Remarks by Deputy Secretary of Commerce Don Graves at the Center for Strategic and International Studies (CSIS): The Private Sector as a Champion for Democracy – A Call to Action

Remarks by Deputy Secretary of Commerce Don Graves at the Center for Strategic and International Studies (CSIS): The Private Sector as a Champion for Democracy – A Call to Action

Thank you, John, for that introduction and thank you to the Center for Strategic and International Studies for hosting this forum.

I also want to thank the private sector leaders that are here today. You play a vital role in countering democratic backsliding and ensuring that democracies deliver for their people.  

As President Biden has said, “democracy does not happen by accident…democracy needs champions.” From my conversations with the private sector and from the commitments and successes we will hear about in this forum, I know businesses large and small are standing up and being counted.

And there is good reason for that.

Throughout our history, and especially since the end of World War II, we have recognized that the foundations of a prosperous, inclusive, and stable world economic order are democratic societies that value the rule of law, fundamental freedoms, human and labor rights, fair and mutually beneficial trade, and innovation and entrepreneurship.

We know from our history in the U.S. that when we have adhered to these highest ideals, our private sector has flourished, creating unprecedented economic opportunities for the middle class and for those seeking to enter the middle class. Put simply, democracy creates conditions for private sector growth, and a flourishing private sector in turn ensures that democracy delivers.

And yet, today we are at a critical moment. Whether it is China’s misuse of critical technologies or Russia’s illegal invasion of Ukraine, authoritarian regimes are evermore adversarial, taking actions that serve to undermine the rules-based order that we, as democracies, have been building for decades. We are at a critical juncture  – how we as governments and the private sector in democratic societies respond will have a profound impact on the future.

Will we work together to secure the benefits of democracy not only for this generation but future generations? That is the challenge.

That’s why the Biden-Harris Administration’s call to action to the private sector and this forum on Business and Democracy are so timely.

This morning, I’d like to discuss why the role of business in advancing democracy is so important, and what the Commerce Department is doing with U.S. business in four critical areas:

  1. Winning the high-stakes tech competition with authoritarian adversaries.
  2. Advancing the global fight against corruption.
  3. Promoting labor and environmental standards and human rights in the conduct of business.
  4. Protecting the civic space.

Winning the High-Stakes Tech Competition with Authoritarian Adversaries

First, on the high-stakes tech competition with authoritarian adversaries.

Authoritarian regimes are accelerating their efforts to expropriate critical technologies, including for military modernization, mass surveillance, and other human rights abuses. Their efforts to control supply chains – including clean energy supply chains and others – can create choke points that will jeopardize the ability of democracies to deploy vital technologies to further their development.

Look no further than China, which, for example, is using supercomputing capabilities and AI models to monitor, track, and surveil their own citizens. And as has been widely reported, they are also harnessing biotech to build a massive DNA database to help fuel their surveillance state and repress members of ethnic and religious minority groups. 

This technological advantage, along with economic coercion, means that they can undermine the sovereignty of other countries, including their ability to develop freely. We have seen this in countries from Eastern Europe to the Pacific.

How this global tech competition plays out will profoundly shape our economic security – our ability to innovate, grow exports, create jobs of the future, and provide opportunities to all our people. It will also impact our national security .

It is vital that free and democratic societies prevail if the future world order is to be based on norms like the free flow of information, data privacy, and an open internet, rather than the alternative, democratic backsliding, the subversion of markets by state actors, and fewer opportunities for private sector innovation.

This is why the Commerce Department is taking action on three fronts, along with  like-minded allies, to ensure that their private sectors help democracies deliver.

First, under the Biden Administration, we have broken new ground in our partnerships on export controls to prevent, for example, Russia’s use of technologies to enhance its military and defense sectors as part of the U.S. Government’s and its allies’  response to the Russian invasion of Ukraine, and in other contexts to address the deployment of technologies to advance antidemocratic agendas. 

For instance, at the 2021 Summit for Democracy, the Administration announced the creation of the Export Controls and Human Rights Initiative collaboration with Australia, Denmark, and Norway and others. Through the Initiative, we are working to stem the misuse of technology and promote a positive vision for technologies anchored by democratic values.

Similarly, in October 2022, we took strong action to restrict access to AI-enabling technologies such as advanced semiconductor manufacturing equipment and other items to China. We have also vigorously used the Entity List and imposed other export control restrictions to prevent both foreign government and private sector entities from accessing commercial technologies that can be employed to abuse human rights. Private sector compliance ensures that these controls are successful.

Second, we are working to win the tech competition through the development of risk frameworks that help the private sector anticipate and mitigate emerging threats that may surface in connection with key technologies.  

Earlier this year, the National Institute of Standards and Technology – or NIST – released its AI Risk Management Framework, a voluntary framework to advance more trustworthy and responsible development and use of AI, while managing risks based on our democratic values. The framework helps accelerate AI innovation and growth while protecting against its misuse against civil rights, civil liberties, and equity. We also released, via the White House, a vision for harnessing biotechnology and biomanufacturing R&D to build supply chain resilience – which includes ensuring that we consider biosafety and biosecurity risks from the start of development and use of these technologies.

Third, we are investing to preserve our tech advantage through industrial strategies at home that mobilize private sector investment, growth and jobs in critical technologies that will have an outsized impact on our economic future.

Thanks to the bipartisan CHIPS and Science Act, we are investing billions in our domestic semiconductor industry. Under the Bipartisan Infrastructure Law, we are deploying nearly $50 billion to bring affordable, reliable high-speed internet to every American. Under the Inflation Reduction Act, the Administration is making largest-ever federal investment in clean energy innovation.

At the same time, we are bolstering our investment screening capabilities through, for instance, our review of inbound investment in U.S. companies and operations under the Committee on Foreign Investment in the United States to identify adversarial capital that leaves us vulnerable. We are working closely with the private sector to alert companies to the potential risks of transactions with malign actors. And we are considering outbound investment screening in areas where we may inadvertently further adversaries’ efforts to undermine our economic and national security interests.

Abroad, we are revitalizing economic alliances with partners and democracies around the world – in Europe, the Indo-Pacific, Africa, and Latin America.

Through bilateral engagements in countries as diverse as Mexico, Cote d’Ivoire, and India, as well as multilateral approaches like the U.S.-EU Trade and Technology Council and Indo-Pacific Economic Framework for Prosperity, or IPEF, Commerce is leading efforts to improve market conditions for exporters, ensuring acceptance of high product and labor standards, improving supply chain resilience, and driving progress on the clean energy transition and digital trade.

We are building on President Biden’s announcement of $15 billion in private sector deals at the US-Africa Business Forum in December and Vice President Harris’ announcements just this week. These deals are cementing business to business relationships across the Atlantic in ways that promote jobs and demonstrate how democracies, working together, can deliver for our citizens.

The Global Fight Against Corruption

Business is also an indispensable ally in the global fight against corruption, the second area I mentioned earlier.

President Biden has called corruption “a cancer within the body of societies,” and his Administration has released the first-ever U.S. Strategy on Countering Corruption. Corruption erodes trust in business and democratic institutions. It undermines economic growth, social equity, and democracy. And corruption distorts markets and prioritizes private gain over public interests.

Under the Strategy, we are working with governmental and non-governmental partners – including bolstering and promoting public-private partnerships – to more consistently bring in the private sector as critical actors in the fight against corruption, to help level the playing field for businesses operating with integrity, and to improve the international business climate.

The Commerce Department supports a wide range of efforts to work with the business community to combat corruption.

In Africa, through our Commercial Law Development Program, we are working with the Nigerian Independent Corrupt Practices and Other Related Offences Commission to develop and implement ethics and transparency standards.

 In the Americas, we partnered with the private sector to establish the Inter-American Coalition for Business Ethics for the MedTech Sector. This is a code of ethics for the Western Hemisphere in a sector of export value for U.S. companies and is supported by ethics compliance training and a monitoring mechanism to track progress.

And under the “Fair Economy” Pillar of IPEF, we are working with 13 partner countries across the Indo-Pacific to accelerate progress on implementation of international anticorruption obligations such as the UN Convention against Corruption, promote private sector ethics and compliance programs , and facilitate  input from the private sector – including business organizations, industry associations, and workers’ organizations – on progress on implementation of anti-corruption efforts. 

Advancing Labor and Environment Standard and Human Rights

The third area I mentioned was advancing labor and environmental standards and human rights. The private sector has a choice in how they conduct their business, how they innovate and produce, how they source inputs.  A work-centric, climate-smart approach and one that respects human rights reflects foresight – and is more likely to contribute to shared prosperity, reduce inequality and sustainability.

From my conversations with CEOs and small business owners across the United States, I know that many business leaders understand this.

That is why we collaborated with the private sector and the Department of Labor to publish a set of Principles for what constitutes good jobs.

In the industrial strategy programs we are implementing, we are asking companies to submit workforce development plans that align with these Good Jobs Principles.

We are also encouraging Project Labor Agreements, which are an essential tool in ensuring that constructions projects of this scale and complexity stay on track.  

And because childcare is critical to expanding employment opportunity, we’re requiring companies that receive CHIPS funding to tell us how they plan to provide access to affordable childcare for workers.

We are following a similar approach abroad in partner countries. For instance, the Partnership for Global Investment and Infrastructure, a G7 partnership, aims to leverage a total of $600 billion in public and mostly private infrastructure financing in emerging markets for projects in health security, clean energy transition, critical minerals, and the digital economy. 

These PGII projects aim to be inclusive, transparent, and supportive of high labor and environmental standards that enhance their sustainability and impact. Over the course of 12 roundtables with the private sector over the past year, the Commerce Department has heard time and again how U.S. businesses view these high standards projects as a key differentiator relative to our competitors.

Our partners in emerging markets in turn view the U.S. private sector as a partner of choice. Working together in this way, businesses with governments at home and aboard are ensuring that democracies deliver.

And there’s more. The private sector is also a key ally on the frontlines of the fight for democracy. Following Russia’s brutal invasion of Ukraine, I was particularly proud to see the U.S. business community step up through the donation of funds and critical products, in-kind support to help the continued flow of commerce, and industry expertise and know-how to assist Ukraine in other ways.

Protecting the Civic Space

Finally, the private sector like other stakeholders in democratic societies has a responsibility to protect the civic space.

A healthy public square encourages debate, ensures access to information, and provides the enabling environment for free speech. Here too, the private sector’s role and its voice as a key stakeholder in civil society is critical.

That is why – on behalf of the United States – I was pleased to sign onto the Declaration for the Future of the Internet.  

The Declaration is political commitment led by the U.S., the European Commission, Australia, Canada, Japan, and the United Kingdom to defend the open internet, promote human rights online, and foster fair competition in the digital economy. We are working with multiple stakeholders, including the private sector, to implement and advance the principles laid out in the Declaration.

From where I sit in the Commerce Department, I see the vital importance of the private sector’s voice – along with labor and other stakeholders, in rulemaking and policy formulation.

We currently support 62 federal advisory committees across a wide array of topics. These committees are vital vehicles for transparent private sector engagement that – by design – bring in diverse voices to develop consensus recommendations on policy priorities. Membership is public, as are the committee meetings and their recommendations.

Under the Biden Administration, we have made deliverable progress in ensuring that these committees are more diverse and inclusive than they have been, for instance, ensuring membership of labor unions as key stakeholders.

I’ll close with this:  a prosperous business community and a flourishing democracy are inextricably linked.

But democracy, like business, is always a work in progress. It takes leadership, vision, and commitment to keep a business running, just as it takes those same qualities to advance the values of democracy.

The conditions for a free and open democracy enable businesses to thrive. Companies, therefore, have an incentive and a vital role to advance democratic norms, principles, and institutions.

This forum is helping to deepen the vital partnerships among government, the private sector, and other stakeholders as we work together to strengthen democracy around the world.

We in the government are working hard to set the stage, but we can’t do it alone. The actions of the business community are paramount to this effort. We need you to be champions of democracy. That’s why this forum is so important.

We’re counting on you to continue your critical work to counter authoritarianism and democratic backsliding, combat corruption, and promote human rights. I know you’re up to the task, and we’re eager to work with you.

Thank you to CSIS for the opportunity to join you today. I look forward to continuing our partnership. 

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