Stabilizing an economic agenda through international cooperation

International Financial Institutions like the IMF and World Bank are facing challenges due to the realignment of great power competition and have been slow to respond to China’s economic behavior and climate change mitigation; partner governments are securitizing their economies through new trade and investment instruments that seek to safeguard and bolster advanced technologies while de-risking from geostrategic competitors; governments and the private sector must work together to ensure that technology competition protects efficiencies, institutionalizes trade cooperation, and promotes a level playing field. (pp. 33-34)
Partner countries should decide which forum will host economic security dialogues to determine how to articulate economic security strategies; for now, partners have concentrated economic security efforts in the G7; partners must pursue institutional changes at the domestic level to promulgate economic security policies; partners must work with domestic legislative bodies to pass companion laws to support economic security objectives. (p. 34)
The most fundamental problem facing international cooperation is that no institution is able to create enforceable rules to deal with a new economic security reality; the G7 could be expanded and used to create an Economic and Technology Security Regime (ETSR); the ETSR could have two pillars for deeper cooperation on trade, investment and technology; one pillar would focus on export control parity, the other would focus on investment security, aligning standards for high-risk transactions; the investment pillar could include a "golden share" fund to acquire distressed firms deemed critical to national security. (pp. 34-35)
US allies and partners agree with the US desire to accelerate de-risking, but fear that the growing scope of trade and investment controls risks inviting Chinese retaliation and driving up costs without a clear mechanism for offsetting them; the US and its partners should:
1. Eliminate tariffs on green technologies while working jointly to determine applied tariff rates in other sectors like critical technologies;
2. Develop a risk taxonomy for trade, pricing in both climate risk and geopolitical risk;
3. Deepen research cooperation to scale up next-generation technologies;
4. Adopt a golden shares instrument to provide governments the ability to intervene jointly to protect strategic assets in high-risk cases;
5. Advance critical supply chain arrangements with partners to deepen supply chain resiliency, and the private sector should recognize that supply chains will increasingly serve as the primary vehicle for operationalizing the economic security agenda and participate actively in advancing supply chain security initiatives;
6. Encourage regulatory cooperation between member countries to align standards and regulations, reduce barriers to trade, and promote mutual recognition of product standards and certifications;
7. Work through the G7 and other frameworks to establish the Coordination Platform on Economic Coercion; and
8. Create a buyer’s club (offtake agreements) for critical minerals to create demand and price stabilization to keep producers operating. (pp. 36-37; 41)