about that.  So do other countries.  And that’s why when we’re thinking about this, what we’re looking at is not, as I said, ending trade and investment at all.  It is – and not putting a low fence around everything.  It’s saying in certain specific areas we need a high fence around a very discreet piece of land.

MR BARKER:  So that inherent incompatibility – you’re talking to your allies at the moment, you’re trying to shore up your alliances around the world – can you explain – at the moment you’re inviting people to a Summit for Democracy.

SECRETARY BLINKEN:  That’s right.

MR BARKER:  The EU is a big ally, but Hungary is not invited.  NATO, big ally; Turkey is not invited.  How did that work when a bunch of your allies around the world aren’t democracies?  Can you talk about how that structure actually sits together?

SECRETARY BLINKEN:  So the summit, which’ll – which starts this week, is a really important moment, and it’s an important moment for this reason – and then I’ll come to the specific question.

MR BARKER:  Sure.

SECRETARY BLINKEN:  It’s no secret we’ve seen a democratic recession over the last decades, countries in every part of the world falling back on the basic benchmarks of democracy.  We’ve experienced our own challenges when it comes to our democracy.  And I think President Biden sees this as an important moment to try to shore up the democratic world, because one of the contests that we’re in is the contest between autocracies and democracies.  And the case that autocracies are making is that they can deliver more effectively for their people, that the paralysis that we see in some democracies, the polarization that we see, the slowness to respond, means that they can more effectively answer the needs of their people.

MR BARKER:  And that makes sense.  But if you’re Turkey and not invited, and you’re Hungary and not invited, and you’re Saudi Arabia and you’re an ally effectively, what are you meant to think?  What are you going to make of that, being excluded from it?

SECRETARY BLINKEN:  Well, first I would point out that this is a Summit for Democracy —

MR BARKER:  Sure.

SECRETARY BLINKEN:  — not “democracies,” by which I mean we have countries coming from different parts of the world, and it’s virtual this year.

MR BARKER:  Sure.

SECRETARY BLINKEN:  So we want to make sure that there’s representation across the board, but it’s not a singular event.  There is going to be a year of what we hope will be action following this; another convening, hopefully in person next year; the ability for other countries to join in based on commitments that they make, that we’re all making, to trying to both strengthen our democracies at home as well as our capacity to defend democracies under challenge around the world.

MR BARKER:  And just on that, bringing those democracies together, obviously, as you’ve said, at home there is a lot of polarization that needs to be solved.  Even in traditional relationships like the EU, you’ve got the EU and the UK at each other’s throats all the time.  I mean, do you see any role you can play in helping to actually coalesce those relationships at a time when, as you say, there’s this much bigger challenge at play?  And yet, if you look at things like the EU, people don’t seem to be seeing that bigger strategic challenge.

SECRETARY BLINKEN:  Well, look, we’ve had just in our own relationship with the EU, I think, a significant revitalization of that relationship.  The summit that President Biden held with our EU counterparts in and of itself was a revitalization, but what’s flowed from it, including the establishment of the Trade and Technology Council – it had its first meeting in Pittsburgh a couple of months ago that I took part in, along with our Secretary of Commerce, the U.S. Trade Representative, and our EU counterparts – is actually building very concrete convergence on a host of critical issues, including supply chain resilience, including investment screening mechanisms, including export controls, including dealing with distorted practices of non-market economies.

And so in the relationship with the EU in and of itself, I think we’re seeing much more work together and moving in the same direction.  At the same time, if we happen to have partners and friends who are striving —

MR BARKER:  (Inaudible.)

SECRETARY BLINKEN:  — for a good relationship and we can help, sure, we’ll try.

MR BARKER:  Okay.  Before we stop, I do need to ask you quickly about Iran.  We’ve had this stall in talks.  They’ve also made a lot of progress towards getting material necessary for a bomb.  You’ve already got very, very strong sanctions in place.  What do you do next when you’ve already gone to those degrees from an economic perspective?

SECRETARY BLINKEN:  Well, I’m not going to negotiate in —

MR BARKER:  Yeah, sure.

SECRETARY BLINKEN:  — public or show our hand in public, but —

MR BARKER:  But I guess what I’m trying to say is:  At what point do you just give up on the talks completely?  And you’re obviously under pressure from Israel to take more serious action.  Can you just talk about how you see that situation?

SECRETARY BLINKEN:  We continue to believe that the best way, the most effective way, to resolve the nuclear challenge posed by Iran is through diplomacy and through a return to mutual compliance with the so-called JCPOA, the Iran nuclear deal.  Given all of the alternatives – and there are alternatives – it remains the best way to actually answer the problem.

What is deeply, deeply unfortunate is that an agreement that was in place and was working, and it put Iran’s nuclear program in a box for a long duration with the most intrusive inspections and transparency regime of any arms control agreement, was effective, working, and of course, we pulled out of it.  I think that was a terrible, terrible mistake.  Iran has used that in the last couple of years, despite the maximum pressure being exerted against it, has used that as justification for turning back on the nuclear program and moving very, very deliberately toward having an incredibly dangerous nuclear capacity, spinning more sophisticated centrifuges, accumulating 20 and 60 percent enriched uranium, all the things that the – and also making it very difficult for the inspectors to do their job, all of which was prohibited by the agreement and was in force.

So here’s the challenge.  As we continue to believe that a return to compliance with the agreement is the best way forward, that is not an infinite prospect, because what we will not allow is for Iran to, in effect, tread water at talks and not come forward with any meaningful and serious propositions for finally – for resolving the outstanding issues to returning to compliance while at the same time advancing its program.  So the runway —

MR BARKER:  Sure.

SECRETARY BLINKEN:  — is getting very, very short on that.  We had a resumption of the talks, as you know, a week ago in Vienna, the seventh round, after this interruption of about five months.  The Iranians did not come to the table with a seriousness of purpose necessary to get back into compliance.  I think the talks will resume.  We’ll see – having heard not just from us indirectly but directly from our European partners, as well as from Russia and even China, that this is not the way to move forward, we’ll see if they take a different approach.  But the time for them to do that —

MR BARKER:  Are you hopeful?

SECRETARY BLINKEN:  “Hopeful” is probably not a word I’d use based on what we’ve seen so far.  And again, the runway is short.

MR BARKER:  Okay.  Secretary Blinken, we’re out of time.  Thank you very much, indeed.

SECRETARY BLINKEN:  Great to be with you.  Thanks.  (Applause.)

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In recent decades, spectacular advances in technology have transformed everything from how we do business to how we communicate to how we treat and cure diseases. But because of technology, we're also struggling with privacy, security, and other concerns. Perhaps the most urgent challenge we face is our nation's deteriorating financial condition and growing fiscal imbalance. The United States now confronts four interrelated deficits with serious implications for our role in the world, our economic growth, our standard of living, and even our national security. The first deficit is the federal budget deficit, which in 2005 was around $319 billion on a cash basis. The second deficit is our savings deficit. Too many Americans--from individual consumers to elected officials--are spending today as if there's no tomorrow. So, if we aren't saving at home, who's been underwriting America's recent spending spree? The answer is foreign investors. And that brings me to America's third deficit--our overall balance-of-payments deficit. Finally, there's our fourth deficit, and it's probably the most sobering deficit of all. What I'm talking about is America's leadership deficit.Our population is aging. At the same time, U.S. workforce growth is slowing. This means that just when increasing numbers of baby boomers are starting to retire and draw benefits, there will be fewer workers paying taxes and contributing to social insurance programs. Importantly, retirees are living longer but wanting to retire earlier. These developments are going to put huge strains on our pension and health care systems. With the end of the Cold War, we face new security threats, including transnational terrorist networks and rogue states armed with nuclear weapons. On an accrual basis, our fiscal 2005 deficit was $760 billion, up $144 billion in the last year alone. Even more troubling, the federal government's long-term liabilities and unfunded commitments for things like Social Security and Medicare benefits have risen to more than $46 trillion. That's up from about $20 trillion just five years ago. The new Medicare prescription drug benefit, which may be one of the most poorly designed, inefficiently implemented, and fiscally irresponsible government programs of all time, has added more than $8 trillion to this sea of red ink. And these numbers don't even take into account the bills that are coming from rebuilding New Orleans and the Gulf Coast or future costs associated with Iraq and Afghanistan. Our quality of life in many ways has never been better. But America also faces a growing and unhealthy gap between the haves and the have-nots. And as some of you may know firsthand, we're also facing a range of quality-of-life concerns in our personal lives, including underachieving public schools, gridlocked city streets, and the stresses of caring for aging parents and growing children all at once. At the same time, our nation's health care system is in critical condition, plagued by growing gaps in insurance coverage, soaring costs, and below-average results on basic measures like medical error rates, infant mortality, and life expectancy. America is simply spending more than it's producing. In 2005, the U.S. trade deficit hit about $726 billion, up more than $100 billion from the prior year. While our own saving rates have plummeted, savings rates abroad have not, and overseas money has been pouring into the United States. Thanks to the high savings rates in China, Japan, and elsewhere, it's been relatively cheap for Americans to borrow. But there's a catch, and it's a big one. Increasingly, we are mortgaging our collective future, and some of our leading lenders may not share our long-term national interests. Not enough key policymakers are concerned about America's growing fiscal imbalance and the other long-term challenges that I've mentioned. As a result, there have been pitifully few calls for making tough choices or fundamental reform. If our nation is to be prepared for the challenges and changes that are coming, government transformation is essential. The challenges I've discussed aren't partisan issues, and the solutions won't be either. Nothing less than a top-to-bottom review of federal programs and policies is needed to determine if they are meeting their objectives. This will also help free up resources for other needs. Congress and the President need to decide which policies and programs remain priorities, which should be overhauled, and which have simply outlived their usefulness.
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