Congress Should Create an Economic Statecraft and Security Commission

The United States has a few powerful tools to conduct economic warfare and strengthen its economic security. Unfortunately, many of them operate independently, without coordination, lacking strategic guidance, and sometimes without political leadership having an inventory of them at all. Congress should replicate its recent success with the PPBE Commission and create a similar Commission on Economic Statecraft and Security to further address this problem. This Commission would lend itself to the same bi-partisan, expert-led, professionally staffed, and with unfettered access as other commissions, but focus on finding ways to make economic agencies (e.g., the SEC, CFTC, FTC, etc.) a more useful part of America’s economic security apparatus.

In today’s highly integrated global economy, authoritarian adversaries are using economic warfare to achieve geopolitical ends – warfare that demands fit-for-purpose tools of economic defense and counteroffensive capacities. Economic threats to American security are substantial. No country is more capable of using economic levers to impact U.S. and global security than China, which has explicitly committed to using its economic power to overthrow the American-led global order.

Lawmakers and policymakers in Washington are thinking through how to configure and empower Departments and Agencies across the entire government to play a more meaningful role in the US-China economic competition. While Congress’ Select Committee on the Chinese Communist Party (CCP) has done critical work in identifying the economic security and competition landscape between the US and China – as well as making recommendations on how to prevail – there is continued demand for a much broader response to include other countries and responses beyond new legislative ideas. A Commission would provide a different value than the Select Committee because it would be comprised of former government officials currently serving in the private sector with deep domain expertise. Rather than introducing laws, the Commission would propose changes to rules and regulations and serve as a liaison back to the commercial entities, causing the effects and receiving the harm of economic warfare. It could also look at the broader global economy and regional economic considerations.

Today, much of America’s response to China’s economic coercion, illegal activities, statecraft, and warfare is charged to the Departments of Defense, State, Commerce, and Homeland Security, each with narrow economic authorities, but sometimes overlapping areas of focus and jurisdiction. Law enforcement and the intelligence community sit alongside the federal agencies. However, there are many other economic agencies – such as the Securities and Exchange Commission (SEC), Commodity Futures Trading Corporation (CFTC), Export-Import Bank (Ex-Im), and the International Development Finance Corporation (DFC) – which can and should play a role in America’s broader national security toolkit. These agencies are limited in how much of a role they can play in protecting America by disparate and often outdated authorities. There is also the need for greater coordination and improved efficiencies between the numerous agencies and authorities that should be tasked with defending America’s economic security.

There are a range of legislative and policy ideas being touted regarding how the U.S. can improve its economic security apparatus. Expanding the scope of export controls, implementing outbound investment screening regimes, reconfiguring trade agreements, and introducing more sanctions are among them. Each of these serves a valuable role in America’s economic statecraft and security but are different shades of the same, previously used colors. What America needs to optimize and maximize the utility of the large government it has created is for a bipartisan commission to determine how existing, yet unused tools can be refitted, new laws or rules can solve critical problems, or how agencies previously considered outside of national security can step into the fold. America needs all its departments and agencies involved in addressing our most pressing challenges as it relates specifically to China and more broadly to economic statecraft.

For example, the commissioners could assess how expanding the scope of the SEC to consider whether a company that is financially propped up by an adversary of the U.S. is good for capital creation in the marketplace. The commission would also determine if the CFTC is sufficiently authorized and resourced to address pricing opacity, artificial supply constraints, and market manipulation of commodities by Chinese entities. There are countless examples of how a commission could help Congress better understand what is missing from these organizations as it thinks of ways to reduce the flow of capital into China as it feeds weapons to the enemies of the U.S., harasses our allies and partners, and mismanages its shipping monopoly to the detriment of global trade flows.

David Rader is a senior fellow at the Foundation for Defense of Democracies and the former deputy director of the U.S. Defense Department’s Global Investment and Economic Security.

Elaine Dezenski is a senior director and the head of the Center on Economic and Financial Power at the Foundation for Defense of Democracies. She was formerly an acting and deputy assistant secretary for policy at the U.S. Department of Homeland Security.