Allied Economic Forum: Lessons Learned

For the past two and a half years, the CSIS Economics Program, along with the CSIS Scholl Chair in International Trade and Business and the CSIS Technology Policy Program, has convened a group of officials from the United States and select allies and partners to discuss economic issues of mutual interest, in particular those related to the challenges of a rising China and leakage of critical technologies to competitors and adversaries.¹ CSIS launched the Allied Economic Forum (AEF) under the organizing principle that certain economic policies, especially those to respond to China’s technology acquisition efforts, require close coordination among like-minded countries to be effective. This brief highlights five central lessons from the AEF discussions for future cooperation with like-minded partners to manage shared national security challenges.

The AEF first met in early 2018 to discuss reforms to foreign investment screening mechanisms in various countries. Over time, the agenda has expanded to cover four distinct policy areas—foreign investment screening, export controls, supply chain security, and international research collaboration—with emphasis on managing the transfer of technologies critical to national security.

Five central lessons for future cooperation with like-minded partners emerged from our discussions:

1. The interconnectedness of the global economy and innovation ecosystems means unilateral approaches are unlikely to succeed.
2. The high degree of interconnectedness results in multiple vectors for sensitive technology and data transfer, requiring coordination across countries as well as policy areas.
3. Allies should proactively manage areas of tension between them, for instance on trade, that might otherwise jeopardize coordination efforts.
4. Technical assessments should remain independent of political considerations and be shared among allies to build consensus.
5. Future cooperation should build on recent efforts to coordinate policy mechanisms over the past few years.

Looking ahead, the traditional distinctions between national security and economic competitiveness are being blurred. Policymakers should resist justifying economic protectionism in the name of national security. Instead, they should deepen mechanisms for engagement among like-minded countries on shared security issues. They should also explore possible joint action to promote technological development and secure critical functions such as medical supply chains in a way that limits distortions and promotes a level playing field.

Dylan Gerstel is a research assistant with the economics program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Stephanie Segal is a senior fellow with the economics program at CSIS. Matthew P. Goodman is senior vice president for economics and holds the Simon Chair in Political Economy at CSIS.

This report is made possible through the generous support of member governments of the CSIS Allied Economic Forum.

CSIS Briefs are produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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