Strengthening U.S. – Taiwan Relations to Advance Freedom Keith Krach 2021 Yushan Forum
Source: Yushan Forum Author: Keith Krach
The Yushan Forum is a platform for Asian regional dialogue that aims to promote multifaceted regional linkages and strengthen partnerships between Taiwan and its neighboring partner countries. Founder and Chairman of the Center for Tech Diplomacy at Purdue (CTDP) and former Under Secretary of State, Keith Krach, addressed this year’s forum on the topic of Strengthening U.S. – Taiwan Relations to Advance Freedom.
Transcript of Krach’s address:
So today I want to talk about transformational diplomacy, which I learned is the key to global economic security and the cause of advancing freedom. And I want to share some of the things that I did and hope to do in the future with our Taiwan partners. But first, let me just tell you a little bit about my mission to the State Department. I’ll never forget the last time I visited China, the mainland, when I was running DocuSign. I’ve been going there since 1981. But this time it was different and it was clear that the Chinese Communist Party was amping up their techno economic competition into a form of aggression. When I was flying home, I wondered if the leaders in Washington knew about it. I really didn’t know anybody in Washington, I went a week later and next thing you know, I get asked to serve my country as Under Secretary of State. And I thought to myself, You know, this is a dream that I never knew I had, but my charge was very clear.
And the charge was to develop and operationalize global economic security strategy to drive economic growth, maximize national security and combat China Communist Party, their economic aggression. And I’m grateful for that unanimous confirmation and getting that bipartisan stamp, because the reality is one of ever increasing cyber warfare with seemingly ceaseless intense, even perhaps weaponized economic competition. And I don’t think I have to tell the Taiwanese people that the CCP is playing the long game and they’re playing for keeps–a game of four dimensional economic, military, diplomatic and cultural chess with little regard for human rights, intellectual property, the environment or sovereignty of nations.
In February 2020, I got the urgent mission to stop CCP’s master plan to control 5G, and I think as many of you remember back then it looked like it was inevitable that China’s most important company and national champion, Huawei, the backbone of their surveillance state, was going to run the table. They just announced 91 5G contracts and in the United States, the situation looked bleak. Nobody could imagine a world where authoritarian regime controls technology. Both sides of the aisle were hitting the panic button, and previous US efforts had failed. Everybody thought it was about technology when we got the authorities for that. It really wasn’t. It was about trust, and I knew it would take a new kind of statecraft to take China Inc on in this mission.
And the mission that we undertook, we utilized the same principle that in answer, I gave to my confirmation hearing when Senator Coons asked me what my China strategy would be to combat their economic aggression. I said we’d harness the US’s three biggest areas of competitive advantage by rallying our allies and our partners, leveraging the innovation resources of the private sector and amplify the moral high ground of democratic values.
So we built an alliance called The Clean Network of like-minded countries, companies and civil society and economies that operate by a set of trust principles to advance freedom and stand up against authoritarianism. And we really thank the people of Taiwan because you were one of the first members.
Now, those trust principles are the same as what we would call democratic values, respect for rule of law, respect for property of all kinds, respect for sovereignty, the environment, human rights, with a premium on integrity, transparency and reciprocity. These are things that we honor in the free world. But the Chinese Communist Party does not. And if you look at them, they all equal trust. And you know what was interesting for me at my first 60 bilaterals? And I would ask, you know, foreign ministers, economic ministers, finance ministers… “How’s your relationship with China?” And they would say, well, they’re an important partner, and they look like both ways they go. “But we don’t trust them.” And, you know, that rang bells in my head because I had just come from being the CEO of DocuSign. And I would stand up in front of our company and say, we’re not in the software business. We’re in the trust business. We deal with people’s most important documents. Those are ones you sign. And 5G is certainly that trust business, and that’s the most important word in any language. You do business with people you trust, you buy from people you trust, you partner with people you trust. And there is no business without trust. And, 5G is the ultimate of the trust business, so we would go around the world talking to country leaders and CEOs and say, Who are you going to trust with your citizens’ data with your with your company’s proprietary information, with your country’s most precious information? It’s not going to be Huawei and the Chinese Communist Party.
And so that was at the heart of that clean network strategy and those trust principles that you see. And, you know, if you look at that, what we did is in one jujitsu move, we flipped him on their back on these trust principles that they had been using against us. If you think about it, if you can steal my intellectual property, if you can use slave labor, if you could use coal fired power plants, you don’t have to be transparent and you have no regard for the law or you are the law, you’re going to win every time. Well, we took that and used that against them. We weaponized those very principles that protect our freedom.
So let’s take a look at the results. By the time we finished–in less than a year–we had 60 countries, representing two thirds of the world’s global GDP, 200 telcos and industry leading companies that turned the tide on Huawei. They went from their, 91 5G contracts down to a couple dozen. And for the first time, we proved China Inc is beatable, and in the process we exposed their weak biggest weakness, which is lack of trust. And now it provides an enduring model for all areas of economic competition. But perhaps the most important thing is it’s a bipartisan model that provides unity and continuity of policy between a Republican and a Democratic administration, which is critical to our allies. And it’s also what General Secretary Xi fears the most. And it’s probably why my family was sanctioned by Xi and the way I look at it, I will not bend a knee to emperor Xi. And I know the Taiwan people won’t either.
So now let me just tell you a little bit about my China mission. So, you know, I saw this what what is his mission? Right before I was going over there and everybody was wondering. Well, the mission was simple it was to strengthen global support for Taiwan. And my strategy, I believe strategy equals sequence–was comprised of six sequential moves. The first was bolster support for countries who have the courage to still recognize Taiwan. The second was to create a Taiwan win for the United States. The third was to build a foundation of trusted relationships. And then the fourth and the fifth that was to establish a formal economic partnership as broad as possible and then establish a technology partnership as deep as possible. And then the final one was to lay the groundwork for a formal trade relationship.
So that first, chess move was to bolster that support for those courageous countries who still recognize Taiwan and to provide the support they deserve. And it started at my home in Washington, November 9th, 2019. I’ll never forget it. I led all these countries finance ministers in discussions in terms of defending the island of democracy, Taiwan, and developing strategies for standing up to their aggression. We had a lot of in-depth discussions. It was probably one of the most amazing emotional nights of my life. We followed through with all of them. Many of those were the first countries on the Clean Network. I just met with the president of Palau.
The second chess move was to get a win for the United States, and I knew from my Silicon Valley days that TSMC is one of the most vital companies to United States national security. And in two weeks time, we brokered the biggest onshoring in history, $12 billion on-shoring of TSMC it was huge news in the United States. That was May 15, 2020. And that represented a quantum leap in terms of securing the global supply chain. And now and we believed that it would be a catalyst, a catalyst to get money from Congress, which now we helped design the CHIP Act was $50 billion dollars that combined into another bill that we designed–the Endless Frontier. And now it’s $250 billion United States Innovation Competitive Act that passed in the Senate. It’s now in the House. But the other thing that we knew is that it would grow and be a catalyst for other semiconductor companies to invest in the United States. And now when you look at TSMC’s expansion, when you look at Intel’s expansion, Samsung’s expansion and all the ecosystem that is now up to $350 billion will go down in history as the greatest onshoring, perhaps of all time. And that was a great win for the United States.
Let me just talk about what a great honor it was to be the highest ranking State Department official in more than four decades it’s one of the highlights of my life, and certainly of my time at the State Department, and I really believe that we can all learn from President Lee, his quest for democracy, and advancing freedom his leadership– his transformational leadership. And it’s accomplished, I think, for all of us as we navigate through these unprecedented times. So China expressed displeasure conducting, you know, conducting their combat exercises, I don’t think I need to tell anybody at this conference about that.
And China’s Foreign Minister Wang strongly condemned coming to Taiwan to honor what we call the George Washington of Taiwan democracy. And once again, I think his vision and his courage is just it’s just such a profile of how we all want to be. I had a great honor being able to go over to the Taipei guesthouse and had President Tsai threw a banquet for us and I’m forever in her debt. She is a role model of courage and what a great friend to the United States. And also, my friend Morris Chang came over for dinner. It was great. We utilize that time I was there. It was less than 48 hours, but we utilized every second. But the most important thing–and it was low key, no press conference, no anything. But the most important thing is we built a foundation for trust, for what was about to come. And we set some goals.
And the first goal was to form that economic prosperity partnership that we call the Lee Economic Prosperity Partnership. We signed that on November 20th, 2020 where I was able to lead that dialog from our side. And it really builds upon that inspiration– it includes everything from the Clean Network, semiconductors, pandemic response, supply chains, clean infrastructure, renewable energy, global health, economic empowerment of women, education, entrepreneurship. That was really great, and we hit that schedule right on time.
And at that we set the goal of December 15th to do it in-depth science and technology cooperation pact. And I’m here to tell you that usually in the United States government that takes a year, we are able to do that in 30 days and that is a great, great relationship. We only have that with a few countries.
And so the objective was the lead up to a free trade agreement and taking it step by step, if you know, what was interesting was that I had Bi-khim over… the representative, your ambassador to the United States, over at my home, I think about a week before I left, and that’s when President Tsai just announced lifting the beef and pork restrictions, which when I went to Taiwan, I could see that that costs a lot of political capital. And that was a big deal. And the way I looked at it is that was a big step, and return that favor for a friend. And I was unable to get that trade agreement done. We wanted to go for TIFA, I’m very happy to see that the Biden administration is going to be pursuing that because if there’s anything I learned as Under Secretary of State is a trade agreement is way more than about trade. It is about creating a halo effect for U.S. private sector investment. And then when that happens, more companies will invest in Taiwan, and when that happens, allies will invest in Taiwan. So for the sake of Taiwan’s national security, I knew that some type of trade agreement is so vital to not only Taiwan’s national security, but to democracies all around the world and the role model of friendship and democracy that Taiwan is.
So if you look at. You know, taking it to the next level of support, I think it’s important. In November, the US Asean Summit is coming up. It’s important to affirm that respect for Taiwan and respect for freedom of the seas and skies and sovereignty and market based countries and economies. That’s key. And also, you know, one of the things with the economic prosperity partnership I’d love to see bring in Japan and Korea into that partnership to take advantage of that broad partnership. I also believe in more official visits. I could see how that really shaped my views. And then, you know, that TIFA is the key to lead up to that free trade agreement. And. Of course, the the CPTPP, I talked with your ambassador to the United Nations, about Taiwan’s entry into that. I think that would be absolutely fantastic. And then you know, if TIFA not by then, then TIFA and of course, more official visits.
So I can pledge my lifelong commitment to the great people of of Taiwan, and you’ve changed my life forever. And I will always be at your beck and call.
And I think I have to say is, I’ll be back. I love to bring my, my wife, my five children to once again enjoy. The beautiful Taiwanese people in the great island of Taiwan, I thank you very much.