Strengthening the Transatlantic Bond to Confront Today’s Challenges
Thank you for inviting me here today. It’s an honor to be among some of Sweden’s most influential policy thinkers on the eve of Sweden’s National Day and to discuss some of the very complex global issues affecting us all.
Of course, when we made plans for today’s event, none of us had any idea about what was going to transpire in the United States over the course of the last two weeks. Although my focus is U.S. foreign policy, and particularly our policy as it relates to Sweden, I would be remiss if I didn’t at least say a few words about the horrible events that have unfolded in our country over the last almost 14 days. Secretary Pompeo last week offered condolences to Mr. Floyd’s family and to all the people who have been impacted by the subsequent rioting and violence, calling the actions of the police officers responsible for Mr. Floyd’s death abhorrent. President Trump said that the death of George Floyd was a grave tragedy and should never have happened. It has filled Americans all over the country with horror, anger, and grief, adding that the U.S. Department of Justice has made clear that accountability for his death is being addressed through our criminal justice system, both at the state and at the federal level.
On a more personal level, I have to say that I feel heartbroken for Mr. Floyd and his family, for all those who have been the victims of police brutality, and for all those whose suffering is magnified now by the violence that has erupted throughout the nation. It is hard to be so far away from home at times like these. It’s hard to watch the country I am so proud to represent reveal some of our greatest flaws like this. But ours is a country that has often struggled to overcome both internal and external threats, and I am confident we will come out of this better, stronger, and an even truer model of the principles we advocate. I trust that the forces of freedom and equality and rule of law will ultimately prevail. As Dr. Martin Luther King, Jr. said, the arc of the moral universe is long, but it bends towards justice.
Of course, my tenure as Ambassador like everything else has been heavily impacted by the COVID-19 pandemic. This is unprecedented in many ways. But I am a technologist at heart. I really believe technology and innovation will be key to solving this and many other complex challenges. A friend of mine in tech mentioned to me we have never before in history seen brain power the world over all focused at the same time on solving the same problem. Things are incredibly difficult right now for a lot of businesses and certainly for all of us as individuals. But I am an optimist and I think we will see some very innovative technology come out of this crisis. I am excited to see what all of these collaborative efforts will produce.
As the situation improves, I really hope to be able to continue getting out around Sweden and to be able to meet with many of you in person.
If you know my backstory, you probably understand why I have such confidence in the American dream and innovation. For those of you who don’t, I started my career as an entrepreneur. And as perhaps some of you at this meeting know, being an entrepreneur means pursuing a non-linear career path. After graduating from Stanford, I did not join a large established firm, but instead I found my first job working for a start-up firm making capital investments with Peter Thiel. Our office was in a former broom closet with no windows. It was so small that every time Peter came or left, I had to scoot my chair in as far as I could so he could get out the door. However, we wanted to be on Silicon Valley’s famous Sand Hill Road and that was all we could afford.
Little did I know that this former broom closet would be the first step toward one of my proudest successes: helping to found and build PayPal with Max Levchin, Peter Thiel, Elon Musk, Luke Nosek, Yu Pan, and Russel Simmons.
While working in our broom closet, our fund became the first investor in a small encryption company called Field Link. Field Link was doing encryption for the most cutting-edge technology at the time: the Palm Pilot. Do you remember the Palm Pilot? One day, a group of us from Field Link were at a local Chinese restaurant for lunch. Being recent graduates, we were on tight budgets, so when the bill came, complex discussions began about how we would split the bill. In the middle of that conversation someone remarked, wouldn’t it be nice if we could just use our Palm Pilots to beam money to each other? Everyone stopped, thought, and the next thing I knew, we were founding an ePayments company. Yet, although we had a great idea, it was definitely not an overnight success.
We founded PayPal in 1998, but it took us almost three years to become profitable. During those years we tried five different business models before we found one that worked.â€¯ It wasn’t until users started using PayPal to accept payments for eBay auctions that we really were able to find success. Just after three years with the company, we were able to take PayPal public in 2002, only to sell the company to eBay for $1.5 billion that same year.
When I think back on that experience, I often wonder how we did it. No one from the PayPal team had payment experience; most of us didn’t even have Internet experience. It was a huge risk to spend all that money and time – years! – on something outside our expertise. However, by seeing opportunity where others didn’t and madly embracing the unknowns of where that opportunity would take us, we were ultimately able to find huge success.
And after 20 years as an entrepreneur and venture capitalist, I decided to embrace another unknown by leaving the private sector and entering government service. I was honored to be nominated by the President as Ambassador to Sweden and I was ecstatic to finally arrive in Stockholm last October. Although being Ambassador doesn’t exactly carry the same risk as starting a company, it is quite unlike anything I have ever done.â€¯â€¯Prior to the outbreak of the COVID-19 pandemic, I made it a point to get out and meet as many Swedes as I could across your amazingly diverse and beautiful country. I plan to jump back into that as soon as things start to open up more. But, for now, I am hoping to do as much virtual outreach as I can, so I am grateful for opportunities like this one.
I do not come from a political or foreign policy background. Yet, in my short time serving as Ambassador, I have become acutely aware of just how important the transatlantic relationship is. In the thirty years since the fall of the Berlin Wall, the world has gone from the binary nature of the Cold War to a world that is exceptionally more complex and connected with competing agendas and divergent interests.
Our current U.S. National Security Strategy, published in December 2017, highlights the need for the West to adapt to a new era of great power competition, focusing specifically on the threats posed to our way of life by non-democratic regimes, especially Russia and China.
Our strategy encourages our partners to recognize that China and Russia want to shape a world antithetical to the values and interests the United States and Europe have espoused over the last two centuries. It also makes clear the U.S. intent to preserve peace through strength. I believe the strongest, most effective way to confront these threats to our values is through transatlantic cooperation.
Many of you are already experts on the threats posed by Russia. Given recent global developments and our time limitations, I thought might focus more on the current situation with China. For decades, U.S. policy was rooted in the belief that support for China’s rise and its integration into the post-war international order would liberalize China. But contrary to our hopes, China expanded its power at the expense of the sovereignty of others.
Just last week, President Trump said that the United States wants an open and constructive relationship with China, but achieving that relationship requires us to vigorously defend our national interests. The Chinese government has continually violated its promises to us and so many other nations.
The United States supports multilateral institutions that hew to their mandate and that serve the interests of all member states. Last week as well the U.S. Mission to the UN made efforts to raise Hong Kong at the U.N. Security Council. Despite some people’s claims to the contrary, we support multilateralism that works. For far too long, China has taken advantage of multilateral fora to advance its own interests without making any progress on democracy, human rights, or rule of law. Recently, we’ve even seen multiple examples of it trying to stifle fundamental freedoms in liberal democracies, using threats of economic retaliation as leverage.
In light of this, we were particularly pleased to see the release late last year of the Swedish government’s new China Communication. It serves as a good starting point for a comprehensive response to the threats China poses to Sweden and Europe.
The Swedish strategy recognizes that China suppresses political dissent, manipulates and exploits global trade architectures, commits horrific human rights abuses, engages in predatory financing behavior through its Belt and Road Initiative, and spies on Sweden’s military, industry, universities, and residents.
It also blurs the line between Chinese private and defense sectors. The Chinese Communist Party’s handling of the coronavirus outbreak has been a costly and painful reminder that the actions of non-democratic regimes will always be antithetical to the values liberal democracies hold most dear. Its efforts to downplay the severity of the outbreak and to silence medical professionals and other whistleblowers cost the entire world valuable time. We must condemn and reject its efforts to suppress any and all media criticism, including by foreign media, of the Chinese government’s actions.
Sweden’s China Communication sets forth a perspective from which public, private, and academic sectors in Sweden should assess their interactions with China. The United States would be honored to work with Sweden on jointly implementing the recommendations in the Communication.
We are also very pleased to see the EU’s coordinated risk report on 5G that came out October 9th. It recognizes that 5G networks must be protected because they are susceptible to cyberattack due to the expanded role of software and the increased ability of service providers and software vendors to influence the network. To cite the most obvious example, it is clear that the relationship between the Communist Party of China and 5G provider Huawei makes any network running on Huawei technology vulnerable to Chinese government influence.
That is why we welcomed Swedish proposed legislation that requires a security review of 5G providers. Clearly, doing business with China is not business as usual, and any potential short-term economic gain countries may see as a result of Chinese investment may ultimately be negated by the possible long-term harm to those countries sovereignty and national security.
So, how do we confront these challenges posed by non-democratic states which play by different rules than we do, which are prepared to use military force to occupy the territory of their neighbors, which resort to hybrid warfare to undermine democratic states, or which pursue malign trade practices in violation of international obligations?
I think the answer is by deepening transatlantic cooperation within NATO, with NATO partners like Sweden, and between NATO and the EU. And by deepening our cooperation on a bilateral basis between the United States and Sweden and between the United States and the EU.
We are grateful that our European partner like Sweden are alert to the challenges posed by tyrannical regimes. The United States welcomed the decision earlier this year by the Swedish government, the Center Party, and the Liberals to increase defense spending by 50 percent over the next five years.
That investment will strengthen the security and defense cooperation between our two countries and enable us to do much more together in research and development, international missions, and joint exercises.
But the malign activity of Russia, China and others is hybrid, diffuse, and unpredictable, so NATO and the EU must work together.
In fact, NATO-EU cooperation has grown significantly following the signing of the Joint NATO-EU Declarations in 2016 and 2018, which have resulted in 74 proposals to increase cooperation between those two organizations.
Our agenda for broader and deeper cooperation with Europe is robust. It is an agenda based on shared goals and values, mutual respect, and high expectations.
We firmly believe that partnerships will be key to success in confronting complex, multilateral challenges. But these partnerships must be founded on shared responsibility. They will require burden-sharing, free and fair trade and bilateral and multilateral agreements that are both reciprocal and substantive. These are guiding principles for our current foreign policy approach.
The United States will continue to be a global leader, and we hope our European allies and partners will join us in that leadership. And with that, I would like to open it up for a few questions.