COVER STORY • 4Interview with Matthew P. Goodman, Senior Vice President for Economics, Center for Strategic& International Studies

T

he Biden Administration’s New
Foreign Policy – a Key Geopolitical
Question in the Pandemic

By Japan SPOTLIGHT(Interviewed on Jan. 12, 2021)

Main Pillars of Biden
Administration’s Foreign
Policyand economics are very closely linked.
Foreign policy in the past has been too
focused on external issues and politicalissues and traditional security concerns like
JS: We are in a somewhat
nuclear proliferation or terrorism; these arecomplicated world, and geopolitics
very big problems, but the new approachand economics cannot be
under the Biden administration is that someseparated. It is impossible toof those policies have been taken in the past
imagine that one can have truly
without enough consideration for whatstable economic relations with any
American people are really worried about,nation in the absence of stable
including economic concerns. From thatpolitical ties. It is also true thatflows first the “build back better” policy,
domestic political stability is very
which is the term for their economic andimportant in deciding on anysocial plan at home, which has four broad
foreign economic policy. In thispillars: re-energizing American manufacturing
regard, facing high geopoliticaland innovation, investing in infrastructure,risks and stronger populism in theinvesting in the caring economy, andMatthew P. Goodman
United States, how would you
addressing issues of racial injustice. All ofdefine the main pillars of the incoming Bidenthese are top priority before turning to foreign policy issues. Of
administration’s foreign policy?
course, foreign policy starts from the first day and so they will haveto immediately focus internationally. I do think that there will be
Goodman: The first point is that the Biden administration’s firstmuch more focus in Biden’s foreign policy on issues of democracy,priority is going to be the Covid-19 pandemic and dealing with thathuman rights and political stability around the world; that will be
problem as a health problem, and as an economic problem. That ismore central to their foreign policy than during the administration ofgoing to be the top priority, and that is the reality that they are going
President Donald Trump.
to be dealing with before foreign policy. That will shape theadministration for the first 100 days or so. The second point is that
JS: There is particular interest in foreign policy vis-àvis China. Would democracy and human rights be thethe Biden administration has defined foreign policy priorities in terms
main pillars in dealing with China as well?
of what they call a “foreign policy for the middle class”, and what
they are trying to do is to link traditional foreign policy interests
Goodman: I think they will be a pillar, and it will be a more important
more clearly with domestic economic and social and other concerns.
pillar than it was under Trump or even under President Barack
This is more than just a soundbite or a headline. They are
Obama. The Biden approach to China begins with agreement with thegenuinely committed to starting the foreign policy conversation by
Trump perspective that China is a leading strategic competitor of thelooking at what American workers’ problems are, what their needs
US, and so it starts with strategic competition but then looks at theare, what their desires are, and then deciding what foreign policy
elements of that competition and how to address it.
interests should be pursued to support Americans at home. I believe
Democracy and human rights will be a much higher priority, butthat is a genuine impulse of President Joe Biden himself and hisother elements will still be there: there will still be trade, technology,
security advisor Jake Sullivan, who first coined the term “foreign
and traditional foreign policy elements such as security. Then there
policy for the middle class”. That is the broad mindset that they arewill be questions of climate change and global health responses,
going to be bringing to foreign policy and in that sense foreign policy
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Japan SPOTLIGHT • March / April 202119

which provide areas for cooperation. All of these elements will bepart of the China policy, but yes, democracy and human rights will bea much more important pillar of the China strategy.
JS: In the domain of trade policy in dealing with China,

perhaps encouraging structural economic reform
could be much more effective in achieving smooth
relations between the two countries.

Goodman: Yes, it would be better for China and for the US, andindeed for Japan, if China moved back to its previous path ofdomestic economic reform and opening. However, the Biden
administration is going to take the view that this is really a decision
for China, and outside forces – whether it is the US or Japan or othercountries – are going to have relatively little ability to influence
China’s decisions about its own reform path. Of course, the newadministration will work on those issues, particularly those that
directly affect American interests, such as where Americanbusinesses are denied market opportunities or treated unfairly.
Where intellectual property is being stolen or forced technology
transfer policies are being pursued by China, I think the Biden
administration will pursue those issues. Where the Chinese
government is using heavy subsidies of its state-owned or statedirected champion companies, the Biden administration will pursue
those issues, but I don’t think that the focus will be as heavily on
Chinese internal structural reform as previous administrations,
including the Obama or George W. Bush administrations, which hadvarious dialogues to try to address those internal issues. I don’t thinkthat Biden will be so enthusiastic about those issues, and there will
be more focus on strengthening American competitiveness vis-à-vis
China, while the Biden administration will also push backaggressively to prevent China from stealing technology or engaging
in economic coercion.

New US Foreign Policy in East Asia
JS: East Asia is the principal interest for many

countries in terms of geopolitics today. Besides
China, perhaps North Korea is a major source ofconcern. What do you think will be the foreign policy
taken by the Biden administration in trying to achieve
peace on the Korean Peninsula?

Goodman: I am not an expert on nuclear issues, but my generalanswer is that it will be a high priority for the Biden administration.
The threat of North Korea’s nuclear capability, combined with an
improved missile capability, is a huge regional and global concern. In
addition to Antony Blinken, who will be the secretary of state, the20 Japan SPOTLIGHT • March / April 2021

deputy secretary of state will be Wendy Sherman, who was very
involved in the Korean negotiations in both the Obama and Bill
Clinton administrations, so it will be a high priority for her. The Biden
administration will consult very closely with its East Asian allies,
notably Japan and South Korea. I think they understand theimportance of having both of those critical allies, and also Australia
and semi-allies like Singapore, supporting this policy. Incidentally, I
think that the Biden administration will be very sensitive to specificJapanese domestic concerns like the abductee problem.
JS: In particular, perhaps the new administration

would expect Japan and South Korea relations toimprove.

Goodman: It is clear that the US interest in Asia centers on a good
relationship among all its allies and particularly between two criticalallies, Japan and South Korea. The tension between the twocountries today is very unhelpful to American interests, and I think
there will be a strong effort to improve relations, although I don’t
think the Biden administration will play a brokering role but willrather encourage the two countries to try to resolve their differences,
obviously over history and technology transfers and other concerns.
Especially if we are going to deal with the North Korea threat, weneed to have Japan and South Korea on good terms and working
together. Similarly, to deal with China we need Japan and South
Korea to work together, so this will be a high priority.

Climate Policy Affecting All Policies of Biden
Administration
JS: Switching to the global environment, the Biden

administration has already committed to rejoining theParis Agreement, and climate policy will be very
important for this administration. Is it correct toassume that will even be embedded in foreign
relations and trade?

Goodman: I would agree that climate change is a number one
priority for the Biden administration globally, and in foreign anddomestic policy it will be an issue of key focus. Former Secretary ofState and Senator John Kerry, who was very involved in the Paris
negotiations, has been appointed as special international climate
envoy, and former environmental protection agency (EPA) head Gina
McCarthy has been appointed as domestic climate envoy. There will
also be climate issues in our general foreign policy towards East
Asia; for example, I think energy policy in the region will be much
more focused on clean energy, much more discouraging of fossil
fuel-based development in the region, which is a potential point oftension between the US and Japan.
Obviously, climate change and sustainability will be a central
element of the “Build Back Better” plan when it comes to building
domestic infrastructure and investing in innovation and clean energy.
It is going to run through everything that they do in the Biden
administration. One of the interesting questions is how they aregoing to make all of these different elements work together, because
it is somewhat unusual to have such a senior person like John Kerryin the White House specifically focused on international dimensionsof climate change. On the other hand, it is also unusual to have aformer Cabinet secretary in the White House in charge of domestic
climate issues, so how those two will work together and how they
will work with the agencies involved – the State Department, theEnergy Department – will be key.
Incidentally, the Energy Department will be headed by Jennifer
Granholm, who is the former governor of Michigan, which is ofcourse where a lot of US automobile production is based. Governor
Granholm has been very focused on electric vehicles, and I think she
was picked because of her interest in those issues. Traditionally, theremit of the US energy secretary is to protect the American nuclear
weapons supply, and to clean up nuclear problems. That is theirmain focus, but I think the appointment of Governor Granholm is asignal that the Biden administration wants her to play a critical role inclean energy and climate policy.
There are many other players throughout the government who
will be involved in this issue at some level. For example, Pete
Buttigieg, the secretary of transportation, if confirmed, will be very
focused on sustainable infrastructure and transportation, so there
will be many players. One of the questions I have is, will these people
be able to work together in a way that is effective and efficient andachieves real progress on these issues? Based on my experience
working in government, I am a little concerned about this, because
there are many big personalities. I should also mention Brian Deese,
who is going to be the director of the National Economic Council. He
also has a background in working on environmental, social, andgovernance (ESG) investment, and so he is very interested in theseissues. Treasury Secretary Janet Yellen, while a central banker bybackground, is very interested in climate finance. How these diverse
players will work together is a big question in my mind.
JS: We are particularly interested in the linkage

between this new environment policy and bilateralenergy collaboration. The US-Japan energy
partnership could be very important for the twonations. Would this bilateral energy collaboration
likely reflect this change of US environmental policy,
with a wider range of renewable energy sources in
addition to natural gas and nuclear energy?

Goodman: Yes, I think so. I don’t have any inside information aboutthat specific issue, and I am not sure that the Biden transition teamhas focused on that question yet. However, I would expect that it will
be a high priority for bilateral relations and globally to have that
dialogue continue; I think that the emphasis will shift from thetraditional focus on fossil fuels to renewable energies.
Frankly, I think also there may be some pressure on Japan tolessen its dependence on fossil fuel – coal in particular – in order tochange trade patterns between the two countries, and to discourage
Japan from financing overseas coal plants. There may be a different
dynamic between the Biden administration and the administration ofJapanese Prime Minister Yoshihide Suga on those issues, and it will
sometimes be a little uncomfortable for Japan. Suga has committed
to net zero emissions by 2050, and that is an ambitious objective; I
think that Biden’s interest in macro terms is in pushing in a helpful
direction for Japan’s own ambitions or targets, but I imagine there
will be some friction or difficulty in coordinating and negotiating thespecific elements of that bilateral energy cooperation. It is going to
be an important and constructive, but also somewhat difficult,negotiation.

Trade Policy, Though It May Not Be the First
Priority
JS: Moving to trade policy, the priority of the new

government is on domestic structural economic
reform. Trade policy may not be the first priority;
however, the WTO dispute settlement should be
improved to prevent chaos from ensuing. In thatregard, would it be possible for the US to contributeto the restoration of the malfunctioning WTO disputesettlement by stopping preventing the WTO from
appointing new members of the appellate body?

Goodman: I don’t have any specific information or insight on thatquestion, but first let me validate your basic premise, which is that
trade policy is not going to be an early priority for the Biden
administration, as they are going to be much more focused on
domestic economic policy. Even when they start engaging morestrategically on trade agreements, they are going to have a very
different approach to those issues. However, trade issues are notgoing to wait for one or two years for the Biden people to figure out
their approach.
The most immediate WTO question is the appointment of a new
director general. I think there are at least three big WTO issues thathave to be resolved pretty soon. One is the new director general;another is major negotiations on fishing will have a deadline, butthey will be facing a WTO ministerial meeting in June. Then, theJapan SPOTLIGHT • March / April 2021

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appellate body/dispute settlement issue because it is heavily
problematic right now. The good news is that the designated US
trade representative, Katherine Tai, is very knowledgeable, competentand experienced and understands those issues very well.
On the specific question of the appellate body, I don’t know what
the Biden administration’s approach is going to be; I think it will bedifferent from the Trump approach, as they will understand the valueof an effective dispute mechanism, including an effective appellate
body system. Bob Lighthizer really didn’t believe in the WTO disputesettlement approach because it limited the sovereignty of the US insome way. Even the Obama administration had some real complaints
about the appellate body and the dispute settlement issue and wastrying to fix those issues. The Biden people will also want significant
reform of the dispute settlement system. Whether they will
immediately appoint a new judge I am not sure. Philosophically I
think they would want the body to function, but they might use asleverage the absence of a quorum to force serious reform.
JS: Regional FTAs are of course tools to achieve tradeliberalization, but at the same time tools to achieve asort of geopolitical stability. In that sense it is a kindof foreign policy as well as economic policy. How doyou think the new administration will consider the
RCEP or CPTPP in the Asia-Pacific region? China has
already announced its interest in joining the CPTPP,
so we are curious about the US response to thismaneuver.

Goodman: Honestly, I think that the China maneuver is just symbolicand strategic, not real. I don’t think China is likely to have a serious
interest in joining the CPTPP at the level which existing members
would expect on issues of state-owned enterprises and issues ofintellectual property, subsidies and other issues. I think it will bedifficult for China to reach that standard, and I don’t think that Japanand other partners – Australia, Singapore – are going to water down
the requirements just to get China in. I don’t think it is realistic, but
symbolically it was interesting that China indicated that interest, andwhen you combine it with the conclusion of the RCEP, which is thebiggest regional trade agreement that the US is not part of, thecompletion of that together with this kind of feint, or fake move, by
China into the CPTPP has definitely got the attention of people in
Washington and has focused the strategic players of the Biden
administration interested in East Asia and Indo-Pacific policy onfinding a way to respond to those developments.
The problem lies in an inherent and real contradiction in Biden’s
foreign policy; they really want to re-engage with allies in Asia andthey really want to confirm a strong American commitment to theregion in all respects – diplomatic, security, economic – and they
22 Japan SPOTLIGHT • March / April 2021

definitely want to hedge against China’s increased power in theregion. On the other hand, they are very reluctant to go quickly into
big trade agreements as we discussed before. There is a strong
resistance to moving fast into big trade agreements, especiallysomething like the TPP. That is a kind of tension, a contradiction orforces moving against each other. That is something that the Bidenpeople are going to have to resolve, and I think it is going to be quitedifficult.
I actually think that Biden himself is a little more focused on thegeostrategic part of that story and understands the importance oftrade and agreements like the TPP as a tool to advance our strategicinterests in Asia more than some people on his team. There aremembers of his Cabinet and his immediate advisors who are more
skeptical about those arguments and definitely very reluctant to do
trade agreements. I think Biden might be a little more willing to takerisks on trade, but I don’t think it is going to be his top priority. Theinteresting thing I am watching is what Biden will do in the run-up to
the APEC summit in November 2021. New Zealand will be hosting
the APEC leaders meeting and there will be an East Asian summit aswell, and as that meeting gets closer, there will be pressure on the
White House to come up with a big strategy for Asia, and that has toinclude a credible economic pillar and a credible trade pillar. If the
Biden administration does not want to rejoin the TPP, or join the
CPTPP, then it has to find some alternative strategy on trade, and I
think the best they will try to offer is some sectoral agreements, sayon digital trade or on maybe other elements of the TPP that are lesscontroversial, where it is easier to get an agreement, for example on
subsidies or state-owned enterprises. Maybe they will try to pursue
some new bilateral trade agreements although that is very difficult
also. Possibly a new phase two agreement with Japan, although I
think that is unlikely, and perhaps with Vietnam or the Philippines(but not under President Rodrigo Duterte, I think). This is a big
tension: between the desire to be involved strategically in Asia –needing a trade policy to be credible as a strategic player in Asia –but on the other hand, not wanting to do big trade agreements. I
think there is a conflict there which Biden will have to resolve before
he goes to APEC.
JS: There are concerns over the new rules for digitalproducts. On such urgent issues, should plurilateralagreements be achieved as quickly as possible inlight of the speed of technological progress?

Goodman: I think there are different elements involved. Digital is a
big subject that covers many issues. There are rules on data flows
across borders, and there is definitely an impulse in the Biden team
to work with Japan and other partners in the region to try to advance
those rules. There are rules in the TPP, rules in the USMCA (the new

NAFTA), and there are rules in the US-Japan bilateral digital deal,
which are good. There is also APEC, which has done work throughCross-Border Privacy Rules (CBPR), and I think the Biden
administration may try to integrate all of that work with Japan,
Singapore, Australia and other partners to try and come up with a
new package.
At the same time there are serious concerns about technology
transfer, which is a related but slightly different issue. I think there isa strong interest in the Biden administration to work with partners in
Europe and Asia to try and ensure that we control sensitive andcritical technologies, and I think there will be a strong effort to try to
work with allies like Japan and also European allies. One of the
Trump administration’s successes has been to strengthen theCommittee on Foreign Investment in the United States (CFIUS)
investment screening tools, and Japan and Europe have also
strengthened their rules, encouraged by the Trump administration.
Export controls also have been strengthened in the US and Japan,
and I think there is more work to be done there.
Then, research collaboration – there is a big concern in Japan andthe US about technology and ideas leaking through universities. For
all of these topics there will be a strong impulse in the Biden
administration to work with our allies and partners, and there arealso interrelated questions about supply chains. Huawei is the target
now, but there are other questions around critical supply chains
where there will be a strong desire to work with allies and partners toensure that these supply chains are secure and, frankly, notdominated by China. I think there will be an interest in working withJapan and other allies on digital infrastructure, working together tobuild infrastructure to provide telecommunication services. The
Japan Bank for International Cooperation and the US Development
Finance Corporation have been working together with theAustralians, including through the Blue Dot Network, which is anidea to build high-quality infrastructure. A lot of this is aimed at adigital “One Belt, One Road”. There is a whole portfolio of issues inthe technology or digital space on which the Biden administration
will want to work with Japan and other allies.

Strengthening the Indo-Pacific Region
JS: A re-strengthened alliance would seem to be a key

issue for Biden’s foreign policy. Would the IndoPacific region be one option for such a
re-strengthened alliance in Asia?

Goodman: The “Indo-Pacific” terminology was created by Japan andthen adopted by the Trump administration. It was a little
controversial at first, and there are still questions about it. I am
worried about India, because I don’t think it should be in the room

when we are talking about economics. When we are taking aboutmaritime security or other rules and norms, OK, but when we aretalking about trade, investment, even digital economy, I am nervous
having India in the room, because I don’t think India believes in free
and open trade and investment, so I personally don’t like India being
part of this.
I think the Biden team will be very committed, and National
Security Advisor Jake Sullivan has already used the term “IndoPacific”. They might not use “free and open” but instead change thatto “secure and prosperous Indo-Pacific.” I know this might worry
some people in Japan in terms of the approach or focus, but actually
I think it means that they want to focus on the ultimate goal, which issecurity and prosperity in this important region.
On a related issue, I think the Biden administration will continue
to also pursue the Quad with India, Japan and Australia as a security
initiative. There is no question that the Biden team intellectually
understands the importance of the Indo-Pacific; they understand theimportance of a region where there are many critical issues,
especially the rise of China, the issue of North Korea, maritime
security challenges, and health challenges.
My sense is that the Biden team’s passion is transatlantic, andthat bridging our differences with Europe is an equally high priority.
A lot of the key players in the new administration are focused on
Europe, Russia and the Middle East rather than Asia. That is mypersonal view, and it is a little hard to prove or provide hard
evidence, but my instinct is that they are going to be most energetic
about trying to reconcile with Europe. When the European Union
announced that it was going to reach this investment agreement with
China – the CAI – we saw Jake Sullivan tweeting, “The Biden
Administration will welcome a chance to talk to our European friends
about our shared economic concerns with China.” So it was a kind of
hint that we don’t want Europe to move too fast to negotiate or finish
this deal. We want to talk to Europe about China and about Asia, so
in my view the new adminstration will have more interest in talking
as a group like the G7 countries or even a slightly broader group of
democracies about these issues. Having a strong Europe policy does
not mean a weak Asia policy or vice versa – the two are not mutually
exclusive, and I think they want to integrate both elements. But there
is a strong passion and energy that they want to devote to improving
US-EU relations.

Written with the cooperation of Joel Challender who is a translator, interpreter,
researcher and writer specializing in Japanese disaster preparedness.

Japan SPOTLIGHT • March / April 2021

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