New FDD Study: Securing American Interests: A New Era of Economic Power

(Washington, D.C., Feb. 6, 2017) – North Korea’s growing use of offensive cyber capabilities to target the international financial system, China’s assertive efforts to undercut U.S. interests in East Asia using its economic clout, and Iran’s continued attempts to undermine Middle East stability and corrupt the international financial system are just a few of the challenges the Trump administration and Congress must address to protect America’s economic national security. These and others are included in a report issued today by the Foundation for Defense of Democracies’ (FDD) Center on Sanctions and Illicit Finance (CSIF).

The report, “Securing American Interests: A New Era of Economic Power,” describes how economic tools play an increasingly important role in U.S. national security, and details how the United States can sharpen those tools to protect its interests at home and abroad.

“President Trump has powerful tools of economic statecraft at his disposal, yet he will also face a challenging environment where state and non-state adversaries are also learning to more effectively use those levers,” said Juan C. Zarate, former Deputy Assistant to the President and Deputy National Security Advisor for Combating Terrorism and current CSIF Chairman. “This report provides the administration and lawmakers with an overview of the national economic security issues we face, as well as recommendations for how we can better prepare to compete successfully in this complicated and evolving space.”

Drawing from their extensive expertise in economic statecraft, coercive diplomacy, international banking and financial integrity, positive economic power, and a deep knowledge of the United States government, CSIF’s experts identify in the report key threats and opportunities, and they recommend strategic and structural changes to prepare the United States for economic national security battles that could be just around the corner.

Lead author Eric B. Lorber, a CSIF senior advisor, details how, the United States in recent years has at its disposal an ever broadening set of economic tools to achieve its foreign policy objectives. This, of course, includes punitive measures like sanctions, but also includes positive economic power, including strategically deployed aid.

“The release of this report could not come at a more important time,” Lorber said. “New technologies and novel means of financial influence are enabling our adversaries to threaten U.S. national economic security. China, Iran, North Korea, Russia and the Islamic State are among the key adversaries with which the United States must contend.”

CSIF’s experts detail five areas critical to U.S. national economic security:

• Sharpening U.S. tools of economic coercion to achieve foreign policy goals

• Defensive economic approaches to protect America’s U.S. economic national security

• Positive economic power to encourage financial transparency and economic growth

• Ensuring the integrity of the global financial system, and

• The strategic and structural changes necessary to ensure U.S. national economic security.

The CSIF report is unique in that it brings together all of these elements of America’s economic power into a single, coherent framework. It also offers concrete policy recommendations for strengthening U.S. economic security, including developing a National Economic Security Strategy, establishing an Office of Policy Planning within the United States Department of the Treasury, and creating an Economic Sanctions Advisory Board to ensure better coordination with the private sector.

“This report is the first of its kind,” said Mark Dubowitz, FDD CEO and CSIF director. “Until now, policy prescriptions have focused on specific components of national economic security, but none has fully explained how the disparate elements of U.S. national security can be brought together to protect our vital interests. This report aims to fill that crucial void. We are pleased to provide practitioners with a framework for developing the field of national economic security.”

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About the Foundation for Defense of Democracies:

The Foundation for Defense of Democracies is a non-profit, non-partisan 501(c)3 policy institute focusing on foreign policy and national security. Founded in 2001, FDD combines policy research, democracy and counterterrorism education, strategic communications and investigative journalism in support of its mission to promote pluralism, defend democratic values and fight the ideologies that drive terrorism. Visit our website at www.defenddemocracy.org and connect with us on Twitter, Facebook and YouTube.

The Center on Sanctions and Illicit Finance (CSIF) expands upon FDD’s success as a leading think tank on the use of financial and economic measures in national security. The Center’s purpose is to provide policy and subject matter expertise in areas of illicit finance, financial power, and economic pressure to the global policy community.