Came across this article today and it raised some interesting questions.
Backstory:
Thoughts about this? Does the FCPA work against our interests?
Backstory:
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It is easy to get lost in the storm of executive orders that Trump 2.0 has produced since Inauguration Day, and miss the methods behind the mad frenzy of DOGE audits and renewed hardball diplomacy.
Amid the flurry, Trump recently ordered a pause to enforcing the Foreign Corrupt Practices Act (FCPA) in the hope of bringing "a lot more business for America."
The 1977 Carter-era law prohibits American businesses and executives from offering gifts or payments abroad in order to secure or facilitate deals abroad. The FCPA's proponents point to cleaner business dealings and the reputation of American business that the law supposedly brings. In Trump's thinking, the FCPA restricts American commercial access to resources and infrastructure abroad that are vital to national prosperity and security.
But then there's this point.Quote:
Like most of Trump's orders, the pause of FCPA enforcement has given rise to alarm among defenders of the status quo. Mark Pieth, a criminology professor in Switzerland, declared that the pause will usher in a new "Wild West" of "everyone against everyone." What Pieth and other detractors do not understand is that levying private business for national security is not only normal for the foreign policies of republics in the past, but is vital to leveling the playing field against Communist China.
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Historically, Western democracies and republics punch above their weight due to the power of their commerce. In Ancient Greece, the Athenian commercial fleet enabled Athens to avoid immediate direct confrontation with Sparta in the Peloponnesian War. Centuries later, the Republic of Venice utilized its commercial networks and merchant fleets to collect intelligence and protect trade routes that spanned from Italy to India. Nestled on a lagoon as a city-state republic, Venice successfully fought off the significantly larger and autocratic Ottoman Empire for several centuries. In more recent eras, Britain relied on private companies as a force multiplier to compete abroad with centralized great power competitors such as Spain and France. Britain's East India Company fought against its French equivalent for control of India in the 18th century. Farther West, Britain deputized private commerce through letters of marque to attack Spanish shipping and to starve the Spanish Empire of capital flowing from the Americas to Madrid. In the grand scheme of Western geopolitical theory, Trump is returning to a well-known and practiced playbook.
Trump's pause of the FCPA not only comes at a time of global crisis, but in an era where capitalism and responsive republican governance, two of the critical elements to Western success, are under threat at home and abroad. Europe is in a state of chronic decline, and faces not only a threat of Russian expansion westward, but also a demographic cliff, an inability to contain Islamism at home, and an inability to pay for its own defense. With Europe representing more of a security dependency than a security partner, America also faces a new threat from China in the form of a major landed autocratic power that would have been familiar to commercial republics of the western past. In the context of the Athenians facing Persia, the Venetians holding off the Ottomans, and Britain countering landed behemoths like Russia and Germany, America is in a classic matchup against Communist China.
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China understands economic warfare well. The Belt and Road Initiative announced by Xi Jinping outlines a grand plan to reorient global commerce around the Eurasian landmass with China at its center. Beijing relies on state-owned enterprises (SOEs) and firms with only a veneer of private ownership to take control of critical mineral rights in Africa. In Central America, China has used companies such as the Landbridge Group and CK Hutchison Holdings to secure influence and port over both openings of the Panama Canal. Even in Europe, China's BYD is buying up Germany's industrial base with purchases of old Volkswagen factories shuttered due to Europe's own poor economic statecraft and self-imposed regulatory costs. On the monetary front, China has been building a coalition with Russia, India, Brazil, and others to dethrone the U.S. dollar as the reserve currency of choice among global investors. These are threats that Trump not only seems to understand, but is actively working to combat.
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Unshackling private American companies from the FCPA is one step in leveling the playing field with China and is but one signal of many that Trump understands economic warfare. The performance of American firms highlight the advantage inherent in Western capitalism when compared to statist equivalents, as U.S. companies overtook their Chinese rivals after the COVID-19 pandemic and increasing skepticism of the world order that Beijing suffers. Trump rightly sees American business as a force multiplier, and by stopping the FCPA, he is putting America back within the norm of great power competition.
Thoughts about this? Does the FCPA work against our interests?
