US

Max Bergmann: Center for American Progress

Foreign Interference and Russia 2016 Election Special.

Max Bergmann is a senior fellow and director of the Moscow Project at the Center for American Progress, where he focuses on European security and Russia policy. Previously he served in the U.S. Department of State where he focused on political-military affairs, arms control and international security. He was also speechwriter to Secretary of State John Kerry. A graduate of the London School of Economics, Max joined Misha Zelinsky to discuss foreign interference in democracy, what the Mueller Report uncovered about the US 2016 election, whether the Congress should impeach the President, how Russia interfered in the Brexit referendum, and how democracies can fight back against hostile actors. 

Misha Zelinsky:             So, Max, welcome to Diplomates. How are you?

Max Bergmann:            Good, how are you?

Misha Zelinsky:             I’m well, and we are obviously doing this by the miracle of the internet. I think it’s about the end of the day in DC and the start of the day here in Australia, so welcome to the show.

Max Bergmann:            Thanks so much for having me.

Misha Zelinsky:             And so, I was thinking about the best place to start. Now your background is foreign interference. You have a background in the US State Department and you’re working in foreign interference at the Center for American Progress. I suppose firstly, before we get into the specifics, why does foreign interference matter at all? Why would we at all be concerned about this?

Max Bergmann:            Well, I think it matters even more now than it has in the past and it’s partly because of how our politics work now. It’s how people get their information, how the Internet has transformed people’s lives, has made, I think modern societies particularly vulnerable to foreign interference in a way that wasn’t really the case, I think, in previous eras, at least not to the same degree. Partly because, now, it’s very easy to reach people to connect with people, to influence different segments of the population and so, the way foreign governments are interfering, I think is particularly important because for our Democratic politics, both in Australia and the United States and everywhere there’s a democratic country, it’s important that that be an internal conversation. It’s always going to be influenced in some ways by the broader world, by broader dynamics, but when you start having foreign governments saying, “We are going to deliberately get involved and find a way to tip the balance, put our thumb on the scale in a particular direction,” where you start undermining the very legitimacy of democratic politics. And the way we live now with this modern network society, it’s increasingly easy and available to foreign countries to try to put their thumb on the scale.

Max Bergmann:            And so, I think it’s a particularly pernicious threat to open societies, to open liberal democratic countries where our openness is our big great advantage and what these foreign governments are trying to do is really undermine that and take advantage of it. And so I think it’s a real worry, it’s a real threat and a real concern and something that all democratic societies now really have to pay attention to.

Misha Zelinsky:             And, of course, the most famous example, there are other examples we could get into, the most famous example that’s been debated lately is the 2016 US presidential election and the interference of the Russians there. Before we get into the Mueller report and the political dimensions of all this, what do we know specifically? What are the uncontested facts in this space?

Max Bergmann:            Well, so there’s a lot, actually of uncontested facts and Mueller’s 400+ page report I think, most of that, almost all of that, is largely uncontested. But I think when it comes to the foreign interference dimension, in particular, now I think the way the Mueller report has been interpreted, I think, particularly outside of America and abroad is, well it didn’t quite have the smoking gun to nail Trump. I don’t actually think that’s quite true, but the more important part of the Mueller report for foreign countries, for foreign democracies, is the first 50 some odd pages where he outlines a Russian conspiracy against the United States. We forget that Mueller has brought all these criminal charges and what Mueller effectively identifies in Volume I, in the first 50 pages, are two distinct Russian lines of effort to influence American politics. And they’re quite successful in 2016.

Max Bergmann:            And that first line of effort was to social media, through the creation of the Internet Research Agency. This is sort of a pseudo-private oligarch funded operation in St. Petersburg. And what does it do? It was trying to influence American, the political discussion on social media, facebook, on Twitter, this is where we hear about the troll farms, the bots, which are automated accounts. And what the Russians effectively figured out is how to game the American debate, how to game the social media companies by, if you amplify content, if everyone’s retweeting the same thing, if you create automated bots that is all retweeting racist content, some of that racist content gets amplified. Lots of people then look at it. He gets promoted. And so that was one major line of effort. Where the Russians were trying to interfere both to sow discord in American politics, basically amplify our racial divisions, amplify aspects of American political debate that they wanted to promote, and then the other aspect was to simply promote Donald Trump. There were a lot of Russian accounts that were promoting Donald Trump. And this was not a Mickey Mouse sized operation. It had roughly 80 people devoted just to the United States, just to the 2016 election with a multimillion dollar budget.

Max Bergmann:            Now if you look at the Clinton campaign’s digital operation, this is the presidential campaign of Hillary Clinton, she had roughly 80 people devoted to digital. So you see what is, in effect, a Russian online campaign, digital campaign, devoted to influencing American politics. And probably, it’s not going to be as effective as the Clinton digital campaign, but, on the other hand, this is the campaign, on the Russian side, willing to say things that normal political campaigns wouldn’t do, push certain messages, attack candidates in ways that people that were had to be true to who they were, had to represent themselves wouldn’t say.

Max Bergmann:            And so the second line of effort, so the first line is the social media campaign that Mueller outlined. The second line of effort is the hacking. Now this is basic intelligence operations. A Russian military intelligence unit within the Russian GRU that was devoted, not to hacking the State Department or hacking a diplomat’s phone, but to hacking an actual political campaign. And hacking the personal email accounts of John Podesta, who is the cofounder of Center for American Progress, who I should disclose the place that I work at, but also, penetrating the Democratic Party, which they were able to successfully do.

Max Bergmann:            When we think about political campaigns, political campaigns, especially in the American context, are basically like small start up companies that suddenly balloon overnight and have all these young twentysomethings working for them. And so they are quite actually easy in some ways to penetrate or should be. Actually, the Clinton campaign took cybersecurity incredibly seriously. So the Clinton campaign actually wasn’t breached. It was a personal email account of Podesta and it was the Democratic Party. But so the Russians broke in, stole tens of thousands of emails from both the Democratic Party and from John Podesta. And not only that, they also stole a lot of stuff, like their field operations research, basically their battle plans for the campaign, and we don’t know what they did with that. We know that they release the emails into different waves through Wikileaks, which was an online transparency organization that felt no bones about releasing content that was given to them by Russian intel and release that right before the Democratic convention in July, which was the first release. And then the second release, which came in October was sort of the October surprise of the election.

Max Bergmann:            And so it had a huge impact on the race, in a race that was so close there is no doubt that when you look at the impact of both those lines of effort, it definitely swung the election, tilted the election in Donald Trump’s favor. So that’s in the Mueller report and I think it’s something that all countries, that all democratic societies should look at those, especially the first 50 pages, to learn about, hey, if this could happen in the United States, how could this also happen here in our country?

Misha Zelinsky:             And I suppose I should apologize on behalf of the Australian people for the role that Julian Assange played in Wikileaks. We won’t get into that too much, but that was a really good run down of the 400 page report and a two-year investigation, but I think you’re right. One of the things that’s fascinating to me is that, you’re right, the question of the smoking gun that if Mueller wasn’t able to find a recording between Vladimir Putin and either Donald Trump himself or someone in the Trump organization, campaign, that this was all going to be a farce of an investigation, that it wasn’t going to be that… One of the things that I think would be good for you to unpack would be all the people in the Trump campaign, that worked on the campaign, that have since been indicted and arrested and charged, and in some cases, imprisoned. So if you could give us some idea, a quick rundown of the rap sheet, I think that would be interesting.

Max Bergmann:            Yeah, no sure. The Mueller investigation was probably the most successful special counsel investigation that we’ve ever had in the United States. And the report that he produced is the most damning thing ever written, most damaging official document ever written about a President of the United States. And as you mentioned, the Mueller investigation has led to guilty pleas of Donald Trump’s campaign chairman, Paul Manafort; his deputy campaign chairman, Rick Gates; his personal lawyer, Michael Cohen; his first National Security Advisor, Michael Flynn; as well as a Foreign Policy Advisor, a guy name George Papadopoulos. It has produced a tremendous amount of indictments and charges also against Russians and Russian affiliated individuals. So this was an investigation that found a lot of lawbreaking, found a lot of crime.

Max Bergmann:            I think when it comes to Donald Trump, what we see here is, in fact, a classic counterintelligence investigation, that what Mueller found was a lot of smoking guns. What he didn’t find was Donald Trump pulling the trigger. When we think about famous, if we go back to the Cold War era or post-Cold War era, where the US was busting a lot of Russian or KGB agents that were embedded in the CIA, the FBI, we have the famous Aldrich Ames case and the famous Robert Hanson case, what happened in both of those, the FBI caught them at the dead drop. They got them in the act of committing this crime. In this case, Mueller was only appointed to investigate a year after the election almost and what seems pretty clear is the FBI was very slow on the uptake in terms of Russian interference during the actual election. Some of this was actually the fault of the Obama administration not being super focused on the threat of Russian interference at the time. It caught everyone off guard. And so that gave people a lot of time to delete messages, to delete emails, to erase things on their phone and coordinate stories.

Max Bergmann:            So what we see in the Volume II of the Mueller report is the crime, is the crime that implicates the President of the United States, his obstruction of justice. And we have the famous story here in the US of Al Capone who was this famous mobster during the prohibition era in the 1920s and how did Al Capone go down? Well, of tax evasion. No one says that Al Capone wasn’t this famed mobster, he was avoiding taxes because he was this famed mobster. But it was the tax evasion that got him. And I think what we see here is Robert Mueller, the reason why there’s 198 pages of Volume I devoted to Trump’s Russian contacts, the Russian contacts with Donald Trump in the Trump campaign with Russia is because Mueller was describing a story, a story of something that Donald Trump wanted to hide, wanted to conceal, wanted to obstruct from the investigators that were looking into it.

Max Bergmann:            And I think in some cases Donald Trump was successful. But there’s also a lot of smoking guns. Maybe I’ll just run through them quickly. One, they have the campaign chairman, Paul Manafort meeting with someone who the FBI believes is a Russian intelligence agent. But it’s not only the FBI, it’s also Paul Manafort and his deputy, also believe this individual Konstantin Kilimnik is connected to Russian intelligence. And they meet with him on August 2 in the midst of this campaign. Throughout the election, they’re sharing polling data, internal polling data from the campaign. This is sort of the crown jewels of the Trump campaign. This is confidential information about how their polling numbers, the messages they’re looking to push, and they also shared the campaign battle plan, the states they’re looking to focus on. And they’re sharing it with Konstantin Kilimnik, who they know is sharing it with Oleg Deripaska, Who is this Putin connected oligarch who’s been sanctioned by the United States. And why to they want it shared with Deripaska? I think it’s fairly clear that they knew Deripaska was sharing that with the Kremlin more broadly.

Max Bergmann:            So we have a very unique chain of events to Russian intel from the trunk campaign to Russian intel with very few actors in between. Now Mueller identified all that. His problem was Paul Manafort was a cooperating witness, decided to not cooperate about why he was providing that information to Konstantin Kilimnik. And so Mueller withdrew the cooperation agreement, Manafort’s now going to jail for a very long time and the question is why did Manafort not want to disclose that information? And I think the conclusion is pretty clear. It’s because he was sharing that information with the intent that it was going to get to the Russian government.

Max Bergmann:            Now there’s other examples of Donald Trump’s advanced knowledge and awareness of the WikiLeaks releases. In fact, not only that, instructing his campaign to establish a back channel to WikiLeaks knowing that WikiLeaks was getting the content for the releases from Russian intel. And why did they know that? And this is the other bombshell, because the Trump campaign was told about it. The Trump campaign was informed by this Maltese professor, Joseph Mifsud, in London that the Russians had “dirt on Hillary Clinton” that they had thousands of emails. And this was in April and May before it was known to the world.

Max Bergmann:            So what we see are all these sort of… this awareness on the part of the Trump campaign about what the Russians were doing, this willingness to share internal Trump campaign data and information that would be very useful to the Russian campaign that they were running, that I mentioned earlier. And so Trump’s awareness of this crime, Russia was doing and his willingness to say go out, collude, connect, meet with the Russians. The Trump campaign effectively ran toward the crime. And that’s what Mueller outlines.

Max Bergmann:            Now he says, I wasn’t able to find any tangible agreement, tacit or expressed, that could amount to a conspiracy between the Russian efforts and the Trump efforts, but he did find a lot of collusion and then he found a lot of obstruction of justice in the Volume II.

Misha Zelinsky:             And so, I’m keen to turn to, I suppose, where this goes from here. But just going back a step, you talk about, you outlined a very concerning and alarming series of facts, the concerning part, I think, is some of this was known. The Obama administration certainly knew. The FBI had some concerns. Why was there no red flag going up before the election? Why was this, in effect, sat on and we didn’t hear about it until after the fact?

Max Bergmann:            So I think there’s a few reasons and it’s a great question. I think, one, I think everyone was just caught off guard. We’re the United States of America, no one messes with our internal democratic politics. It’s just not a threat that we expected or anticipated, partly because we can deter foreign actors from doing that by the very nature of us being the world’s largest superpower. And so I think there was a little bit of just lack of imagination that occurs in every major intelligence failure, whether it’s 9/11, whether it’s Pearl Harbor, of just not anticipating how a foreign actor would actually go about attacking you.

Max Bergmann:            When the DNC, the Democratic Party was hacked, and it became known on June 14, 2016, it was actually reported in the Washington Post that day, the initial response from US government or thought process was that, well, this is happened before. It’s not unusual for foreign countries to want to hack a political party, political campaign. Barack Obama’s campaign was hacked by the Chinese in 2008. Lots of Washington think tanks are hacked all the time by China, by Russia. And so it was sort of viewed as this was traditional intelligence gathering, this wasn’t about influencing events, it was about, you know that the Russians wanted to know where the Clinton campaign may be going or where the Democratic Party may be going on certain issues. You could very quickly scratch the surface there and say, well that didn’t quite add up based on what they were doing. I think that was the basic sense at the time.

Max Bergmann:            That all changed on July 22 when the Russians, through WikiLeaks, release the DNC emails right before the Democratic convention. This was a huge deal. This resulted in the resignation of the head of the Democratic party, Debbie Wasserman Schultz, at the time, it left a massive rift between the Clinton and Bernie supporters. And so suddenly, at that moment, there is a realization in the US government that they have a problem.

Max Bergmann:            After this point where the FBI, who had sort of been slow on the uptake of conducting counterintelligence investigation gets information from a good Australian diplomat in London who had actually had drinks with George Papadopoulos in early May where Papadopoulos who’s a foreign policy advisor to Trump, told him that the Russians had this dirt and were going to release it. This information is passed to the FBI. The FBI opens a counterintelligence investigation. But then what we see… Donald Trump’s stance during the election was problematic. Because he was saying, dismissing the notion that Russia was involved, it meant that if President Obama got involved and said the Russians were doing this, they were worried it would be seen as partisan, they were worried it would be seen as tipping the scale on behalf of Hillary Clinton.

Max Bergmann:            And so what we saw, in September and October, was the Obama White House going to the Republicans in Congress, Mitch McConnell and Paul Ryan, who were the two leaders in Congress, and saying, “Hey, let’s issue a bipartisan statement.” And both of them turned it down and said no. We think this would be partisan. And so what we saw was actually a breakdown, I think, it wasn’t just a failing on the Obama administration, it was also a failure on behalf of the Republican Party. We have political parties to act as guardrails for our democracy and here was a Republican Party failing to step up.

Max Bergmann:            Now that being said, there’s no doubt that the Obama administration’s response was way too weak, was way too timid. They should have gone out and spoke out more loudly than they did. When they did try to speak out, well, there was two things that happened. One, they tried to pick up the red phone and tell the Russians, the red phone was used during the Cold War to avert a nuclear crisis, this was actually picked up where John Brennan, the head of the CIA, told his counterpart, “Cut it out. We know you’re doing this.” And Obama told Putin at the G 20 summit, I believe in China.

Max Bergmann:            The second thing that happened was they decided to go public. On October 7 about noon, this was a Friday they released from the head of the Department of Homeland Security the head of the director of national intelligence, a statement about Russian interference. Then a few hours later the biggest bombshell of the election happens, which is Trump’s Access Hollywood tape comes out and this is where Donald Trump is basically bragging about committing sexual assault on a hot mic. And then 29 minutes after that tape is released, we have this good Australian, Julian Assange, of WikiLeaks, releasing at 4:32 PM on the Friday on October 7, the John Podesta emails. And so, suddenly announcing to the public that yes, Russia was doing this just got completely buried in the news cycle and no one paid any attention.

Max Bergmann:            So I think what we have is a failure of imagination, slow in how to respond and how to react, being hamstrung by Republicans, and finally acting and then it getting consumed in the broader news environment. So that’s a pretty long answer to the simple question, but I think anyone in the Obama administration who says they would do it exactly the same as they did it is lying. I think everyone looks back, and also has the assumption… The last thing I should say is everyone assumed she was going to win. So it’s easier not to do something. It’s always easier not to act than to act, especially when you could say well she’s going to win it.

Misha Zelinsky:             They certainly weren’t alone in predicting that Hillary was going to win. I was certainly on board with that prediction as well. So I think… Thank you for that really concise answer.

Misha Zelinsky:             So I suppose she sort of touched on a bit of the politics. I think it’s a good time, because this has now become political but first there is a National Security element discuss, but there’s a political dimension to this.

Misha Zelinsky:             The Mueller report itself has become politicized. So I’m curious of your take, the Republicans are effectively now saying through the Attorney General William bar put out a summary of the report, effectively saying that case closed. The president is saying he’s exonerated. Some Democrats think it’s time to move on. Is it time to move on from this in your opinion?

Max Bergmann:            No. As you and your listeners could probably tell, I’m fairly committed to this topic. No, I think it’s the exact opposite. I think the last few months of inaction on the Democratic side of the house, the stonewalling from the White House, have been a real disservice. I think there’s a real need to act. I think what’s broadly happened here is, to step back for a minute, the last two years the Democrats were in kind of a tough spot actually. They were wanting to let the process play out, not prejudge an ongoing criminal investigation. Now Donald Trump was not doing that. Donald Trump was working the rest. Donald Trump was basically running, for the last two years a campaign against being impeached. He was telling the American people there’s nothing there, this is all a hoax, no collusion, no collusion, no collusion. I didn’t do this. I didn’t do this. And so he sent a very clear message while the Democrats’ message has been where basically protect the Mueller investigation, wait for Mueller, which isn’t really a clear message.

Max Bergmann:            And I think that continued after the Mueller report where what you now have is, I think a Democratic Party that wasn’t prepared for the Mueller report to be as damaging as it was. And so, partly because of that, they’ve also had to view this through a more political lens of is this a smart political step to move forward with impeachment because, perhaps if we move forward on impeachment, then Donald Trump will be able to say that we’re just obsessed with impeaching him and the public will view us as not really focused on their interest but focused on just getting a Donald Trump.

Max Bergmann:            I don’t really view it that way. I think that what this is… That impeachment is bad, that being impeached is bad. It’s not something anyone wants. It’s fairly simple and that if the Democrats in the house move forward on impeachment, that will send a real signal to the public that Donald Trump’s actions have been unacceptable. I think they’re walking… There’s all these other competing domestic political issues as well, but I think that’s the basic thrust here is that it is important for House Democrats to hold Donald Trump accountable for the action that’s outlined in the Mueller report, because failure to do so, I think essentially means that what the Mueller report then will become is, that sort of a new guide, it’s a new precedent for how you can actually collude with the foreign intelligence service in running a political campaign and get away with it. And I think that’s a terrible precedent to set, especially getting into a 2020 election cycle.

Misha Zelinsky:             So what about the facts. Not to make the arguments for the House Democrats, because you’re certainly more plugged into the Democratic Party than I could hope to be, but the argument seems to be, yes the House could impeach Donald Trump now that there’s a majority since the midterms. Then the Republican Senate would likely exonerate, given the way that you require a super majority to remove a president and the Senate to find him guilty of high crimes and misdemeanors. So is that a relevant point? Do you think that’s relevant? And would that make the case for exoneration greater?

Max Bergmann:            No, I think that’s a very relevant point. And that’s the argument that House Democrats are making saying that this is a symbolic exercise. Here’s the thing, is that every piece of live legislation that Democrats in the House are passing as well is a symbolic exercise because there’s this roadblock called Mitch McConnell who runs the Senate and is the Republican leader and is not going to pass any legislation that goes forward and actually impeaching… My counterargument would be, look, Republicans in the Senate have been like frightened turtles over the last two years. They haven’t wanted to talk about this. It has been something that they are very glad not to have to be confronted with. The problem, I think… I think that if Democrats were to move forward and actually impeach and then move it forward to the Senate and there would be a trial in the Senate. That has happened very rarely in American history. Bill Clinton, it happened in 1999. Richard Nixon, we never got to that point because he resigned. And then it happened in 1866, I believe, with Andrew Johnson, after Abraham Lincoln.

Max Bergmann:            So this would send, I think, a big signal to the country. It would be treated very seriously in the press. And then you’d be forcing Republicans in the Senate to stand up and to defend the actions and conduct as outlined in the Mueller report. And I think where it makes sense for me to do this is I think you’ll actually get some Republicans to join forces with Democrats. No I don’t think you’re going to get the two thirds majority to remove Donald Trump, but I think you could see a real strong bipartisan rebuke. And that will also be very useful for a Democratic candidate opposing Donald Trump in 2020 that can then run on the argument that Donald Trump is, in fact, a criminal and should be going to jail. That strikes me as a strong argument to make in 2020.

Max Bergmann:            And if you get the 2020, and it doesn’t poll well, you can always just run on other issues. But, to me, the conduct outlined in the Mueller report just cannot stand, and I think the political calculation here, the political machinations don’t make a lot of sense to me, number one. Number two, even if they did, I think there’s a duty on the part of members that took an oath to uphold our Constitution to act. We’re not a parliamentary system. We only have one way to remove a leader and that is through the impeachment process And the impeachment process-

Misha Zelinsky:             As an Australian, mate, I should probably say that removing leaders is not without its problems, but sorry not to cut you off.

Max Bergmann:            That is a good flag. On the other hand, not removing leaders that are hugely problematic, having to sit out and wait for four years, is also a problem. And the designers of our Constitution back in 1770s, 1780s, put this in there for a reason. And they put it in there for a guy like Donald Trump who is basically used corrupt means to gain the office, who has committed high crimes and misdemeanors while in office in the obstruction of office. So if you’re not going to use it now, then when? And I think not acting just sets an incredibly terrible precedent for the future of our democracy.

Misha Zelinsky:             And so you talked about Watergate. The Clinton comparison, I mean I think it’s an interesting one given when you consider the relative conduct, I think it speaks for itself, but the Watergate ones more instructive because that was a Republican president in the end who while was not impeached, was removed because the Republicans Senate abandoned him or the Republican senators. Do you have any confidence that that’s the case given where the Republican Party is at now? And is it not relevant political calculus? You’ve talked about some may be coming over, but is that enough, really, in the…

Max Bergmann:            So the Nixon example, I think is one that we… in America’s not been totally internalized. It’s viewed through this, All the President’s Men movie with Robert Redford and Dustin Hoffman where, aha, Woodward and Bernstein got it and then Nixon resigned fairly quickly. But it was a two-year process. It was very similar. It was the slow burn of information that came out. It wasn’t until the very end that political support for Nixon collapsed. Nixon’s approval ratings had gone down throughout the process and Watergate helped push them down, but Republicans actually stood by his side up until the very end. And suddenly the dam broke and it broke completely and Nixon saw that there was no future. And so I think the… Here’s what I would tell the Democrats in the modern age is that you don’t know unless you try. You don’t know unless you push forward.

Max Bergmann:            And why did Nixon’s support collapse? Because House Democrats were moving forward with an impeachment inquiry. It was the impeachment inquiry which then elicited new information, get more information out there, the tape broke, but it was that that was the forcing function that put pressure on Republicans to justify it. And the political results through the Democratic Party in the 1974 election, it was the biggest wave election, I think, in modern history where Democrats won by 17% and two thirds majority in the house. And then, the only Democrat to win in the period between 1968 and 1992 was Jimmy Carter in 1976. And why did he win? Partly on this backlash, this anti-Watergate backlash.

Max Bergmann:            And so I think, if I were the Democrats, I would look at that example as the high-end. Nixon resigning essentially confirmed everything that everyone was saying about him. And then you’d look at the ’98, ’99 Clinton scandal. And what happened in ’98 was Republicans lost five seats in the house. This wasn’t this huge backlash against Republicans for pushing it, for pushing impeachment. And then George W. Bush won in 2000 based off of basically restoring honor and integrity back to the White House. He ran against Bill Clinton’s image.

Max Bergmann:            If the Clinton case is the backlash example of pursuing an unjustified impeachment process and it only, the backlash is that minimal, losing five seats, having George W. Bush sneak through in the controversial election in 2000, okay. And then you look at the 1974 and if that’s the high-end, where we are, at the very least, with the Mueller investigation, why I think it’s a bigger scandal than Watergate, the political dynamics are different. We’re much more in the Watergate space than we are in the Clinton space. And I think if Democrats push this and pursued it and actually made this a big political issue, I think it would bear political fruit for them, but they’re very reticent to do so.

Max Bergmann:            And I think there’s a number of reasons for that that go beyond there’s a larger psychology here. Democrats don’t like to run a scandal. While the Republicans, their whole, what drives them when they run political campaigns is to search for political scandal, for Clinton emails, for some sort of Obama-ish scandal that they could make a big deal out of. The Democrats like to talk about policy and are very wonky in some ways lovable and sort of boring in that sense. And that’s, I think, really hurting them here.

Misha Zelinsky:             That’s an interesting point. The progressives don’t tend to dial up the outrage on those types of things, they like to make it about the issues. We’re often outraged about the issues but it’s a really valid point. The 2020 election is anyone talking about this to your mind? We just had the debates, do you think this is getting enough air time because there’s been significantly a pivot to perhaps the issues health education, etc. Do you think that this is getting enough air time or are the candidates still mind waiting to see what that House does and see if there’s a tailwind there?

Max Bergmann:            Well actually the Democratic political candidates have led on this. I think Elizabeth Warren, in particular, was the first major political figure to come out in favor of impeachment. She was then followed by a number of other Democratic presidential candidates. And most of the top-tier candidates have all come out calling for Donald Trump to be impeached and for the House to move to an impeachment inquiry. So I think they’ve actually led. The debates that occurred, I was sort of surprised that there weren’t more questions related to impeachment. There was one on the first night, not on the second, in that this hasn’t played a bigger role in the questioning.

Max Bergmann:            Some of that is because it’s a lot of the folks agree internally, but I am a little surprised it’s hasn’t been a bigger issue. I think it’s now been a few months since the Mueller report has dropped. It shows that how if you don’t react and if there’s no outrage, the outrage will decline over time, people’s attention spans are short especially with Donald Trump in the White House and there’s a scandal every 15 minutes. But we’re about to have a big thing happen in a couple weeks where Robert Mueller is going to testify, or is scheduled to testify, and I think that’s going to put this back into the news. I think it’s going to put more pressure on House Democrats. And what we’ve been seeing is this trickle of more and more House Democrats are coming out for impeachment. So the numbers are sort of ticking up and I think the big question is…

Max Bergmann:            August is sort of this mythical month actually in American politics where there’s no news, boring eras, like the 1990s, August will be dominated by news of shark attacks and other things. But it’s also a month that because it’s a limited new cycle there’s not much happening that one issue could sort of dominate and perhaps the one issue to dominate might be Russia, and I think that’s one of the big, the Russian investigation. In 2009, it was the Tea Party movement sort of developed then. Two years ago it was Charlottesville. It was Donald Trump’s racism dominated. So we’ll see what sort of drives the news in August. And if it drives the news, this investigation drives the news, I think you could see House members coming back from that long recess, having been home speaking to their constituents, and say okay, I can’t look my constituents in the eye and not move forward on this. We’ll see.

Misha Zelinsky:             You’re right, I think Mueller testifying will be interesting because in his report, as I understand it, he’s effectively said, you can’t indict a sitting president and the mechanism for that as you pointed out is an impeachment through the Constitution. So that case might come out and that evidence as well.

Misha Zelinsky:             We talked a lot about US, there are obviously other democracies in the world and quite a bit of interference, particularly in the European context. What sort of work are you doing looking at the level of Russian interference or foreign interference in the European elections or particularly in the Brexit election? How concerning is that, given that you talked about driving to those schisms that exist within societies?

Max Bergmann:            Been doing a significant amount of work looking into those. I think one of the things that when we think about, at least in the Russian case, Russian interference, is that they look to exploit the gaps that our domestic politics make available to them. In the United States there’s lots of gaps in terms of the financing of campaigns of money… And the Russians were able to identify those gaps. I think in the Brexit case, for example, we see a lot of the same similarities. So a lot of the things happening in the United States were happening in the UK.

Max Bergmann:            I think one of the things that’s most troubling about Brexit is that while we’ve had this two-year long investigation and discussion and focus on Russian interference that has resulted in the Mueller report, and the one thing the United States can firmly say is we know Russia interfered in the 2016 election. The one thing that you still cannot say about Brexit, or at least that is not accepted in UK politics, I think you can say it, but is not accepted as conventional wisdom in UK politics is that Russia interfered in the Brexit Referendum. And to me, there’s very little doubt that that occurred. And you just have to look at the way Aaron Banks, who is the main financier of one of the Leave campaigns, what we see is exactly the same thing that was happening with Donald Trump. Almost exactly at the same time.

Max Bergmann:            Donald Trump was being offered this Trump Tower in Moscow, this too good to be true business deal and at the same time he was then running for office in which, and Donald Trump was using his pro-Russian statements throughout the campaign as a way to advance his business deal that involved working with the Russian bank, involved coordinating with the Kremlin. And we see the same thing with Aaron Banks, where he essentially he’s being offered this too good to be true deal to take to run the merger of these gold mines in Russia, something that would be well beyond his depths. It would be incredibly lucrative. He’s having meetings with the UK and the Russian ambassador with in the UK. He’s in talks with a Russian bank and so you see very similar, a lot of similarities. You also see the Russian online social media arm, the Internet Research Agency didn’t just start operating in 2016. It started years before that. And Brexit would be something that the Russians would have definitely worked to promote. There’s a lot of digital, computer scientists that have looked at the Brexit referendum and have seen the same sorts of social media activity in the UK during that period that we saw in the United States.

Max Bergmann:            But the UK has not conducted a similar sort of investigation. And when they have, when the Parliament did, it found a lot of there there, referred Aaron Banks to the National Crime Agency, the FBI equivalent, and it raised a lot of questions about some of the digital campaigns, one being digital companies, Cambridge Analytica, who worked on the Trump campaign who is now out of business because of the practices that it used. And so, I think that is a particularly worrying case of lack of actual energy and resolve on behalf of British authorities to actually protect their politics from Russian interference.

Misha Zelinsky:             It would be a significant win for for Vladimir Putin and Russia to split apart the EU. That’s a foreign-policy aim of the Russian government.

Max Bergmann:            Yeah, I think particularly, one of the things that occurred, I think, after 2014 is pre-2014, so pre the Ukraine crisis, the EU was seen in Russia as a second-tier thing. NATO was the major focus. But what the Ukraine, the Maidan Revolution was about, which then resulted in the collapse of the pro-Russian, pro-Kremlin government of Viktor Yanukovych, It was about whether Ukraine was going to have an economic agreement with the EU. And Russia was offering an economic agreement with Russia, the Eurasian union as they described it. And Yanukovych decided to go with Russia. It led to mass protests in the streets, which then an occupation of Maidan Square, which lasted for months. And so here was a revolution started, essentially by EU bureaucrats, not realizing, basically, how far they were going and offering Association agreements with the EU. And the power of the EU that countries like Georgia and Ukraine wanted to be part of the European Union. They looked at countries like Latvia, Estonia, Lithuania, Slovakia, their neighbors, that were part of the EU and said we want that.

Max Bergmann:            And so, think after 2014, you see a particular Russian focus on how do we undermine the European Union. One of the ways, you cultivate and you build up and you amplify the far right leaders of Europe and seek exits, Brexit. Brexit would totally be in Russian interests, but then you also see it in France with Marine Le Pen. This is probably a much clearer example Marine Le Pen’s National Front party was funded by a Czech Russian bank, they got around €10 million to operate. There was lots of online social media support from Marine Le Pen’s campaign and attacks against Emmanuel Macron in the 2017 election. And then, of course, what did the Russians do? They also hacked Macron’s campaign and released the emails a la the same thing we saw in 2016. And Marine Le Pen was running on an anti-EU, anti-NATO, pro-Russian platform.

Max Bergmann:            And we’re seeing it now in Italy with Matteo Salvini government where he’s potentially a recipient of millions of dollars from Russia, or at least his party is. And so the playbook is very straightforward. It’s the idea that you can corrupt politicians. And so why not corrupt Democratic politicians, especially those on the far right who, in fact, seem more corruptible than those on the left and seek to cultivate them and amplify them and try to promote their candidacies. It’s been particularly effective and I think it’s one thing that I think were seeing in Europe, one positive, is that there’s been a strong backlash actually against Brexit and so the EU seems, in some ways, more solid than it was a few years ago in 2016.

Misha Zelinsky:             One of the things you talked about and I think is relevant to basically all these issues that were having with foreign interference is this question of openness versus closed systems. Up until now, the theory’s been that openness wins liberalism wins markets, tends to win, democracy wins. As you said, they’re driving, foreign interference creates schisms in society. They’re already pre-existing but the openness And messiness of democracy and the openness of the media, the openness of social media, in particular, seems to now being a tool used against liberal democracies in the West and Europe and other parts of the world. And so how do democracies guard against that, that openness, without losing a sense of self?

Max Bergmann:            It’s a great question. I think it’s in some ways the question of our age. Now I think step one is to have a degree of confidence in the success of open systems. I think in some ways close systems are more afraid of us then we should be of them. There’s a reason why Vladimir Putin, in particular, is striking back at the West. It’s because he is incredibly nervous of a color revolution, of a liberal uprising happening within Russia. Why would that happen? It’s because Russian citizens decide they want to have more of a democratic society. They want to be more open, more like us. And so Putin needs to make, and I think China as well, democratic societies seem unattractive. And so, I think it’s one where we need to have a degree of confidence.

Max Bergmann:            The second thing is, I think we need to be aware of this challenge, of this threat, of the fact that we done all this business, we need to pivot, reassess that after the 1990s we assumed that if we opened our economies and opened our societies to autocratic governments it would change them, and it wouldn’t change us. And, to a degree, we were right. It has changed autocratic societies, but it hasn’t changed them to the degree we thought it would. In this glide path to democratization, I think we have to reassess. And in some ways it’s also changed us. So it doesn’t meet that we need to close off an autocratic societies, but I think we need to be more guarded. We need to have a real focus on transparency within our democratic politics, really focus on our rules and legislation, foreign interference, foreign registration, other areas where how do we make sure that yes, we can have foreigners here in our society, but they can’t covertly influence our politics. So that remains, I think, a critical challenge.

Max Bergmann:            I think the other larger aspect is that it means that we need to go back and look at our democratic allies and partners and value them much more and work together much more closely, look to have our economies of democratic societies linked together more closely. As opposed to having it be just generally open, we should focus on like-minded partners, democracies. And so, I think that is both a broader challenge in terms of… And also protecting ourselves in our political systems.

Max Bergmann:            And the third component is that I think we do need to go on offense a bit more. There does need to be a bit more of pushing public diplomacy of competing more with autocratic states, particularly in areas like the Balkans and areas in Asia and Africa where authoritarian countries are moving in, offering lots of resources, working to corrupt those countries and turn them away from liberal democracy. And we need to counter that.

Misha Zelinsky:             One of the other areas, and we talked a lot about safeguarding systems and making sure that the institutions themselves are safe, but I think one of the areas that we need to address as societies are the schisms that you’re seeing between rural and urban, between educated and uneducated, between the economic uplift that people are experiencing or not experiencing, these are relatively present in most advanced economies and advanced democratic societies. And I think there’s probably a need for us to address the schisms themselves. We can stop them from being exploited but the best way to stop them being exploited is to probably try to remove them as best we can. I’m sure you probably agree with that.

Max Bergmann:            Yeah, no I think that’s dead on. And I think one of the ways that foreign interference works is that it can tap into discontented populations within society. And it’s particularly problematic when a large portion of your democratic population is extremely discontent. A lot of the discontent is over the different economic inequalities, economic setbacks that have occurred, divergence between urban and rural areas I think is particularly something we see very strongly here in the United States. We used to talk about red states, blue states, but now it’s really blue cities, red country. The dynamic is very clear. And so part of that is because, and part of the resentment of globalization that were seeing, resentment of liberalism is that from rural areas where economic growth in the United States has flat-lined over the last 20 years and, in particular, were particularly hard-hit by the great recession. Cities like Washington DC have thrived, actually in the past 20 years and have become super expensive, have become plugged into the global economy, to the global intellectual architecture, the hub of ideas that are flowing around the world. And I think there’s a resentment of that and a willingness on the part of large parts of the population to vote for anyone that will change the system, that will break the system.

Max Bergmann:            So one immediate remedy for addressing foreign interference, and it’s complicated, but is to try to address that broader discontent. And if your public is not as discontent about the current situation, then democratic societies will thrive, you’ll create less space for foreign interference. And so I think that is a major focus, should be a major focus of policymakers. I think one good thing we’re seeing here in the Democratic political discussion is a lot of focus on that in a way that hasn’t actually occurred in modern memory.

Misha Zelinsky:             I completely agree. Democracy needs to deliver. It’s not purely just of voting process of itself. They need to deliver for people. If it delivers for people than the rest takes care of itself. The one thing I was curious to take you on, we talked a lot about Russia. There’s been an enormous focus from the administration on the question of China and the use of Huawei potentially moving liberal democracies and the concerns about its links to the Chinese Communist Party and whether or not… It’s a company in Australia that’s been banned from joining the 5G network. Do you see perhaps… Is China the main game when it comes to interference? We talk about it a lot in Australia. It’s tended to dominate the discourse a little bit in the US, but from a public policy point of view, how do you see the threat posed by the use of Huawei and the use of Chinese interference?

Max Bergmann:            I think it’s a really significant threat. I think it’s one where… Sometimes the Trump administration isn’t wrong. And the problem is we’re used to them just being wrong all the time that when they’re right it becomes a little bit… It can fall on deaf ears. But I think this is super problematic because if you control the broader telecommunications architecture of a democratic society and that’s being controlled by an autocratic government that has its own political designs and intentions, I think that the potential for abuse is huge. Now, we’ve worried in the past about Russians hacking into the communications links of sea cables under the sea, of satellites of intercepting all sorts of communication. And so if you basically allowed China to control your information technology backbone structure, I think you’re potentially exposing yourself, not just from a potential foreign interference, China’s potential ability to observe and monitor Australian society or whatever society they’re in, but in a national security contingency, in an event where there’s a conflict or if something were to happen, then you’re already compromised and how to combat that threat and challenge.

Max Bergmann:            And so I think one thing for countries to assess, especially if you’re Australia, is what is the potential contingency like? What side would you want to be on, and I hope that would be, I think as we see the new sort of geopolitics of the day, it’s clear that the US and China are, I think, hopefully will always avoid conflict, but they’re going to be two competitors and I think the alliance between the US and Australia, and I saw this at the end of the Obama administration, has sadly actually come to supplant the special relationship with the UK and its importance. That’s partly because of the UK’s own actions of austerity, of Brexit, but it’s also because Australia’s now pivotal role in a pivotal region. It’s also Australia’s partnership throughout the years with the United States. And I think part of that is our democratic values that are so closely aligned. We speak the same language, we have similar forms of government, we’re democracies. And I hope, and I think that is something that… So if Australia when it’s making a geopolitical decision here, sees that as the trend line to be with the United States or to make a choice, I don’t think China’s the right bet.

Max Bergmann:            Now it’s hard to make that case when we have Donald Trump in the White House, someone who, I think, is not quite an attractive figure and makes America, I think embarrasses the country a lot, but we are a democracy. We’ll have an election next year and hopefully, at least from my perspective that will pivot. I think having a Chinese company control something so vital is something to really be wary of.

Misha Zelinsky:             You’ve ended on an uplifting message there. And as one of my famous clunky sort of segues, you managed to bring it back to the Australian American alliance So I can pivot out of that to say, the last question I ask every guest, foreign guests, who are the three Australians that you might reluctantly, perhaps there’s not enough of us, but that you would bring to a barbecue at Max Bergmann’s place? I should give you up the fact that you were desperately googling famous Australians so I’m curious to see who you came up with in the top three Google searches?

Max Bergmann:            No, the problem is I got distracted. And I wasn’t really able to go through it. I think so… Famous Australians. Well I mean I think I would have to have dinner with the former Australian ambassador to the UK, Ambassador Downer, who met with Papadopoulos. So I think that’s a no-brainer given my role. I’m sort of friends with another Australian ambassador who used to be posted here in the United States who would also get me drunk quite frequently, but I won’t say his name because I don’t want to get him in trouble… So the famous Australian NBA player Bogarts would be one. And then, oh Tim Cahill of soccer, also played for the New York Red Bulls, who’s not my team, I’m a DC United supporter, but Tim Cahill seems like a great guy. So I think that’s, that’s three.

Misha Zelinsky:             Alexander downer, Tim Cahill, and Chris Bogut at and an unnamed ambassador who would be bringing the booze, I assume. So that sounds like a good barbecue.

Max Bergmann:            Yeah… Often times Americans are bad at dissecting American accents, often times from our movie stars were all be like that person’s not American? Or that person is not British? So I know there’s more Australians among us that should be brought to the dinner party.

Misha Zelinsky:             Will there’s a whole heap of Australians that are actually New Zealanders that we claim, like Russell Crowe. So there’s a whole system in place where if you become famous your Australian, if you’re notorious you become a Kiwi right?

Max Bergmann:            Yeah.

Misha Zelinsky:             Anyway, look thank you so much for joining the show, Max, it’s been a pleasure. And thank you for your time.

Max Bergmann:            Yeah, my pleasure, thanks for having me.

 

 

Ambassador Curtis Chin

Ambassador Curtis Chin served as the US ambassador to the Asian Development Bank.  In doing so, he became only the fourth US ambassador of Chinese heritage. As one of the world’s foremost experts on the Asia-Pacific region, Curtis now serves as the Asia Fellow of the nonpartisan Milken Institute and works with a range of startups and impact funds in Asia. Curtis joined Misha Zelinsky for a chat about the US-China trade war, what a deal looks like for both countries, the future of global trade and governance, and how the world should respond to countries that want to break the rules.

TRANSCRIPT

Misha Zelinsky:                  Curtis Chin, welcome to Diplomates. How are you?

Curtis Chin:                           Hey, doing well. Great to be with you.

Misha Zelinsky:                  And I should just reference for the audience, that we’re doing this through a web chat interface, so you’re currently in Bangkok, which is three hours behind Sydney time. So thank you for joining us. You’re an American in Thailand, but thank you for joining us as an international guest.

Curtis Chin:                           Delighted to be with you. I think though with so many of us, it’s one city one day, another city the next day, but very clearly, I spend most of time here in Asia, really Southeast Asia. And I’m with the Milken Institute out of Singapore, but yeah, from the US, but back and forth between the US and Asia-Pacific. So great to be with you today, chatting about Asia-Pacific, sharing some thoughts on Australia, the rest of the region, and some of the big stories of these weeks, and probably the whole year, which is the front and foremost, China and the US.

Misha Zelinsky:                  Yeah. I think that’s actually a good place to start. So you’re obviously an Asia-Pacific expert, you spend a lot of time in the Asian region. Big news at the moment, and certainly the last six to twelve months has been this question of trade, and certainly this trade tensions between China and the United States, and what increasingly now looking like a trade war. So I suppose the first question is, is this a trade war and what should the world make of the sort of these trade tensions between the United States and China?

Curtis Chin:                           First let me go back to your comment that I’m an expert, I don’t think there’s anyone that’s an expert in terms of what’s going on right now between the US and China. I mean, it really is unprecedented. You know, I was very lucky to serve primarily in Republican administrations, but I was lucky to serve also in the Obama administration as our US ambassador to the Asian Development Bank. And I’d say for a long time Republicans and Democrats … and no one’s really been a big fan of tariffs. So today we’re at a situation where back and forth, whether you call it a trade war, or let’s say a tariffs war, we’re seeing the United States and China continue to raise tariffs on each other’s products. For me in the short run, clearly not a good thing. In the long run my hope is that both sides will come up with a way that will lead to a more balanced, more sustainable relationship between China and the US.

Curtis Chin:                           But also if both sides succeed in moving this forward, it will be to the benefit of the entire region, of all of Asia-Pacific, including Australia. When you think about countries that in my view, have become so dependent on China as a source of purchases of their commodities, Australia comes to mind, but also as a place where you move supply chains because labor costs have been cheaper there. So you’ve seen this movement over the what? Last decades, but that needs to change. One, it’s already changing even before these tariffs back and forth, because the cost of production in China is getting more expensive. But also I could say quite frankly, that as we think about China’s behavior, what might have been acceptable two or three decades ago … I mean, clearly China was a poor country, is not acceptable today. Bluntly we might say it’s time for China to grow up and take on some of the responsibilities that come with being again, a great economic power.

Misha Zelinsky:                  It’s interesting you said there, you touched on that for a long time the bipartisan consensus in the United States, certainly globally too, is that free trade is good, tariffs are bad, interventionism is bad. What’s interesting is … I suppose firstly, and I’m keen to get your take on this, a lot of people will say that this is a Trump thing, but it’s actually, interestingly, perhaps the only thing that both sides of the United States, of the aisle politically agree on, which is that sometimes the war on trade is popular and bipartisan, because you saw Trump tweeting as he does, about tariffs that he’s going to put on, and being encouraged by the House Speaker, Nancy Pelosi, and the Senate Minority Leader, Chuck Schumer, saying he was doing the right thing and to keep going. So it’s interesting the US in a very quick way, in a bipartisan way, to have a more assertive approach to Chinese trade in the United States. So I’m curious to get your take on what that journey is and how the United States has gotten itself to this point.

Curtis Chin:                           Well, you know I think your points, it’s clearly not just a Trump thing, I think President Trump to his great credit, has really captured kind of the moment, the feeling, the frustration of not just Americans, but people all around the world who have tried to engage with China. Clearly the world has benefited from less expensive products made in China because of traditionally what have been lower labor cost. And in may ways it was a gamble, with purchasing products from China, with making products in China, lead also to a more economically, politically liberal nation. That gamble has not paid off. We’re seeing a China today that is much more strict in term of how it treats its own people, in terms of its crackdowns on Christians and Muslims, in terms of its behavior on human rights. And it shouldn’t take away from the successes that China has achieved in lifting really, hundreds of millions out of poverty. But again, I think to one of my earlier points, China also has to evolve, China has to grow up.

Curtis Chin:                           And so Trump has in a way, come into this moment, really perhaps, he was the president for this moment, and even China in the past has said this trade imbalance between the United States and China is not sustainable, because ultimately it will lead to a pushback, and we’re seeing that, not just in the United States, but really throughout the Southeast Asia region in particular. Again, I’m based mainly in Southeast Asia, and when I speak to chairmen, CEOs, senior leadership of Southeast Asian businesses, you also find tremendous support, tremendous sympathy for the points that Donald Trump is making. I was out actually recently with the chairman of a Southeast Asian company, he stepped down as CEO from his role, and what he said to me was very interesting, he said that in many ways, they would all love to go on record and say what Trump is saying, but China has been a vindictive nation, that we’ve seen records recently, of where they’ve punished companies for doing things that went against China’s foreign policy.

Curtis Chin:                           One specific example would be South Korea. In South Korea, there’s a big conglomerate called Lotte, big South Korean company, respected company. The South Korean government, to protect its own people, made the decision to install kind of like a missile defense system. The land that was used was once owned by Lotte. So what happened? China sought to punish Lotte in terms of its business transactions in China. So just one very real example of how the Chinese government behaves against individual companies. President Trump to his great credit is saying, “We the United States will speak up on these issues,” because in many ways I think his language was, “China has been ripping off the US and too much of the world. We need to rebalance that.” And that rebalancing also will be to the benefit of China itself. I’m sure China is not happy with it being kind of like the country that’s increasingly kicked around in rhetoric not just in the US, but in public and in private, in parts of Asia.

Curtis Chin:                           That’s not good for China. China really should be embraced for what it has done in terms of lifting millions out of poverty, but its treatment of foreign businesses, both in China and outside of China really has to stop. And so where I would say that I think the Trump administration needs to evolve, is they’ve identified very clearly and spoken out very clearly on the issue, but I think they have to evolve in a way that also brings in their many natural allies to come together, to help China move forward in this situation.

Misha Zelinsky:                  Yeah. One of the things I’m curious about, Trump sort of is always promoting himself as the great deal maker, but the question of tariffs is obviously that it sort of punishes the country that’s taking their export for some sort of practice, but at the same time it obviously lifts prices for households. Now, a figure I saw was that if they end up putting up this 25% tariff on all Chinese imported goods into the United States, we’re talking about $2,500 a year per household increase in the cost of living. The thing I’m curious about is does this have implications for Trump in the domestic policy sense, and also to your mind, what does a deal look like? Trump focuses a lot on trade deficits, but what does a deal look, and what does victory look like in this situation, because the grievance is clear, but it’s not as clear one who wins, households in the United States get punished, and secondly what does a deal look like in the minds of Trump or other experts?

Curtis Chin:                           Yeah. A number of interesting points you raise. First, when you have tariffs … and I’m no fan of tariffs. Tariffs openly I hope, are means to a more balanced relationship between the United States and China. The other is that question, who pays for a tariff? So let’s say you’re selling a product, a tariff is imposed, one question will be, “Can that tariff be passed on to the end consumer?” Right, then of course the consumer will most ultimately pay. Will that company though first try to absorb it because they’re afraid of losing the business? It’s a little bit more complicated than what people say. But I also underscores, there are always winners and losers when it comes to tariffs. Another tricky point. We talk about the impact of tariffs on the American consumer, but I remember I did one interview where someone said to me, “But don’t you benefit from cheap products at Walmart?” Though again, it’s a big American store. Of course we do, but clearly I can only afford those cheap products if I have a job, and have I lost my job because of all those cheap products?

Curtis Chin:                           It’s really kind of a balance that we need to seek, and then likewise, when people raise the point of American consumers ultimately in the short term pay, I wonder if people will pose that same interpretation to China, or is it just China cares less about its consumers, and they’re thinking that the US will worry about its consumers but China will not, as it tit for tat, tries then tariffs the other way around? So I think we need to look at the individual winners and losers. I think the Chinese are now trying to target agricultural areas, big support areas for President Trump. As we think about the politics of trade also, President Trump of course, is running for reelection. Election is next year, next November. That’s a lot of months before that election, to get a deal done. So we’ll see how it plays out with this timing. Your second point, what will a deal look like?

Curtis Chin:                           My fear is that ultimately there will be a face-saving deal, where each side claims victory, but really nothing changes. And so that goes to you, what is success? For me success isn’t simply that Chinese buy a lot more US exports. Clearly that’s a short-term win. But it doesn’t address the longterm issue that many countries … maybe the US is at the forefront, but many countries are facing with regards to China, which is theft of intellectual property, which is forced technology transfers, which are non-tariff trade barriers. It’s a range of things that companies, whether they’re Australian, or American, or from somewhere in Southeast Asia are facing. For me a real success would be if some of these things change. You know there was some talk that actually, that the Chinese as part of the negotiation process, had agreed to some of this, because perhaps they saw that it was in their interest too.

Curtis Chin:                           On this war, who knows the backstory and all these reports and tweets? But then you saw, most recently, leading up to the latest announcement by President Trump, about really, a move to impose tariffs on all Chinese exports, was this point that China reneged, that China moved backwards in terms of edits on the agreement that the negotiators had already agreed to. So only the people involved will know the truth to that, but I can tell you as business person who’s worked in Beijing, who’s worked in Hong Kong, and now worked throughout Southeast Asia, business people from all kinds of companies, American, Australian and others, have seen that same reality, where something that you thought was negotiated with a Chinese counterpart, all of a sudden doesn’t seem so negotiated as the process moves forward. So I would not be surprised that there is quite a bit of truth to that comment, to that tweet from President Trump, “The Chinese reneged, the Chinese moved backwards.” And so again, that needs to change.

Curtis Chin:                           So again when we talk about what is victory, victory ideally is a victory for both sides. That both sides, China and the United States, to go back to their really important domestic constituencies, and say “We’ve come to an agreement, we moved these things forward.” But then ultimately that victory will be a more sustained trading relationship between the United States and China. One of the point I always want to make though, is that we looked at some of the drivers of where we are today. Clearly for decades the Chinese have in a way, been gaming the system, taking advantage of the system, something that might have been tolerated when they really were a much poorer nation and a less militaristic nation than they are today. So that has to evolve. But I think one thing that we need to think more about more, and hopefully media can talk about more, is that in the world today, exports are both of goods and services.

Curtis Chin:                           So we talk a lot about things that were made, or grown, and exported, but we also need to think about the services. United States, developing nations, are also trying to move this way, but the United States has moved to develop the economy, where a lot of things we produce are services, are intellectual property, are things that again, are of great value, of greater value added than something simple that might have been made 10, 20, 30, 40 years ago. As we talk about the balance between nations in terms of what they import or export, I think we should ideally spend also more time talking about both goods and services, versus the focus on the easy number to understand, which is how many widgets or bushels of this has a nation purchased. Out of all this I think back about our evolving sense of trade, of Asia. Ultimately, and I say to people, “Things have moved forward, it’s a positive thing. Trade has been a wonderful thing.”

Curtis Chin:                           But the reality also is that in this more globalized world, this globalized economy of ours, many people have not done so well. So Trump has captured that moment, and spoken to people about what can he do to fight for them. But I see that across this world of ours, and across Europe, but very much across here and Asia, where in the Philippines, they had a recent election also, a very populist leader, India is going to an election, Indonesian had its own election, where leaders have to respond to their vast number of citizens who maybe don’t see that they’ve become better off as part of this globalized economy.

Misha Zelinsky:                  And we’ve certainly seen that with Brexit as well. I think you’re right. I mean, the question of trade and who benefits, and it might … it looks good in a headline number, but often say trade destroys and distributes unevenly. And I think there’s a lot of people that have been left behind or dislocated, and it’s expressing itself in this politics in a worrying sort of way. So I think certainly a lot to think about there for policymakers. One thing I’m curious about is, and you sort of talked a lot about the trade relationship, that seems to me now that the United States very much considers itself or it sees China now as very much a strategic competitor.

Curtis Chin:                           I think in every US administration, every country around the world, even your government hopefully, is working to give its citizens a better life. And so I think what we’ve seen is this continuing movement to a richer world, but also a more unequal world. And so you’ve seen so much talk about inequality kind of bubbling up over these last, really two decades, and I think we’ve reached that point where people are trying to look for what are the drivers of this inequality, how do we address that? And so very clearly, the two biggest economies in the world, China and the US, ought to be very much part of that conversation. You raised an intriguing question when you talk about China and the US, China versus the US. For me taking a step back, in many ways I see things also as not just China versus the US, but a US-driven system versus an alternative that China is pushing when it comes to concepts of competition, economics, of trade, and governance.

Curtis Chin:                           In general, I think no country wants to chose and say, “I’m on the US’s side or on the China side,” but I would say to nations, I would say to the people of Australia and elsewhere, “It really it’s up to you to decide which system is better for your own people.” For me, clearly I’m biased, I am for a system of free markets, free trade, and free speech. This is not what China is for, right? But often people will say, “But I got to follow the money, I got to pay the bills, I got to do what I need to do. It’s China that is the big customer.” And so that’s what people think to think through. It’s a very difficult question sometimes. I spoke recently at a Bloomberg event in Singapore on this whole same issue of China and the US, and I was struck by one of our fellow panelist, a friend … he’s actually from the Democrat side versus Republican side, but clearly we’re both Americans. Kirk Wagar, the former US ambassador to Singapore.

Curtis Chin:                           It was very interesting when he made a comment, and that comment was basically, “Western businesses, when they deal with China, the big question for them is, ‘Do you have to sell your soul, or to what degree do you sell your soul?’” So I’m paraphrasing his comment, but that’s that challenge of you’re going to make so much money hopefully dealing with China, the reality is many companies lose money dealing with China. But in pursuit of that market, or in Pursuit of that cheaper production base, do you simply look the other way on all the terrible things that China is doing? Maybe case number one, we see these days are these reports coming out of Xinjiang, this Northwest part of China, of where they put, by some accounts, one million to two million people into camps. Some would say concentration camps, of all the terrible connotations that raises from World War II. But they put people there simply because they’re Muslim.

Curtis Chin:                           That clearly, I would hope the world would speak out about. But we’ve seen how Muslim nations, many nations have looked the other way. “It’s China’s right,” I think one Saudi leader said, “as to how they deal with what China perceives as a terrorism threat.” But for me, maybe I’m not getting any business in the near term in China, because I want to speak up on behalf of all Chinese people, whether they’re Muslim, or Tibetan, or Han Chinese. You know I’m ethnic. People can’t see me on your podcast, but I think my great-grandfather went to the US way back in the late 1880s to help build the railways or something. I’m ethnic Chinese, but for me it shouldn’t be about your ethnicity, really even your nationality, but people should willing speak up on behalf of those that really need speaking up on behalf. So clearly the Muslims, the Tibetans, but even Christians. We’re seeing reports that the Chinese have been particularly aggressive in tearing down Christian churches, which they don’t recognize. These are all not great things.

Curtis Chin:                           But what if you want to do business in China? Do you say nothing because you’re going to make some money? That’s a very difficult question for people who again, who have to pay the bills. But for me, you can’t, in my mind, simply chose to say nothing because you want the money. There is some balance and each individual, each company needs to think through what is that … and in the long run, my hope is that all Chinese people will appreciate this notion that every single individual has value. There I go sounding like an American.

Misha Zelinsky:                  Well, that’s okay. It’s good to be of your people. But it’s so curious, you were touching quite a bit there about the rule of law, I think largely, I mean. And the United States is larger] since World War II certainly, in this so-called rules-based global order. China’s really bumping up against that now, and one of the things I’m sort of curious to take on, I mean, where are the areas that you think that the United States is prepared to turn the other way? So for example, if you take South China Sea where Barack Obama, President Obama sort of didn’t do a great deal as the Chinese government sort of constructed these artificial islands in the South China sea, and then militarizes on, has in effect sort of annexed a part of the South China sea.

Misha Zelinsky:                  How do you see things of that nature when it comes to getting the Chinese government to obey and respect maritime law in that instance, where the international courts very clearly ruled against China, and it essentially ignored them? How do make your earlier point that China, and they need to be a responsible grown up actor? How do you actually enforce that with the Chinese government?

Curtis Chin:                           I think the reality here, even when I go back thinking about that question you asked, the reality is it cannot just be China and the US deciding. What are the regional bodies, global bodies that can play really, a shaping role? I mean, the reality is that at the end of the day, and sadly this goes back to a statement, even when you think about Chinese history that, “Power grows out of a barrel of a gun,” Mao famously said in the civil war in China. And the reality is that when you look at some our regional institutions like ASEAN the Association of Southeast Asian Nations, they act by consensus. Many of those nations have a stake in the South China Sea, and the Philippines even calls it the West Philippines Sea, but China has been very aggressive in building up … I don’t know, we call them [islandets00:25:55], or little islands, or fake islands, I don’t know. And then despite saying they wouldn’t, moving into to militarize them.

Curtis Chin:                           But China’s got the guns, and maybe other countries don’t have the guns, or they want Chinese investment. So lets deal with that. But to your point, I would hope that a nation let’s say like Australia, can step up. It’s what we call like freedom of the seas, freedom of navigation, trips to the South China Sea. That nations throughout the region can seek to come together to engage with China. The Chinese strategy has always been one of like picking off countries, some would argue that ASEAN already has in a way, been nullified because China has bought out Laos and Cambodia. And for a associations that acts by consensus, if Cambodia has in the past said, “Well, no, no. We’re not going to issue a joint statement because we Cambodia, don’t agree,” it blocks efforts. So hopefully that will evolve and all. Your question also raised this point about systems, and organizations, and governance.

Curtis Chin:                           One I know very well, is this whole issue of how will we support and fill the financing gap? How will we support the building of infrastructure in the region when there’s been a big gap? The region’s infrastructure needs and how they will be financed. So four years, nearly two under Obama, nearly two under Bush, I served as our US ambassador to the Asian Development Bank. For those who don’t know, that’s kind of like an Asia-Pacific base, Philippines headquartered version of the World Bank, primarily focused on ending poverty in this region, mainly through building infrastructure, a lot of core infrastructure, roads, power, water systems, sanitation. Really doing good things there. But how do you build those infrastructure projects? So World Bank, Asian Development Bank, they’re all in this region. For the last couple of years we’ve seen Chinese rivals.

Curtis Chin:                           And so we’ve first and foremost seen the rise of the Asian Infrastructure Investment Bank. We’ve seen something called the New Development Bank, some people call it the BRICS bank after Brazil, Russia, India, China and South Africa, the key players there. That one’s based out of Shanghai. We’re see moves by bilateral financial institutions like the Chinese development banks, or that will be just working with one country, versus these multilateral banks. We’re seeing a lot of new players challenging that old, what they call this old Bretton Woods type institutions to finance and move Asia forward. In many ways that’s a good thing, hopefully it makes some of those old bodies, like my old colleagues at the ADB, a little bit more hungry, innovative, focused on acting quicker to serve the needs of this region. But it’s a bad thing if what it is, it’s also a push to the bottom, who will get the money out the fastest. When I was on the board of the Asian Development Bank, I visited a nation whose engagement with the ministry of finance, is they seek to get funding for key infrastructure projects.

Curtis Chin:                           ADB, I think to its great credit, like the World Bank and others, we’ll try to push for certain, what we call safeguards, so that if you put in an infrastructure project, the environment would be in some ways be protected. There’d be … the lingo today is ESG, so there’d be like environmental, social, governance safeguards put in place. These are all good things, but then it makes a project take a little bit longer to develop. So if you’re a country just in search of financing, what if all of a sudden there are Chinese-backed banks? There’s nothing else. “We don’t care about those ESG, those safeguard standards, we trust you as the borrowing country to decide what’s right for your own people.” You can see there will be sympathy for that, “You decide what’s right for your own country in term of protecting the environment based on your own spot in that kind of development line.” But then the Chinese might say, “But if we do the financing for you, maybe Chinese state-owned enterprises were going to do a lot of the work, maybe it will come with 500 to 1,000 Chinese employees and workers.”

Curtis Chin:                           So I think any nation, they decide. It’s their money, they ultimately have to pay it back, but read the fine print. So don’t think that because maybe the Chinese aren’t insisting on certain safeguards that others might, that it doesn’t come with other things that they might well insist upon. And so that’s how it should be. As long as it’s transparent, these institutions are accountable, that’s how it should be. Let the market compete. What the big problem is though, and we’re beginning to see it even in China’s One Belt, One Road initiative, this is a big infrastructure funding push, is that what if decisions aren’t made fairly? What if corruption is involved? What if money changes hands? And case in point has been what we’ve seen has happened in Malaysia. In the last year or so, Malaysia brought back its longtime prime minister, probably the oldest prime minister in the world, Mahathir came back in with … was swept his party back into government, overturning the rule of, I think for decades, of what is not the opposition party.

Curtis Chin:                           And when Mahathir came back in as leader of Malaysia, he raised questions, it certainly raised eyebrows in China, but he raised question about some of the big infrastructure deals that were signed by his predecessor Najib, with the Chinese government. And to his great credit, forced renegotiation. And so one that’s come up most recently is … I think is calling it like an East Rail, a project … Really so much money in his huge infrastructure projects. Mahathir was ultimately able to shave the cost of the product or project. Not exactly apples and oranges because the project did change somewhat, but shaved the cost of that project by a third. And so it makes you wonder where was that extra third, you were talking really tens of millions of dollars, where was that money going? Into Chinese pockets? Into construction company pockets? Into Malaysian pockets? And then a question for the region, for countries that haven’t had this kind of democratic revolution bringing back an old prime minister, focused now on corruption.

Curtis Chin:                           What about all of those countries with deals other than the One Belt, One Road initiative, that haven’t had a Mahathir, to try to renegotiate and bring those costs down by a third? Where has that money gone? And so these are some of the questions that I think individual citizens may well raise when they see deals signed with China. But sadly in so many nations, those citizens are ignored, because the deal is done with leaders, and those leaders know for good and for bad, where that money has gone or will be going. So yes, China can be a constructive force in this region, but for that to happen in this changing world of ours, China too must evolve. And so bringing this all kind of full circle to how we began talking about China and the US, clearly we see this rivalry between the Chinese and the US government at this time. Hopefully it’s not a rivalry between the peoples of these nations, where people just want a better life for themselves.

Curtis Chin:                           But it’s also a rivalry, I believe, between different systems. So this Chinese system is one again, of subsidizing their own companies. To what degree is that acceptable or should it be acceptable, and then how do you have a level playing field when you’re up against a state-owned enterprise that’s completely subsidized by the second largest economy in the world? And I think these are important questions, that again are just not US versus China questions, and hopefully they’re questions that are also being asked within China. But we’re seeing now in some of the reports that are coming out of China, few and far between, where China itself is cracking down on its own Chinese economists and their own people who would dare challenge what Xi Jinping is pushing through right now. As I think a Chinese American, as somewhat Asian American, someone who’s living in both the US and Asia, I in particular want China to move forward and to succeed just like every other nation, but China must evolve, and my hope is that it’ll be done peacefully versus all the turmoil that China has gone through this last century.

Curtis Chin:                           My hope is that that does not come back. In a weird way, that may be what Xi Jinping fears, but is he putting in place a system which might encourage or increase the odds of that coming back. A case in point, Xi Jinping, president of China, pushed through a way for him to serve as really president for life. So in a way governance has moved backwards in China. Xi Jinping has a lot of rivals within China that maybe aren’t so happy with how he’s done things. This US-China back and forth, this trade war really emerged under his watch. So there’s a lot of questions within China about he’s doing things, but those people are increasingly kind of squashed. In the old days, if you were a senior Chinese leader, maybe you’d wait out whoever the president was, you’d wait five years, you’d wait 10 years, but that has now changed. Maybe there is no waiting out Xi Jinping.

Curtis Chin:                           And so are people moving sadly, back to that old system? Are they trying to bring him down, stab him in the back? Things that are not good, because that’s how China has evolved. It’s evolved backwards, and it’s gone back to the system where actually it’s almost like there’s a new emperor in town, that emperor is Xi Jinping. And what happened to emperors in the past? They either died or were overthrown. So that’s not a good thing for China, and I think no one should welcome turmoil in China. And so again it’s in China’s own interest to rethink about how it treats not just the US, but how it treats all its neighbors. The Chinese version of rule of law is not one that I would hope the world seeks to emulate. We look right now at an imprisoned … out on parole I think, the technical term is, but an imprisoned Huawei, this big Chinese tech company CFO in Canada under the Canadian version of rule of law.

Curtis Chin:                           I think that Huawei executive has just moved from one of her multimillion dollar houses in Vancouver to another multimillion dollar house in Vancouver while she goes through the Canadian legal process as will she be extradited to the United States regarding charges of was she really directly involved in her company’s trying to avoid sanctions on Iran, create shell companies, all these things. Right? So the rule of law is proceeding. Meanwhile in China, and I dare say it’s not coincidentally, but connected, China has retried one Canadian, I think sentenced him to death. China is now putting I think two Canadian citizens under arrest, alleging that they’re spies. There was one, I think social media post, that’s never all …. as you know never sure how accurate some of these posts are, but this particular social media post contrasted the treatment of those Canadians under the Chinese version of the rule of law, versus the Huawei CFO, her name is Meng, CFO Meng, among under the Canadian rule of law.

Curtis Chin:                           And so I say to countries, I say to people, “As you think about the systems that are really contending now, a Chinese way of doing things, a Western way of things, what is better for you?” And so my hope is that this notion of East versus West isn’t one of really of East versus West, it’s really what’s right for a nation. And as I think about even one person … I did an interview when someone said to me on air, “Well, isn’t this stealing of property by the Chinese cultural?” And I had to push back, one because I’m ethnic Chinese. But when you think about what does that mean, culture, because very clearly when I go to a dynamic place like Singapore, or a dynamic place like Hong Kong, or Taiwan, mainly Chinese people, ethnic Han Chinese people, I don’t see them ripping off and stealing other countries’ or other companies’, other countries companies’ intellectual property like you do in China.

Curtis Chin:                           So if it’s cultural, it’s because of a business climate that the communist Chinese have created, it’s not because people are ethnic Chinese or Caucasian or whatever. And I think that’s how we need to look at things in order to move things forward. And again, I keep coming to this point that moving things forward are also in the interest of the Chinese people. And so it’s always intriguing where people say that, “How long will you as a citizens stand for tariffs?” If indeed those higher costs are passed on to them. But then we can throw that same question at the Chinese, how often will Chinese citizens stomach and tolerate all that their leaders do, then impose this higher cost and burdens on them, whether it’s the money they spend, the lives they live, or what they can say? And unlike in a democracy, where the Chinese citizens say, “No, we want to change things. We’ll have different leaders,” how do people change things in China? Their track record has not been good when it’s been a system where the Chinese people have no way to peacefully speak up. And that’s the challenge for our world today.

Misha Zelinsky:                  So the question I have … So you sort of talked a lot about this sort of the competing models and the hope that I suppose, over time the theory always was that China would gradually adopt Western norms of global leadership and rules-based order. The thing that is curious in all this is that the United States has always been the underwriter of these systems and has always had great confidence in these systems. One of the great strengths of the United States model of global leadership has been its alliance system. Now, people have thought about Trump’s approach to the strategic rivalry with China, but one of the things I’d like input is Trump’s administration approach to United States’ friends in a way that has attacked NATO allies, it has attacked allies in Asia region, such as South Korea for not pulling their weight, etc. How can the United States’ friend believe in the system that United States has underpinned and expect China to adopt a system that perhaps the United States itself seems to be walking away from somewhat.

Curtis Chin:                           I don’t know if the answer is walking from a system that we’ve all benefited from, this global trading system, but very clearly, the United States is saying it needs to be change and fixed. One case and point I look at is think about all these global bodies, and that’s where my hope … We talk about West versus East, but I hope some of these global bodies are really seen as global bodies, because I think part of the challenge is we say it’s a Western system or, “I’m from the East. I don’t want that system.” But I would argue that things like human rights, free speech, worship whatever you want, your religion, or whatever your faith is, isn’t a Western concept, but then I hope would be more universal concepts. So going back to your point, so one of the institutions that I think needs to evolve, one example would be the World Trade Organization, and I think even the WTO leadership has said, “Yeah. We need to change too.” And it’s the Trump administration that is pushing for some of these changes.

Curtis Chin:                           One example would be under WTO rules right now, that China is still treated as a developing nation. So maybe it’s allowed to do certain things, can it have more state-owned enterprises, more support for state-owned enterprises, but then a developed nation can’t? So doesn’t that need to change? For me it’s kind of ridiculous also that this second largest economy in the world that is China, some would say largest economy based on purchasing power parity, that this nation still borrows money from the World Bank, still borrows money from the Asian Development Bank, because they say, “Oh, we’re a poor country.” So again it goes back I think, to these metrics, but very clearly, China has resources that other nations do not have. China again, amazing, has put like this little rover on I think, the far side of the moon, and yet it still borrows money from the World Bank and the Asian Development Bank because it says, “Oh, we’re a poor country, we need these subsidized loans to help us fight poverty.”

Curtis Chin:                           And so I think these institutions need to change, WTO, ADB, World Bank, and how they treat a nation like China. And what’s great about these rules-based organizations also, it would be that, it’s not just about China. If it were another nation in that same kind of role as they move up, they also should in a sense, graduate from these kinds of assistance like grants and subsidized loans. And so I think, we think about this China and the US, I think that’s part of the challenge that right now because of this tariffs war, it’s seen as China versus the US. But in many ways, there will be many allies in the battle if they could speak freely, and also many more allies in a sense, if the Trump administration to your point, I think were more adept in how it handles its long time allies and friends. The US relationship with Australia, with Thailand, with Singapore, with the Philippines, these are relationships that will continue to evolve, but really are foundations for moving things forward in a way that will I think, benefit the countries involved, but also benefit this region, this Indo-Pacific region as well as the world.

Misha Zelinsky:                  So one question I want to ask you, are you a member or do you have an involvement in the International Republican Institute, the IRI which is responsible for promoting democracy globally? There’s a sister organization to Democrats version of them. Traditionally people have always thought that China would grow rich and then it would grow democratic. What we’ve seen as it’s grown richer, unfortunately it’s become more autocratic. You touched on the fact that Xi has made himself emperor for life. With your sort of background in what makes democracy great and how democracies flourish, do you hold any sort of hope … is there anything to hope for people that want to see China become more democratic, or is that just a lost hope now to your mind?

Curtis Chin:                           Are both the International Republican Institute and this National Democratic Institute, they’re both come under this umbrella, National Endowment for Democracy, which really comes out of … started to work way back when I began my career, like an intern under Ronald Reagan. But something that Ronald Reagan sought to encourage, was the spread of democracy. So these are nonpartisan groups, even though one sounds Republican one sounds Democrat. And their job really is to encourage democracy, but I think more importantly and this goes to the heart of your question, to encourage institutions, and systems, and processes that allow democracy to flourish. I’m usually always like the most hopeful person in the room, even though like the room’s falling apart. And so I’m always hopeful that things will be moving forward. But I think it’s important that we talk about democracy, that we realize that democracy is not just elections, democracy is about balance, it’s about systems, checks and balances, it’s about institutions.

Curtis Chin:                           And so like the work of both IRI, NDI, would be things like encouraging political parties, it doesn’t matter which party you are, but encouraging political parties to think through the use of research, degree that is allowed or easily done in a given country, so that they can better understand what citizens are worried about, what they’re concerned about, and then think through how they can best address those concerns. It’s about how do you strengthen a democratic process? Where people don’t like whoever is running, there’s a chance to get rid of that person. So yes, I’m hopeful for China in the long run, but clearly what we see in these last what? Five years, is a China that’s become much more economically assertive and militarily aggressive in the Indo-Pacific region. And so what will happen over time? The reality is that it won’t just be China and the US contending, it will be the other rising powers in this increasing … what they call multipolar world.

Curtis Chin:                           They will also have to contend with a rising China. One day we’ll see India come into its own, we will see Indonesia, the largest economy in Southeast Asia come into its own. How will China engage with an India, with an Indonesia, with a stronger ASEAN, Association of Southeast Asia Nations? How will they deal with this? Probably one of their biggest headaches is their friend, North Korea. At the end of the day, I believe, here I’m being hopeful again, I believe that Korea will be united one day, but clearly when it unites, the reality will most likely be a democratic, in a way, westward-oriented democracy, versus the model that China and North Korea itself now present to the world. That’s really what holds back these two nations from coming together, North Korea and South Korea, is China. China would probably prefer kind of a somewhat unstable North Korea on it’s border than a united westward-looking Korea.

Curtis Chin:                           And so China has a lot of headaches to contend with, this trade war is really just one of them. And as you think about the calendar of this year, China has so many worries to contend with. An anniversary of the June 4 Tiananmen, I say massacre, Chinese doesn’t like that word, incident, I would say. But when we think about the June 4 anniversary coming up, when you think about labor unrest in China, Xi Jinping is in a difficult situation, and maybe in some ways much less secure and stable than he would like the world to think he is. And so this trade war at a time of an already slowing but still growing Chinese economy, is not good for him either. And so maybe he will pursue the route of again, trying to unite the Chinese people in a very nationalistic way. You’re seeing some of the rhetoric coming out of China, “China will never back down.” Very nationalistic, trying to unite his own people against an enemy, when the reality that maybe his biggest challenge is what’s happening at home, in his country.

Misha Zelinsky:                  Thanks. I could probably talk to you about this all day I think, it’s so may fascinating different areas we could go to, but of course you’re a busy man, you’ve got things to do. So as I always do, very clunkily segue to the fun part of the show. I get a lot of good feedback on this really lame question that I ask everyone. But of course you’re an American guest on our show, just curious about the three Australians that are coming to Ambassador Curtis Chin’s barbecue and why? And I should disclose, earlier he said, “What if I can’t think of three Australians?” I said, “Well, just do your best.”

Curtis Chin:                           Yeah. What if I can’t think of three Australian? But yeah, I kind of laughed when you asked me that question earlier, because in the United States when we think of Australians, they’re like people we’ve taken from Australia like Nicole Kidman and Keith Urban, but I think … wasn’t Keith actually born in New Zealand? But again, I think they live in Tennessee right now. So I’m going to cheat and only give you two, but because they live in Tennessee, I bet they have some of the best barbecue in the United States. So I’d certainly love to have them because then maybe we wouldn’t talk politics, or we wouldn’t talk about China and the US, and we’d just have a great time …

Misha Zelinsky:                  Well, it’s funny you should say that …

Curtis Chin:                           … and enjoy American-Australia hospitality.

Misha Zelinsky:                  It’s funny you should say talking about Americans stealing Australians, because Australia is very famous for stealing New Zealanders like Russell Crowe. So it’s sort of … it’s all just [crosstalk 00:52:52].

Curtis Chin:                           That’s right. I think Keith Urban, I think he’s really a New Zealander. I don’t know what he is, but …

Misha Zelinsky:                  I’m not sure, but that’s a cute …

Curtis Chin:                           Nicole Kidman is Australian for sure …

Misha Zelinsky:                  She’s absolutely Aussie.

Curtis Chin:                           … and maybe they both Americans, I don’t know. But let me close by just saying that US-Australian relationship is a great one, it’s a solid one. I think United States, we can learn from Australia. I mean, look at your economy, you haven’t had a recession in a long time. A lot though has been driven by China, and so also how will Australia deal with this evolving economic world. Australia also, I think for a while, kept changing its prime ministers, I don’t know. It seems like there was a new one all the time, but maybe that’s also a broader point for all of us, that no matter who’s in charge things will be okay if we leave it to our people to run things, just American, Australia, Chinese whoever. They just want to move things forward, but maybe it’s the politics that gets in the way of everything. And sometimes when government does nothing, maybe things just move on forward.

Misha Zelinsky:                  A very positive message of hope to finish on there, Curtis. Thank you so much for joining Diplomates, mate.

Curtis Chin:                           All right, my pleasure. Take care.

Misha Zelinsky:                  Take care, mate.

Elaine Pearson

Elaine Pearson is the Australian Director of Human Rights Watch.

As a graduate of Princeton’s Woodrow Wilson school, Elaine is a global expert in human rights law and has worked all over world – including stints at the United Nations and various NGOs.

Elaine joined Misha Zelinsky for a fascinating chat about the intersection of democracy and human rights, the fate of Hakeem Al Arabi currently detained in Thailand, China’s use of hostage diplomacy and its muslim reeducation camps, whether autrocrats are winning the global PR battle and what role Australia has as a middle power in global diplomacy. 

 

Misha Zelinsky:                  Elaine Pearson, welcome to Diplomates. Thank you for joining us.

Elaine Pearson:                  Thanks for having me.

Misha Zelinsky:                  So, you’re the head of Human Rights Watch in Australia, so a lot of places we could start, but it seems a good place for us to start the conversation might be the news related to the young soccer player, Hakeem, who’s now been detained in Thailand. Maybe you could just give us a bit of background about that before we start to discuss it?

Elaine Pearson:                  Yeah, sure. I mean Hakeem al-Araibi went on a belated honeymoon to Thailand in November with his wife. He’s originally from Bahrain. He got refugee status in Australia in 2017, and when he got off the plane in Thailand, he didn’t even make it to Bangkok, or anywhere, because a squad of police were waiting for him. And what had happened was that there was an Interpol red notice out for him, which was actually a massive screw up. Interpol should’ve never issued the red notice because he’s a refugee, but he was sentenced in absentia in Bahrain for a crime that he says that he didn’t commit, to 10 years in prison, for supposedly vandalizing a police station. So since that time, Bahrain has basically issued an extradition request. Interpol got rid of the red notice, because as I said, it should never have been issued. And he’s sitting now in Bangkok jail, awaiting, basically the trial for extradition proceedings to be carried out.

Misha Zelinsky:                  And of course he is a refugee in Australia, subsequent to the Arab Spring in Bahrain. And so he came to Australia when?

Elaine Pearson:                  He came to Australia in 2014.

Misha Zelinsky:                  Right. And he’s a permanent resident, but not a citizen?

Elaine Pearson:                  He is a permanent resident. Actually, he was days away from being able to apply for his citizenship. And at the moment, there are moves underway to file those papers and make him a citizen, because we feel that that might strengthen his hand in dealing with the Thai authorities. But in any case, whether he’s a permanent resident or a citizen, he should be returned to Australia. He should not be returned to a country that he fled persecution from, and was found to be a refugee from.

Misha Zelinsky:                  So he was just days away from applying to be an Australian citizen?

Elaine Pearson:                  That’s right.

Misha Zelinsky:                  Wow, that’s really scary for him. So, a little bit about, why has this captured the attention of so much, so why is it such a big deal for someone to be arrested in an airport the way that he has, to be sent to face charges? I mean, is that something that you’d be worried about or is it not a big deal? I mean …

Elaine Pearson:                  Well, I think it’s a really shocking case, and I think it’s very scary for people who flee their home countries, think that they’re then safe in a country like Australia. He then subsequently spoke out against a member of Bahrain’s ruling family, who’s a president of the Asian Football Federation, and it’s because of his criticisms of the Bahrain government that he feels like he is being punished. That’s really what this is about, and that’s why this case, I think, will have really global ramifications, because it means that if he was sent back to Bahrain, anyone who’s been found to be a refugee who comes an authoritarian country, will have to think twice before taking holidays to third countries, because of the risk that something like this potentially could happen to them.

Elaine Pearson:                  As far as Thailand’s concern, unfortunately, Thailand has a really horrible track record of collaborating with countries like China, Bahrain, in the past, Cambodia, Vietnam, and basically sending back their citizens on the result of these extradition requests, and many cases, these people have been activists who, yes, may have been convicted on national security charges, but I think there’s very big concerns about how those people were convicted, and whether those people actually committed these crimes or whether these are people who were thrown in jail, basically for peaceful acts of free expression.

Misha Zelinsky:                  And what about Bahrain’s record in human rights? I mean, it’s not a country that’s really got strong rule of law despite their guarantees, as I understand it, coming from the leader of the country. It’s a place that if you had fled from it, you would have valid concerns, would that be right?

Elaine Pearson:                  Well, yeah. I mean, Human Rights Watch has reported on the torture in Bahrain’s prisons. We issued a big report just a few years ago. There were five deaths in custody as a result of torture in, one year alone. So this is a country that has a really big problem with basically torturing dissidents, in order to get forced confessions out of them. So the claim by the Bahraini government that, we have an independent judiciary, he should just come back here and face charges. Look, in the last time that Thailand send someone back to Bahrain, the person was beaten so badly, before he even got off the plane at Bahrain’s airport, that he had to be hospitalized. So that’s why we’re so worried about the fate of Hakeem, if he was returned to Bahrain. And he says that he was tortured before, so we have no reason to believe that it would be any different this time, if he’s sent back.

Misha Zelinsky:                  And, one of the things I’m never clear about, I mean, I think you hear about Australian’s being detained, well what’s the role of the government here? Because we’ve got people … you’ve got similar emissaries like [Fozzy 00:05:03] going over there to intervene, and we’ve had the soccer unions getting involved, and the player’s association. What’s the role of the government here, because I think people think, well, the diplomats will come in and save it, but how easy is that? I mean, is that more difficult than it seems, once you actually been in custody in another country?

Elaine Pearson:                  Well, it can be quite difficult. I mean, our government tends to adopt a sort of quiet diplomacy approach. Often when these cases come up, they’re dealt with very quietly, behind closed doors, with our government believing that that’s the best way of resolving these matters. But in this case it’s a bit different, and part of it is because there was a massive screw up on the part of the Australian Federal Police, who actually notified the Thai police about the Interpol red flag.

Misha Zelinsky:                  So that came from the AFP?

Elaine Pearson:                  That came from the AFP. I think it’s an automated systems, but in any case, they should have obviously checked his status and realized that he was a refugee. And I think because of the intense pressure from the media on this case, from FIFA, from the football groups, actually the Australian government has taken a much more robust and public stance, and I think that’s really important. But there are many other cases actually, where the Australian government is dealing with similar cases of people being wrongfully detained abroad, where they haven’t had such a strong response. I mean, there was James Ricketson, for instance, last year in Cambodia, he was eventually released but he was also someone who was tried and convicted on espionage charges, and unfortunately spent many months in a Cambodian prison.

Misha Zelinsky:                  And so, just before we act, because I’m keen to talk about some of the detainments, how is Hakeem? I mean, how is he coping? This would be a terribly … I mean, I can only imagine what he’s sort of fearing in terms of being in a Thai prison, in of itself. And then the prospect of being sent somewhere where you fled political persecution, I mean how is he doing, given the circumstances?

Elaine Pearson:                  Well, he’s not doing that great. I mean, the conditions, as you can imagine in Bangkok jail, are not particularly good. He’s been a bit sick in recent weeks, he’s sharing a cell, I think, with about 35 other people. He’s also extremely worried about his wife. I’m in pretty much daily contact with his wife, who’s here in Australia, but you know, she’s also terrified about what’s going to happen to her husband, and she was with him when he was arrested, but has not been able to have direct communication with him since, because he’s not allowed to have telephone calls.

Elaine Pearson:                  So, they are now allowed to pass messages to one another, but obviously, he is extremely scared that he’s going to be sent back, and he’s really worried about spending the next few months in prison. The next court date is not until late April. April in Thailand is incredibly hot. I mean, it’s hot enough … I’ve lived in Bangkok, in an apartment without air conditioning. You can just imagine if you’re in a jail cell with 35 other people, how uncomfortable that is going to be. And clearly he shouldn’t be there. He should be back in Australia with his wife, and playing football with his team.

Misha Zelinsky:                  And, how hopeful are we that we can get a positive resolution for him?

Elaine Pearson:                  Well, it’s unknown. I mean, I think the great thing about this case is there has been so much support and pressure coming from the Australian government, also from the international diplomatic community. They turned out in force at his extradition hearing, last week. But I think, in any case there’s big questions around, why the Thai government seems to be prioritizing and entertaining this extradition request from Bahrain, and why it would be prioritizing that relationship, over its relationship with Australia. Because clearly, Thailand and Australia also have a very long relationship.

Elaine Pearson:                  Australia has provided a lot of security training, development aid, over the years. Obviously, a lot of Australian tourists [crosstalk 00:08:52] Thailand every year. So, it makes you wonder what incentives the Bahraini government has offered, or why, basically, Thailand is doing this. The Thai government’s now saying, they put out a statement recently where they said, this is a matter between Australia and Bahrain, and Australia and Bahrain should sort it out, and we just want to win, win result for everyone, which obviously is kind of ridiculous, because there can’t be a win, win result. Someone’s going to have to lose here.

Misha Zelinsky:                  Well, that’s why effectively, you can only be in one country at a time. So-

Misha Zelinsky:                  Indeed. Well, I mean, keep up the good work and no doubt, I think a lot of Australian’s obviously sending a lot well wishes, but you talked a lot about the high profile this case has but of course there are other Australians being detained around the world. Is it getting increasingly dangerous to travel the world as an Australian, or any sort of citizen from a Western democracy, into perhaps places that are more autocratic? I mean, because there are a number that you can think of.

Elaine Pearson:                  Well, I mean I have to say it just somehow seem that way a little bit. I mean, in recent months there have been a number of these high profile cases. China in particular, there’s the case of the Australian writer, Yang, who was detained just a few weeks ago in China. Obviously, there’s been a number of Canadians, including some really high profile Canadians who’ve been detained in China. I don’t know if it’s actually increasing, but I guess in a globalized world, people are traveling more and more, and I think we are seeing authoritarian governments basically becoming more aggressive, in the stance that they’re taking. And particularly if they see people as potentially a threat to national security, because they’ve spoken out, that this is one way of, I guess, lashing out at those people. So I think, the people who are particularly at risk, are people who are dual citizens or who have come originally from authoritarian governments, and if they’re visiting that country again.

Misha Zelinsky:                  Yeah. So you’ve raised a Chinese example, and one of the things that people discussed, is the Chinese detainments of both the Canadians, and obviously the young Australian … Yang, the blogger, came hot on the back of a decisions made in relation to, Huawei’s banning from participation in telecommunication networks, in Australia and other countries, but also the arrest of the CFO of Huawei in Canada. That kind of sort of retribution, arguably from China, or and a payback of detainment of people, where they’re effectively holding people hostage, how concerned should we be about that?

Elaine Pearson:                  We should be very concerned about it. I mean, I think this kind of hostage diplomacy … I mean, in some sense, it’s not new tactics from China. We have seen them use these tactics before. There was the case of Stern Hu, which Australians might remember, an executive from Rio Tinto, who was detained I think for nine years, in China, over allegations of bribery and I think sharing state secrets. But while all of that was unfolding, obviously Rio Tinto was also having it’s issues with the Chinese government. But, now it seems like the Chinese government is becoming increasingly bold, and even more blatant, in the way that it’s going after people.

Elaine Pearson:                  And it is unusual, I think, that it has chosen to go after Yang at this point in time. We don’t really know why, but I think we’re very concerned that he’s someone that they’ve been saying is being held in residential detention. That doesn’t mean house arrest. That means he’s being held in an unauthorized place of detention, where sometimes quite frankly, the conditions can even be worse than in regular jails and prisons in China. And he could be held up to three months, in residential detention and that could be extended for another three months. So potentially, we’re looking at six months without him even having access to legal representation, family and friends, and so on.

Misha Zelinsky:                  Which is terrifying when you think about it. So, comparing and contrasting, because Hakeem, who’s currently detained, it’s a global story, national story set in Australia, but a global story because of the football component. You’ve got a situation with another Australian, in another country. Why is there so little attention, comparatively, and now of course it’s been reported, but not nearly to the extent as it captured public imagination, and are we doing enough as firstly, from a discourse point of view, but is the government doing enough, and why is it different when you can contrast Thailand and China, is it the countries involved, or something else?

Elaine Pearson:                  Well, I guess Thailand is a lot more open, so obviously, people have been able to go to Thailand. Thailand’s media has a lot of foreign correspondents being able to report on Hakeem’s case. Foreign correspondents have actually been able to go to the jail and talk to Hakeem. Thailand hasn’t prevented that from happening. Whereas in China, we don’t even know exactly where it is that Yang is being held. There’s very little information, it’s very difficult for journalists that work in China to get information about this case. So they are different, I guess, in that way. But obviously, yes, I mean we think also the way to address these cases is to bring more pressure to bear on the Chinese government.

Elaine Pearson:                  And I think many governments, including Australia, have been very reluctant to criticize China about human rights abuses, about detentions of human rights lawyers in China, but also of our own citizens, of Australians, are precisely because the Chinese government has so much clout, and it’s so powerful. And so at the end of the day, I think that’s also a big reason why we haven’t seen the prime minister speaking publicly about letters that he’s written to the Chinese government, in the way that he has spoken publicly about letters that he’s written to the Thai government, on Hakeem’s case.

Misha Zelinsky:                  It does make you wonder, because I mean, I always think of Hillary Clinton’s off the record comments about arguing with China, that it’s hard to argue with your banker, given the debt situation and underwriting of the US economy. And for Australia perhaps it’s hard to argue with that best customer, and when you look at the trade relationship, but should the government be doing more, irrespective of … is it possible to ignore those kinds of realities, or did they have to be managed in that way? Because some people will say, well, there’s no real … words are bought in diplomacy, and you’ve got to sort of talk quietly, but is that beneficial in these situations, or is it better to, for lack of a better phrase, blow it up in the media?

Elaine Pearson:                  I don’t think a quiet diplomacy is enough. And look, quite frankly, until Hakeem’s case was blown up in the media, the Australian government had not been as responsive on this case. It was really the public attention that this case brought, the fact that football associations we’re getting so involved, that really upped the ante in terms of the Australian government’s response. But no, I mean I think, look, where, China is concerned, it’s not like a very strong robust, response from Australia will necessarily win Yang’s freedom, but I think the danger of not speaking out, is that China will become more and more emboldened, to take these actions, because there’s no repercussions. And so, I think it’s actually really important that Australia have a more robust policy of speaking up on human rights issues, so that it doesn’t come as a shock to the Chinese government when the Australian government does speak up in cases like this.

Misha Zelinsky:                  Good. You’ve actually just touched on the next thing I want to talk about, which is a human rights record in China. And, you’re right, we don’t talk about it much at all. So, one thing that I’d be … and I know Human Rights Watch has done some work in this area, about the situation related to the Uighurs in the Xingang province. Are you able to get a little bit of background about that, and then we can perhaps talk about that issue in a little more detail? Exactly what’s going on there, in respect to the camps?

Elaine Pearson:                  Yeah. I mean, the situation of Uighurs in China, has always been dire in some respects. They’re in a far western province of China. Uighurs and Turkic Muslims have always been somewhat viewed with suspicion, by the Chinese government, but the repression really has been turned up a notch in recent years with the establishment of these political reeducation camps. And so now you’re looking at a situation where you have more than a million people, according to the UN, detained in these political reeducation camps. These are arbitrary detentions, so there’s no court. You can’t protest your detention. You don’t know how long you will be there, and living life in the camps, it’s very militarized. They’re forced to sing Chinese songs, they’re forced to pledge their allegiance to the Chinese state, and it’s really about eradicating any sense of Muslim identity or Uighur identity, and effectively trying to brainwash these people to become loyal Chinese subjects.

Misha Zelinsky:                  I mean, that’s terrifying. I mean, a million people in a reeducation camp, to be forced to pledge allegiance and give up their religions. I mean, these are the sort of things we haven’t seen, globally, for a very, very long time. Why are we not talking about this? I mean, again, we’re talking, and we should be talking about one Australian detained, in a Thai prison, but a million people detained in reeducation camps in a large country, is really quite scary. So why isn’t that not anymore attention?

Elaine Pearson:                  Well, it’s a very good question, and I mean certainly, Human Rights Watch and Amnesty and a bunch of organizations, are really trying to up the profile of what’s happening, and try and get governments to address this issue. So at the moment, we just launched the campaign, we wanted the March session of the Human Rights Council, governments to issue a resolution which would force the Chinese government to allow a fact finding mission, to come to China to look at the situation in Xinjiang, particularly with regard to the political reeducation camps.

Elaine Pearson:                  The problem is because the Chinese government is also a member of the Human Rights Council, a lot of governments and it’s … it tends to retaliate against governments. Frankly, a lot of governments don’t want to take on China, and so they don’t want to support resolutions like this because they’re worried that the Chinese government will retaliate, financially. A lot of countries in the world, involved with the belt and road initiative, and frankly that’s been a very effective way for the Chinese government to buy the collaboration and complicity from a lot of governments.

Misha Zelinsky:                  Yeah. Just before we turn to that, because I think that’s really a fascinating topic, about Chinese assertiveness in the region. The other thing I’d love to get your take on, because you talked about Chinese, this urge to control its population. They’re very autocratic regime, obviously, very controlling of the media, but this latest thing, and maybe you could talk a little about this concept of social credit. And when I first read about it, the notion that you can … they’ll basically be scoring everyone for everything that they do. Jaywalking, whether or not you pay your bills on time, if you’re polite to people and then everyone has this score. It’s sort of almost like an Orwellian nightmare, or for your younger listeners, it’s something from a Black Mirror episode, and literally was an episode of Black Mirror. So, I mean-

Elaine Pearson:                  It was.

Misha Zelinsky:                  … Tell us a little bit about that because, that is legitimately scary.

Elaine Pearson:                  Yeah. I mean, the social credit system has been rolled out in China over the last few years. I think they expect it to be fully operationalized by 2020, and it’s basically a big data system that collects a whole lot of information, and scoops it up. So it could be all sorts of things as to whether you parking fines, court orders, what kind of shopping you do, where you go out, who you’re associating with, what kinds of comments you’re making on social media. And it basically uses that information to give you a score, and it determines whether you are a trustworthy member of Chinese society, in which case you will be entitled to all sorts of benefits from the Chinese state.

Elaine Pearson:                  Or if you’re in the untrustworthy a category, then you might actually have trouble in booking flights, or booking a fast trains to get around. And you know, it also has repercussions in terms of your social credit score for applying for government jobs, or if you want to send your kids to a good government school. So it is extremely scary, that the Chinese government has embarked on the system. I think it’s part of the broader efforts of the Chinese government to have this mass surveillance state. And unfortunately, because China is becoming increasingly totalitarian, there’s no real way for Chinese citizens to really object to this, because if they do, they likely to bend themselves, find themselves in jail.

Misha Zelinsky:                  Or with a low score.

Elaine Pearson:                  Or low score, indeed.

Misha Zelinsky:                  And so, in terms of, so if the ability to protest these things internally in China is difficult, and we’ve seen in the past with Tiananmen Square, where attempts have been made, that the dissidents have been brutally crushed, but also the hunting down of people that blog online, or tweet online, and the great firewall of China, I mean so, it really falls to other countries to call out this sort of behavior. So, can you talk a little bit about the way that China tends to sort of bully it’s neighbors, or coerce its neighbors, into silence? And we’ve talked about trade and that kind of bilateral nature, but you know things like the BRI with diplomacy, where China lends money for projects of questionable value, and then when they can’t pay it back, they either take the asset or reach some sort of accommodative arrangement with you. I mean, how worried are you about that as an organization, when you look at human rights, globally, and in China?

Elaine Pearson:                  Oh yeah, I mean we’re extremely worried about it. I think we’re seeing that happen all over the Asia Pacific. I think now, Australia for many, was the biggest donor to Papa New Guinea, but now that’s been dwarfed by China. But most of the money that the Chinese government is giving to the PNG government, is not aid, it’s loans, and it’s for infrastructure projects. And so I think there are real questions about what happens when that money has to be repaid. But the fact that China has this ongoing, with so many different countries around the world, it means that it is also effectively able to buy the silence of these countries when it comes to raising human rights violations. So when we were talking a bit about Xinjiang, this is happening to a million Muslims, you would think that Muslim majority countries would be concerned about this, because this is happening to their brothers and sisters. And in China, they’re not even allowed to say Salaam alaikum anymore. They have to say nǐ hǎo, because if they say that, they might get sent to a political reeducation.

Misha Zelinsky:                  Right.

Elaine Pearson:                  But we’re not seeing the criticism coming from these governments, because many of these governments are also indebted to China. I was just in Indonesia a few weeks ago to talk to the Indonesian government about this, because we saw the Indonesian government really show a bit of leadership on the Rohingya issue, ethnic Rohingyas and Muslims. And as you might remember, many of them had to flee to Bangladesh because of the Myanmar militaries mess campaign of rape, murder and arson. And in that case you saw countries like Malaysia, Indonesia, really taking a stand and calling on the Myanmar government for accountability. But, Myanmar and China, I guess, are two very different beasts, precisely because of China’s economic clout. And so actually it’s been much, much more difficult to get governments to speak up about what’s happening in China right now.

Misha Zelinsky:                  And so, thinking about the way that typically human rights has been led by liberal democracies, are you concerned about, and is the organization concerned about this sort of increasing divide where, so leaving aside China, but increasingly divided between countries that are democratic and countries that are either autocratic, or democratic in name only, we’re starting to see increasing divides emerge, when you look at the countries that have recognized the new president of Venezuela, they’ve tended to fall along the lines of countries that are broadly democratic, or countries that are broadly autocratic. What is the role of that, in the human rights discourse, and how important is democracy to civil liberty?

Elaine Pearson:                  Yeah look, I think that’s a great question. And I think democracy is really important to civil liberties. I don’t think you can have … it’s very hard to see how you could protect basic civil rights of free speech, freedom of association, free press, if you don’t have a democratic system or a way in which you can raise … basically call for your rights. I think we’re very concerned about the sort of sweeping populist, autocratic movement around the world, and I think we’re seeing democracies, even the established ones, are really fraying at the edges.

Elaine Pearson:                  And the rise of these populist leaders, they’re coming to power because I think they see the world as a complicated, difficult place. They were able to really tap into the fears of a lot of people, and they’re basically scapegoating minorities, and here it might be asylum seekers, in other places it’s migrants or Muslims. In other countries, it might be LGBTI people. And I think the other thing that they do is they really erode away the checks and balances that we need in place in order to defend our basic civil liberties. And so, it’s eroding away a free press, an independent judiciary, a vigorous civil society. And we’re seeing that happen all around the world.

Misha Zelinsky:                  And, so you just touched on media there, which I think is a really important one, because media model is collapsing of the exact same time we’re seeing these problems emerge. I mean, and then there’s a further complication, I think around sort of social media, and then you kind of got this post truth, this fake news phenomenon, so what’s real, what’s not? Do you find that it’s kind of almost like a propaganda, it’s like a almost an autocratic propaganda playground, because you can always contest what’s true and what isn’t, what’s real, what’s not, and increasingly it’s very difficult to source what actually is the case. And so, quality reporting from areas that are subject to human rights abuse is becoming increasingly difficult, if you can obtain it at all. Do you find that to be the case?

Elaine Pearson:                  Yeah, I think it is becoming a bit of a propaganda war now, in some ways. And I think in the past, Human Rights Watch use to diligently do it’s reports, put its reports out there and then we would kind of think, well, the facts speak for themselves. But frankly, that’s not enough anymore. So it’s also about getting visuals. It’s about using video. It’s about effectively using social media to get your message out there, because otherwise, I think there’s also so many counter narratives around the world. But I also think, we are seeing that certain sources of information that are considered accurate, that are considered independent, are actually even more important in this world today, that’s being dominated by fake news and by spin.

Misha Zelinsky:                  Because there’s that saying which is, a lie gets around the world before truth even has time to get out of bed and put on his pants, or something – I probably butchered the quote, the quote. But that’s even more true now with social media and the way things can quickly be spread. I mean, do you think in this battle, are the autocrats winning this PR battle? I mean, I think increasing you look at polling and even in advanced democracies, in Australia, you taking the example where, young people had to be convinced that democracy is the best model, which is quite scary. I mean, do you think we’re winning or we’re losing this fight, in very broad terms?

Elaine Pearson:                  Yeah, I mean it’s hard to say. I mean I think, look, working for human rights organization, you have to be an optimist. You can’t be a pessimists because we work on pretty depressing subjects. So, I mean I think the good thing … I think we were at a really low point, particularly after Trump won the US election, and I think at that point it did seem like, you know, all of these autocratic leaders, also in Europe, were basically coming to power and how we going to stop this? But that’s not true.

Elaine Pearson:                  I mean we have seen some positive stories in Malaysia, in the Maldives recently, where they’ve been able to oust authoritarian governments through having democratic elections. And even looking at the US midterms, I mean, I think that’s another example that gives us hope. But ultimately, it is up to people to vote for the type of leaders that they want. And I think, the Philippines is an extremely concerning example, where Duterte didn’t even hide about extrajudicial killings. He openly flaunted that he wanted to kill people who were involved in the drug trade, and-

Misha Zelinsky:                  He made it a virtue as a part of his platform-

Elaine Pearson:                  Yeah. And unfortunately he maintained a lot of popular support, despite those positions. So, I think now we seeing, in the Philippines, some of the independent media that were really reporting quite strongly on the war on drugs, also facing a lot of problems from the Duterte government. So I think it’s a matter of being vigilant, everywhere. And I think it’s also about ensuring that the way in which we fight back against these autocratic governments, might be trying to get more people to come out and protest, getting people to understand the impact that this has on their rights, and I think we are starting to see that around the world. I mean, even in places like Poland, I think the fact that you had the judges protesting and saying, no, we’re still going to come to work, you can’t just dismiss us, was actually really moving. And in Hungary too, you’ve seen massive protests against Orban. So it’s not like people are just suddenly sitting back and accepting, suddenly, these more repressive governments.

Misha Zelinsky:                  That’s a really interesting point. And it’s good to hear some positive news sometimes, because we do often focus on the negative. But yeah, again, we’ve sort of talked a little about the contest between democracies and autocrats, and the old divide of … the old cold war divide, but what’s the role of values projection in foreign policy? Because, I mean we talk a lot about hard power, and things in a national security frame, about cyber security and military and alliances. But what’s the role of values projection in it, and also, how much is it dependent on western credibility, and has some of that eroded over time, that we can’t really talk about these things as confidently as we once did?

Elaine Pearson:                  Yeah, I mean, I think there’s definitely some truth to that, that if you’re going to talk about respect for international law, and get other countries to agree to that, then you also need to apply those same principles at home. And we have seen basically hypocritical governments, from the US to Australia, on a number of these issues. But I think the role of values in diplomacy is incredibly important. And even if you read the foreign policy white paper that came out, it talks about the need for an international rules based order, and how Australia’s interests will best be protected in a region that respects the rule of law. Well, if you want a region that respects the rule of law, then it is about also promoting those values, because you’ve got the Chinese government at the other end, throwing all its cash around, in a lot of these countries in this region.

Elaine Pearson:                  And so I think, it is really important for democratic countries like Australia, New Zealand, Japan, Korea. It’s not simply, I guess, the place of Western governments to be speaking out for these things, certainly at Human Rights Watch, we’ve been investing more in middle power countries, not just western countries, because we think that they’re really crucial to the global fight to press for human rights. So it depends, a really good case example, the Japanese government gives massive aid all around the region, yet never has really raised human rights concerns. It never comes with any conditionality attached. So we’ve certainly been working with a Japanese MPs, to talk about the importance of making sure, at least in the aid packages, that there is some human rights benchmarks, or human rights monitoring that they’re doing, and trying to get the Japanese government to be a little bit more outspoken on some rights issues.

Misha Zelinsky:                  Okay. So you mentioned Australia, so circling back to us again, which we sort of started, I think it’s a good time to talk about it. What is Australia’s role in maintaining … we’ve said, and it’s very clear that Australia benefits, middle size economy, we’re down at the bottom of the world. We benefit from a liberal rules based order. What’s our role in maintaining that? Do we have a role? I mean, how does a middle power navigate this sort of uncertain times, where there’s these sort of emerging tensions between titans, globally?

Elaine Pearson:                  Yeah, so look, I mean I think, it’s about standing up. Consider having a consistent principal position on human rights, and standing up for those values, and those principles, wherever they under threat. And this doesn’t mean megaphone diplomacy, or … I hate that term because the whole idea that you would shout at someone through a megaphone, obviously is never going to be effective.

Misha Zelinsky:                  We do it at the unions, but …

Elaine Pearson:                  But maybe not, maybe not in senior meetings between prime ministers and foreign ministers. And it doesn’t mean lecturing other countries, but it also means finding ways to support civil societies, support human rights defenders, to support the lawyers and people in those countries, who frankly are under attack for their views. And so it might be simple things like, you know, inviting them to embassy functions, providing support to organizations who really need that work to document human rights abuses. But I think it’s also calling governments out, when people are unfairly prosecuted, or when political prisoners go to jail, and showing governments that the Australian government cares about these values.

Misha Zelinsky:                  And so, I mean, I think Ozzie’s often wonder, when we look at the world, we think, do we really matter? We’ve got our alliances, and they kind of taking care of us and the world and we just sort of ride along. Does our opinion matter in this space? Are we seen as a serious player in the human rights space? I mean, how much should we care about this, and what’s our influence, in a realistic sense?

Elaine Pearson:                  Yes, it totally matters. I mean, I think particularly now, given that the traditional countries that spoke up very strongly about human rights, for better or for worse, the US and the UK, they’re pretty absent now. The US is completely absent on a Trump. The UK is totally preoccupied by Brexit. That leaves the EU. Canada has been pretty good, in raising these issues, but I think that really sort of opens the space for middle power countries like Australia, and particularly in the Asia Pacific region. I mean, Australia is a really important player. It has important trade and security relationships with a lot of these countries.

Elaine Pearson:                  It’s provided a lot of aid over the years, and so our voice does matter. But I think it’s not just about Australia speaking up on its own, it’s actually about Australia working in coalition with a bunch of other governments, and especially if you’re dealing with a very strong, powerful country like China, it’s not going to be effective if it’s just Australia raising its concerns on its own. But in a case like Yang, I think it’s effectively trying to get joint demarches by embassies, getting other embassies to also speak up, and speaking with a united voice on these issues.

Misha Zelinsky:                  Well, I think it’s been a really fascinating chatting, and we could talk all day about this, well I certainly could. I bore people to death with my podcast. But, so the last question I ask everybody, so Ozzie’s get asked … so the mirror version, but foreign guests get asked which Australians they’d invite to a barbecue, so three foreigners at a barbecue at Elaine Pearson’s house. Who are they, and why?

Elaine Pearson:                  Three foreigners at a barbecue? Well, I think I would have to say Kofi Annan, because yeah, I have long been a fan of Kofi Annan. But at the other end of the spectrum, I would probably love to have Jacinda Ardern, the New Zealand Prime Minister there, and he had her insights as a young female leader of the country. And then, maybe because this is a podcast, Ira Glass, who does, “This American Life”, I just feel like I’ve listened to his voice for so many years, I would love to have him around for barbie.

Misha Zelinsky:                  Very good. A podcaster, a politician, and a diplomat. It would be a great time to be a fly on the wall there. I’d like to record that barbecue, it would be a very fascinating-

Elaine Pearson:                  Well, maybe I’d let you come along too.

Misha Zelinsky:                  It’s kind of implicit in the Diplomates title I’m coming, but no, thank you so much for joining us tonight. It’s been a fascinating chat. Appreciate it.

Elaine Pearson:                  Thanks, Misha.

Misha Zelinsky:                  And we are done.

 

Governor Kim Beazley

Kim Beazley is the Western Australian Governor.  Governor might be his current job, but he was also the Australian Ambassador to the United States, Parliamentary Leader of the Australian Labor Party, Deputy PM of Australia and also served as Defence Minister – quite a CV!

Governor Beazley joined Misha Zelinsky to talk about Trump, Putin, China and how Australia can navigate the global rivalries that are fast emerging between our strategic allies and our regional trading partners.

We apologise for the quality of this audio. It was done in Government House in Perth, which is currently under extensive renovation. 

 

 

EPISODE TRANSCRIPT

Misha Zelinsky:                  Governor Kim Beazley, thank you for joining me on Diplomates. Now, I should note that we’re doing this in the rather salubrious surrounds of the Government House in Western Australia so thank you for having me along. Very lovely digs you have here.

Misha Zelinsky:                  Now, Governor, I thought it would be useful to start off here. You’re former ambassador to the United States. The U.S. under Trump, it seems to be picking fights with its friends in the European Union, it’s broken deals with the Iran Deal. Of course Australia was not immune in respect to the discussions around migration. The United States has been a very long term friend with Australia. Can we still count on the United States as a friend?

Kim Beazley:                         I’m going to separate Australia out from the rest. We’re unique. I suppose you could also include Israel in that uniqueness. We are not criticized by the U.S. in any way shape or form. That all the old verities were there and the language between us and the United States, all the old undertakings, all the old promises, they all still feature in the rhetoric of, not only the officials of the United States, but also President Trump. So it’s as though, excuse me, we’ve been frozen in aspic. The Australian relationship is carved out from the roiling of the rest of the U.S. relationships in the Western alliance. Most notable with NATO, but also, really, too, with Japan and South Korea and experiences that they have had. So there is no reason to say, in anything that has happened to this point, that Australia has been … had its relationship changed.

Kim Beazley:                         But the circumstances in which we conduct our own diplomacy in the region and further afield, yeah, that has been impacted. But that’s in a sense for us to work out how to handle it.

Misha Zelinsky:                  So we’ve had, recently the foreign minister come out and say that the relationship perhaps is changing. We’ve had the Shadow Foreign Minister in Penny Wong also talk about perhaps a new paradigm emerging. The U.S. president seems to be very focused on deals. He says that NATO’s a bad deal. The Iran deal was a bad deal. Various trade relations are bad deals. Could ANZUS ever be a bad deal, do you think? In that context?

Kim Beazley:                         I think the problem that we have with the President and others, is related to how he sees the world. And basically, American statespersons have run the United States since World War II on the basis of the post World War II settlement. Liberal internationalism, multilateralism, rules of the road in so far as the global commons is concerned, open trading relationships as far as the WTO is concerned. It’s at the heart of the liberal internationalist project of the United States. Trump is the polar opposite. He is a nationalist. He is a unilateralist. He has no permanent friends and no permanent enemies. He is an admirer of authoritarian rule. He sees essentially the paradigms that I described earlier on as essentially excuses for looting the United States. And in that position for a lengthy period of time.

Kim Beazley:                         He takes umbrage, therefore, at anything he thinks in past relationships with allies, in particular, as indicating that they’re users as a reason for him to bring them under a scalpel. And then he looks to Russia, probably in a quite unique way and we don’t know fully the reasons for that, but irrespective of his attitude to Russia, he is essentially not about an international order of liberal principles. He is about an international order of survival of the fittest, competitive and that order is ruled, not by rules, but by force de rigueur and the creation of facts.

Kim Beazley:                         Now that’s him. But his officials don’t agree with that. So you have these absurdities. You have the visit this month in July to Europe, Brussels, one or two other European capitals and then Helsinki with Putin, in which he exhibits all the, with NATO, all the facets of their changed ideological direction. But then the communique comes out. And there’s not a dime of difference between the communique from this NATO and any of the communiques in the past. And American officials are writing that.

Kim Beazley:                         He comes out with the picture I presented of nationalist unilateralism and his Defense Secretary, Mattis, personally writes the national defense strategy which is an enormous re-endorsement of the saliency of the American alliances.

Kim Beazley:                         So you’ve got the President out there with new directions. You’ve got the rest of his administration talking up the old storm, and most of Congress as well, doing the same. So this is, to say the least, a confusing time for Australian ministers.

Misha Zelinsky:                  Given the depth of relationship, I think it’s interesting because as you say the relationship is deep at a political level, it’s also deep at an institutional level. It sent us, for want of a better word, seems to be holding for now but given the extraordinary powers the president has, over foreign affairs in particular, can the relationship survive four years, potentially eight years of Trump? Can they potentially, given the importance of the U.S. relationship to Australia and it is, how do we maintain that relationship in the context of unilateralism and nationalism from a Trump administration?

Kim Beazley:                         If this was being pursued in an intelligent systematic way, based on our, what you’d call full court press of officials, and U.S. policy was proceeding with structure down the line that we’ve been talking about, the answer would be no to that question. But the essence of Trump’s administrative style is beyond the expression of an attitude. It’s impossible to develop a body. And so no one can really predict what’s going to come out of all of this, beyond volatility. And certainly there will be volatility and that volatility may produce crisis, particularly when they interact with other changes in the system.

Kim Beazley:                         See, I would say that Australia has more to think about in the much more rapidly changing distribution of power in our region, than simply Mr. Trump. And we do have to look very seriously at recasting the defense policy that we have.

Kim Beazley:                         And one of the things that Trump is doing, I think, inadvertently helpfully, and I put the helpfully in quotation marks because it’s not his intention, is that he’s forcing us to rethink the way we do force structure. And we put up global rules out there and global order up there and the relationships in the region as an equal force structure determinant with the defense of our approaches. That was a mistake when we did it and it’s now completely unsustainable. So we have to-

Misha Zelinsky:                  You mean the reliance on the U.S. underpinning security in the region?

Kim Beazley:                         Not reliance on the U.S. so much as the character of the region.

Misha Zelinsky:                  Right.

Kim Beazley:                         And the character of the region did not really reflect what we assumed of it and the fact that Mr. Trump is not actually prepared to pursue his side of some of the underpinnings means that what we should have done anyway, we absolutely have to do. We have to go to Plan B.

Misha Zelinsky:                  And so let’s talk a little bit about Plan B. You mentioned the shifting of power and I think, effectively, that’s a shifting to a more multi-polar world with the rise of China and the reset of Russia. And you’ve got Putin and Xi actively challenging some of these structures that we have and the alliance system, it’s not being helped by perhaps uncertainty around the U.S.’s position on those alliances. But in the region, with Australia and our relationship with China, we’ve seen [inaudible 00:10:11] assertiveness in the region from China militarily. How concerned should we be about China under the Xi regime.

Kim Beazley:                         There’s no reason that we have to engage with China. We have to calculate what the Chinese are likely to do in the future. We have to see how they interact with other powers in the region, including the United States. But I’ll just say this about President Xi, he has shifted China a long way from the vision of Deng Xiaoping. And there’s a big area of risk here that people just simply don’t talk about and that is, how does he keep his legitimacy going now that they’ve essentially moved away from collective leadership? It moved away from the trend towards constitutionalism. It reinserted the Party processes.

Misha Zelinsky:                  That’s right he was saying he’s a big reformer.

Kim Beazley:                         Yeah and everything. And they’ve done that. So you now have a totally different picture emerging from China. How does he keep legitimacy for what is a lifetime of leadership instead of the 10 years normally accorded. Well, he’ll run into trouble. All governments do run into trouble. The Chinese are not exempt from that. And when he does, people are going to start looking at him from a nationalist point of view and say things like, you made a big deal of re-incorporation of Taiwan. You made a big deal of enforcing our position in the South China and East China Seas. Why is nothing changed? Are you really the defender of the nation?

Kim Beazley:                         Now that’s not a question that would normally have been asked of any of his predecessors as president. It will be asked of him some time in the next 10 years.

Misha Zelinsky:                  What sort of event would ask that question?

Kim Beazley:                         The Chinese people are engaged. Yes, there’s oppression. Yes, there’s a failure to recognize rights, but there’s two things. One, they’re very courageous. Two, they’re very opinionated. And generally they’ve found out this, which is not a good thing, necessarily for the rest of us. They’ve found that if you go after the Communist Party from the right, you frighten them. If you go after them from the left, the super libertarian and the rest of it, you’re easily oppressed. And so-

Misha Zelinsky:                  So nationalism is the big threat to the regime.

Kim Beazley:                         Nationalism, you can always get them

Misha Zelinsky:                  Interesting.

Kim Beazley:                         And nationalism gets bound up in what we’ve just been talking about. So there’s that. There’s not just Trump out there on the landscape. There’s also these other changes and where on earth are we going to end up with North Korea is a further factor in this.

Misha Zelinsky:                  That’s right.

Kim Beazley:                         So what do we need to do? Well, we don’t need to move away from the United States for the very simple reason. In this more volatile region, where we have effectively a total focus on technological skills as our defense, staying ahead of the game technologically, we now only have one alternative and that is relationship with the United States. They are the only people really in the game, in technological enhancements, in capacity in weapons systems, military tactics, all the things that are associated with the next generation of military technologies.

Kim Beazley:                         The only other people in the game are the Russians and the Chinese. The Europeans are on the outskirts. So for us, if we want to survive in this zone, in the long term, we have no choice but to associate with the United States if we want to be anything.

Misha Zelinsky:                  Let’s talk about the United States, China, and the South China Sea. You’ve got the Chinese being very provocative, building manmade islands, taking ownership of other islands and then now militarizing those islands despite promises not to do so. The Americans are very keen for us to engage in the Freedom of Navigation exercises which is to go within the 12 nautical mile range of those sites. Australia has yet to do that. Should we be doing that? Should we be participating in those types of Freedom of Navigation exercises?

Kim Beazley:                         Well that’s a matter for the government. The government is quite clear on what it believes the legalities of the situation are. Also quite clear on what they believe the Chinese are already doing or not doing. Also quite clear on what the rights are of the states that have got counterclaims and the rest of the world in terms of movement of shipping, both civil and military through those areas. So there’s nothing you can complain about, I think, sensibly about Australian government policy and it’s quite reasonable for them to be presenting those policies to the Chinese in argument and discussion.

Kim Beazley:                         Before I became governor and was then less reticent about putting my views across about what government should be doing, what I used to say-

PART 1 OF 3 ENDS [00:15:04]

Kim Beazley:                         My views across about what the government should be doing. What I used to say was by and large, I think we should do these things on our own. That we have our own view about the legalities here and how these legalities ought to be pursued and we were pursuing it. The marginal zone about where we ought to operate in this regard is about island like features that are being created but do not attract island like legal rights. So that is when you take a rock and turn it into a base, that sort of thing, even when you’ve done that, that attracts no automatic rights to a territorial sea around it.

Kim Beazley:                         Most of what has been done has been turning features which do count as islands into bases. And the position of the Australian government over the years has always been that they treat those entities as though there was an owner because there is than owner. The question about who the owner is is to our mind not settled. But then we would observe the limits that would have been observed if an owner was in place.

Misha Zelinsky:                  How do we grapple with, as a democracy in Australia that we favor these rule based order, where you have contested claims in the South China Sea, they go to court, they’re ruling in one particular which is against China in that particular instance, and that has not subsequently been observed. If it does start to unstitch the entire system when countries don’t observe the outcomes of the great system, or the referee so to speak.

Kim Beazley:                         Well our view of course is they should. And hardly anyone can ever enforce its views on the rest of the globe. You basically have to simply influence folk or try to influence folk. Whether you do actually anything practical about it or not, at least when there is a discussion of these issues, you don’t back away from the principles that you evolved. So any argument that takes place you take the view of the legalities which we have supported for a very long period of time.

Kim Beazley:                         It’s not an embarrassment, I don’t think, for a country like Australia if the views we express are not entertained by others with whom we’re talking. We can’t force them to do anything. And in those circumstances, the best we can do is to articulate those concerns, keep doing so, give support to other people who are doing it who may be more directly effected than we are, and learning the maturity and toughness that comes with somebody or some nation that is prepared to stand up for what it believes.

Misha Zelinsky:                  I’d just like to just quickly talk about China’s relationship with some of the other players in the region. Some of the smaller countries of the Asian nations and also the Pacific in terms of this One Belt, One Road initiative. And we’ve seen initially it’s talked about one of the largest investment in human history to reestablish that trade route through sea and land.

Misha Zelinsky:                  But we’re also now seeing the so called debt book diplomacy where countries have signed dup for projects they don’t necessarily need at terms that aren’t that particularly favorable. Then when they can’t make the payment, that asset’s taken back. Most troubling-ly the example of Vanuatu it looked like there may have been a military lock base or Naval base being built there potentially. How concerned should we be about that the way that China’s asserting itself through trade or through debt in a region?

Kim Beazley:                         I think China might be concerned out it, not just us. International politics is pretty fluid. Reputational issues are very important. You start developing our reputation for using debt to essentially take over parts of other countries, if you start building installations which are of very little value to the country in which they’re built but a substantial value to yourself, if you start projects which can’t be paid for by their own intrinsic merits, or you can’t complete to the satisfaction of the folk concerned, you’re going to suffer immense reputational damage. And people will deal with it.

Kim Beazley:                         This is particularly so in the experience of countries in Africa, but also in Southeast Asia and South Asia. A lot of these things are self correcting. And China’s going to have to learn from that. and will learn from that as people respond. When you actually look at the completion rights of these projects, and then look at some others who engage the infrastructure of the region like the Japanese, at a much lower level the Japanese have a much higher success rate. And what the Japanese actually produce is something usually useful to the countries concern.

Kim Beazley:                         They don’t talk about belts and roads and endless highway of Japanese economic activity, but to all intensive purposes, when you look at the infrastructure projects they’re engaged in, they’re similarly geographically aligned to those which the Chinese do but with smaller amounts invested and better outcomes for the people that are concerned. It’s not just there, it’s Americans, it’s a lot of other people engaged in this.

Kim Beazley:                         But it is an opportunity for many countries, and there will be from time to time an intersection between what is fiscally sustainable and what is actually locally necessary. And that’s certainly, China’s a powerful country, it helps advance their influence. At the moment you’d say that the most impactful in political terms of these Chinese strategies is not so much on the region we inhabit but in Central Asia. And who loses out? In Central Asia, to those Chinese infrastructure initiatives, what? Russia.

Kim Beazley:                         So Russia has this relationship with China which sees Russia’s interests and influence effectively being subsumed.

Misha Zelinsky:                  That’s interesting. So you think that … A lot of people are now seeing it perhaps it’s a Cold War sort of prison, but a lot of people are seeing it as an alignment of interests between Russia and China. But you’re suggesting perhaps there are tensions that will emerge at Eurasian crossover region as China seeks to build up it’s sphere influence. Because Putin’s very concerned about spheres of influence.

Kim Beazley:                         Look, there’s no conflict of interest between the two except perhaps in the challenge to what they think is objectionable features of the rules based order. But the truth is there’s no symmetry there either. Putin just totally rejects it, the Chinese don’t. The are may feature of rules based order which they absolutely agree with. There’s no symmetry between the two of them on that.

Kim Beazley:                         It’s convenient to have that relationship with China, but there are contradiction elements of it too. The Russians built up a lot of influence and Vietnam and a lot of influence in India and South Asia. And the performance of the Chinese is causing all of our lives to be quizzical about them. And there’s no activity which when analyzed in detail to engage in which Russia does not look to complete in theory.

Kim Beazley:                         Putin may have had a triumph with his conversations with Trump and made the American president look ridiculous or as a satrap. And all of the allies of the United Stares might have been embarrassed by it. But where does it get Putin? Has it got him a relief of sanctions? Has it got him a non-engagement with the NATO powers along his border? Has it got him an American recognition of where he stands in Ukraine? Has it got him anything that actually matters to him?

Kim Beazley:                         And when you look at Russia’s situation, an economy the size of Australia with about four or five times that number of people to look after as Australia with about two and a half times out spending on defense, there’s a few people in Russia who are beginning to start to say to Mr. Putin, “Enough already.”

Misha Zelinsky:                  With a very low life expectancy evidently as well.

Kim Beazley:                         Yeah. Except the Russians are pretty courageous people.

Misha Zelinsky:                  They’re stoic.

Kim Beazley:                         They’re stoic as you say, they’re cynical. They like the fact that they’ve seen him stand up proud, take over property and the rest of it. They also want to be fed. And at some point of time, where Putin stands at the moment means they’re not going to be. So he needs those changes. If I was a Russian I’d be saying of the old lad, I’d be saying, “Oh yeah, you did real well. You poisoned our relationship with the United States, you’ve interfered in their politics in a way beyond any interference they’ve done in ours, you’ve got yourself in your mind a president elected at your own behalf. What’s on my table as a result of that please?” And the answer of course is nothing.

Misha Zelinsky:                  Yes, well that’s interesting. So you talked about economics there, and I think in the old Cold War we had two separate systems that a lot of people now point to the economics being this, perhaps the destiny in terms of security. You have people that look at China’s projections in our region and then say well there’s no way the that US can compare against China’s GDP therefor game over. Some analysts will say that. Others will point to the quad. Now I’m curious to ask you about which is the alliance of Japan, India, the United States, Australia which is very nice and do you see that as a potential counterbalance in our region in terms of economic response and in security response?

Kim Beazley:                         No, I just see it as a useful engagement. We are moving. China’s not the only country rising economically. You’ll see the same set of statistics that you just quoted applied to India, show India in the second half of this century we’ll all be thoroughly dead, taking over that leadership position from China. And you’ll see a straight line projections are all terrific except there are human realities that intervene.

Misha Zelinsky:                  And India has a demographic advantage as well.

Kim Beazley:                         Yeah. That’s right. And at the moment there’s a writing America off which also doesn’t have population problems. It’s economy is going to expand. The relativities that work towards China are not based on collapsing the American position. It’s a the American position advances, US is now starting to compete in new technologies, having let it go to some degree. And they’ve just put humongous amounts of money into it. Another great triumph for Putin. Gets out the and boast about a bunch of hypersonic missiles and related technologies which he doesn’t possess. And threaten to incorporate nuclear weapons within technical strategies which he hasn’t arrived at. He may arrive at that.

Kim Beazley:                         But with his 78 billion a year that spends on defense, he just massively tweaked the tail of somebody spending 715 billion. Brilliant move. You really scored with that one. So what do the Americans say? Oh well, we better got on with the hypersonic, we better get on with a different technical nuclear weapon usable in the battlefields. We’d better get on with the lasers, we’d better get on with the Artificial Intelligence and the rest of it. He’s just invited competition for an outfit spending ten times what he’s spending on defense. Fled losers.

Misha Zelinsky:                  Which is exactly what happened in the 80s with Reagan handcrafting the Soviet Union.

Kim Beazley:                         Exactly. And we need to take a look at that. There’s an awful lot of what the Americans are doing with their massive new defense spending that I think is a bit unwise. They’re focused too much on platforms and personnel and not enough on the new technologies. Though they’re spending a lot on the new technologies. I think the objective of the 350 ship Navy works against the rapid incorporation within the platforms they do have which is about 280 of them, of some of the new technologies which they brought forward very substantially particularly in related to direct energy weapons like lasers.

Kim Beazley:                         Their demand to put another 100,000 men or whatever it is in the Army works against the Army’s clear preference for next generation technologies on the battlefield. So there’s that tension going on. But the amounts of money is so huge that they may well be able to sustain the apparently contradictory priorities.

Kim Beazley:                         So there’s all of that going on at the moment which gives absolutely no attention or focus here at all.

Misha Zelinsky:                  And Australia benefits from that because we use a lot of the same combat systems as the United States, is that right?

Kim Beazley:                         And also we are very adept in sitting down with the Americans and converting those technologies into things that are usable in our environment. And I notice for the recent meeting of OSMET that the American Defense Secretary was pointing out our membership of the industrial recognized, industrial and inventive capabilities that the US will want to partner with. So we have got the possibility of engaging a lot of these technologies given that we can’t any longer do that ourselves. Or count on getting it from anywhere else. At least we are now heavily engaged with the Americans on that front. And we have at our defense …

PART 2 OF 3 ENDS [00:30:04]

Kim Beazley:                         … the Americans on that front, and we have at our defense, science and technology organization exactly the sort of capabilities that we need to ensure that we prioritize those technologies rightly and incorporate them effectively. We’re on the verge of a [walk 00:30:18] in the next generation systems, but only on the verge of that because of the continuing relationship with the Americans and nothing Trump has done threatens that. Trump creates a difficult international environment for us. He has not created a difficult military development environment for us.

Misha Zelinsky:                  Well, that’s very assuring. Just to bring it, we’ve talked a lot about international defense policy. I’m curious to get your views on some of the things that are happening at home in a foreign policy context. We’ve had Chinese interference in our domestic affairs, and all the debates between the so-called China Hawks or the Panda Huggers, how seriously should we be concerned about Chinese interference in our democracy with various financial interference into major parties, and how hard should we be pushing back on that?

Kim Beazley:                         Most countries, and this country is now included, but wasn’t, most countries extract themselves from the contribution of other countries and involvement in domestic politics. It doesn’t necessarily work regarding the subject of illegal penetration on the scale that you saw from the United States and Russia, but there are some protections there and the protections have come in here. I think we have to be very careful here in how we handle this. We do not want to make the many Chinese Australians uncomfortable in their own country.

Misha Zelinsky:                  Absolutely.

Kim Beazley:                         It is important that they feel welcome, that they are Australians like the rest of us. We have a blessed tendency in this country not to refer to ourselves as Italian Australians or Irish Australians or Chinese Australians or Indian Australians. The Americans do that.

Misha Zelinsky:                  Yes.

Kim Beazley:                         We don’t.

Misha Zelinsky:                  Yep.

Kim Beazley:                         We just talk about Australians and then we may get in the conversation go down the line to look at ethnic origins, but we assume that in the end they get absorbed by the great Australian, lovely cultural system.

Misha Zelinsky:                  Absolutely.

Kim Beazley:                         We’ve got to think about that. That means that when we have a disagreement with the Chinese, and we will from time to time and we do look at the sorts of issues that come up here, we need to be polite. We need to be firm, but we also need to be polite, and we need to avoid humiliation wherever we can. The debate that we had on these various issues at the time of Sam Dastyyari put out of the show late last year. I’m not defending him. I’m suggesting that he shouldn’t have gone, but it spiraled out of that into mutual insults, and there certainly is enough to go around in the political process about engagements of the past, in a way which I could understand why Chinese government would start to look at you sideways.

Kim Beazley:                         See, you’ve got to be sensib;e about it. The Americans are the biggest investor in this. The Chinese are our biggest trading partner. Chinese Australians are critical contributors to the stability of this country and its success. We need to bear all those things in mind and grab some maturity in handling it.

Misha Zelinsky:                  No, that’s interesting because I think there’s some difficulty in how to handle the relationship. You mentioned earlier about reputational concerns that the Chinese have, but also there is a, there seems to be a tension between calling out behavior from the Chinese, be it in island building in the South China Sea, or perhaps in meddling in democracy, but it seems to be the tone that is a concern rather than the … How would we be better to manage that?

Kim Beazley:                         Adopt a reasonable tone. You can make these points without getting hysterical. The points need to be made and you want to be able to incorporate those issues in your conversations without necessarily creating massive damage to your country while you do it. One of the problems is this, and this just doesn’t apply and this issue applies in any issue, if you go out of the top and you create a situation where you were tricked and you left worse off than before when you went over the top in your response. The point is, the object of your attention is no longer the issue. You are the issue.

Kim Beazley:                         Now, how do you deal with that? Well it’s a maturity and it also means too that there are a lot of areas of politics when you’re a nation like us, which is not all powerful, you need to actually learn to manage your words and manage your approaches. We’ve done it in the past. We now have to do it full time.

Misha Zelinsky:                  I was just curious just to peek a little bit about the tension that exists, and it’s kind of the elephant in the room where we say we don’t have to choose between our secured relationship with the United States and our trade relationship with China. Can you see, what are the potential triggers where a choice may need to be made? There’s a whole, Hilary Clinton famously said you can’t argue with your banker. How do we argue with our best customer at the same time as wanting to perhaps stick with our best friend in the United States?

Kim Beazley:                         A good start is not to ask the question, and to actually look at how governments handle issues and not the commentary. Commentary has to ask the questions because there’s nothing else to say. The government doesn’t operate like that.. We decided that it was in our interest to proceed with membership of the Asian Infrastructure Investment Bank. This is a big deal, a far bigger deal than any of the things that we’ve been talking about so far.

Misha Zelinsky:                  The Americans didn’t want us to do it.

Kim Beazley:                         The Americans did not want us to do it, but we decided, particularly with the south east Asians who are very important to us, [inaudible 00:36:45] to us, wanted us to get involved. We decided to get involved, so what do we do then? We go around saying, “Well, we’ve chosen between the US and China and we’ve chosen China.” That would be the height of immaturity, stupidity, and factually wrong. We chose to be a member of the Asian Infrastructure Investment Bank. That’s what we chose. What we did with the Americans was to say to them, “Look, we think that we need to get into this.” I used to say to them, “You look at China through the prism of the geographic relationship, through Confucian societies, Indochina.” We look at China from a north south perspective. We go through a whole variety of other cultures before we arrive at the Confucian ones. They are important to us and we take some guidance from them. We take the view that we need to listen to what they want us to do and they said that they would feel much more comfortable in that bank if we are there, so we’re going to do it.

Kim Beazley:                         What we will do is we will firstly say that we’re going to try and make the government’s terms as close to the Asian Development Bank as we possibly can, and we are going to keep you advised on each step that we take. That’s how you handle those issues. We didn’t running around asking silly questions about whether or not we’re choosing between China and the US. You do what is in your national interest. That’s what you do.

Misha Zelinsky:                  That’s interesting, so I would like to actually ask you a questions following on from that because you’ve talked a lot about the economic rise of China and the choices there. Australia has been at every war with the United States, certainly the twentieth century and twenty first century. Is that relationship too strong? Should we be more independent given that what we know now with the Iraq war and the subsequent knock on effects of that? Is there a situation where we can perhaps not necessarily go all the way with LBJ so to speak?

Kim Beazley:                         You make your own decisions. Every one of the wars you referred to we made our own decisions. There was always a factor in those decisions about, at least since World War II, about the character of the relationship we have with the United States is one of the issues that we thought through, but it was not the only issue. We thought through those issues from the perspective of our own national interest, particularly recently, our involvements in Afghanistan and our involvement in Iraq, not the original one. I would say that these are issues which we’ll have to keep on thinking about all the time. You always need to think about it from the point of view of understanding that we’re already deeply embedded in the American system, through the job facilities of which we’ve added another couple over the course of the last decade, in relation to another area of contest that need space, and therefore we’ll always making a substantial contribution to them. We need to work out whether or not we want to make more.

Kim Beazley:                         Tony Abbot, as I recollect at the time of his last latest engagement in Iraq was hardly influenced by American concerns at all. He was influenced by and trying to influence the Americans toward committing themselves because he believed that it would be fatal for the rest of us if that caliphate got underway and successfully ensconced itself in Syria or Iraq. I would have said that our engagement, and I was looking at it from the point of view of the point made in Washington while it was being discussed, not at my level. It was being discussed at other levels, but I was at least in there. It was virtually nothing to do with the alliance and virtually everything to do with the situation on the ground and our concern that the Iraqi government should survive.

Misha Zelinsky:                  That was in response to the ISIS sort of take over over parts of Syria and of Iraq, but the original decision in 2003, I’d like to ask, would you have handled that differently?

Kim Beazley:                         Yes I would have.

Misha Zelinsky:                  Yep.

Kim Beazley:                         To be honest, I’m not quite sure where I would have ended up at the very, very last minute, but I can tell you what I would have been doing in the period of time when the British and the Americans and the rest of the world really was looking at what ought to be done about Saddam Hussein, and I’d be doing my damnedest to try to persuade the Americans not to do what they did because if you look at our speeches at the time, you will see that we knew exactly what was going to happen as a result of all of this. We understood of course that the Americans after 9/11, they’re pretty much a winded society, and there’s a lot of motivation around about punish one, educate a hundred.

Kim Beazley:                         We saw at the time that this was not a sensible way of doing that and that you were likely to get yourself into serious trouble if you persisted with it. I suspect that possibly at the end of the day, as the whites in their eyes time had been arrived at, probably would have redeployed the ships that were in the gulf anyway. That would have been a very last minute point, and that was after you’ve exhausted every capacity to persuade them not to. It would be a bit absurd had the ships sailing around there not engaged in what subsequently emerged.

Misha Zelinsky:                  Have been not perhaps as a starting player in the coalition of the willing, so to speak.

Kim Beazley:                         It would be a concluding point, not a starting point.

Misha Zelinsky:                  Well, that’s a good place for us to finish up. Just as a final question we ask all of our guests on Diplomates, which is, and you’re a former ambassador, so with international guests like to ask them which Australians they’d invite to lunch, but as a former ambassador I might ask you three Americans to lunch with the governor, who are they and why?

Kim Beazley:                         Well, I would love to have ex-President Obama as one of those to lunch. I’d love to have Hilary Clinton, and I would be fascinated to have added to them Jim Mattis.

Misha Zelinsky:                  Oh wow. That would be an interesting group.

Kim Beazley:                         To see what they’ve got to say about contemporary affairs. I’ve got a huge amount of time for all of them and I think that they would make, because all three of them make excellent dinner companions.

Misha Zelinsky:                  That would be a lovely, to be a fly on the wall that would be great, but look, Governor Beazley, thank you so much for your time. It’s been a fantastic conversation and all the best with the new year.

Kim Beazley:                         Thank you.

 

Steve Glickman

Steve Glickman, the CEO and founder of Develop Advisors, is the world’s foremost expert on Economic Opportunity Zones. Steve joined Misha to give his predictions on the mid-term and 2020 elections, discuss solutions to geographic inequality, dissect the problems with a UBI and explain what’s gone wrong with global trade. Steve also gives tips on how to overcome partisanship in the legislative process.  It’s a BIG chat.  

A young gun in US politics, Steve was an advisor in the Obama Whitehouse and started his career as Special Assistant US Attorney. 

While at the Economic Innovation Group  – which he co-founded with Sean Parker – Steve developed the radical ‘Economic Opportunity Zones’ that are tasked with kickstarting capital investment and job creation in areas of the US suffering from high inequality and low capital investment. He is now bringing EOZ’s to life via his new investment firm, Develop Advisors. 

It’s a great and really fun chat. For policy nerds, there’s a really fascinating critique of the Universal Basic Income.

We need this guy to run for President some day (no pressure, Steve).

 

 

EPISODE 2 FULL TRANSCRIPT: 

Misha Zelinsky:                  Steve Glickman, how are you? Welcome.

Steve Glickman:                 Thanks for having me.

Misha Zelinsky:                  I should say that it’s in the evening in DC right now. Is that right?

Steve Glickman:                 Yeah. It’s 5:40. So all the government bureaucrats have already gone home

Misha Zelinsky:                  Very good. So I should say we’re obviously recording this across time zone. So it’s early in the morning here in Australia. But yeah, the wonders of technology bringing people together. So Steve, I was actually just going through your CV before. You and I first met through the American-Australian leadership dialogue where youth delegates. I’m a little bit surprised at the depth of your CV. Are you sure that you actually youth delegate or are you fudging things a little?

Steve Glickman:                 Well, you know, I make up most of the stuff that I do or talk about on the spot so you can pretty much assume it’s all one big running lie.

Misha Zelinsky:                  Well, just on that. So your main role, and we’ll talk a little bit about your broad career as we go along. But your main role is that to you are the co founder and CEO of the Economic Innovation Group. I was hoping that you might be able to tell us a little bit about what the EIG is and how and why it was set up.

Steve Glickman:                 Yeah. I think a good way to think about us is we’re social entrepreneurs. So we are trying to find a new pathway at addressing big economic challenges in a very crowded marketplace of think tanks and political organizations, and other groups that are trying to make their mark in DC. We were founded in early 2013. It was really, much of this was the brainchild of Sean Parker, who as you know is the co-founder of Napster and the first president of Facebook. And when he and I got connected at the end of 2012, early 2013, he was really focused on how you leverage the private sector to solve big economic challenges. Particularly, how you drive more private sector investors to a bigger part of country.

Steve Glickman:                 And that was really our DNA from the beginning was could we get a group of Democrats and Republicans, conservative and liberal thinkers, private sector, public sector actors to really come together around the notion that we could create a new incentive system to change the flow of capital markets in the US?

Steve Glickman:                 And as we started unpacking that problem and that approach, we found ourselves doing a lot of research around what drives inequality on a community level around America, and what the depths are of that inequality and what the impact is. And the more and more we unraveled that onion, the more questions we had and the more we realized that we think we had stumbled upon maybe the most important economic policy challenge that wasn’t really being addressed by either political party and that gave us a pretty strong feeling that we were onto something meaningful. So we’re really intensely focused just around that problem, and bringing in a whole new set of actors from the private sector to solve it.

Misha Zelinsky:                  Yeah, that’s really interesting. So we’ll talk a little bit about the bipartisan part of the EIG. But I’m just curious. I mean, I think a lot of people talking about inequality. I think what’s interesting about what the EIG does is that you are very focused on can I say, in an American sort of way, is that it’s focused on capital investment and enterprise. I was wondering if you could maybe just unpack that a little around how you see the role of enterprise in lifting people up out of inequality and rather than it being perhaps a government led solution.

Steve Glickman:                 I think our approach to it is that it involves both, but that the government at all levels. Whether it’s the federal government or local governments in the US, which is unique to the US structure that we’ve got that federalist system. That a lot of the programs initiated by government having worked very well, but even more importantly, it’s both politically, financially, they’re broke. There’s just no capital based on the changes in our tax system and the changes in the political acceptability of big government programs to do a lot more out of the public sector. And some of that’s just a factor of the economy and our debt, and the fact that between social security and Medicare, and defense spending, and payments of the debt, there’s just not a lot of additional capital to go around unless you hike up taxes.

Steve Glickman:                 And certainly in America, the political trends are in the opposite direction where you’ve been lowering taxes, or have had pretty low taxes for 30 or 40 years. So if you, go ahead.

Misha Zelinsky:                  Sorry, keep going.

Steve Glickman:                 So if you’re gonna solve the problem of how you create more economic growth, it costs money from somewhere. And the private sector is to contrast to all those trends in the public sector has never been wealthier, more profitable. The stock market’s never been higher than ever before. So clearly there’s a lot of capital that’s resting there. From our standpoint, the capital markets aren’t broke, they’re just broken. And they’re not working in the way that they could or should work. And if you’re not driving more capital places, you’re not ultimately creating more businesses places. And if you’re not creating more businesses places, there’s no other way to get jobs. So we subscribe to the notion that to change economies, it starts with the ground up. You have to create local, homegrown businesses and you can’t do that without capital.

Misha Zelinsky:                  Now, that’s really interesting. And I think you talked a lot about tax cuts there. And tax cuts at the moment, corporate tax cuts are on the agenda in Australia in a very contentious. There’s a lot of argument from both sides of politics. I think what was interesting, obviously those are major tax cut I’m brought in by the Trump administration and the republican congress. But what was within that was a small piece of a very innovative policy that the EIG championed. I was wondering if you could maybe tell us a little bit about the role that the tax cuts have played in helping the EIG actually get some rubber on the road in terms of things you just talked about.

Steve Glickman:                 Well, so the program you’re talking about is called opportunity zones. And let me separate it out a little bit from the overall tax reform package. It was a vehicle to make a certain set of tax changes, but I think it’s a little bit different in the tenure of what you see from many other parts of that tax reform package. It’s designed to do something that the US tax code has done for a long time, which is if you want to incentivize certain types of behavior, and in our case it was incentivizing moving private capital to low income parts of the country. The tax code is the most important and most powerful, most systemic way to do that. And of course we do that in the US to stimulate a charitable contributions. We do it to stimulate people buy houses, we do it to stimulate companies to make investments in research and development. We do it to stimulate the clean energy economy.

Steve Glickman:                 So it makes total sense and if you think, and we do think that community level inequality using most important problem to solve and there’s lots of capital in the private sector. Let’s utilize the tax code to systemically change the flows of that capital. And that’s basically what the opportunity zone program does. It’s essentially a deal between the federal government and private investors that we as the federal government will give you some level of tax forgiveness if you’re willing to make longterm and economically productive private investments in communities that are cut off from capital markets.

Steve Glickman:                 The program is obviously more complicated than that and we can get into whatever level of details you want, but at the end of the day, that’s what it’s about. It’s about getting capital off the sidelines. By our calculation there’s about 6 trillion with a T, $6 trillion in unrealized passive capital gains sitting in the economy. that’s in the stock market, in the real estate market that has been booming for at least a decade now. And if that money can be funneled to distressed communities around the US, there’s a pretty powerful tax incentive attached to it and we think it will move markets, it’ll change the way the market works.

Misha Zelinsky:                  That’s really interesting. So yeah, obviously taxes. It controls the flow of money. You’ve talked a lot about the role of capital in these distressed communities. I know the EIG talks a lot about the geographic role of inequality. I’m just wondering about the role. How do you see the role of responsible business in addressing inequality? And obviously we want to see capital investment in distressed communities creating jobs, but what do you think, what’s the role of the business community in addressing wage inequality and lifting up people and making sure that we don’t have a situation where you have people working one job or multiple jobs, and being unable to sustain themselves?

Steve Glickman:                 There’s no doubt that how stagnant wages have been an America is a big source of inequality on a number of different levels. And this was one of the stories of the recession and the recovery was that we gained back all of our high wage jobs. We gained back way more than we lost in terms of low wage jobs, and we didn’t gain back those middle wage jobs. And a big reason for that is the industries that really never came back were a lot of those middle wage industries like manufacturing. Now a lot of thinkers and policymakers in both parties understand that. But then your solution set gets all over the place and a lot of it has been focused for years on well, if we want to bring back those type of jobs, we have to bring back those sectors, and that’s not our perspective.

Steve Glickman:                 It’s manufacturing has fundamentally changed. But those communities that were manufacturing communities need similar quality jobs to replace it. And jobs that fundamentally don’t require a college education. On the democratic side, you hear a lot of talk about how everyone should go to college and that’s just not really a practical solution at least in the US. So you’ve really got to create new business activity in order to change that. And listen, I don’t think you’re going to be able to get there by forcing the corporations to do that, at least not in traditional ways. There is a big competitiveness problem in the US economy. It is much harder for new businesses to start and grow. We’re on this huge 40 year decline in our ability to create. So there’s this myth that the US is this entrepreneurial economy, and of course in some ways we’re more entrepreneurial than many other places around the country. But that edge that the US has is rapidly declining, and in part that’s because we’re creating businesses in such a smaller number of places around the US.

Steve Glickman:                 So again, we think it’s a homegrown problem, and that there are entrepreneurs everywhere. And the way to get at solving that problem is by getting more and more of those entrepreneurs capital. Let me give you one quick stat. If you look at the venture capital industry which is the source of much of the high growth entrepreneurship in the US, nearly 80 percent of that capital is invested in only three states. So three out of the 50 states, Massachusetts, New York, and California get nearly 80 percent of the capital. And that’s true across many other parts of our capital markets. Including how banks lend and where banks are located around the US. So this is a big problem to unravel and we think it starts with how capital flows.

Misha Zelinsky:                  That’s really interesting, and I think it gives us an opportunity to talk a little bit about this geographic inequality, these distressed communities. It’s been discussed a lot and I’m curious to hear your take on it as someone who’s a Democrat and perhaps has a slightly a nuanced view of the election. The geographic role that inequality pied in the US selection, you of course grew up in Michigan. That’s a state that’s blue state gone red, so to speak. But I think that what’s interesting is you talked about there was the loss of jobs, Trump zeroed in on very acutely around this loss of jobs and the promise to bring back steel jobs mining jobs in those distressed communities. And whether it was true or not, it certainly resonated. So I’m curious just a little bit about the geographic role that inequality played in the US election.

Steve Glickman:                 So I think there’s a couple answers to that. One is let’s take a look at how people evaluate the economy. So in a time when the national economy was booming, our unemployment rate was close to four percent and the stock market had been growing for this long bull market. That national level economy was just not resonating to people because frankly, it’s just not how people evaluate the economy. They evaluate the comedy based on what they see happening in their community. And people are really good at evaluating how well their local economies are doing. And as it turns out, a lot of national policy makers and the media don’t fully understand what the country looks like outside of big markets like New York, LA, San Francisco, and DC because that’s where they spend most of their time.

Steve Glickman:                 It looks much different than the rest of America. We for instance looked at swing districts, at places that voted for Barack Obama twice and then voted for Donald trump. And those are places it’d be hard to say that the difference in the election was based on race because they elected for an African American president twice. And much more likely, the driving force there was the economy. And if you look at those counties, and there were 200 plus of them that voted for Barack Obama twice and then voted for Donald trump. The big tying factor for all of them is that three quarters of them lost businesses during the recovery years and lost jobs on net during the recovery years. So while our national unemployment rate is going lower, in those places unemployment rate is not being affected at all. In fact, they’re losing jobs.

Steve Glickman:                 And one of the stories about the economy that people don’t fully understand even now is when we talk about the recovery, we’re talking about a recovery that really disproportionately benefited the top 10 or 20 percent of the country, that the rest of country kind of stayed even. And that the bottom 20 percent of American communities lost jobs and even a greater trajectory than they did before the recession. And in a lot of those places, it was totally rational to say the status quo establishment economic thinking from both parties isn’t working for us. It’s not changing our trajectory. So we’re going to vote for something different. And, one of the things they’re voting for is how to maintain their quality of life, maintain a community where their kids can stay and achieve the American dream.

Steve Glickman:                 And we know the reality is changing in those communities. The tragic thing is I don’t think either party is really giving folks a viable solution for how they change their trajectory. Because a lot of these jobs aren’t coming back. And a lot of the problems for their current economic situation isn’t as simple as trade, or immigration, or any number of issues that have become the threshold issues in our debate. It’s really a much more complicated, long term structural change of communities that haven’t kept up with the how fast the economy’s been changing and having diversified the industries and the opportunities they’ve given to people who have lived in a lot of these cities.

Misha Zelinsky:                  That’s the challenge, isn’t it for progressives I think is that the difficulties of the problem cannot be explained in neat, make America great again, type sloganeering. So that is always the challenge. But what’s interesting as well as you talked a lot about there about the main economies LA, New York, San Francisco. But what’s interesting as well is this so called red state blue state thing where people look at them on a headline map. But what’s actually interesting, if you dig into a blue state, you’ll see that it’s actually perhaps a blue dot or a blue island on a red ocean. And maybe just talk a little bit about the differences between outcomes and metropolitan people versus outcomes in those sorts of non metro rural areas. And the tensions that are building there.

Steve Glickman:                 And I think the problem is even a little more complicated than that. So listen, the geographies that do really well in our economy typically are the suburbs. And the suburbs can be republican or democrat. Some studies going to do really well and some cities tend not to do well. And a lot of those cities, you have large population groups, particularly minority population groups that are doing much worse than whites even in rural areas. But ultimately, I think this comes down to a trajectory. If you’re living in an African American or Hispanic community, even one that’s on absolute terms not doing as well as a lot of white communities, you’re probably doing better than your parents or your grandparents did. And that’s not just an economic issue. That’s also a social justice, civil rights status that have improved for many, many millions of Americans despite a whole set of current challenges.

Steve Glickman:                 If you’re in the white working class community and a lot of those are small town and rural America, your trajectory has gone the opposite direction. You’ve lost. Particularly if you’re in a manufacturing community, you’ve lost those industries. You’ve lost those quality of jobs. You’ve lost your main street. It’s been replaced by a minimum wage jobs. Whether it’s working for really big companies or for distributors or call centers, or whatever is left. And the quality is just different. There are rural communities and small towns in America that are doing great, but disproportionately the parts of the country that are doing the best are cities that are connected to global markets, connected to immigrant communities, and connected to the digital economy. And those are places like you mentioned, like New York and DC and San Francisco and LA, and also other towns that are, cities that are taking advantage of it. In the middle of the country, like Denver and Austin. And Minneapolis and other communities.

Steve Glickman:                 But those are the exceptions. And so the reality is this is not a rural versus urban issue. There’s just huge amounts of distress in both communities, and it’s not even a black versus white issue. But a lot of this has to do with trajectory. And, if you see yourself going the wrong direction, if you see your kids have less opportunities than you do, it makes people angry. And rightfully so. And I think at a starting point, and this goes back to our conversation around Trump, people want to be seen. They want to know that you understand their problem, and how their problem is unique and different because of where they live. And I think to Trump’s credit, he understood it and was able to articulate it. And whether or not you have a good solution for it or not, more politicians on both sides have to articulate that as the biggest problem we need to solve with this country.

Misha Zelinsky:                  I think that’s interesting. And you’ve talked a bit about Trump, but I think what’s interesting and puzzling to a lot of Australians is that you had people that voted for Obama. We had eight years of Obama, and then suddenly those very same people turned around and voted for Trump someone that not only was the antithesis of Obama, but was the leader of the birther movement. So it is quite puzzling from an Australian point of view. But I’d be curious to get your views as someone who worked in the Obama administration in an economic portfolio. Could the Obama administration done more for people, in terms of making sure that those communities weren’t so left behind in the recovery? Because I think Obama rightly put a lot of focus on saving Detroit with the auto bailout and focused very heavily on making sure that those working class jobs were not lost. But should the Obama administration done more and should the Democratic Party have detected this problem that was out there?

Steve Glickman:                 So the short answer is yes. I mean clearly, the Obama administration should have done more. I would separate a little bit the first term from the second term and not just because I served in the first term and not the second.

Steve Glickman:                 But I really think in the first term, the big focus was on the economic infrastructure of both America and the world. Which as you probably remember was teetering. And even right coming out of the recession, people were extremely nervous. Not just about the US, but Europe was going to collapse. That Italy and Spain and Greece, were going to default. And that meant the end of the EU and a new global recession and we would have all been screwed. And so that sucked up a lot of the bandwidth in the first term all the way through. And the bailout and TARP and the stimulus package, and the auto rescue in Detroit. And I’m pretty proud of the role I think the president played in, not just in America but globally in stabilizing the economy.

Steve Glickman:                 In the second term, I think we could’ve done a lot more. In part, we didn’t have as much political capital as we had in the first term for sure. And we didn’t have congress anymore. And that makes it difficult to do real big meaningful things including things that require for instance, changes to the tax code, which you need an act of Congress. Congress controls really all the spending in the US political structure and they were openly at war with the president and vice versa. So, the White House was really limited to what it could do through executive order, which is a much smaller set of authorities then you can do through law. So I think a lot of bridges had been burned by then, and all that political capital had really been used on creating health reform and creating universal access to healthcare, which I think is part of the problem you’re talking about.

Steve Glickman:                 But this is a problem that we could have focused more in on in the second, could have done more about. It’s also a really longterm problem. So the recession was not a turning point for most of these communities except in degree of distress. Most of these places where it had been distressed for at least 10 years before the recession and probably decades beforehand. Detroit hit its peak in the 1950s where it was one of the wealthiest economies in the country and had been in a downward slide as the US lost manufacturing shares to other world economies. And that’s just the way the economy works. So I do think the White House has some blame and the administration has some blame. But at the end of the day, this is as much an issue about local leadership as it is about federal leadership. And there are certain places now that are just well much better prepared to take advantage of this economy than others.

Steve Glickman:                 And once they got lazy and passive, and decided they were gonna hope and pray for another company or another manufacturing plant to take the place of the last one they lost instead of how do we take advantage of this new tech enabled economy and use our infrastructure of universities, I mean don’t forget, places like Michigan and Ohio and Pennsylvania have had world famous engineering research universities. University of Michigan, Carnegie Mellon, Ohio State, and so you have the raw firepower to take advantage of the new economy. But it requires a local leadership and local vision to get there. And I think too few places had that until the last couple years or so.

Misha Zelinsky:                  That’s really interesting. And I think you’ve touched a little bit on trade and touched a little bit on the effects of job replacement in communities where you’ve seen perhaps a steelworks shut and not be replaced with anything. One of the things I’m very fond of, and we certainly see similar things in Australia. I certainly see that in my role in the Australian Worker’s Union. One of the things I always say is that trade is good, but fundamentally trade destroys and distributes unevenly. And I think we’ve certainly seen it in the US, but I’m curious at Trump has been putting forward a very muscular focus on trade. He sees trade in a binary sense where a trade balance if it’s negative, the US is losing. And if it’s positive, the US is winning, he sees it in a zero sum manner. Just curious how do progressives grapple with this question of trade which can hurt people, and how do you make sure communities aren’t left behind in the process?

Steve Glickman:                 So there’s no doubt that trade, as a lot of people will say, the benefits of trade are dispersed pretty widely and the impact of trade and the challenges with trade tend to be very concentrated. And that’s certainly the case in the US economy. The economies that were most dominant by manufacturing, not necessarily most dominated by trade because the trade rich, trade dependent economies, some of them are booming. And a lot of the places we mentioned like Seattle and Los Angeles and New York, which are big hubs of trade are doing really well. But if you’re a dominant sector and is manufacturing and you don’t have a diversified economy, than the impact of trade can be huge. And one, as the Democratic Party or either party. I think we need to start by doing a better job giving communities the tools that they need to adapt.

Steve Glickman:                 Some of that is capital and how they access capital so they can build new industries. Some of it is how they retrain workers. We have a terrible and a terribly outdated worker retraining system in the US. It requires you to lose your job. It retrains you into sectors that aren’t producing jobs. It’s both inefficient and ineffective for people. And this is really a place where the private sector can and should play a huge role. If you’re not creating a workforce training system where the private sector is at the table to talk about where their hiring needs are and how government can offload some of that training with the guarantee or the commitment that private sector interview and hire people coming out of these programs, until that works better it’s really hard to solve this problem. But this conversation has been one that progressives have been good or even better at talking about for a long time.

Steve Glickman:                 So if you look at the height of progressivism, you’re really talking about the thirties, forties, fifties, sixties, even going into the seventies. So from like FDR through Lyndon Johnson where we had massive policies around retraining, around settling the west. And I think just as importantly and something that the Democratic Party is starting to talk about more around competition and corporate consolidation. So we really have the most consolidated and economy in the US we’ve had since the depression, since the 1920s and thirties where a smaller number of big companies control a bigger part of our economy. And that leads to a lot of this inequality and wage suppression and lack of investment, which we’re all seeing. Because workers and communities are less able to compete. And if you look at where airline hubs have gone from when you’ve gone from having 10 airlines to having four airlines. Or where banks are located. Bank of America shut down 10,000 of their branches over the last 10 years. And community banks are growing at a slower rate than ever, which means small business lending in this country is basically plateaued at a 20 year low.

Steve Glickman:                 So it matters what the private sector is made up of, not just what they do. And if they’re made up of lots more of, many more companies that are growing and more dispersed as opposed to a few really big companies, it makes a big difference in the economy. And so this question around how you create a more competitive economy in the US is really important. And Democrats used to talk about this all the time, and we really stopped talking about it in the last 20 or 30 years.

Misha Zelinsky:                  It’s interesting. It’s interesting, the concept of competition. It’s a bit of an anathema sometimes to those on the progressive side of politics, but competition is inherently good for the economy. It’s also good for consumers, which fundamentally the people that we seek to stand up for which are families, people buying things. And you want to see competition in wages, making sure that wages are going up and competing for labor, but also that you want to see competition in the cost of goods and reducing the cost of living for people. So it is interesting the level of concentration, but also what you’re seeing increasingly is a global phenomenon. We certainly see it here in Australia with many US firms where it’s winner takes all markets. And, one of the things I’m curious actually if your take on this and I think perhaps I could already know your answer. But one of the solutions being advocated is universal basic income. If there’s no jobs and jobs that are being inherently more and more consolidated into mega firms and you’re seeing market’s up ended and people unable to work, that we should have a universal basic income, which is basic principle.

Misha Zelinsky:                  Everyone gets, no matter if you’re a billionaire or dirt poor, everyone gets a certain income and then off you go to try to do best from there. But I think that there are certainly some problems with that idea, but I’m curious about your take on that because I think fundamentally, the better outcome is you want to see a good job. If you lose a good job in a steelworks, a unionized job, it’s well paid that it’s replaced with another good job and it’s not that you’re on your own driving Uber and trying to make ends meet.

Steve Glickman:                 So I dislike almost everything about UBI. One I think it’s an American. We already really have a UBI through our social security system, and it’s just for people who can’t contribute to the economy. People who are disabled or a retired, or for reasons that are no fault of their own no longer working. And then it makes sense to have a massive safety net, one that’s growing with the way the economy’s changing, for people who are no longer contributing. But otherwise our system is premised on people working. And I believe people want to work and want quality jobs where they’re contributing to their economy and being, their wages reflect their contribution.

Misha Zelinsky:                  Well there’s a dignity in work as well, right?

Steve Glickman:                 Of course. But in UBI is like giving up. It’s a form of charity and saying we can’t solve this problem of how we create new businesses and new industries and train people with new skills. So we’re going to pay people, but we’re going to pay them a poverty level wage. And I believe even if we could afford it, which we couldn’t because you gotta think in the US, if you’re paying for 350 million people, but let’s assume half of those are workers, so 150 million workers and you’re paying them $15,000 a year, you’re talking about a program in the trillions of dollars a year. And the US doesn’t have that type of capital. It can’t afford that program. And even if it could afford that program, it would suck away from every other single domestic spending program we had. We’ have a UBI program, and a Pentagon, and social security and Medicare. And that’s all the economy could withstand. The US budget $4 billion dollars a year. You’re talking about this would be something like 40 or 50 percent of our budget.

Steve Glickman:                 So I don’t think it’s either politically or economically viable, which is why I don’t spend too much time thinking about it. But I think conceptually it’s also a broken. And we shouldn’t be giving up. On the Republican Party, I think as they see the economy particularly in the lens of this new republicanism, it’s very focused on how we separate ourselves from immigrants and our trading partners. And I think that’s a big mistake, and it’s particularly a big mistake in the context of immigration.

Steve Glickman:                 Immigrants, there are very few economic thinkers who would tell you that immigration is not a large net positive to any economy. These are people that want to be here, that want at work, that are disproportionately business owners and the creator of high growth businesses. Something like half of our venture backed businesses in the US, 50 percent are backed by immigrants or immigrant co-founders. So they’re a huge part of our economy. But on the democratic side, there’s this theory around the future of work that robots and artificial intelligence are taking over and there’s nothing we can do about it. So let’s just pay everyone, five or 10 or $15,000 a year. And to me that’s just as big of a cop out.

Misha Zelinsky:                  It’s technological determinism, so that we have no control over the technology that we can’t shape it to our way either, right?

Steve Glickman:                 Well first, yes. And there is no evidence of that. Our economic evidence shows a low productive, low wage, low unemployment economy. And if there were tons of robots and artificial intelligence, productivity will be super high. Wages would be higher and there’d be a lot less jobs because robots would be doing it. So that’s not the case right. Now that even if you thought that was the case 10 or 20 or 30 years from now, which I don’t subscribe to, the fatalistic way to your point that we look at this is sad. Because there are lots of things we should try. If we thought robots were going to take over the economy in 30 years, then the solution is let’s not give everyone charity so they’re making a poverty wage. The solution is how do we prepare more American communities and more American workers to take advantage of that technology enabled economy? We need more thinking about that, not more thinking about how we’re going to spend more money to spend our way out of this problem. At least in my view.

Misha Zelinsky:                  I subscribe to that view too. I don’t think the UBI, whilst it’s interesting, I think it’s under the assumption that there’s no work, and I don’t believe there will be no work. So I think it’s actually making sure that the work we have is well paid and people are skilled for it accordingly. But so I’m just curious. You touched on immigration there and the role that immigrants play. And I think any policy person would agree with you, but that’s certainly not the mood in the community globally. You’re seeing it in Europe, you’re seeing it in Australia, you’re seeing it in the United States, suddenly with Trump with his wall. How can progressives articulate a positive view of immigration and not purely on an identity basis, but on an economic basis?

Steve Glickman:                 Well listen. Fear and economic scarcity or the perception of economic scarcity drive bad policy decisions, and they drive anti-immigrant thinking for hundreds and hundreds of years.

Misha Zelinsky:                  This is not new. That’s important.

Steve Glickman:                 No. And I think for a lot of these issues, the question like for instance, the answer to trade is not making a better argument for trade. And the answer for immigration is not making a better argument for immigration. It’s ultimately solving that perception people have of economic scarcity and that they’re in decline. And so these are all first order questions. It starts with if you want to get those issues right, and we may get them wrong for the next four or five or six or seven or eight years. And it’s not because people are in my view, hateful or mean or irrational. It’s because they don’t see any other option. So I think we have to give people other options. We have to convince them that there’s a way they’re going to get skills and there’s gonna be new programs, new cooperation between the public and private sector around how we upscale people.

Steve Glickman:                 I think they have to see that investors are rebuilding a bigger part of this country because they buy the fact that there’s a future in more places than just a handful of cities around the country, and they have to see new businesses start in their backyard so the trend lines aren’t just Kmart and Target, and then came Walmart, and then came Amazon, and out went all the local businesses that thrive and grow in these economies.

Steve Glickman:                 And by the way, the notion that San Francisco and LA, and New York, and DC are better places because everyone’s crammed into them looking for opportunity and they have to pay outrageous amounts to buy condos. It costs over a million dollars to buy a one bedroom condo in San Francisco now, and they’re losing more people than they’re taking in because nobody wants to live there anymore, because it’s unlivable. The fact that that’s a better outcome even for those economies is crazy.

Steve Glickman:                 So this requires dramatic action. The market’s not going to work it out. People are not mobile. We have lower rates of mobility in the US than we’ve ever had before because people don’t have the connections, the skills, the capital they need to be able to move to places that have these industries. The only solution is to create more industries and more businesses in a bigger chunk of the country. And I think there’s plenty of interesting entrepreneurs and you, I think at this point earlier. We know there’s plenty of work because there’s plenty of problems to solve. Work is just a function of solving problems for other people. Whether it’s the problem of how you create stuff in mass or how you grow stuff in mass, or how you provide certain services to people. And most of those jobs you can trade away.

Steve Glickman:                 Our economy like the Australian economy is mostly a services economy. And those services are locally provided. They’re your restaurants and dry cleaners, and they’re your bars and your doctors, much of this stuff you get locally. So a lot of the economy is not going to change dramatically. We’re really talking about the parts of the economy that are globally connected, and if you just focus in on that part of the problem, there are solutions there. At least in the US, we have a huge infrastructure around our capital markets and our labor markets and it’s just working really efficiently, and we as a society and the government can fix that if we wanted to.

Misha Zelinsky:                  That’s a really interesting point. So earlier on, you touched on this concept of unamerican. I think as an Australian, I certainly understand what you mean by that and I think many people in the world would. What’s a lot of people asking at the moment is what is it that America stands for? And I know that’s a broad question, but we talked a little bit about immigration and Trump’s take on that. And, we talked a little bit about trade. The US, for many, many decades now since certainly since World War II is been the guarantor and the prorector and advocate of an open global system. Be it of immigration, be it of trade and has also added support that with its institutions. Now in recent times, the US is turning in on itself. So I’m curious about how does the US with these challenges that it has around inequality, around the negatives around trade and around the negatives around immigration and the political impacts of that is happening, and the political part is detecting that? But at the same time, the rest of the world, countries like Australia, other western liberal democracies are looking to the us to say how is it that the US can help underpin the challenges we’re seeing from China, from Russia, from other models. From non-US models. And how can the US juggle both its challenges at home but also help us friends abroad?

Steve Glickman:                 Well, listen. There’s no doubt we’re at an unprecedented point in our politics where leadership that our friends around the world who are used to seeing from the US is lacking, at least in terms of our role in the global economic stage. With that being said, nothing in my view so far has fundamentally changed. We’re still a part of an active participant in the WTO, the World Trade Organization. We still have, with some very small exceptions given the size of our economy, a very open market both for investment and portrayed. We still have a immigrant rich country, that takes in large numbers of people every year and it brings a large number of tourists here, and large number of people are educated around the world in US universities. So I think the tone and the rhetoric is certainly off in terms of where the US is traditionally lead.

Steve Glickman:                 I’m not sure anything has fundamentally changed yet in terms of how the American economy and the American immigration system fundamentally works. Now of course, some of it is starting to change. I think it’s an open question of whether Congress pushes back against that. Our system is, the president’s got a lot of authority, particularly around foreign policy issues, but very little unilateral authority around core economic issues. And that includes trade, taxes, and even immigration where the president’s powers are limited. So congress ultimately has to come along, and I think what you’re not seeing is an acceptance from either party, including the Republican Party that their norms have fundamentally changed around trade or even that our national consensus has changed around immigration yet. I wish we were letting in far more immigrants than we are now, and I wish we had not pulled out of the transpacific partnership, which I think would have put us on a much stronger footing to be closer allied to Australia and Japan, and Korea, and other countries in the region in dealing with China. That was a big I think self inflicted wound.

Misha Zelinsky:                  Let’s talk about TPP. Let’s just talk about TPP.

Steve Glickman:                 But I’m not sure how much has fundamentally changed in the US beyond that.

Misha Zelinsky:                  Yeah, because I think TPP is interesting because you talked about trade. And you said the US president has limited powers. But the TPP, I think there are a lot of problems with that deal. But nevertheless, the TPP was seen as the US as part of Obama’s pivot into Asia is about setting the rules of the game, setting the rules of the road. And the US 2016 election pulled, both parties away. I mean the Republicans got pulled away first through trump’s challenge internally, but then Hillary Clinton was also pulled to the left by a firstly Bernie sanders and then Trump himself who she was effectively crucified over NAFTA and the impact that NAFTA had rightly or wrongly at least in a perception sense on the communities we talked about earlier. So that’s I think one real world example, and China are filling I suppose the vacuum around TPP with their one belt, one road initiative, certainly in the Asian region. So I think there’s certainly already observable impacts from new us retreat from an open liberal system.

Steve Glickman:                 Yes. I mean you’re totally right. I wouldn’t buy too heavily into any of the campaign rhetoric, at least from Hillary Clinton’s camp around TPP. She was one of the architects of TPP when she was the secretary of state in the Obama administration. And if you look back at the history of trade agreements, it’s typically been democratic presidents who have done the heavy lifting on trade despite the stereotypes of the party. Bill Clinton got NAFTA done. I’m, Barack Obama did most of the heavy lifting around the TPP. Kennedy was really the initiator of the first big trade expansion in US history, and Roosevelt and Truman were big supporters of how you use economic diplomacy to solve big means here. I think what we got wrong in the TPP debate was that it’s fundamentally an economic agreement. It’s fundamentally a political agreement. I think the biggest, most important part about TPP was securing our place and our alliance within Asia and dealing with any number of issues that balanced powers in East Asia that would give us better footing from everything from North Korea to the South China Sea, to engaging with Russia and elsewhere.

Steve Glickman:                 And that should’ve been the debate we were really having because that’s where it has the biggest impact. It would have honestly marginal economic impact even though these are really big markets because we had agreements with most of these countries. The only one that we didn’t have a meaningful agreement with was Japan. And that’s where a lot of the tussling was at the end and it was around really small issues. Most of the tussling and these agreements, for instance, TPP happening around Ag. And the AG sector in the US is .5 percent of our GDP. 99.5 percent is something else. Manufacturing, services, natural resources. This is a really small part of the US economy and that’s not really what the agreement was about. It was about a new political order or at least preserving a political balance in Asia. And unfortunately we’re losing some of that.

Steve Glickman:                 What’s interesting is that the president’s in Singapore right now trying to create a new political packed with the Koreas, and we’ll see if that works and we’ll see whether his shoot from the hip model is effective. I’m not ruling it out. It’s not the only way to get there. But I do think when we take away the tools from our tool box, which trade is a big one of those tools, we hurt our standing around the world and thus hurt US security and foreign policy interests.

Misha Zelinsky:                  So you talked about China and the South China Sea. One of the things that Australia focuses a lot on is the role of China and trying to grapple with the economic underpinning relationship that we have with the Chinese, and also the challenge that China brings to the liberal world order, but also the challenges that it brings to our launches with the United States and other like minded countries, and they’ve been very city in the South China Sea.

Misha Zelinsky:                  So there is a lot of nervousness around the US’s continued role as a strategic guarantor of freedom of navigation in South China Sea. But also, do you see that the US is focused enough on the challenge that China has brought? The US tends to be at its best when it’s challenged. Much like in the Cold War, but also with the rise of Japan. And do you see that it might actually bring the best out of the US in terms of raising its own standards, but also reaching out to friends around the world?

Steve Glickman:                 Well, China is the most complicated national security foreign policy issue the US has to deal with. And we have a really complex, multifaceted conversation with China that’s ongoing and has been ongoing for years. However, I think 2018 is not the 1940s and 50s. I think that across the world, countries that have long relied on the US as a guarantor have to start taking care of their own backyard. And that’s both Europe and Asia. I think the Europeans have to step up and play a bigger role in world affairs. They’ve got the resources, they have the military technology and the military powers to do it. I think it’s the same thing in Asia. I think that Japan’s, the current construct that Japan is going to be taken care of by the US is one that’s been outdated over the course of 70 years, and that everyone needs to play a role in keeping up their own backyard.

Steve Glickman:                 The US is not the sole world power. It’s undoubtedly still be richest and most powerful country in the world, but that margin has decreased across a number of different factors. And that means other countries have to step up. And the US, listen. I have no doubt that over even the medium term, the US will know its allies from its friends and be there for its allies when push comes to shove. But it’s a lot easier if our allies have leverage in their own regions. I think frankly, not to preach to the choir here, but Australia has done a really good job of this. Australia’s emerged as a powerful force in Asia. It’s a tiny country, because it has stepped up, and stepped up in a lot places have where it’s had the US back where it didn’t really need to, in I think asserting its roll and influence. I’d like to see Japan step up in a similar way and I’d like to see Germany step up in a similar way in Europe. These are the two richest country in the world aside from the US and China, and they need to step up.

Misha Zelinsky:                  Yeah, I think that’s an interesting point. And I know the Japanese certainly are looking at amending their constitution. But I do think even from a leveraging resources standpoint, it’s important that every country unifies. Because people often look at it as though it’s a United States versus China, but when you actually look at it, if you add the liberal democracies. You add Europe, you add the US, you add the UK, now Australia and other countries. You put those together, the GDP between those countries is extraordinarily huge. And you can certainly leverage that in a number of strategic ways, further the projection of a broader liberal order.

Misha Zelinsky:                  But I just want to take it back to domestic politics. You are, as I said earlier, a senior figure in the Democratic Party. And you’re also based in Chicago, which is endlessly fascinating. From a political standpoint, it’s obviously the political home of Barack Obama. I’m curious, you didn’t grow up there, but you’re now in there. So maybe you could give us some insights as to how you ended up in Chicago from a political standpoint, and we’ll talk a little bit about the midterms as well.

Steve Glickman:                 So two small corrections. One, very few people would describe me as a senior figure in the Democratic Party.

Misha Zelinsky:                  I’m being generous mate.

Steve Glickman:                 And two, I don’t live in Chicago. I live in Washington DC.

Misha Zelinsky:                  Oh yes you do. But you are Chicago Bears, Cubs fan?

Steve Glickman:                 I do. My dad and my grand father grew up in Chicago, so spent a lot of time there growing up and a big Chicago cubs fans.

Misha Zelinsky:                  Someone needs to do better research for me.

Steve Glickman:                 No, I chalk it up to the time zone change. That’s probably what’s contributing to this.

Misha Zelinsky:                  That’s right. So your family is from Chicago. That’s right, isn’t it? And that is a very democratic political city.

Steve Glickman:                 Yeah, although every city is a Democratic city these days for the most part. But yeah, there are these very storied democratic roots in the, in the city of Chicago.

Steve Glickman:                 Listen, I think that there’s this, what’s I think interesting to me now is there’s been this incredible comeback story of the role of cities as almost replacements from actors on the federal level. There’s lots of ways you’re seeing this in ways that are kind of surprising, if you look at climate change and the pact Eric Garcetti, the mayor of Los Angeles has pulled together by getting a large contingency of mayors to subscribe to certain climate change goals. Even with us pulling out of the Paris Accords. Or whether it’s the role cities are playing in creating new economic future for their citizens without relying on the federal government to step up and do anything dramatic. The most interesting I think politics right now are city level politics. And some of these cities, their economies are so large, whether it’s LA, New York, Chicago, and elsewhere. That they rival many countries around the world, so they’re starting to pursue their own trade missions, and starting to pursue their own commercial diplomacy around the world.

Steve Glickman:                 And so I think those are really fascinating trends of the rise of cities around the world, and I wonder whether they’ll start to displace the role of federal governments everywhere when there’s more interesting things happening in the city level than on a national level.

Misha Zelinsky:                  And so just coming up to the midterms and a lot of attention on the elections. A lot going on. It will be very important, at least to Trump’s presidency, whether or not the Democrats can secure either of the houses. How do you see that probably playing out?

Steve Glickman:                 So I think as is typical in lots of midterm elections, the opposition party does really well. And I expect Democrats in 2018 certainly in the house. There’s a much more challenging playing field in the Senate in 2018 because Democrats are defending so many seats in the Senate. But I expect us to do very well in the house. I think Democrats will take over leadership of the house, and I think there’s a lot of signals you’re getting from existing members of Congress, including in the Republican Party where you see a number of senior retirements among Republicans in the house. Which is a pretty good signal that they don’t have a strong feeling they’re going to hold onto power next year. Now with that being said, being in control of one house of Congress only gives you so much when the presidency is the other party and the Senate is the other party, which I think is like most likely to be the case. Although the Democrats have a fighting shot to take over the Senate. We’re only down two seats. 49 seats are held by Democrats in the Senate and 51 are held by Republicans.

Steve Glickman:                 But it will make a difference in at least slowing down the agenda that President Trump has in the White House because he’ll be forced to work with Democrats. I think it might be a very interesting paradigm though, because I think President Trump has shown that he’s willing to work with Democrats and Republicans when the circumstances are right. And so I wonder if he’s going to have some issues he can work on with a democratic house.

Steve Glickman:                 I think the other big looming question is whether a democratic house moves forward to impeach the president, which they can do with-

Misha Zelinsky:                  I’m curious to ask you about that because you’re a former trial attorney at the Department of Justice, so it’d be remiss of me not to ask you on the Trump Russia investigation, how you see that playing out.

Steve Glickman:                 Yeah. And there’s also an investigator for congress. I investigated the wars in Iraq and Afghanistan. And so a sense for how that process works. So all democrats would need is a majority vote in the house to impeach the president. And they should I think have the numbers to do that if everyone voted that way, I’m not sure everyone would. I think right now, I think the grounds on which to impeach the president are pretty late. I think that there would be some unintended consequences of this creating some sympathy for the White House and a distraction for an agenda the Democrats may want to start to lay out going into the 2020 presidential election. And I don’t think it’s likely to result in the president being removed from office because Democrats would need two thirds of the Senate, which is likely to be controlled by Republican to be pretty close to 50/50.

Steve Glickman:                 And so they would need a number of Republican votes. Unless there’s a smoking gun that comes out of the Bob Mueller investigation of the Trump campaign, and their connections with Russia which at least I’ve not seen or heard yet. I don’t think that’s very likely to be successful. And I’m not even sure whether that vote will be taken in the house because it comes with a lot of political risk. So I think the president is likely to serve out his term and I think there’s likely to be a Democrat who’s speaker of the house. And that brings us to 2020, which I image you’re curious about as well.

Misha Zelinsky:                  Yeah you’re well ahead of me mate. You’re just naturally guiding yourself to the questions. But so 2020, you’ve talked a lot about I think a bit of a different democratic agenda for certainly in respect to the campaign that the Democrats ran in 2016. So I’d be curious to see what you think are some of the lead candidates are to take on Trump in 2020 in the assumption that he’s there, and then who you might favor?

Steve Glickman:                 So I’ll answer both those questions maybe a little differently than how you asked them. One, let me just talk about the context now. So if you ask voters, and I’ve heard this pretty recently from very experienced public opinion researchers who have looked at how voters view the Democratic Party and the Republican Party, and the president. I think you get some surprising results. One, the president’s a lot more popular than people give him credit for. And in part, I think it’s a factor of the fact that the economy is still really strong, and the president’s viewed as very strong on the economy. And he’s viewed as someone who a while his unfavorability rates are still very high and they had been all the way through the campaign, even when he won. People view him as pretty strong, as someone willing to stand up to what he thinks is right. And someone who’s good at business and good at the economy.

Steve Glickman:                 And that still holds true. And if you ask voters what Republicans stand for, it’s pretty clear to them they stand for less government spending, lower taxes, and for big business. Now as a Democrat, I think that’s a very vulnerable set of associations to have with voters, because people like a lot of the things government provide. And they’re I think skeptical of large businesses, but you have to give them an alternative vision. And when you ask voters what they think about Democrats and their economic vision, there’s a series of like 10 question marks in that answer. No one has any idea.

Steve Glickman:                 I was close with Hillary Clinton’s economic team when she was running her campaign for president. And I could not tell you what her priorities were, and I can easily tell you what Trump’s priorities were. In fact, he stayed pretty focused on them. I may disagree with a number of them, but you know what they are. And so Democrats first and foremost, they need a positive vision for the economy, which is the only game in town. People don’t vote in foreign policy issues, and they don’t vote on social issues, at least on a federal level. They really vote on the academy, first and foremost. It’s issues like one through five for when you ask people what’s most important to them, it relates to the economy. It’s healthcare, it’s housing, it’s a good job. It’s my community, etc. Wages. So we need to give them a reason to vote for democrats. We really need a new economic world view and vision and philosophy. And ultimately that boils down to a new generational thinking of this.

Steve Glickman:                 There’s this very outdated notion in I think both democratic and republican circles that we’re still having a debate that’s left versus right or left versus center. When really we’re having the most important debate is one that’s new versus old. It’s a new generation where you’d see a lot of agreement around certain issues among new republicans in new democrats. A new generation of them, let’s say under 45. And the old views of what the parties stands for, and that I think is the most important debate in the country. Now, democrats are going to run 20 candidates for president. And lots of them are impressive and maybe might be very good presidents. I’d give you some who I think are going to be front runners.

Steve Glickman:                 I think you’ll see Cory Booker, the senator from New Jersey do well. I think you’ll see Terry McAuliffe, the former governor from Virginia do really well. I think you’ll see Jason Kander, a young rising star from Missouri who ran for senate and has now become a national figure. I think you’ll see him do very well. But I think all of them are going to have a really tough time beating the president. It’s very hard to beat incumbent presidents. It’s very hard to beat incumbent presidents in a really good economy. It’s really hard to be incumbent presidents in a good economy who’s maintained a pretty high level of popularity in his own party. And he’s extremely popular in republican circles. The notion that he’s vulnerable is a total farce. His approval rating in the republican party is 80 percent or higher. This is like George W. Bush numbers after 9/11. He doesn’t have to win by much to win. So I think you need a democrat that’s got a real affirmative vision that people want. It’s got to be more than being anti-Trump. And frankly, I have not heard much of that breakthrough in the party so far and it makes me very nervous the democrats are not prepared Well for 2020.

Misha Zelinsky:                  Well that’s a very sobering analysis and we’ll leave it on that note on the serious. All our guests are asked, so I know you’ve been to Australia and this is about making, the show’s called Diplomates. So it’s about making some mateship across the ocean. So just curious about having visited Australia, who are the three Australians that you would invite to a barbecue, and obviously you’d invite me. So I’d be there anyway. So I’d be looking for you to think of three others mate.

Steve Glickman:                 Yeah. Well I need someone to drink all the beer. So that’d be you. So I’m going to stick in the political and economics lens around three Australians I’d like to have dinner with. So let’s start with politics. We’re bipartisan, so I’ll take a bipartisan approach to this. So on the left, definitely Julian Assange, I’d want to have him at the table. When I think about Australia-

Misha Zelinsky:                  You might have to get him in by Skype mate. I don’t know whether or not he’s going to be allowed out of the embassy, but …

Steve Glickman:                 You didn’t say it had to be practical. You just said who I want. If I’m thinking about someone who to me represents Australia, it’s Julian Assange on the left. On the right, the most famous Australian, most consequential Australia I can think of is Rupert Murdoch. So he’d be the Australia and I’d have from the right. I’m sure you’re loving these choices. You’ll like choice number three.

Steve Glickman:                 So choice number three would be an economics focused choice. And the person I have in mind gave probably the most compelling analysis of what happened in the economic crisis of anyone I’ve seen, American or Australia. And do you know who that would be? She’s from a very famous movie you may know.

Misha Zelinsky:                  I ask the questions on this thing mate, so I have absolutely no idea. But you’ve got me on tender hooks right now with Julian Assange and that Rupert Murdoch.

Steve Glickman:                 So number three in this trio would be Margot Robbie, because there’s no one I’d rather listen to on the economy then than Margot Robbie. I think she, Julian, and Rupert all in one room would be a tremendous Instagram photo at least.

Misha Zelinsky:                  Well, Steve Glickman, Margot Robbie, Rupert Murdoch, and Julian Assange would make quite a group. I don’t know whether or not either Rupert or Julian would want me there, but I’d certainly be happy to get along and at least drink couple of those beers you talked about. Steve, thanks so much for your time. I think it’s been a fantastic chat, a lot of great insights and good luck with everything. Hopefully if we don’t see on the ticket in 2020, hopefully see 2024, 2028 Glickman. I’ll be there handing out for you mate.

Steve Glickman:                 Well, I appreciaTe that. That will never happen, but I do appreciate you having me on the show anyhow and love talking with you. Good on your Misha.

Misha Zelinsky:                  Never say never mate. Thanks a lot.

Steve Glickman:                 Talk to you, bye.

Ambassador John Berry

Ambassador John Berry was the US Ambassador to Australia from 2013 to 2017. He is now the President of the American Australian Association.

Ambassador Berry joined Misha Zelinsky to talk about the future of the ANZUS Alliance, strategic competition in the Asian region, Chinese debt diplomacy, the rise of autocrats globally and how we can get young people to care about politics and democracy.

 

FULL TRANSCRIPT

This is a transcript from the interview with Ambassador John Berry. Please forgive any typographical errors.

Misha Zelinsky:                  Recently, I caught up with Ambassador John Berry. John was the U.S. Ambassador to Australia from 2013 to 2017. Since that time, he’s been named the president of the American Australian Association. Ambassador Berry and I had a great chat about the future of the ANZUS Alliance. Strategic competition in the Asian region, the rise of autocrats, and how we can get young people to care about politics.

Misha Zelinsky:                  Ambassador John Berry, welcome to Diplomates. I honored to say today, it’s a little bit of eponymously named, as you are a former ambassador to Australia, and obviously, I know you’ve said on many occasions that you were a mate of Australia. And we certainly consider you a mate of ours. But, welcome to the show, and thank you for joining us.

John Berry:                            Misha, it’s a great privilege to be with you this afternoon. Thanks so much, I really appreciate it.

Misha Zelinsky:                  The privilege is all mine, I assure you. But look, I though it would be a useful place to start, it’s a big sort of topic, but the importance of the relationship between the U.S. and Australia. You’re a former ambassador. You’re now the head of the American Australian Association. I think sometimes, Australians don’t think that the relationship matters from the American end. And sometimes, we feel that it’s slightly one-sided, or that we’re very much, the junior partner. I’d be curious to get your take on that.

John Berry:                            Yeah, I think there’s really no sense of a junior partner. Australia is a full-fledged partner, and really, the best ally of the United States, both in history and in current times. We deeply, deeply appreciate both the creativity, the intellectual power, and the straight-forwardness of the friendship that the United States shares with Australia.

John Berry:                            Sometimes, when you’re heading off in the wrong direction, it’s awfully good to get advice to get you back to the destination. And Australia is not afraid to do that. And you’ve never been, and never will be. We don’t ever want you to. You’re a sovereign nation. We want your straight opinion, and I think the relationship is so deep, because that opinion has been proven time and time again to be so helpful to the United States.

John Berry:                            So, it’s a full partnership. It’s an active one. It’s engaged on every level. Economic is the strongest. But, also, equally important is that the defense and the intelligence and the cultural, and the educational connections that we share, along with sports.

Misha Zelinsky:                  That’s right, and unfortunately, though, whilst we’re good friends with the Americans, we often don’t criss cross in the same sporting arenas. We very enjoy beating the English at cricket, but unfortunately, you guys aren’t really much into it. But, maybe we’ll teach you sometime.

John Berry:                            Yeah, my Tigers didn’t make it to the grand final this year, but they acquitted themselves well this season. Maybe next year for the grand final.

Misha Zelinsky:                  You can’t win them every year, unfortunately. Now, you’re showing your Australian bona fides, but of course, you were ambassador in Australia for a very long time. But, your father was also in Australia for World War II, as I recall. It always fascinated me, that story. Perhaps you could share a little bit about that.

John Berry:                            Yeah, Misha. In fact, it’s interesting. You know, right now from August until December of this year, it’s the 75th anniversary of the Battle of Guadalcanal, which was the first land offense in the Pacific in World War II. And, my father was in the United States Marine Corp, First Division, which was the division charged with taking and holding that land during the war.

John Berry:                            It was a much harder, tougher slog of a battle than was expected or anticipated. Japan appreciated the strategic importance of that battle, and knew that if they could defeat the U.S. land effort there in Guadalcanal, that likely, U.S. attention would prioritize Europe ahead of Asia, and that perhaps, the war would not end up as it did.

John Berry:                            But in fact, those Marines did hold that rock of an island, that’s an important island. And were given R and R to come to Melbourne. It was a tough six months. My dad was a skinny kid, 18 year old from Philadelphia. And he lost 45 pounds on Guadalcanal. He didn’t have that much to lose. But, I grew up with, from the youngest age, of hearing his powerful stories about what a wonderful people he found in Australia, and that not only were they good, they were true. They really reestablished his belief that there was good left in the world, which quite frankly, he and many of his mates doubted after they left Guadalcanal.

John Berry:                            And, you know, he tells a story about how he was just on the trolley car in Melbourne, and he was looking pretty, his clothes were pretty loose on him. And the ticket taker on the trolley said, “Young man, you look like you could use a good cooked meal.” He said, “You know, I get off work at the next stop. Why don’t you come home with me?” And my dad would tell us all the time how that was the best dinner he had the entire war. And he was just so stunned that someone would be so friendly.

John Berry:                            And so, till the day he died, if we were anywhere, when I was growing up and even when he was older and I was older, if my dad heard an Australian accent, he would jump up and offer to buy them a beer. And it was that deep and profound a relationship.

Misha Zelinsky:                  Well, that’s a great way to make a mate in Australia, is to buy them a beer.

John Berry:                            Yeah.

Misha Zelinsky:                  So, if he’s …

John Berry:                            Well, lest you think it’s just one guy’s story, it’s important to point out that it was so impactful, not only on my dad, but on the entire First Marine Division, which is the storied First Division of our United States Marine Corp, when they landed at Melbourne, a band struck up the tune, Waltzing Matilda. And here we are, 75 years later, the fight song of the United States Marine Corp First Division is, and always will be, Waltzing Matilda. And it’s because that tune and the spirit and welcome of the people of Australia, renewed their faith in the goodness of humanity, and taught them not only was it still very much alive in the world, but it was still damn well worth fighting for.

John Berry:                            And so, it is, whenever that division ships out even today, to Afghanistan, to Iraq, they do so to the strains of Waltzing Matilda. And when they come home, it’s to the same song. So, you get a sense of just how deep and power and lasting that friendship is.

Misha Zelinsky:                  That’s an incredible story. And we often like to hear Waltzing Matilda around the water. I never would have imagined you’d hear it in a U.S. Military Division, but that is a fantastic story.

Misha Zelinsky:                  I think that’s a good spot to sort of pivot to the importance of the relationship between the United States and Australia. Because it’s probably at it’s most contested. You recently said that it’s important for democracies to stick together when you were in Australia. And you said that we must defend democracy, our collected democracies. And that second place is not an option for democracies and the geo-strategic place in respect to military, AI, and that we need to avoid a Sputnik moment, so to speak, as you put it.

Misha Zelinsky:                  And I’m curious to take your, get your take on why democracy needs to stick together, and how we might defend our democracy in that context.

John Berry:                            Well, you know, we’ve been lucky. We have enjoyed 75 years of peace, or just under that, because obviously, World War II didn’t end until later. But, the world has enjoyed an absence of world conflict, if you will. Not to say that there haven’t been regional conflicts or terrible battles and troubles around the world, but nothing on the scale that would go back to World War I or World War II.

John Berry:                            And, I think we, you know, would be looking at history through rose-colored glasses if we felt nothing like that could ever happen again. And look, I think a lot of us who’ve worked in diplomacy over many years hoped and continue to hope that China’s rise will continue to be peaceful. But, there are many signals that are warning signals, that democracies need to pay attention to.

John Berry:                            First, we need to admit we’re not dealing with a democracy in China or in Russia, or in Iran, or in North Korea. And these countries are increasingly coordinating their efforts, and they are significantly, not only singling us out, but attacking each of us individually, through our democratic processes and using our own liberties and tools against us, if you will, in such a way that you have to call into question what their end goal and end objective is.

John Berry:                            You know, I was very happy when President Xi stood in the Rose Garden and promised that there would be no militarism of any of the land reclamation efforts in the South China Sea. He lied. We now know they’ve been intentionally militarized. There are three runways on those islands, now longer than the runway, the international runways at JFK here in New York City, right behind. Those are not runways needed for life-saving missions.

John Berry:                            The hardening and the missile installations and the radar installations that are being installed on those islands are not for life-saving missions. And no one should kid themselves about what’s going on there. And when you see what China’s done with the internet and the use of information, and artificial intelligence, what they have done has been able to increase the ability of authoritarian governments to suppress liberty, to suppress freedom, and to clearly, as they’ve shown both there, as well as other countries, like Russia’s involvement in our elections and other countries around the world, that they are not supporting democratic values, vision, or future.

John Berry:                            And we ought not kid ourselves that this is all going to end without some troubles. And so, you know, democracies are slow to recognize and prepare, oftentimes, for these things. As the world gets more technologically proficient, the time to prepare may grow even shorter. And so, that’s why I think it’s a good time for all democracies around the world to be on guard.

John Berry:                            I’m not saying it’s time to hit the panic button. I’m not saying conflict is a given. But, we shouldn’t be caught off guard.

Misha Zelinsky:                  No, it’s interesting, you’ve talked about the South China Sea. It gets discussed quite a bit in Australia. How do you think Australia and the United States should be responding to the militarization of the islands in the South China Sea? I mean, you know, part of China’s strategy is seem to be, to break up some of the will to resist, particularly with the Asian region, you know, with the Philippines. Is there a way that those countries can actually stick together in a way that gives them confidence? Or, is China gonna be able to pick countries off one by one?

Misha Zelinsky:                  Some countries in our … Well, there’s some discussions of the quad which is India, Japan, United States, and Australia. I’m just curious about how do you think you can resist that kind of, almost, irresistible force from the China’s government in the region.

John Berry:                            Well, we ought to not kid ourselves. It’s not gonna be … There’s no simple solution, Misha. This is gonna be a long-term effect. And I think Australia’s doing a great job already with your response right now. And Papua New Guinea, and you know, to …

Misha Zelinsky:                  In respect to the cables, you mean, or …

John Berry:                            Yeah, well, in terms of the one belt, one road expansion throughout the Pacific. You know, that’s not only the Pacific, but the Indian Ocean, around the world, and Africa, and beyond. And, these 99 year leases are all, when you step back and look at the map, are very interestingly located in strategic military and trade choke points. You know, again, not saying that they have to end up being military or strategic choke points, but we ought not kid ourselves. We ought to prepare. And one of the ways we can do that is to … You know, nations are already realizing this debt burden that they’re being saddled with is taking away a great deal of their sovereignty. And that’s of great concern to their populations and governments.

John Berry:                            And as the awareness of that grows, I’m concerned for this initiative as a true trade initiative will be called into greater question. But, the responses that are happening by democracies, you’ll notice, not only is the United States regularly exercising these rights of free travel and navigation throughout the South China Sea, but many other nations do as well, including Australia. And Great Britain has stepped up its actions in that regard.

John Berry:                            So, it’s again, a sign of democracies recognizing that you can’t just let an existing situation rule the day, especially when it’s been done by might and not right.

Misha Zelinsky:                  And you touched there on the 99 year leases. In Australia, we were quite alarmed to find out that there was discussions of a potential port being funded by the Chinese government in Vanuatu, and given the situation that occurred in Sri Lanka, where that port was funded by the Chinese government through the One Belt, One Road Initiative that government can’t pay. And, of course, that port is then handed over. The prospect of a port that could be militarized, 200 nautical miles up Australia’s coast, is very alarming.

Misha Zelinsky:                  It’s debt diplomacy, it’s called, which is, you know, you lend on terms that are somewhat unfavorable. And then, of course, when you can’t pay, you take that strategic asset, as you said, and in key points. How can the U.S. and Australia resist that type of easy money for these countries? You know, the Papua New Guinea government has made it very clear that they’ll take the best deal on the table, commercially.

John Berry:                            No, I think that’s where we have to be involved. And Vanuatu is a very good example of that, Misha. And Australia’s response there has been very, very helpful. You know, the United States is stepping up its efforts and increasing resources that’ll be available. I think other democracies will hopefully do that. And I think coordinating that effort is going to be something that we really need to think through.

John Berry:                            There are many institutions that can do that, but we need to, we could increase and leverage the power of our investments on the democratic front, if we were to work more carefully, in careful coordination. And so, I think that’s begun. That’s under way. And it will hopefully, only continue to improve.

Misha Zelinsky:                  And I’m just curious to get your take, you know, we’ve talked a lot about the contest between democracy and autocracy, and perhaps the autocratic countries coordinating in a way that, perhaps, they haven’t in the past. And that the importance of liberal democracies coordinate amongst ourselves. And I think that makes a lot of sense in a geo-strategic sense.

Misha Zelinsky:                  Curious about the credibility of democracy. You know, that’s another thing that is new, perhaps, in the modern debate with the Brexit debate, you know, what’s happening in Europe with the rise of autocratic governments in parts of Europe with the … Italy has a pro-Russian government. Hungary and Poland have right wing governments. You know, the Brexit election was very troubling for Britain, but also the recent United States election and the discussions of Russian meddling. What’s the … How does the credibility of democracy impact on this broader piece of countries competing against one another?

John Berry:                            Well, I think it’s important, each generation has to revive it’s appreciation for those core values of being able to have governments created that are responsive to the will of the people. That is still a very legitimate goal. And it is a goal that every one of the authoritarian nations fear mightily. And much of their actions are meant to undermine it, wherever they can, because they do not see it washing onto their own shores.

John Berry:                            So, first, we need to recommit our own selves to our own values. Those core values that our fathers and mothers fought, died, and suffered and sacrificed for, over so many generations. And I think we ought not take them for granted, because we’ve been fortunate to have enjoyed Australia … You’ve enjoyed the longest period of economic growth, I think, in any country in the world. You have a really phenomenal …

Misha Zelinsky:                  For 27 years.

John Berry:                            It’s a pretty phenomenal result. You know, you didn’t go through the global financial crisis like we did. You didn’t make many of the mistakes that we did. But, you know, so each generation can sometimes forget amidst its good times, the importance of those core values that allow those good times to exist. That allow people to exercise their creativity and earn a living, and to benefit from their creativity and their ideas and their hard work.

John Berry:                            As you, so you say it so beautifully in your National Anthem, wealth for toil. That is not a given around the world. And it’s important for democracies to continue to support and continue advancement. We have to always get better. As Winston Churchill said, it’s the worst form of government ever invented, but no one’s found anything better. And so, so we’ve got to keep at it. We’ve got to … We need to deal with … You know, in our own country, we have issues with student debt. We need to resolve that.

John Berry:                            We need to resolve our overuse of our credit card. You all are much more fiscally responsible than the United States. Here we are, in very good times ourselves, we’re running up increased debt at a time when we should be paying it down. So, you know, democracies make mistakes. Let’s not kid ourselves. But, it doesn’t mean that the core values of allowing people to control their governments and protect their liberties isn’t important and still worth fighting for.

Misha Zelinsky:                  It’s interesting, because you’ve talked about student debt and the economic piece. And I think that that’s also an interesting part of what’s going on around the inequality story and how that’s eroding the capacity of democracies deliver for ordinary people. I find it very concerning in an Australian context, but it’s certainly global, that young people don’t automatically consider democracy to be the best form of government. And I think that’s very troubling.

Misha Zelinsky:                  You’ve, in the past, said that, from an Australian context, that you’d like to take back what we call independent redistricting, or having the government, an agency, set the boundaries of electorates. In the United States, that’s a political exercise done by the politicians in charge, who unsurprisingly, draw up the boundaries to suit themselves; What you guys call gerrymandering. And also, you have non-compulsory voting in Australia, compulsory voting is in place, which the theory goes that the more people that vote, the more that they [inaudible 00:22:06], and you get less extremes. Do you think that those would be useful in an American context, still?

John Berry:                            I think they would greatly assist us, Misha. It would be a great thing, not only those two ideas, you know, correcting gerrymandering, compulsory voting. Americans don’t like to be told to do anything, so we’ll have to find a different word than compulsory. You know, maybe a national holiday voting, or something that would encourage higher turnout would be how we, maybe, have to approach that.

John Berry:                            But, you know, other ideas you do that are brilliant, I think, you limit your entire election time, is it to 60 or 90 days? I forget the day limit.

Misha Zelinsky:                  The minimum is about 31 days, I think. But sometimes that could be longer.

John Berry:                            Americans would think they’ve died and gone to heaven, if we could have a 31 day or a 60 day, even a 90 day election. You know, as you know, our presidential election for the next, which is three years out, has begun already. So, you know, obviously, we have a mid-term coming up here in three weeks, which will tell a lot. But the other thing you have … I’d say there’s four things that would really benefit our democracy that you’ve pioneered. And the last one is campaign contribution limitations.

John Berry:                            And, prohibiting, you know, the impact of so much money that can have such an untold influence on elections these days. So, you know, the secret ballot was invented by Australia. And we adopted it after much debate here in the United States. And while it was being debated in the late 1800’s, it was referred to in the United States as the Australian ballot. So, you gave us our secret ballot, which now we take for granted.

John Berry:                            I hope that the four lessons you all have also pioneered in this past generation of having a national commission that draws up unbiased legislative districts, having 99 percent of your population voting, you know, limiting your election cycle so that they don’t endlessly drag on, and controlling campaign contributions, are four very smart things for democracies to undertake. And certainly, the United States would benefit from all four of them.

Misha Zelinsky:                  No, although I will say that we actually had a … Our last federal election was eight weeks, and it was considered to be the most longest, most oneriest, you know, turgid campaign. And so, even an eight-week campaign in Australia seems like a long time.

Misha Zelinsky:                  Just on, you’ve touched on contributions and the effect of money in politics. You made some comments about, that the United States was alarmed about donation interference from the Chinese government in Australia’s democracy. It was very alarming to a lot of Australians, as well. I think it was something that we, a little bit, as a country, slip on the wheel and have sought to correct. But how concerned should all democracies be of that foreign interference of that nature?

John Berry:                            Look, I think it’s one of the areas where we have to play a very, very strong defense. There is no legitimate purpose, Misha, for any foreign government, especially a foreign authoritarian government, to be involved by contributing dollars in any other sovereign nations, a democratic nation’s, elections. There’s just no legitimate purpose. It’s illegal in the United States. It should be illegal in every democracy, because there is no argument on it’s behalf. It is, it has no good, positive effect. And, I hope, I know Australia has a number of efforts that it’s considering in that regard that it will continue, but not let the issue die. Because you know, if it’s allowed, we will eventually, if it is allowed in democracies, I believe that democracies can eventually lose control of their ability to maintain their sovereignty in dealing in important issues. And, you know, no democracy should allow itself to be so prostituted.

Misha Zelinsky:                  I think that’s very, very good advice, and that’s certainly something that we’re looking at very closely in Australia. But, I think you’re right. We need to guard against the easy money that can seem easy. But, as we talked about, even in the context of the 99 year leases with the debt diplomacy of the One Belt, One Road Initiative, money often comes with strings attached, as you rightly point out.

Misha Zelinsky:                  So, yeah, I just wanted to, perhaps, pivot to last couple of questions, but pivot to, you’re a former ambassador, but you’re also our most recent ambassador in the sense that the chair has not yet been filled. Let’s [crosstalk 00:27:41].

John Berry:                            Very, very hard to replace, Misha.

Misha Zelinsky:                  That’s right, irreplaceable John Berry. So we’ll, well, you’re welcome to come back, mate, at any time. That’s …

John Berry:                            I would in a heartbeat, but I don’t think I’ll be being sent your way.

Misha Zelinsky:                  Well, we did actually have an ambassador en route who was then directed to some important work in South Korea. Are you able to give a scoop? Are we gonna get an ambassador soon?

John Berry:                            Well, he would have been fantastic. He’s a dear friend, Harry Harris, Admiral Harris, is a brilliant man. And he would have made an outstanding ambassador. I know there’s a bunch others being considered now. I hope the president will pick a good one and send them down as quickly as he can. It’s important, and thank goodness we have a great [inaudible 00:28:28] in James Carouso there. He’s doing a great job during the interim, and I think James would make a great ambassador.

John Berry:                            So, there’s plenty to pick from. There’s plenty of good Americans who would do an outstanding job in Australia, and I just hope the president sends one soon.

Misha Zelinsky:                  Well, we’d love to have one. But as I said, mate, the chair’s still warm for you if you’d like to come back. But, just lastly, the question I’d like to ask our guests is … particularly, foreign guests, it’s a show that’s about, we call it Diplomates. It’s about mates you put in diplomacy, and it’s a hokey pun. But, I would say, in your time in Australia, if you could invite three mates to a barbecue, perhaps at the ambassadorial residence, given it’s still vacant, we could have a party there, who are the three Aussies that you would invite along as your mates?

John Berry:                            Well, the hardest thing, Misha, would be narrowing it down to three.

John Berry:                            Oh, boy, well, one, I’ll tell you, would be Quentin Bryce, who is the most wonderful person I’ve ever met in terms of everything, intellect … She has more class in her little finger than I will ever have in my entire life. And whenever I get to spend 10 minutes with her, I learn something. And so, I would love to have Quentin Bryce be one of those people. She is one of the crown jewels of Australia, in my opinion.

John Berry:                            The other is someone who I just love. He’s a native of Cambra. He’s president of the University of Cambra, Dr. Tom Calma. Tom is a brilliant leader in the Aboriginal community. He’s an indigenous Australian, a proud indigenous Australian who has done so much good in his lifetime, advancing his community within your wonderful country. And, we … Just like you, we talked about how you could help improve our democracy through some of your reforms, there’s many things that I think we could learn through more exchanges between our indigenous cultures. Because our history with Native Americans, Native Alaskans, and Native Hawaiians, for example, here in the United States, has been a sad one. And we’re still wrestling with many, many issues that are a result of that sad history.

John Berry:                            There’ve been some great success stories in Australia, just like we have had success stories in the United States. And I think Tom is one of those people who is a glass half full kind of guy, who is always coming up with new ideas and creative ways to make the future better, for not only indigenous people, but for all people in the country. So, Tom would be my second person.

John Berry:                            Who, who’d be the third? That is tough. Gosh, it’d be a toss-up between … You know, you’ve got two LGBT leaders there that I think are wonderful. Ian Thorpe and Alan Joyce. Alan comes at it from the business perspective, Ian from the, sportsman perspective.

John Berry:                            But, both of them have been amazing leaders in the LGBT community. And as you know, that’s one of my lifetime Civil Rights engagements and involvements.

Misha Zelinsky:                  Absolutely, yep.

John Berry:                            So, maybe you can give me the luxury of having four, and I’d invite Ian and Alan together, and then, we’d have a wonderful barbecue.

Misha Zelinsky:                  Well, I wouldn’t, couldn’t possibly deny having the Thorpedo there, so it’s more … And Alan can fly everyone in, so it’s no problem at all.

John Berry:                            And all of them should bring their spouses, so that would be, that makes it more than three. You can’t have a barbie without their good partners along, so …

Misha Zelinsky:                  Absolutely. Well, thank you so much for your time, Ambassador Berry. I think Admiral Phil Davidson recently said that there’s friends, allies, partners, and then there’s mates. And Australia and the United States are mates, and I think you’ve proven that today. So, thank you so much for your time. And good luck with everything over there. And we look forward to getting an ambassador soon.

John Berry:                            Misha, thank you so much.