McCain Institute's
Sedona Forum Discussion with Mitt Romney
delivered 3 May
2024, Sedona, Arizona
SENATOR ROMNEY: I don’t know who gets to go off first, but I’m going to do that,
because I get to ask the questions. I’m not the questioner, usually. Usually I’m
the person trying to give answers, all right? Have you ever watched
Mr. Roger’s
Neighborhood? There’s a little train and there’s the little king, and he -- the
king is always right -- “Right as usual, King Friday.” My kids say, “Right as
usual, King Romney.” I mean, because I’m -- I’m always out there
with the answers.
So I -- tonight I’m supposed to ask the questions, which I will do. But I want to
begin by saying thank you to Cindy McCain for hosting us and bringing this
extraordinary group together. Thank you to the Navalny family and for your
beautiful words -- extraordinary. Thank you so very much for your inspiration. It
is touching and powerful. Thank you to the McCain Institute. Thank you to
David Axelrod. I have mixed emotions about David Axelrod.
I appreciate the Secretary of State and his leadership very much. And we’re
fortunate to have a Secretary of State who’s a thoughtful, perceptive,
intellectually curious, devoted person; dedicated, determined, indefatigable,
who has traveled the world time and time again -- not a person of bombast, but a
person who listens and is soft-spoken. We are very fortunate to have a man of
the kind of quality, experience, and character as our current Secretary of
State, Secretary Antony Blinken. Thank you.
So because I’m not noted for my questions -- and frankly, my answers aren’t much
better but I’m going to ask a few questions, but if there’s a
little time, I might turn to you to ask, if there are questions. I’m going to
just sort of go topic area by topic area. I’m going to start with the
Secretary’s most recent trip to the Middle East and then turn to Ukraine, and
then finally to China. And so if there’s someone who has a question on one of
those topics, or -- I’ll take a breath, and you can -- and please ask questions
that are interesting to you, but also, you might think, to the entire audience.
First, I’m going to say up top, with regards to the trip to the Middle East,
give us the lowdown, give us the rundown. What is happening there? What’s
happening among the Israeli people? What are -- what is Bibi Netanyahu thinking?
What’s happening with Hamas? What kind of a deal has been put on the table?
What’s -- what is -- the people and the leadership in Qatar -- see, I can get all
my questions out. I mean, give us a full lay of the land, and then
we can sort of probe areas of interest.
SECRETARY BLINKEN: Mitt, thank you. And before trying to tackle that multi-part
question -- actually, it sounds like --
SENATOR ROMNEY: It’s -- it’s just the lay of the land.
SECRETARY BLINKEN: It sounds like the reporters in my pool, who manage to get in
five questions for one.
First, let me say how wonderful it is to be here and to be with a truly
remarkable group of people. I think there’s a common denominator in this room,
and it’s epitomized by John McCain, it’s epitomized by Mitt Romney, but everyone
in this room is for an engaged America. Everyone in this room believes that our
engagement, our leadership matters, makes a difference. And that commitment is
more important than it’s ever been. That’s what I’m seeing and feeling around
the world.
Now, it may be that years from now people come back here and look at this group,
and it’s the La Brea Tar Pits of internationalists and institutionalists.
But we’re fighting to make sure that’s not the case, and no one has
fought harder than the gentleman sitting to my right.
Now, Mitt, I was going to say thank you for reading the lines that I wrote -- appreciate that. But I think you all know -- the country all knows
-- Mitt Romney is a man of extraordinary principle, married to extraordinary
pragmatism. It’s a rare combination, and I’ve gotten to see that up close these
last few years since you’ve been in the Senate. But for me, it’s an honor to
share the stage with you. So, thank you.
SENATOR ROMNEY: Thank you.
SECRETARY BLINKEN: And to the entire McCain family, starting with Cindy --
following in the footsteps of John McCain -- there too I have gotten to work with
Cindy these last few years. You are doing what is maybe the greatest calling
anyone could have, which is trying to make sure that parents can put food on the
table for their kids. And when it comes down to it, nothing matters more than
that. So to you, to the entire family that remains so engaged, it’s wonderful to
be here and to share this evening with you.
Now, I have to tell you -- and maybe the Middle East is actually a -- it’s a
perfect segue to the Middle East. But let me just say quickly, before we were
coming out here, we were listening, Dasha, we were listening to you, and the
senator and I had the same reaction: Let’s go in the other direction, because we
don’t want to follow Dasha. Thank you for your extraordinary profile in dignity
and in courage. And I can only imagine how proud your dad would be of you.
So when I’m asked how it’s going, and the Middle East is usually the first thing
I’m asked about, I actually tend to quote John McCain. John McCain used to say,
“It’s always darkest before it goes completely black.” So -- and I
thank you, Cindy, for letting me borrow that.
But now to get serious for a minute, so in this moment, the best thing that can
happen would be for the agreement that’s on the table that’s being considered by
Hamas -- to have a ceasefire, the release of hostages, the possibility of really
surging humanitarian assistance to people who so desperately need it -- that’s
what we’re focused on. And as I was talking to various colleagues this morning
--
and I see one of my closest colleagues, John Finer, the deputy national security
advisor, here -- we await a response from Hamas. We await to see whether, in
effect, they can take yes for an answer on the ceasefire and release of
hostages. And the reality in this moment is the only thing standing between the
people of Gaza and a ceasefire is Hamas. So we look to see what they will do.
In the meantime, even as we’re doing that, we are working every single day, the
President’s working every single day, to make sure that we are doing what we can
so that the people in Gaza who are caught in a crossfire of Hamas’s making get
the help, the assistance, the support they need. And we’re doing that with
partners like the World Food Program; and of course, we’re working with many
other governments, we’re working with Israel.
I was just there, as you said, and I got to see firsthand some of the progress
that’s been made in recent weeks in actually getting assistance to people who
need it. Progress is real; it’s still not enough. And we are trying to make sure
that in everything we do, we’re supporting those efforts.
If you step back, I think we’ve seen a few things in the last few weeks -- some
incredibly promising, others incredibly daunting. And to start with the
daunting, we now have the Israelis and Palestinians, two absolutely traumatized
societies, and when this conflict ends, building back from that trauma is going
to be an extraordinary task.
We also see in all directions -- and I think we’re seeing this not only in the
region, we’re seeing it around the world; to some extent we’re seeing it in our
own country -- maybe the biggest poison that we have to fight constantly, and
that is dehumanization, the inability to see the humanity in the other. And when
that happens, hearts get hardened, and everything becomes so much more
difficult.
So the other great task that I think we’re going to have when we get through
this is to build back that sense of common humanity. And I hope we can do that
amongst ourselves as well. But there’s also some promise. There’s promise in
that one of the things we’ve been working on for a long time, with the
President’s leadership over many months, is seeking to normalize relations
between Saudi Arabia and Israel. And for Israel, this would be the realization
of something that it’s sought from day one of its existence: normal relations
with other countries in the region.
This is something we were working on before October 7th. In fact, I was due to
go to Israel and Saudi Arabia on October 10th to work on this, and in particular
to work on the Palestinian piece of the puzzle, because for us, for the Saudis,
if we’re able to move forward on normalization, it has to include also moving
forward on the aspirations of the Palestinian people.
So I think there’s an equation that you can see, a different path that countries
in the region can be on and really want to be on, which is a path of
integration, a path where Israel’s relations with its neighbors are normalized;
a path where Israel’s security is actually looked out for, including by its
neighbors; a path where Palestinians achieve their political rights; and a path
in which the biggest threat to Israel, to most of the countries in the region,
and a threat that we share, Iran, is actually isolated.
Now, whether we can move from the moment that we’re in to actually start to
travel down that path, that’s going to be a big challenge. But you can see it,
and it’s something that the President is determined to try to pursue if we have
the opportunity to do it.
One other thing on this. We saw something related that was quite extraordinary
about two weeks ago. Iran engaged in an unprecedented attack on Israel, the
first direct attack from Iran to Israel. And some people said, well, it was
designed so it wouldn’t do much damage, carefully calibrated. Nothing of the
sort. More than 300 projectiles launched at Israel, including more than a
hundred ballistic missiles. John and I were in the Situation Room watching this
unfold.
It’s because Israel had very effective defenses -- but also because the
President, the United States, managed to rally on short notice a collection of
countries to help -- that damage was not done. And that also shows something in
embryonic form: the possibilities that Israel has for, again, being integrated,
a regional security architecture that can actually, I think, keep the peace
effectively for years to come.
So that’s where we want to go. But getting from here to there, of course,
requires that the war in Gaza come to an end. And right now, the quickest path
to that happening would be through this ceasefire and hostage deal.
SENATOR ROMNEY: I think a number of folks, myself included, have wondered why
Hamas has not agreed to other proposals with regards to a ceasefire. What are we
misunderstanding? What is their calculation? What are they -- why are they
hesitating? This -- I mean, we read about what’s being proposed. It sounds like a
no-brainer. But they must have a different calculation. What is going through
their head? What -- I mean, they want to be just martyrs? Is that -- I mean, what
is it that they hope to carry out, and why have they not just jumped on this,
saying, oh, yeah, this is fantastic?
SECRETARY BLINKEN: One of the challenges we have, of course, is that the leaders
of Hamas that we’re indirectly engaged with through the Qataris, through the
Egyptians, are of course living outside of Gaza, living in Qatar or living in
Türkiye, other places, and the ultimate decision makers are the folks who are
actually in Gaza itself with whom none of us have direct contact. So trying to
understand what they’re thinking is a challenge. Now, we have some sense of it,
but it’s not -- it’s far from perfect. And there are different theories about
what’s actually motivating their decisions in this time. It’s something we --
we’re constantly trying to get at.
But I can’t give you a definitive answer, and I think we’ll see, depending on
what they actually do in this moment, whether in fact the Palestinian people
whom they purport to represent -- if that’s actually true; because if it is true,
then taking the ceasefire should be a no-brainer, as you said. But maybe
something else is going on, and we’ll have a better picture of that in the
coming days.
SENATOR ROMNEY: Tell us about Bibi Netanyahu and what his
-- what his position of
power is, how he’s seen among the Israeli people, what the level of commitment
is in Israel for them to go into Rafah, to continue this effort. Where is he? If
this -- well, I’m not -- I’m going to take the if out. I was going to go back to
the ceasefire. But what’s his political posture now in Israel?
SECRETARY BLINKEN: Well, I think, as everyone knows, this is a complicated
government. It’s a balancing act when you have a coalition. And if you’re just
looking at the politics of it, that’s something that he has to factor in.
But here’s what I’d say generally about this. Irrespective of what you think of
the prime minister, the government, what’s important to understand is that much
of what he’s doing is not simply a reflection of his politics or his policies;
it’s actually a reflection of where a large majority of Israelis are in this
moment. And I think it’s important to understand that if we’re really going to
be able to meet this challenge. That’s at least my observation.
I’ve now been there seven times since October 7th, and you get a chance to get a
feel for what’s going on in the society itself. And as I said at the start, you
have a traumatized society, just as you have traumatized Palestinians. And
breaking through that trauma in real time is an extraordinary challenge. But
it’s I think very important that we, as the United States, as Israel’s friend,
try to share what we think is not only in our interest but also what’s in their
interest. And when it comes to Rafah -- Mitt, you mentioned that a moment ago --
look, our position is clear. The President’s been clear on this. Absent a
credible plan to genuinely protect civilians who are in harm’s way -- and keep in
mind there are now 1.4 million or so people in Rafah, many of them displaced
from the north -- absent such a plan, we can’t support a major military operation
going into Rafah because the damage it would do is beyond what’s acceptable.
So we haven’t seen such a plan yet, but right now, as I said, the focus is
intensely on seeing if we can’t get this agreement because that would be a way
of, I think, moving things in a different direction.
SENATOR ROMNEY: You may not want to answer this question, but that is
-- the
President sort of dipped his toe into the criticism of Israel and the way
they’ve conducted the war so far, saying we’re not entirely happy with how this
has been carried out. What would our administration have done differently? What
is our specific criticism, and what guidance will that provide for what they do
going forward?
SECRETARY BLINKEN: Well, let’s start with the -- in a sense, the obvious that
seems to have been forgotten, or almost erased from the conversation, which is
October 7th itself. And it’s extraordinary how quickly the world moved on from
that.
It’s also extraordinary the extent to which Hamas isn’t even part of the
conversation. And I think that’s worth a moment of reflection, too. And so we’ve
said from the start, and the President has been committed from the start, to the
proposition that Israel not only has a right to defend itself, not only has a
right to try to make sure October 7th never happens again, it has an obligation.
And so that’s something that we have supported from day one.
But we’ve also said -- also from day one -- how it does it matters. And here, the
damage that’s been done to so many innocent children, women, and men -- again, in
this crossfire of Hamas’s making -- has to be something that we focus on, as it
has been from day one, trying to make sure that the assistance gets to those who
need it, trying to make sure that civilians are protected to the greatest extent
possible.
Now, everyone here knows that this is a -- almost a unique challenge because when
you have an enemy, a terrorist group like Hamas that embeds itself with the
civilian population in ways that we really haven’t seen before, and that is
hiding in and under mosques, schools, apartment buildings, it’s an incredibly
tall order. But even so, even so, I think where we’ve been pushing our friends
--
again, from the very start -- is to do as much as possible, and to do more, to
look out for civilians, and to make sure that those who need the help get it.
SENATOR ROMNEY: Why has the PR been so awful? I know that’s not your area of
expertise, but you have to have some thoughts on that, which is, I mean, as
you’ve said, why has Hamas disappeared in terms of public perception? An offer
is on the table to have a ceasefire, and yet the world is screaming about
Israel. It’s like, why are they not screaming about Hamas? Accept the ceasefire
and bring home the hostages. Instead, it’s all the other way around. I mean,
typically the Israelis are good at PR. What’s happened here? How have they -- how
have they/ and we/ been so ineffective at communicating the realities there and
our point of view?
SECRETARY BLINKEN: Look, I mean, there are two things. One is that, look, there
is an inescapable reality, and that is the inescapable reality of people who
have and continue to suffer grievously in Gaza. And that’s real and we have to
--
have to -- be focused on that and attentive to that.
At the same time, how this narrative has evolved, yeah, it’s a great question. I
don’t have a good answer to that. One can speculate about what some of the
causes might be. I don’t know. I can tell you this -- and we were talking about
this a little bit over dinner with Cindy. I think in my time in Washington,
which is a little bit over 30 years, the single biggest change has been in the
information environment. And when I started out in the early 1990s, everyone did
the same thing. You woke up in the morning, you opened the door of your
apartment or your house, you picked up a hard copy of The New York Times, The
Washington Post, The Wall Street Journal. And then if you had a television in
your office, you turned it on at 6:30 or 7 o’clock and watched the national
network news.
Now, of course, we are on an intravenous feed of information with new impulses,
inputs every millisecond. And of course, the way this has played out on social
media has dominated the narrative. And you have a social media ecosystem
environment in which context, history, facts get lost, and the emotion, the
impact of images dominates. And we can’t -- we can’t discount that, but I think
it also has a very, very, very challenging effect on the narrative.
SENATOR ROMNEY: A small parenthetical point, which is some wonder why there was
such overwhelming support for us to shut down potentially TikTok or other
entities of that nature. If you look at the postings on TikTok and the number of
mentions of Palestinians relative to other social media sites, it’s
overwhelmingly so among TikTok broadcasts. So I’d note that’s of real interest,
and the President will get the chance to make action in that regard.
The President had also spoken about our commitment to a two-state solution, and
a number of people have said to me that’s impossible. And Bibi Netanyahu has
basically said that’s impossible. Is it possible to have a two-state solution?
What kind of -- I mean, I know that’s far from where we are right now. It’s like
a whole different realm. But is that essential to, if you will, beginning
normalization relations with Saudi Arabia and with others to say, hey, here’s a
vision, here’s some steps we might get to? Is it possible, and what would that
look like?
SECRETARY BLINKEN: So for me and the President, the answer is yes. And you can
say that’s -- especially in this moment -- naïve, impossible. But I think that it
is an imperative. And let me put it this way. First, we were talking about
normalization with Saudi Arabia. I’ve sat with MBS multiple times, the crown
prince, and he’s made clear that he wants to pursue normalization and he’d like
to do it as soon as possible -- if we can conclude the agreements that we’re
trying to reach between the United States and Saudi Arabia. But then two
requirements: one, calm in Gaza; two, a credible pathway to a Palestinian state.
This is what people in the region need to see if they’re going to fully get
behind normalized relations between the remaining Arab countries and Israel. And
it’s also the right thing for the Palestinians. So there’s that.
But the other, I think, more fundamental question is this. You’ve got 5 million
Palestinians living between the West Bank and Gaza. You’ve got about 7 million
Jews. The Palestinians aren’t going anywhere; the Jews aren’t going anywhere.
There has to be an accommodation. Now, I think that some believe that the status
quo that prevailed before October 7th -- fine, let’s live that way. And that
worked brilliantly until it failed catastrophically.
So at some point, I believe there has to be a step back. And everyone’s going to
have to ask themselves questions about what do we want the future to be. And the
future that I talked about a few minutes ago, where Israel finally realizes what
it has sought from day one -- to be accepted in the region, to be part of the
neighborhood -- that’s achievable. It’s there, but it also requires a resolution
to the Palestinian question. And I believe that there can be a Palestinian state
with the necessary security guarantees for Israel. And to some extent, I think
you have Israelis who would like to get to real separation. Well, that is one
way to do it. And then who knows what happens in the following years.
But of course, as we say this, we are absolutely committed to Israel’s security.
And Israel cannot and will not accept a Hamastan coming together next door. But
I’m convinced that there are ways to put the Palestinians on a pathway to a
state that demonstrate that the state will not be what Israelis might fear, and
I think can lead to a much better future than we have.
Look, everyone in this room knows there’s a long story here. We were talking
about TikTok. Not a story you hear on TikTok. You had -- to oversimply, after the
creation of the state of Israel you had decades of basically Arab rejection.
That went away with Egypt and Jordan making peace, and others following. Then
you had some decades, in effect, of Palestinian rejection, because deals were
put on the table -- Camp David, Ehud Olmert, others -- that would have given
Palestinians 95, 96, 97 percent of what they sought, but they were not able to
get to yes. But I think the last decade or so has been one in which maybe
Israelis became comfortable with that status quo. And as I say, I just don’t
think it’s sustainable.
SENATOR ROMNEY: You’ve got to be real loud. And I’m going to repeat it, but it’s
got to be short, too.
QUESTION: All right, it’s very short. You talked about Israel and Palestine,
Saudi Arabia being such a key U.S. ally there. What do you see with China,
Taiwan, India, Japan kind of doing the same [inaudible]? What efforts
[inaudible]? What are the complications that you’re running into trying to
overcome the China threat and the Russian threat to European allies?
SECRETARY BLINKEN: Maybe that’s a great segue. Did we need a segue?
SENATOR ROMNEY: There you go, go ahead. Yeah, please.
SECRETARY BLINKEN: All right. Well, just a few things to say here. First, with
China, just before we were in the Middle East we were in China. And about a
little less than a year ago, I took a trip at a time when we had been very
disengaged. And I think that one of the things that President Biden believes is
that we have an obligation to try to manage this relationship responsibly. We’re
in an intense competition with China, and of course, for Americans there’s
nothing wrong with competition as long as it’s fair. Hopefully it actually
brings out the best in us. But it is a real competition.
But we also have a profound interest in making sure that competition doesn’t
veer into conflict, and that actually starts with engagement. And so we really
began a process of re-engagement with our eyes wide open, and a number of my
colleagues followed. And then, of course, most important, President Biden and
President Xi met at the end of the year in San Francisco on the margins of the
APEC meeting.
And what we’ve tried to do, first and foremost, is to re-establish regular
dialogue at all levels. One of the most important pieces of this was
re-establishing military-to-military communications, because the quickest way to
get into an unintended conflict is not to have those conversations happen.
That’s been fully restored. We look for areas where we might actually cooperate
where it happens to be in our mutual interest to do that -- and I’ll come back to
this in a second because we found a couple. But mostly, it’s so important
because you want to be able to be extremely clear, extremely direct, extremely
explicit about your differences and your intentions. And we have a world of
differences, but it’s better to be talking about them directly than it is to
remain disengaged.
And so what I found, including in this most recent trip, was that we’re able to
engage on those differences in a very clear way. It’s not that we resolve them,
but at least we might have a better understanding of each other’s intentions,
and that’s important.
Second, something else has changed, and this is something that we’ve talked
about a lot and that the senator has been an extraordinary leader on in the
Senate. The relationship with China, as I said, is -- for us is arguably the most
consequential, maybe the most complex. And I think it’s very hard to put it on a
bumper sticker. I said competition a moment ago -- that’s probably the closest we
have to a defining word -- but there’s also contestation. And there are some
areas where we cooperate, because, again, it’s in our mutual interest to do so.
In each of those areas, what makes the most sense for us is to be able to
approach China from a position of strength, and that’s the biggest difference, I
think, that we’ve seen ion the last few years, because we came in with the
proposition that we needed to do two things in order to be able to engage China
from a position of strength. One was to make investments in ourselves, and
you’ve seen that with infrastructure, you’ve seen that with the CHIPS and
Science Act -- and by the way, we have an extraordinary partner in Arizona State
University for CHIPS and Science. That’s been a remarkable thing to see. You see
it with other work that we’ve been -- that’s been done, including on a bipartisan
basis with Congress, which is also a nice thing to see these days.
The flip side of the coin is the part that I’m in part responsible for, and
that’s alignment with our allies and our partners. From where I sit right now,
we have a greater convergence with key partners in Europe, in Asia, and even
beyond, on how to approach China. And I can tell you that it’s something that
our counterparts in Beijing know, notice, don’t particularly appreciate, but
it’s a very powerful reality.
If you’re dealing with China on economic issues where you have a real
difference, as we do in so many areas, if it’s the United States alone, we’re
what, 20, 25 percent of GDP. If we have alignment, convergence, with European
partners, Asian partners, it might be 50, 55, 60 percent of GDP. That’s a very
heavy weight and much harder for China to ignore. So that’s what I’m seeing
right now, and it’s making a difference.
Last thing on this. I mentioned that it makes sense, where we can, to cooperate
if it advances an interest. So right now, the biggest killer of Americans aged
18 to 45 -- not guns, not car accidents, not cancer -- it’s fentanyl. Every single
community in this country has been affected by it. Forty percent of Americans
know someone who has died from an opioid overdose. That’s the impact. And of
course, we know that a big part of the problem, of course, has to be solved here
at home, as we’re doing by investing a lot in awareness, in treatment, in
prevention, law enforcement.
But the other big side of the equation is supply. And how this works, as
everyone knows, is you’ve got the ingredients that go into making a synthetic
opioid, chemicals that may be made halfway around the world -- in this case, in
China -- and made for perfectly legal reasons, but then get diverted into a
criminal enterprise and into the synthesis of fentanyl, comes into the country,
kills our friends and neighbors.
So China’s a critical actor in this. And we have put -- been putting a lot of
pressure on China to take action against some of the enterprises in China that
are engaged in producing these chemicals and then illicitly transferring them to
use in making fentanyl. But usually, you have a chance at getting even more done
if you can find a way to do it cooperatively. So the President spent hours with
President Xi on this and made clear our determination, one way or another, to
get to the bottom of this, and also shared that what we’re seeing around the
world is -- a problem for which we’ve been the canary in the coal mine is now
manifesting itself in so many other places.
The criminal enterprises that have saturated our market, they’re trying to make
markets in Europe, in Asia, in Latin America. And we said to the Chinese:
there’s going to be a huge demand signal on you to lead on this, to act
responsibly. Well, one way or another, they heard the message, and we now have,
at least in its early days, cooperation that we didn’t have before, with China
putting out new regulations, China actually taking down some of the companies
engaged in the illicit production of the precursors or transfer of these
precursors, and establishing a working group together where we’re working
through this problem.
Now, again, they have their own reasons for doing this, and unless it’s
sustained and unless we see certain other actions taken, it won’t produce the
results that we need, but at least it’s a start. So I shared all of that -- and
sorry for going on -- just because I think it’s important to see the relationship
in its -- in 360 degrees, and all of that with eyes wide open, because this
competition is not going anywhere for a long time. If we’re approaching it from
a position of strength, we’ll do very, very well.
SENATOR ROMNEY: The Secretary has been kind enough to listen to me on the topic
of China, invited me to come by his office and spend some time. And given the
fact that my real career was in the world of business, I sort of look at China
from a business standpoint and believe that if I were crafting a strategy for a
country or a company, I would look at China and say: Brilliant, what an
extraordinary job; you don’t have to live by our rules, our regulations, our
antitrust laws, and you’ve done everything that a good robber baron would do in
this country at the turn of the century, 1800s to the 1900s. And I wonder if
we’ve figured out kind of how to deal with this, how to confront it, because
their ability to mount a military -- they spend about as much on their military
each year as we do. According to our Intelligence Community, they spend about
$800 billion a year. AEI says $810 billion, all right, but that’s about -- that’s
close to where we are. We’re 850. And so -- and they’re buying a lot more
equipment than we are.
So, but their ability to spend that is a function of an extraordinary economy.
And even though it’s not as big as ours, they generate massive cash that allows
them to make this kind of investment. They’re -- and then around the world, the
Belt and Road, spent a trillion dollars. We don’t spend a trillion dollars on
ourselves. They spend it around the world. And one of the things they did, they
-- not following the Sherman Antitrust Act -- they said we’re going to take over
one industry after the other. They had 5 percent of the world steel business;
now they have 54 percent of the world’s steel business. They’ve taken over the
aluminum business. They’ve taken over the nickel business. They’ve taken over
rail cars. They’ve taken over buses. Just boom, boom, boom, boom, one after the
other.
And they keep it going. And when you -- by the way, monopolies -- you make a lot
of money with a monopoly, and you drive the American businesses and the Western
businesses out of business. And then more -- I don’t know how many years ago,
they said, you know what, the world is going to go towards the electric world --
solar panels, batteries. So while we’re sitting around thinking about what kind
of batteries we ought to have and so -- they’re going around the world buying up
the mines and processing for nickel and cobalt and lithium. They basically have
a dominant position in the major ingredients that go into batteries and solar
panels.
So as we go into a electric economy, guess who’s going to lead it? We’re going
to have a new OPEC, by the way, but only member of this OPEC: China. All right.
And we’ve sat and watched them do this. And then their cars come along. Do you
know what a Chinese electric car costs? Eleven thousand dollars. Why is that?
Well, because they’re getting the batteries where the country made a trillion
dollar investment to dominate all of the raw materials in the creation of these
batteries, so their companies are able to get batteries for a fraction of the
cost. By the way, the battery is the biggest single component in the cost of an
electric car, so of course their cars cost half as much as ours, or less.
How do we deal with this? And the Secretary has -- has described a strategy which
has three major principles: invest, align with our allies around the world, and
compete. But do we need to align more to get -- to say to China you can’t keep
doing this? You can’t keep taking over industry after industry and bankrupting
our industries, dominating the raw materials we need, not selling them to us at
the same price you’re selling to your own people. You can’t have access to --
what do we do? How do we deal with this economic juggernaut that I think is
brilliant but shouldn’t -- they shouldn’t be allowed to do it and still -- and
have access to our market. I believe in free markets, but you can’t have a free
market if one person is not playing by the rules of free markets. So how do we
deal with this? How do we say enough already?
Sorry about that. I know that was more of a speech than it was a question.
But I couldn’t resist.
SECRETARY BLINKEN: Well, you’ve been extraordinarily eloquent about this for a
long time, and I think it’s exactly right. Because what we have fundamentally in
the economic relationship with China has not only with us but with countries
around the world is a total lack of reciprocity. And that’s unsustainable. It
was one thing when China first got into the WTO, and given where it was in its
development, okay, some allowances reasonably could be made. But we’re now
20-plus years later and China is exactly as you’ve described it and where it is.
And I think what we’re hearing -- again, not just here in the United States but
from so many of our partners around the world -- is no, enough, we can’t do this
anymore, we won’t do this anymore. And again, it’s the -- when you bring all of
that together it is, I believe, a lot harder for China to ignore. So we spend a
lot of time working with our allies and partners on taking this common approach
and making sure that Beijing is hearing in stereo what it’s been hearing from
us. And I believe that this is the way to get change.
Now, we have the immediate problem -- and I think Secretary Yellen was here this
morning, so I don’t know if she talked about this, but she has been intensely
focused on this. She was in China just before I was. By the way, she is very
famous in China -- chopstick ability. When I was there -- oh, you work
with Secretary Yellen?
SENATOR ROMNEY: They test you on the chopsticks.
SECRETARY BLINKEN: Yeah, they do a little bit. It’s good. Janet’s really got it
down.
But the President is intensely focused on overcapacity right now, because we’ve
been through this before. We had what some called the China shock in the years
after it got into the WTO and did exactly what you’ve described -- flooded our
market with certain products, pushed our companies out of business, devastated
some communities -- and we can’t have that again. The President will not have
that again.
So a big part of my visit as well following Secretary Yellen was to help our
counterparts in Beijing understand that we are making major investments in
ourselves, including bringing good, strong manufacturing jobs back to the United
States, and we were not going to allow our markets to be flooded with
underpriced products that would drive our folks out of business. And the cases
you point to in particular -- solar panels, electric vehicle batteries -- China
right now is producing in some cases double the entire global demand for those
products, and it’s trying to work itself out of its own economic challenges at
this moment by exporting, but exporting in unfair ways.
I had this conversation with my Chinese counterpart, the Foreign Minister Wang
Yi, and he said wait a minute, capitalist economies -- they work on comparative
advantage. I said that’s absolutely right. But there’s one thing to say
comparative advantage, there’s another thing to say unfair advantage, and that’s
what we’re focused on changing.
SENATOR ROMNEY: Help me get a sense of what
-- how they’re doing around the world
geopolitically. I hear stories. I’m sure each of the people here have heard one
or the other stories about how China is all over Africa, China is all over Latin
America, it’s all over the Caribbean, that everywhere you turn the Chinese here,
the Chinese there. And yet in their own neighborhood they seem not to be doing
so well, with the Philippines and the Vietnamese and the South Koreans and the
Japanese and the Australians. I mean, they seem to have badly misjudged what’s
happening right around them. Are they doing really well in Africa and Latin
America and the Caribbean or -- I mean, sort of how are they doing
geopolitically?
SECRETARY BLINKEN: I think there are a few things going on. First, of course, as
you mentioned earlier and as you mentioned a few minutes ago, they’ve been
engaged for a long period of time in their Belt and Road program making major
investments in different parts of the world. It’s had real successes over time
in terms of positioning them economically and positioning them strategically.
The two things are, I think, very much married.
But we’ve also seen two things. The way that these investments have been made in
many cases -- not all cases, but in many cases -- piling countries with debt,
bringing in workers from China to take on the jobs instead of having local
workers take them on, building things to substandards, bringing, shall we say, a
disregard for workers and the environment with it -- that also begins to have an
effect. So I think countries appreciate the magnitude of the investment. They
appreciate the rapidity with which China is able to act, something that is not
our forte -- but I want to come back to that in a second. But then there is often
a price to be paid later.
Now, I think China is trying to adjust because it’s getting -- it’s gotten
pushback as people start to realize some of what these investments mean. The
other challenge that it has is it actually has less money to invest in this
moment because it has its own economic challenges. But we’re also not standing
still, and you mentioned the imperative of critical minerals and the building
blocks of the 21st century economy. We put together something called the Mineral
Security Partnership, where we’ve gotten now more than 14 countries to work
together, to look together, and potentially to invest together around the world
in projects to make sure that we can build our own resilient supply chains and
not be dependent on any one part of the world, whether it’s China or anyone
else.
And we now have several dozen projects that are either moving forward or that
we’re actively looking at. And ultimately, our competitive advantage in this
area is the private sector. We’re never going to compete with China on a
state-to-state level, dollar for dollar. That’s not the nature of our system.
Our system is making sure that -- and one of my jobs, one of the State
Department’s jobs, is to try to make sure that we are helping open the terrain
for American investment, for American business. And that’s exactly what we’ve
got the tools of government focused on now in ways that we haven’t before.
Development Finance Corporation, other parts of the government, are focused on
trying to be more effective, to serve as guarantors or as catalysts for the
private sector.
But the critical difference is doing it with other countries. The President put
together something at the -- with the with the G7 countries, the Partnership for
Global Investment and Infrastructure, and it’s the same basic idea. Any of us
acting alone, it’s going to be hard to match what China’s doing. When we can
work collectively, marshal our resources, or, as necessary, have some of us
active in one place, others in another, that’s the way I think you get at
dealing with some of the advantages that China’s shown in recent years.
Pacific Islands are a really good example of this. China covers a lot of ground
in the Pacific islands, maybe more ground that we can cover ourselves, although
we’ve made a major investment there. The President’s had two summit meetings
with all the Pacific Island leaders at the White House. But when we’re working
in cooperation and collaboration with Australia, with New Zealand, with Korea,
with Japan, with India, we cover a lot of ground. You’re seeing that play out.
You’re seeing that play out with undersea cables. You’re seeing that play out in
our ability to help deliver some of the things that people in those countries
want.
And the last thing is this. In diplomacy, it is often more effective to say to a
country: We’re not asking you to choose; we want to give you a better choice,
and then you make up your mind. So our responsibility is putting together that
better choice.
SENATOR ROMNEY: There’s a clock up here that’s telling me how long I get to go.
SECRETARY BLINKEN: It says zero, zero, zero on it.
SENATOR ROMNEY: But it -- from the very beginning
-- no, no, when we sat down it
said zero, zero, zero. It’s been zero, zero, zero the whole time. So
someone give me the signal if there -- oh, I’m getting their signal. I’m going to
ask you one question. I’ve got to ask you one question. That’s my chief of
staff, Liz. Thank you, Liz. It’s like, zero -- what am I supposed to do with
zero?
And that’s help us with Ukraine, your perspective on Ukraine, which, I mean,
there are -- in my party there are people -- and I do not understand the argument.
I’ve got to be honest -- I do not understand how anyone can argue that we
shouldn’t provide weapons to Ukraine. I can’t -- I listen to -- they’ve changed
their argument over time from, one, oh, the Europeans should do more. Well, the
Europeans are doing more. Oh, well, we don’t have enough -- we go from argument
to argument. But more recently, it is that there’s no way for Ukraine to win,
that providing funding for weapons is going to lead to nothing but a
continuation of the status quo. What’s the pathway forward? What are the
scenarios that you see in Ukraine?
And then please offer a last word. You get the -- you get the final word here,
Mr. Secretary.
SECRETARY BLINKEN: Thank you. Well, first, thank you, because your leadership on
this has been instrumental. And one of the things I have to say, too, is your
recognition of the threat, the challenge that Russia posed, well before many
others saw it in this country. Well, I think we’ve finally caught up with you,
and that was a very important thing.
Now, unfortunately, much of what you talked about some years ago is -- we’ve seen
come to fruition. But here’s the thing. First of all, I believe profoundly that
in so many ways, despite the incredible challenge that Ukraine is facing, it’s
already succeeded and Russia’s already lost, because keep in mind what Putin was
trying to accomplish. He was trying to erase Ukraine from the map. He was trying
to subsume it into a greater Russia. That has failed, and that cannot succeed no
matter what happens from here on.
And the reason that’s failed, of course, is because first and foremost the
Ukrainian people were determined and showed remarkable courage. But it also
failed because, yes, the world did come together, and I think American
leadership was what made the difference. We brought 50 countries together in
support of Ukraine, and that continues to be the case today. We often talk about
burden sharing, and Americans complain about the lack of burden sharing. This is
the one place where I can say, without fear of contradiction, that we have
extraordinary burden sharing for everything that we’ve done, and it’s a lot.
Collectively, our European partners and others in Asia have actually done more
--
military, economic, humanitarian support for Ukraine. So I think if you -- if you
step back, that’s an important thing to recognize.
The other thing that’s important to recognize is that, in so many ways, Putin
has precipitated everything he sought to prevent, what Russia has invested in
this horrible adventure. We see it in a country that, despite the massive
efforts it’s making, is going to be militarily, economically, and diplomatically
weaker than it was. You have Ukrainians who are united in ways that they never
were before against Russia, and certainly before 2014 that was the case. You
have Europe that’s weaned itself off of Russian energy in a remarkably short
period of time, and you have a NATO Alliance that’s stronger and bigger than
it’s ever been. I mean, the idea three years ago that we would be talking about
Finland and Sweden as part of NATO -- unimaginable.
Now, all of that said, this is a challenging moment, and it’s been a challenging
nine or ten months, because Russia does have extraordinary resources that it
seems willing to throw at this in ways that most others wouldn’t. Now, the
supplemental that, thanks to your leadership and others’, we got done was just
in time. And I really also have to applaud the speaker, Mike Johnson, for the
leadership that he showed in making sure that that got done. So that assistance
is on its way, and as you know, of the money -- the new monies that we invested,
virtually all of that is actually invested here in the United States into our
own defense industrial base, providing good jobs in the United States but in a
way that allows us to help Ukraine. So that’s a win-win, too.
But here’s where I think this is going. Yes, there is a real challenge in the
moment on the battlefield, and we’re engaged with that, Europeans and others are
engaged in that. But there’s also where we want to take this in the medium to
long term, and on one level it’s pretty simple. We want to see a Ukraine that
stands strongly on its own two feet militarily, economically, democratically.
Militarily -- we have 32 countries now that have negotiated or are completing
negotiations on security agreements with Ukraine that will help it build a force
for the future, one that can deter aggression or defend against it as necessary.
Economically, we’re focused on trying to bring more private-sector investment
into Ukraine. We have Penny Pritzker, our former secretary of commerce, has been
working on this. And there is tremendous potential there, despite the incredibly
difficult conditions.
We can see Ukraine developing a strong defense industrial base that will help
not only Ukraine, but other countries over time. We can see with what they’ve
achieved in the Black Sea, keeping that open -- there is now more getting out of
Ukraine from the Black Sea than before February of 2022. Now, we have a real
challenge in making sure that we get more air defenses to Ukraine so that this
investment can actually be protected against Russian aggression. We’re working
on that.
Democratically -- the EU started accession talks with Ukraine now. It’s a long
process, but that is probably the most effective way to deep-root Ukraine’s
democracy, to ensure the necessary reforms. And the best possible rebuke to
Vladimir Putin, no matter where the line ultimately gets drawn, is a strong
Ukraine, and you can see that happening. It’s -- I’m convinced that as long as we
continue the support, we can and get there -- we can and will get there.
So maybe the note to conclude on is this, because I think everyone in this room
is so representative of this basic idea. What I see and hear around the world,
as I have the incredible privilege of helping to represent the country and
traveling around, is an ongoing thirst for American engagement and for American
leadership. And even the countries that are complaining about what we’re doing
at any given moment or don’t like a particular policy still want us. And as we
look at it, there’s a basic choice. We can continue to engage and we can
continue to lead, or if we don’t, we know one of two things is going to happen.
Someone else will, and probably not in a way that advances our interests and
values -- or maybe just as bad, no one will, and then you’re almost guaranteed to
have a vacuum filled by bad things before it’s filled by good things, and that
will ultimately come back to bite us.
So as I see it, there’s now a greater premium than there’s been in the time I’ve
spent in Washington on American leadership, and we have to find ways to come
together to assert that and to carry it forward. I also think there’s a greater
premium than ever before on finding ways to cooperate and coordinate with other
countries, because -- and beyond countries, private sector, organizations --
because for all of our power, for all of our strength, we can’t effectively deal
with most of these challenges if we’re doing it alone.
So we can’t go it alone, and we can’t go away. And that’s what we’re determined
to make sure we’re focused on as we carry on these next months.
SENATOR ROMNEY: Ladies and gentlemen, the United States Secretary of State.
