[Senate Hearing 116-96]
[From the U.S. Government Publishing Office]


                                                    S. Hrg. 116-96

                        ASSESSING THE ROLE OF THE 
                       UNITED STATES IN THE WORLD

=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 27, 2019

                               __________


       Printed for the use of the Committee on Foreign Relations

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                    U.S. GOVERNMENT PUBLISHING OFFICE                    
38-613 PDF                  WASHINGTON : 2020                     
          
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                 COMMITTEE ON FOREIGN RELATIONS        

                JAMES E. RISCH, Idaho, Chairman        
MARCO RUBIO, Florida                 ROBERT MENENDEZ, New Jersey
RON JOHNSON, Wisconsin               BENJAMIN L. CARDIN, Maryland
CORY GARDNER, Colorado               JEANNE SHAHEEN, New Hampshire
MITT ROMNEY, Utah                    CHRISTOPHER A. COONS, Delaware
LINDSEY GRAHAM, South Carolina       TOM UDALL, New Mexico
JOHNNY ISAKSON, Georgia              CHRISTOPHER MURPHY, Connecticut
JOHN BARRASSO, Wyoming               TIM KAINE, Virginia
ROB PORTMAN, Ohio                    EDWARD J. MARKEY, Massachusetts
RAND PAUL, Kentucky                  JEFF MERKLEY, Oregon
TODD, YOUNG, Indiana                 CORY A. BOOKER, New Jersey
TED CRUZ, Texas
              Christopher M. Socha, Staff Director        
            Jessica Lewis, Democratic Staff Director        
                    John Dutton, Chief Clerk        



                              (ii)        

  
                            C O N T E N T S

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                                                                   Page
Risch, Hon. James E., U.S. Senator From Idaho....................     1
Menendez, Hon. Robert, U.S. Senator From New Jersey..............     2
Burns, Hon. William J., President, Carnegie Endowment for 
  International Peace, Washington, DC............................     4
    Prepared statement...........................................     6
Hadley, Hon. Stephen J., Principal, RiceHadleyGates LLC, 
  Washington, DC.................................................    10
    Prepared statement...........................................    12

              Additional Material Submitted for the Record

Response of The Honorable Stephen Hadley to Questions Submitted 
  by Senator Todd Young..........................................    41

                             (iii)        

 
          ASSESSING THE ROLE OF THE UNITED STATES IN THE WORLD

                              ----------                              


                      WEDNESDAY, FEBRUARY 27, 2019

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:15 a.m. in 
Room SD-419, Dirksen Senate Office Building, Hon. James E. 
Risch, chairman of the committee, presiding.
    Present. Senators Risch, Rubio, Johnson, Gardner, Romney, 
Isakson, Portman, Young, Cruz, Menendez, Cardin, Shaheen, 
Coons, Murphy, Kaine, Markey, Merkley, and Booker.

           OPENING STATEMENT OF HON. JAMES E. RISCH, 
                    U.S. SENATOR FROM IDAHO

    The Chairman.  The Foreign Relations Committee will come to 
order.
    Welcome, everyone. We have very distinguished guests with 
us here this morning, and I am going to make a few opening 
remarks. Then I am going to turn it over to the ranking member 
to make some opening remarks. And then we are just delighted to 
have both of you with us here today.
    So with that, for the first time in a generation, the 
United States is facing a great power competition that 
threatens to disrupt the world order America created with our 
allies in the aftermath of World War II. That world order has 
arguably benefited all, especially those who believe in the 
principles of democracy, human rights, the rule of law, free 
trade, and a capitalistic free economy.
    These cornerstones of liberty and prosperity, however, are 
once again under assault as we face a global power competition, 
most notably by a rising China intent on reshaping the world in 
its own image, and a Russia that wants to be seen as more than 
a regional actor and regain the influence it had during the 
height of the Soviet Union.
    It is no secret that China seeks to surpass us both 
economically and militarily. One of the primary ways they have 
attempted to do this is by stealing our technology and 
intellectual property. The Chinese use American innovation to 
put our people out of work and stack the rules of the global 
economy in their favor. I have seen this firsthand as Micron 
Technologies, an Idaho-based memory chip company, had its trade 
secrets stolen by a Chinese company in an attempt to out-
compete the very companies from which they steal.
    In order to compete on a global scale, there must be 
adherence to rule of law. That is paramount. Chinese law and 
practice allow the government total control over its companies. 
Whether or not Beijing is currently using tech firms like 
Huawei or ZTE to spy, it certainly could demand it and no court 
ruling or constitutional check would be necessary for them. 
This is a serious threat to our national interests and to the 
interests of our allies and friends.
    As to Russia, the Russian Government is making efforts to 
return us to the 1960s, attempting to reignite a nuclear arms 
race by cheating on nearly all of its arms control agreements. 
In doing so, Putin is confirming over and over again what many 
of us already know, and it is time to reexamine and reset our 
nuclear nonproliferation architecture and that must include 
China.
    While our strategic competition with China and Russia is a 
more recent development, the threats of the post-9/11 world 
remain. It is an accomplishment that today ISIS is on the ropes 
and al Qaeda is in retreat.
    However, having failed states, corruption, lack of economic 
opportunity, and political oppression are on the rise around 
the world. According to Freedom House, global liberty declined 
in 2018 for the 13th consecutive year, at a time when even our 
allies in Europe are facing homegrown challenges to democracy 
and the rule of law. The United States needs to stand firm 
against tyranny and corruption now more than ever.
    Ranking Member Menendez and I decided on holding this first 
hearing to provide the opportunity to set the agenda for the 
future work of this committee. The themes you will hear again 
and again from witnesses and Senators on both sides of the 
dais, China, Russia, nuclear proliferation, counterterrorism, 
human rights, and the rule of law are subjects the committee 
intends to focus on intently in the coming months.
    This committee has a constitutional role in shaping the 
nation's foreign policy agenda, and both the ranking member and 
I intended to exercise this authority provided to us by the 
Founding Fathers of this great nation.
    With that, I will ask my friend and colleague, Ranking 
Member Senator Menendez, to make some opening remarks.

              STATEMENT OF HON. ROBERT MENENDEZ, 
                  U.S. SENATOR FROM NEW JERSEY

    Senator Menendez  Thank you, Mr. Chairman, and thank you 
for holding this hearing. And particularly, thank you, our 
distinguished witnesses.
    I join you in many of the things that you said, Mr. 
Chairman, especially towards the role of this committee in 
terms of foreign policy, and I am glad to hear what you had to 
say about the pathway forward. I believe it is critically 
important for this committee to maintain an active role in 
assessing the United States' role in the world, understanding 
the administration's policies, and leveraging our own role as a 
coequal branch of government.
    We face continuing and new challenges from an aggressive 
Russia, a rising China, and an evolving but still threatening 
ISIS and al Qaeda. We face a world with greater strategic 
competition with more dangerous competitors. So let us be clear 
about both our challenges and our opportunities.
    Russia continues to be a leading source of global 
instability and chaos that directly seeks to undermine 
foundational American values. In addition to interfering in our 
democratic processes, Russia has sought to destabilize the 
democratic values of many of our allies and partners. How we 
respond to Putin's strategic adventurism will help define our 
role in the world no less than our efforts to confront the 
challenge of Chinese President Xi Jinping's neo-Maoist 
authoritarian great power nationalism.
    Similarly, the world will judge and indeed follow our lead 
on how we live up to commitments to those who have put 
themselves on the front lines of the fight against terrorism.
    I would also like to note at the outset of this hearing my 
concern about the escalation of violence in South Asia in 
recent days. I urge Islamabad and New Delhi to immediately 
engage in dialogue to deescalate tensions. Past Republican and 
Democratic administrations have played constructive roles at 
the highest levels to promote peace and stability in South 
Asia. And if we are to see a peaceful resolution to the current 
violence, the Trump administration must follow suit.
    In our interconnected and ever smaller world, we cannot 
afford only to address the headline-grabbing challenges. New 
trade patents, new technologies, new economic relationships are 
both bringing tens of millions out of poverty but also 
displacing and disrupting the lives of millions more, many in 
the United States. Indeed, many of these new technologies, 
including artificial intelligence, robotics, and genomics, 
offer huge promises for human advancement, but they also 
threaten to erode valuable democratic institutions, social 
relationships, and economic order. We face unprecedented 
migration challenges, including millions of refugees in our own 
hemisphere and millions more around the world. And we have yet 
to come to grips with the mounting realities of catastrophic 
climate change.
    At a fundamental level, democracy, good governance, human 
rights, the importance of international institutions and 
alliances, the values the United States has championed for the 
past century and that best equip nations to promote peace and 
prosperity are also under attack around the world.
    And I am sad to say, Mr. Chairman, rather than embrace 
these values on a domestic or global level, President Trump in 
many cases has chosen to abandon the very American values and 
institutions that for over two centuries have enabled the 
United States' leadership in the world.
    We are an exceptional nation, a nation founded on ideas and 
ideals, and it is those ideas and ideals, more than our 
economic strength, though that has been considerable, and more 
than our military might, though that has been unparalleled, 
that has rallied others to our cause as their own, built 
partnerships and alliances, enabled the free flow of global 
commerce, and allowed us to help shape a world that has served 
our interests and allowed our values to flourish. All of that 
is today at risk.
    When the United States fails to stand by our allies and 
international institutions or, worse, attacks them, our leaders 
place at risk the very relationships and institutions that have 
made us strong and have guaranteed peace and stability for 70 
years.
    When the United States fails to stand up for human rights 
or, worse, enables the depredations of authoritarian regimes, 
our leaders set conditions for abuse and turmoil that undermine 
true stability.
    When the United States looks the other way as journalists 
are killed or our leaders themselves brand the press the enemy 
of the people, we threaten the vibrancy of civil discourse 
necessary for the values we as a people cherish.
    When the United States fails to enforce the rule of law or 
our leaders suggest that law enforcement is transactional, we 
lead the way to creating global disorder.
    When the United States scales back or cuts our State 
Department and foreign assistance budgets or pushes out career, 
experienced diplomats, we fatally undermine our ability to 
renew and revive our leadership at just a time when our 
leadership is more essential than ever before.
    When America builds walls, America First becomes America 
Alone.
    America derives its strength from our values. We could 
never retreat from that core concept. And as we look across the 
globe, we must lecture less and lead more.
    The world today stands at an important moment, balance 
between order and chaos, between continuing with the decades-
long project of building a peaceful and prosperous 
international order or retreating to isolation and anarchy. The 
path we are on under this administration I feel will leave us 
less safe and less secure in an increasingly complex world, 
unable to advance our ideas or to secure our prosperity. I hope 
we can change that course.
    And I look forward to the testimony of our witnesses.
    The Chairman.  Thank you very much, Senator Menendez.
    And we are now going to hear from our witnesses. We will 
start with Ambassador William Burns.
    William Burns is a 33-year veteran of the Foreign Service 
and holds its highest rank, career ambassador. He was just the 
second Foreign Service officer to become Deputy Secretary of 
State, an office he held from 2011 to 2014. Prior to that, he 
was the Under Secretary of State for Political Affairs. Before 
that, he served as a U.S. Ambassador to the Russian Federation, 
and prior to that role, Ambassador Burns served as the 
Assistant Secretary of State for Near Eastern Affairs.
    Ambassador Burns is currently President of the Carnegie 
Endowment for International Peace.
    Ambassador Burns, welcome.

    STATEMENT OF HON. WILLIAM J. BURNS, PRESIDENT, CARNEGIE 
       ENDOWMENT FOR INTERNATIONAL PEACE, WASHINGTON, DC

    Ambassador Burns.  Thank you so much. Chairman Risch, 
Ranking Member Menendez, members of the committee, it is an 
honor to be with you and an honor to join Steve Hadley, a 
friend and former colleague for whom I have deep respect.
    I will highlight briefly three points from my written 
testimony, which I ask be entered into the record.
    The first point is about the international landscape 
unfolding before us. Understanding that landscape is an 
essential prerequisite to crafting an effective strategy.
    America faces a world that is more crowded, complicated, 
and competitive than at any point in my three and a half decade 
diplomatic career. The global order that emerged at the end of 
the Cold War has shifted dramatically, creating unprecedented 
challenges for American statecraft.
    Great power rivalry is back, bringing with it complex risks 
and tradeoffs for which we are out of practice.
    Crises of regional order continue to bubble, nowhere more 
so than in the Middle East, which remains best in class in 
dysfunction and fragility.
    And challenges like climate change and the revolution in 
technology are outpacing the capacities of governments to 
create workable international rules of the road.
    The second point I would make is about America's role on 
this disordered landscape.
    The bad news is that we are no longer the only big kid on 
the geopolitical block. The good news is that we still have an 
opportunity to lock in our role as the world's pivotal power, 
shaping a new international order before others shape it for 
us. We still have a better hand to play than any of our rivals 
if we play it wisely.
    Fashioning a strategy for America in a post-primacy world 
is no easy task. The most critical test of American statecraft 
is managing competition with China, cushioning it with 
bilateral cooperation wherever our interests coincide and 
developing a web of regional alliances and institutions that 
amplify our leverage. The primary aim, it seems to me, is not 
to contain China or force others to choose sides, but to ensure 
that China's rise does not come at the expense of everyone 
else's security and prosperity.
    Meanwhile, this week's summit in Hanoi offers a rare 
opportunity to reduce the threats posed by North Korea's 
nuclear and missile programs. That will require a serious, 
sustained, disciplined diplomatic effort, backed up by economic 
and military leverage and closely coordinated with our allies 
in South Korea and Japan and other key regional players like 
China.
    We will also have to manage relations with a resurgent 
Russia, playing a long game within a relatively narrow band of 
possibilities, from the sharply competitive to the nastily 
adversarial. But even as we push back firmly against Putin's 
belligerence, we cannot ignore the need for guardrails that can 
help us reduce the risks of collisions and manage nuclear 
dangers.
    The challenges of renewed great power competition will 
require us to take a hard look at our involvement in the Middle 
East. We cannot neglect our leadership role in a region where 
instability is so contagious, but we ought to continue to shift 
the terms of our engagement with less demand on the American 
military and more reliance on creative diplomacy.
    We also cannot afford to neglect our interests in Africa, a 
continent whose population will double by the middle of this 
century or in our own hemisphere, in many ways the natural 
strategic home base for the United States.
    Being a pivotal power is all about putting ourselves in a 
position to manage relationships and build influence in all 
directions. That will require us to shore up our alliances, to 
deal with both immediate crises and long-term global challenges 
and to do better when it comes to following through on our 
international commitments. I worry that we are hemorrhaging our 
credibility at an alarming pace, especially with our closest 
allies in Europe, at a moment when the rise of China and the 
resurgence of Russia make transatlantic ties more, not less, 
important.
    And that brings me to my third and final point, this 
committee's vital role in formulating a new strategy for the 
decades ahead. You have an opportunity and a responsibility to 
help bridge the disconnect between an uncertain American public 
and an often undisciplined Washington establishment. We have to 
show our fellow citizens that effective American foreign policy 
not only begins at home in a strong political and economic 
system but ends there too in more jobs, more prosperity, a 
healthier environment, and better security.
    This committee has an equally important role when it comes 
to overseeing and shaping the tools of American foreign policy. 
Diplomacy in the years ahead will matter more than ever as our 
tool of first resort. We can no longer get our way in the world 
on our own or by big sticks alone.
    Unfortunately, American diplomacy has suffered from decades 
of strategic and operational drift, which the current 
administration has made infinitely worse by its unilateral 
diplomatic disarmament. Not surprisingly, adversaries are 
taking advantage, allies are hedging, and the global order we 
did so much to build and defend is teetering.
    The window for defining America's pivotal role will not 
stay open forever. Whether we seize the moment of opportunity 
before us will depend in large measure on whether this chamber 
and this committee can help recapture a sense of shared vision 
and shared purpose, whether we can recover a sense of 
diplomatic agility out of the muscle-bound national security 
bureaucracy that we have become in recent years, and whether we 
can come to terms with the realities of a new international 
landscape and shape it skillfully with our considerable 
enduring strengths.
    Thank you very much.
    [The prepared statement of Ambassador Burns follows:]

           Prepared Statement of Ambassador William J. Burns

    Chairman Risch, Ranking Member Menendez, Members of the Committee--
it's an honor to be with you today and an honor to join Steve Hadley, a 
friend and former colleague for whom I have deep respect. I'm very 
pleased to offer some brief thoughts about America's changing role on a 
changing international landscape and its implications for the work of 
this important committee.
                             the landscape
    Today's world is more crowded, complicated, and competitive than at 
any point in my three and half decade diplomatic career. The global 
order that emerged after the end of the cold war has shifted 
dramatically, creating unprecedented challenges for American 
statecraft.
    Great power rivalry is back, and it has brought with it complex 
risks and tradeoffs for which we are out of practice. China is flexing 
its muscle and expanding its influence. The Chinese leadership no 
longer subscribes to Deng Xiaoping's ``hide your strengths and bide 
your time'' philosophy, and has accelerated its effort to not only 
establish China as a global economic peer of the United States, but to 
supplant it as the leading power in Asia.
    China's ambition to recover its accustomed primacy in Asia has 
already upended many of our comfortable assumptions about how 
integration into a U.S.-led order would tame, or at least channel, 
Chinese aspirations. And our traditional allies in Asia, as well as new 
partners like India, are taking notice and adjusting their strategic 
calculations--raising regional temperatures and increasing 
uncertainties.
    Russia is proving that declining powers can be at least as 
disruptive as rising ones, punching above its weight as it exploits 
divisions within the West. Vladimir Putin's relentless focus for much 
of the past two decades has been to reverse the decline of the Russian 
State and its international standing--and the result is a Russia that 
sees its best bet for preserving its major power status in chipping 
away at the American-led international order. If he can't have a 
deferential government in Kiev, Putin can grab Crimea and try to 
engineer the next best thing, a dysfunctional Ukraine. If he can't 
abide the risk of regime upheaval in Syria, he can flex Russia's 
military muscle, emasculate the West, and preserve Bashar al-Assad atop 
the rubble. Since I left government, Putin has shifted from testing the 
West in places where Russia had a greater stake and more appetite for 
risk, like Ukraine and Georgia, to a wider range of places where the 
West has a far greater stake, like the integrity of our democracies.
    Alongside these great power frictions, crises of regional order 
continue to bubble, driven by both the strengths of local competitors 
and the weaknesses of failing states. Nowhere is this clearer than in 
the Middle East, which remains best in class in dysfunction and 
fragility. No longer the global energy player it once was, no longer 
able to sustain its rentier economies, no longer able to camouflage its 
deficits of opportunity and dignity, much of the Arab world teeters on 
the edge of more domestic upheavals, with extremists eager to prey on 
its vulnerabilities.
    Beyond the unsettled rivalries of states, and the decaying 
foundations of regional stability, new global challenges are straining 
the capacities of governments to create workable international rules of 
the road. The pace of the revolution in technology makes the impact and 
dislocations of the Industrial Revolution look plodding by comparison. 
Advances in artificial intelligence, machine learning, and synthetic 
biology continue to move at breathtaking speed, outpacing the ability 
of states and societies to maximize their benefits while minimizing 
their potential downsides. We have already seen how authoritarian 
regimes can harness the apparently decentralizing power of technology 
to consolidate control of their citizens.
    Meanwhile, the transformative effects of climate change are 
becoming more evident with each passing season. With polar ice caps 
melting, sea levels rising, and weather patterns swinging wildly, the 
consequences of an environment badly damaged by human behavior are 
growing more dangerous and immediate.
                         america's pivotal role
    These challenges would be daunting in any era, but they are 
particularly urgent now, at a time when America's singular post-cold 
war dominance is fading. On today's international landscape, we are no 
longer the only big kid on the geopolitical block. That's not a 
defeatist argument; it's merely a recognition that the United States no 
longer occupies the unrivaled position of strength that we enjoyed 
after the collapse of the Soviet Union. What we do have, however, is an 
opportunity to lock in our role as the world's pivotal power--still 
with a better hand to play than any of our rivals.
    No other nation is in a better position to navigate the complicated 
currents of twenty-first-century geopolitics: we still have the world's 
best military, spending more on defense than the next seven countries 
combined; our economy remains the most innovative and adaptable in the 
world, despite risks of overheating and gross inequalities; advances in 
technology have unlocked vast domestic potential in natural gas and 
clean, renewable energy; and we still have more allies and potential 
partners than any of our rivals, with greater capacity for coalition-
building and problem-solving. These advantages are not permanent or 
automatic--but they do give us a window in which we can shape a new 
international order before others shape it for us.
    Fashioning a strategy for America in a post-primacy world is no 
easy task. Neither unthinking retrenchment nor the muscular reassertion 
of old convictions will be effective prescriptions in the years ahead. 
We will have to rebalance American foreign policy priorities to tackle 
the most pressing challenges and respond to the most urgent threats. 
That will mean sharpening our attention on managing competition with 
great power rivals, and using our capacity to mobilize other players to 
address twenty-first-century challenges. That ought to be infused with 
a bold and unapologetic vision for free people and free and fair 
markets, with the United States as a more attractive exemplar than it 
is today.
    Asia must continue to be our first priority. The most critical test 
of American statecraft is managing competition with China, cushioning 
it with bilateral cooperation wherever our interests coincide, and a 
web of regional alliances and institutions that amplify our leverage. 
Our economies are deeply intertwined, but that is not in itself a 
guarantee against conflict.
    Both the United States and China will have to work to ensure that 
our inevitable disagreements do not spiral out of control. As regional 
apprehensions about Chinese hegemony grow, there will be increasing 
opportunities for us to strengthen existing relationships and forge new 
partnerships in the region. Part of our strategy has to be defensive, 
pushing for overdue changes in China's trade and investment practices, 
ideally in concert with partners in Asia and Europe who share similar 
concerns. And part ought to be affirmative, laying out a compelling 
vision--and a renovated architecture of trade relationships, alliances, 
partnerships, and institutions--for Asia's future. The primary aim is 
not to contain China or force others to choose sides, but to ensure 
that China's rise doesn't come at the expense of everyone else's 
security and prosperity.
    We also have before us a rare moment of opportunity to reduce the 
threats posed by North Korea's nuclear and missile programs, with a 
second summit meeting unfolding this week in Hanoi. This will require a 
serious, sustained, disciplined diplomatic effort, backed by economic 
and military leverage, and closely coordinated with our allies in South 
Korea and Japan, and other key regional players, like China.
    A deeper American focus on Asia makes transatlantic partnership 
more, not less, significant. It implies a new strategic division of 
labor with our European allies, where they take on more responsibility 
for order on their continent, and do even more to contribute to 
possibilities for longer-term order in the Middle East, while the 
United States devotes relatively more resources and attention to Asia. 
Now is the moment for a renewed Atlanticism, built on shared interests 
and values in a world in which a rising China--as well as a resurgent 
Russia and persistent problems in the Middle East--ought to cement a 
common approach.
    Managing relations with Russia will be a long game, conducted 
within a relatively narrow band of possibilities, from the sharply 
competitive to the nastily adversarial. Even as we push back firmly 
against Putin's belligerence, we cannot ignore the need for 
guardrails--lines of communication between our militaries and diplomats 
that can help us reduce the risks of inadvertent collisions. We should 
be engaging in serious strategic stability talks, and working in our 
own cold-blooded self-interest to limit nuclear threats. Russian 
violations have helped trigger the demise of the INF Treaty, but it 
would be foolish for us to let the New START Treaty lapse in 2021.
    We should not give in to Putin, but we should not give up on the 
possibility of more stable relations with the Russia beyond Putin. 
Russians may eventually chafe at being the junior partner of a rising 
China, just as they chafed at being the junior partner of the United 
States after the cold war, and that may open up space for artful 
American diplomacy.
    Tackling these challenges will require us to take a hard look at 
America's involvement in the Middle East, where we have focused so much 
of our foreign policy attention for the past several decades. We are no 
longer directly dependent on the region for the bulk of our energy 
needs, and a clear-eyed assessment of our interests argues for a 
different kind of engagement. We cannot neglect our leadership role in 
a region where instability is contagious and threats can quickly 
metastasize, but we ought to continue to shift the terms of our 
engagement, with less demands on the American military and more 
reliance on creative diplomacy,
    As part of a long-term strategy, we should reassure our traditional 
Arab partners against the threats they face, whether from Sunni 
extremist groups or a predatory Iran. But we should insist in return 
that Sunni Arab leaderships recognize that regional order will 
ultimately require some modus vivendi with an Iran that will remain a 
substantial power even if it tempers its revolutionary overreach. We 
should also insist that they address urgently the profound crisis of 
governance that was at the heart of the Arab Spring. At a time when 
authoritarians feel the wind in their sails, the United States cannot 
afford to blindly and willfully indulge autocratic impulses. This body 
has already strongly condemned acts like the killing of Jamal Khashoggi 
and called for curtailing the overreach that has bred such horrendous 
conditions in Yemen; we must also do more to make sure that these 
condemnations are followed by tangible actions.
    As members of this committee know very well, the strategic 
significance of Africa and our own Hemisphere has often been 
underplayed in Administrations of both parties. That is a mistake. 
Demography--with Africa's population likely to double to two billion 
people by the middle of this century--and a variety of uncertainties 
and possibilities in both of these critical regions will only increase 
their importance for American interests.
    Successfully executing a pivotal power strategy will require 
shoring up America's alliances. Just as in domestic politics, it's 
important to ``remember your base''--in this case, a set of 
partnerships that sets us apart from lonelier powers like China and 
Russia, and serves as an enormous force multiplier. Over the coming 
decades, we'll have an increasing interest in putting ourselves in 
position to manage relationships and build influence in all directions. 
European partners will be instrumental in countering Putin's Russia, 
while our allies in Asia will be a necessary part of a broader strategy 
for dealing with the rise of China.
    We must also do better when it comes to following through on our 
international commitments. It was, in my view, an historic mistake to 
make the perfect the enemy of the good and walk away from the Trans-
Pacific Partnership; with a subsequent effort in Europe, we could have 
anchored two-thirds of the global economy to the same high standards 
and rules as our own system, helped emerging markets join the club over 
time, and shaped China's options and incentives for reform. Our 
withdrawal from agreements like the Paris climate accords and the Iran 
nuclear deal has further deepened international mistrust of our motives 
and undercut our image as a reliable partner. So has our backtracking 
on migration and refugee issues, and humanitarian diplomacy more 
broadly, which has hampered efforts to get other states to do their 
part and left critical frontline partners increasingly on their own.
         reconnecting with americans and rebalancing our tools
    Just as it has at other crucial moments in our history, this 
committee can play a vital role in answering these challenges, and in 
formulating a new strategy for the century ahead. You have both an 
opportunity and a responsibility to help bridge the disconnect between 
an uncertain American public and an often undisciplined Washington 
establishment, and rebalance the tools in our national security toolkit 
to fit a new era.
    All of you are acutely aware of the tradeoffs and interplay between 
America's foreign and domestic priorities. You know firsthand the costs 
and benefits of our international commitments. It will be impossible to 
fulfill America's potential as the world's pivotal power unless we make 
more vivid the connection between smart American engagement abroad and 
renewal at home. We have to show our fellow citizens that effective 
American foreign policy not only begins at home, in a strong political 
and economic system, but ends there too--in more jobs, more prosperity, 
a healthier environment, and better security.
    In my experience, most Americans don't need to be convinced of the 
wisdom of disciplined American leadership in the world, in our own 
enlightened self-interest. But they are less persuaded of our capacity, 
across Administrations of both parties, to be disciplined in the 
application of American power, and to ensure that Americans across our 
society are positioned for success in a hyper-competitive world.
    This committee has an equally important role when it comes to 
overseeing and shaping the tools of American foreign policy. In the 
years ahead, we won't be able to get everything we want on our own, or 
by force alone. So as a recovering diplomat, it won't surprise you that 
I am absolutely convinced that diplomacy--backed up by military and 
economic leverage and the power of our example--will matter more than 
ever as our tool of first resort.
    Unfortunately, American diplomacy has suffered from decades of 
strategic and operational drift. We were lulled into complacency by our 
strength after the collapse of the Soviet Union, and we inverted 
further the roles of force and diplomacy in American statecraft 
following the terrible shock of September 11.
    These long-term trends have been greatly exacerbated by the current 
administration's hollowing out of American diplomacy. The after-effects 
of its early, ill-conceived ``redesign process'' are still lingering. 
Intake into the Foreign Service was cut by over 50 percent. The Foreign 
Service has lost many of its most capable mid-level and senior 
officers. Key Ambassadorships and senior positions in Washington remain 
unfilled. What was already painfully slow progress toward better gender 
and ethnic diversity has been thrown into reverse. Most pernicious of 
all has been the practice of blacklisting individual officers, simply 
because they worked on controversial issues in the previous 
Administration.
    There is never a good time for diplomatic malpractice, but this is 
a particularly damaging moment. This committee can--and should--help 
shape an affirmative agenda for diplomacy's renewal. At its core ought 
to be a compact--a two-way street in which the State Department and the 
executive branch follow through on serious reforms, streamline 
structures, and find a rational balance for budgets and roles across 
the national security community, in return for more support from 
Congress.
    That will mean an honest self-appraisal by the State Department; 
while individual American diplomats can be remarkably innovative and 
entrepreneurial, the Department as an institution is rarely accused of 
being too agile or too full of initiative. It will mean smart 
bureaucratic reforms that de-layer the Department and push authority 
downwards and outwards, empowering Ambassadors in the field. It will 
mean holding nominees to high standards and working to fill vital 
diplomatic posts around the world. And it will mean adequate resources 
for diplomacy, with more flexibility allowed in the use of funds. 
Neither the State Department nor the Congress can revitalize American 
diplomacy on their own, and this partnership will only work if it's 
embedded in a wider compact with citizens that restores their faith in 
disciplined American leadership and the significance and utility of 
diplomacy itself.
    The window for defining America's pivotal role will not stay open 
forever. Whether we seize the moment of opportunity before us will 
depend in large measure on whether this chamber and this committee can 
help recapture a sense of shared vision and shared purpose; whether we 
can recover a sense of diplomatic agility out of the muscle-bound 
national security bureaucracy that we've become in recent years; and 
whether we can come to terms with the realities of a new international 
landscape, and shape it skillfully with our considerable enduring 
strengths.
    Thank you very much.

    The Chairman.  Thank you, Ambassador. Thoughtful remarks.
    Now we will hear from the Honorable Stephen Hadley. He 
served as National Security Advisor for President George W. 
Bush from 2005 to 2009 where, beyond his national security 
duties, he had special responsibility for U.S.-Russia political 
dialogue, the Israeli disengagement from Gaza, and developing a 
strategic relationship with India.
    Mr. Hadley is current a principal at RiceHadleyGates, an 
international strategic consulting firm, as well as the senior 
advisor to the U.S. Institute of Peace where he has co-chaired 
a series of senior bipartisan working groups on a broad range 
of issues.
    With that, Mr. Hadley. Good to have you here.

STATEMENT OF HON. STEPHEN J. HADLEY, PRINCIPAL, RICEHADLEYGATES 
                      LLC, WASHINGTON, DC

    Mr. Hadley. Thank you, Chairman Risch and Ranking Member 
Menendez, and other distinguished members of this committee. I 
am grateful for the opportunity to be before you today with my 
friend and colleague, Bill Burns.
    As the chairman has pointed out, after World War II, the 
United States and its friends and allies created an 
international system based on democratic values and free market 
principles, and that system produced unprecedented prosperity 
and security for the United States and much of the world. But 
the system must be revised and adapted to reflect both 
geopolitical and domestic political changes in the last 70 
years that have undermined its foundations.
    At the geopolitical level, the world has seen a return of 
great power rivalry and ideological competition. China and 
Russia are challenging the existing international system and 
America's dominant role in it. Their alternative model of 
authoritarian State capitalism is attracting adherence because 
America's model of democracy and free market appears to be in 
decline.
    Much of this is our own doing. Our economic system appears 
unable to produce sustained, inclusive growth offering equal 
opportunity for all our citizens to share in its benefits, and 
our political system appears to be unable to address 
longstanding societal challenges, like immigration, fiscal 
deficits, entitlement reform, infrastructure, climate change, 
even though workable solutions have been more or less apparent 
for years, if not decades. If the United States is to compete 
successfully in the new world it is facing, it must address its 
own political and economic problems, and fixing the American 
model at home will strengthen the American brand abroad.
    The reemergence of ideological competition parallels what 
opinion polls clearly show is a crisis of confidence among the 
citizens of democratic states. They are no longer confident 
that democracy and free markets work for them at home or are 
worth promoting abroad. If the United States is to compete 
successfully in the new world it is facing, it must engage its 
citizens on the basic principles of democracy and free markets, 
and restoring American confidence at home will empower American 
leadership abroad.
    Once the United States and other democratic societies have 
renewed their commitment to these principles, they must engage 
other states, including China and Russia. A system based on 
democracy and free markets is more likely to produce stable 
states able to meet the needs of their people, states that will 
live in peace with one another, and a world in which Americans 
can prosper in security and freedom. If the United States is to 
compete successfully in the new world it is facing, it must 
seek a global consensus behind a revised and adapted 
international system basing it on the principles of democracy, 
free markets, human rights, and the rule of law.
    It is hard to imagine a revised and adapted international 
system in which China does not have a major role. Some say that 
China wants a seat at the table in revising the system and that 
China does not want to overturn and replace it. The United 
States should test this proposition by engaging China and 
embracing appropriate Chinese suggestions and initiatives, and 
the United States should seek strategic cooperation with China 
in meeting global challenges like climate change, environmental 
damage, terrorism, pandemics, and the societal effects of 
revolutionary technological change. These are challenges that 
neither country can solve alone but that must be solved if 
either country is going to realize its goals, whether the China 
dream or the American dream.
    The problem, of course, is that China, with its 
increasingly diplomatic, economic, and military might, is a 
strategic competitor like no other America has ever faced. But 
strategic competitors need not be strategic adversaries. The 
challenge is to see if China and the United States can be both 
strategic competitors and strategic cooperators at the same 
time. The United States should make the effort but not be 
naive. It will be very difficult. And it will only succeed if 
the United States is fully prepared and capable of competing 
successfully with China if the effort fails and if China 
clearly understands this fact.
    If the United States is to compete effectively in the new 
world it is facing, it must develop its own capabilities in 
critical technological areas and get in the game and mobilize 
private industry and private capital, incentivize innovation 
and technology development, and reenergize cooperation among 
industry, academia, and government, along with our friends and 
allies.
    Does the United States still need to be the global leader? 
Yes, for the problem, sadly, is that there is no one else. 
Europe is too caught up with its own internal problems, and 
most of the world does not want either China or Russia to be 
the global leader. Without U.S. leadership, the international 
system is likely to move towards spheres of influence, 
oppression of smaller states, authoritarian politics, state-
controlled economies, and abridgment of human rights. This is 
not a world in which the United States' friends and allies 
would live in comfort, prosperity, or security even if they 
could retain their freedom.
    America's continued global leadership cannot be taken for 
granted, but isolationism and retreat do not work. We know 
because we have tried them before, and history has not been 
kind to the result.
    Thank you very much.
    [The prepared statement of Mr. Hadley follows:]

                Prepared Statement of Stephen J. Hadley

    Thank you Chairman Risch, Ranking Member Menendez, and other 
distinguished members of the committee.
    I am grateful for the opportunity to testify before you this 
morning on assessing the role of the United States in the world.
    My testimony will focus on the current challenges to the 
international system, how we should respond, and the continued need for 
the United States to lead but in a different way.
                           what has changed?
    After World War II, the United States and its friends and allies 
created an international system based on democratic values and free 
market principles. That system produced unprecedented prosperity and 
security for the United States and much of the world. But it must be 
revised and adapted to reflect both geo-political and domestic-
political changes in the last 70 years that have undermined its 
foundations.
    At the geopolitical level, the world has seen the return of great-
power rivalry and ideological competition. The 2017 National Security 
Strategy said it well: ``The competitions and rivalries facing the 
United States are not passing trends or momentary problems. They are 
intertwined, long-term challenges that demand our sustained national 
attention and commitment.'' At the same time, an unfolding Digital Age 
promises incredible developments in key 21st century technologies--
artificial intelligence and quantum physics, robotics and autonomy, 
cyber and biotech--that will revolutionize how people communicate, 
learn, work, live--and how militaries fight.
    China and Russia are already using these 21st century technologies 
to challenge the existing international system and America's dominant 
role in it. They are weaponizing digital platforms to weaken our social 
cohesion, to undermine the foundations of our national power, and to 
fracture our alliances. Disinformation and disruption are not new, but 
digital tools are extending the scale and reach to unprecedented 
levels. Their alternative model of authoritarian state capitalism is 
attracting adherents because America's model of democracy and free 
markets appears to be in decline.
                         how we should respond?
    Much of this is our own doing. Our economic system appears unable 
to produce sustained, inclusive growth offering equal opportunity for 
all of our citizens to share in its benefits. Our political system 
appears unable to address long-standing societal challenges--like 
immigration, fiscal deficits, entitlement reform, infrastructure, and 
climate change--even though workable solutions have been more or less 
apparent for years if not decades. If the United States is to compete 
successfully in the new world it is facing, it must address its own 
political and economic problems--and fixing the America model at home 
will strengthen the American brand abroad.
    The reemergence of ideological competition parallels what opinion 
polls clearly show is a crisis of confidence among the citizens of 
democratic societies. No longer confident that democracy and free 
markets work for them at home or are worth promoting abroad, the 
resulting political disruption has distracted the United States and 
other democracies and made them less willing to play their traditional 
leadership role in the world. If the United States is to compete 
successfully in the new world it is facing, it must engage its citizens 
on the basic principles of democracy and free markets--and restoring 
American confidence at home will empower American leadership abroad.
    Once the United States and other democratic societies have renewed 
their commitment to these principles, they must engage other states 
including China and Russia. A global consensus is emerging that the 
international system needs to change. The issue is on what principles 
should the revised system be based. A system based on democracy and 
free markets is more likely to produce stable states able to meet the 
needs of their people, states that will live in peace with one another, 
and a world in which Americans can prosper in security and freedom. If 
the United States is to compete successfully in the new world it is 
facing, it must seek a global consensus behind a revised and adapted 
international system--and basing it on the principles of democracy, 
free markets, human rights, and rule of law.
          how do we persuade russia and china to participate?
    Russia seems to bear the greatest grievance against the existing 
international system, is the most resentful of American leadership, and 
has become a spoiler in almost every international crisis or conflict. 
U.S.-Russian relations need to return to the traditional framework for 
dealing with adversarial states: cooperate where possible, defend 
American values and interests where challenged, and manage differences 
so as to avoid confrontation and conflict. Until then, engaging Russia 
in seeking to revise and adapt the international system is likely to be 
a frustrating activity. But if China engages, Russia is likely to want 
to participate as well.
    It is hard to imagine a revised and adapted international system in 
which China does not have a major role. Sophisticated Chinese analysts 
admit that China has been one of the biggest beneficiaries of the 
existing international system. Many say that while China wants a ``seat 
at the table'' in revising the system, China does not want to overturn 
or replace it. The United States should test this proposition by 
engaging China and embracing appropriate Chinese suggestions and 
initiatives. The United States missed an opportunity when it refused to 
participate in the Asian Infrastructure Investment Bank (AIIB), now 
widely viewed as a responsible development institution and not just a 
tool of Chinese hegemony. The United States should test whether China's 
Belt Road Initiative (BRI) could become something similar. And the 
United States should seek strategic cooperation with China in meeting 
global challenges (e.g. climate change, environmental damage, 
terrorism, pandemics, the societal effects of revolutionary 
technological change) that neither country can solve alone but that 
must be solved if either country is to realize its goals--whether the 
China dream or the America dream.
    The problem is that China--with its increasing diplomatic, 
economic, and military might--is a strategic competitor like no other 
America has ever faced. But strategic competitors need not be strategic 
adversaries. The challenge--and the opportunity--is to see if China and 
the United States can be both strategic competitors and strategic 
cooperators at the same time. The United States should make the effort 
but not be naive. It will be very difficult. There are few positive 
historical precedents. And it will only succeed if the United States is 
fully prepared and capable of competing successfully with China if the 
effort fails--and if China clearly understands this fact.
    Competition in the key 21st century technologies--the risk of a 
``Technology cold war''--and the strategic challenge presented by the 
Belt Road Initiative are two of the areas that most threaten to disrupt 
U.S./China relations. The United States and China need to construct a 
framework for their competition in these areas that reduces the risk of 
confrontation and conflict. At the same time the United States must 
ready itself to compete and win in those areas critical to its national 
security and economic future. For example, it is just too risky to let 
China dominate--let alone monopolize--the digital infrastructure of the 
21st century. But for less critical infrastructure, the United States 
should cooperate with China if China will follow international best 
practices of transparency, intellectual property protection, resilience 
to corruption, sustainability, and fiscal, environmental, and social 
responsibility.
    If the United States is to compete effectively in the new world it 
is facing, it must develop its own capabilities in critical areas and 
``get in the game''--and mobilize private industry and private capital, 
incentivize innovation and technology development, and reenergize 
cooperation among industry, academia, and government, along with 
friends and allies.
               does america still need to be the leader?
    When global leadership became too burdensome for a Great Britain 
exhausted by World War II, it passed the torch to the United States. 
More than half a century later, many Americans are ready to pass the 
torch to someone else. The problem, sadly, is that there is no one 
else. Europe is too caught up with its own internal problems, and most 
of the world does not want either China or Russia to be the global 
leader. Without U.S. leadership, the international system is likely to 
move toward spheres of influence, oppression of smaller states, 
authoritarian politics, state-controlled economies, and abridgement of 
human rights. This is not a world in which the United States, its 
friends and allies, would live in comfort, prosperity, or security, 
even if they could retain their freedom.
             does america have to lead in a different way?
    While America must still lead, others must both assume more 
responsibility and carry more of the burden. But they will only do so 
if given a greater role in setting the rules, running the institutions, 
and establishing the arrangements for a revised and adapted 
international order.
    This applies especially to America's friends and allies. They are 
most likely to share our values and vision for a revised and adapted 
international system. If given a greater role and participation, they 
can be extenders of democratic and free market principles and America's 
biggest source of leverage.
    Governments are not the only players in the new world America is 
facing. Involving others means involving the business sector, 
charitable organizations, academic institutions, civil society, and 
other non-governmental entities. These are now critical actors in the 
emerging international system.
    The United States must overcome the ``not invented here'' syndrome 
and be willing to embrace sensible ideas and innovations from other 
sources, consistent with the fundamental principles of a revised and 
adapted international system.
    Iraq and Afghanistan-style interventions are likely to be a thing 
of the past. The new formula of fighting terrorists ``by, with, and 
through'' local forces clearly works and is the right model.
    The United States and like-minded states need to adopt a preventive 
strategy to stop and roll back the spread of extremism in fragile 
states. They must empower local partners willing to improve their own 
governance and better serve their people.
    The United States must continue to develop and give priority to 
effective non-military measures like sanctions to deal with countries 
like North Korea and Iran. But without broad participation and support, 
sanctions risk isolating the United States and encouraging others to 
create alternative financial structures. Nations forced to choose 
between a U.S.-based international financial system and an alternative 
(especially one backed by China and Russia) may surprise us with their 
choices.
    America's continued global leadership cannot be taken for granted. 
But isolationism and retreat do not work. We know because we have tried 
them before--and history has not been kind to the result.
    Senators, I thank you for this opportunity to testify before you 
and look forward to your questions.

    The Chairman.  Thank you very much. Also very thoughtful.
    We are now going to do a 5-minute round of questioning back 
and forth between each side. I am going to reserve my questions 
as we go down the pike. And with that, I am going to turn it 
over to Senator Menendez.
    Senator Menendez  Thank you, Mr. Chairman.
    Thank you both for your very thoughtful and insightful 
remarks.
    I just came back recently, along with some other 
colleagues, from the Munich Security Conference and from 
meetings at the European Union and at NATO.
    In this world that you both have described, would you say 
that our multilateral efforts to meet some of these challenges 
are one of the essential ingredients of potential success?
    Ambassador Burns.  Absolutely I would. I believe that what 
sets the United States apart on this complicated landscape from 
lonelier powers like China and Russia are precisely our 
alliances, our partnerships, our capacity to mobilize other 
countries to deal with many of the broader challenges that 
Steve was talking about.
    Mr. Hadley. I agree.
    Senator Menendez  So I will tell you that the synthesis of 
the comments that I got from our friends and allies in Europe 
is that they have a sense that we are going it alone. They do 
not have a sense of the strong foundational commitment that the 
United States has had with them. They see us drifting from them 
and not in concert with them. And that to me is a huge 
challenge.
    It is interesting to listen to the Chinese be there and 
talk about the importance of multilateralism. Of course, it is 
somewhat hollow based upon their performance so far. But where 
there is a void, it will be filled by those who have their own 
aspirations.
    So I think this is critically important for us to be able 
to move forward.
    Let me ask you specifically in the context--you both have 
had experiences with Russia and you both addressed China. So 
what are the risks to U.S. national security of a world without 
any limitations on Russian nuclear forces? What are the 
implications for strategic stability if no inspection regime 
exists to provide information on the size and location of 
Russian nuclear forces?
    Mr. Hadley. Two things. One, the problem I think with 
alliances is while they are a high leverage proposition for the 
United States and one of our unique resources for dealing with 
the world, there is an effort, I think rightly, by the Trump 
administration to rebalance within our alliances and to get our 
allies and friends to take more responsibility going forward. I 
think that is part of what a revised adapted international 
system is going to look like. I think it is going to have more 
players and more people who want a seat at the table. And the 
trick is to rebalance those relationships without straining 
them beyond repair. And that is, I think, the challenge the 
administration has.
    The dilemma on the nuclear piece in terms of the INF Treaty 
is that in some sense, the Russians very shrewdly put us in a 
box. They violated the Intermediate Nuclear Forces Treaty by 
deploying a ground-launched system that violates its terms. We 
addressed it over a period of two administrations, asked them 
to come back into compliance. They did not. And the dilemma was 
do you stay in a treaty where the other side is violating it or 
do you accept the opprobrium of getting out of the treaty, 
which is the box Putin I think put us in because I think he 
actually wanted to get out of the treaty too.
    The question I think is going to be in terms of the New 
START treaty which I would hope would be both extended but also 
in some sense renegotiated to address these new emerging 
nuclear systems that Russia is deploying that were not in 
contemplation at the time that agreement was put into place 
that need to be addressed. There are more nuclear systems than 
are covered by the New START treaty, and the question is can we 
renegotiate, as the head of STRATCOM suggested just yesterday, 
a new arrangement that would cover these additional systems 
that are not covered by the New START treaty and would also 
perhaps cover the intermediate nuclear systems that used to be 
covered by the INF Treaty.
    Ambassador Burns.  The only thing I would add, Senator, is 
that I really do think it would be a huge mistake to let the 
New START agreement expire both for the reasons that you 
mentioned, you know, the transparency that the intrusive 
verification measures provides to the United States and the 
ways in which that enhances our security, but also because, at 
least with regard to the limitation of strategic nuclear 
weapons, this is a really important part of a global regime to 
try to reduce the dangers of nuclear war. So however profound 
our differences with Russia are--and they are profound and are 
likely to remain that way--it is important in my view to 
preserve some guardrails in that relationship especially with 
regard to strategic nuclear weapons.
    Senator Menendez  I will just make one comment. Rebalancing 
these alliances and having their fair-share burden is one 
thing. Straining them to the point that they believe that they 
are not an alliance is another thing.
    The Chairman.  Thank you.
    Senator Gardner?
    Senator Gardner.  Thank you, Mr. Chairman.
    Thank you to the witnesses for your testimony today and 
your service to our country.
    For the last 4 years on this committee, I have been 
privileged to chair the Subcommittee on East Asia, the Pacific, 
and International Cybersecurity Policy. The Indo-Pacific, as 
you know, is home to half of the world's population, half of 
the world's GDP, some of the world's largest standing armies, 
and six U.S. defense treaty allies. The security and economic 
future of the United States lies in a free and open--and the 
right policies in a free and open Indo-Pacific.
    On December 31st, on New Year's Eve, President Trump signed 
into law the Asia Reassurance Initiative Act that I carried 
with Senator Markey. ARIA is a generational effort that has 
garnered broad bipartisan support. Senator Coons, Senator 
Cardin, Senator Kaine, others in Congress were cosponsors of 
this generational effort that has garnered support in Congress, 
the White House, the business community, policy experts, and 
leaders on both sides of the Pacific. ARIA authorized nearly 
$10 billion in new resources for a long-term strategy to 
enhance security cooperation with our allies to promote 
American businesses through trade opportunities and to project 
American values of democracy, human rights, and rule of law in 
the Indo-Pacific region.
    As stated in the editorial in the "Manila Times," January 
20th of 2019, just last month, with ARIA's passage, America's 
engagement of the Indo-Pacific has more focus and resources. 
The new legislation also makes for a long overdue commitment to 
strategic thinking about the region.
    In the 116th Congress, in partnership with Senator Markey--
and I must say it has been an incredible bipartisan committee--
we intend to conduct rigorous oversight to ensure that ARIA is 
fully implemented and fully funded. The line of questioning and 
conversations this morning has focused a lot on building 
alliances. That is exactly what ARIA is intended to do, to 
build alliances.
    And so I would just as you both, how would you advise the 
current administration to best utilize the resources provided 
by ARIA and the language that we have developed to address 
economic security and values in the Indo-Pacific?
    Mr. Hadley. I would urge them to embrace it. I think given 
the challenge presented by China, the United States needs to be 
present in Asia in every dimension, diplomatically, 
economically, militarily, private sector, public sector, and 
working closely with our friends and allies in the region. It 
is one of the reasons why I thought it unfortunate that we 
stopped the further negotiation of the TPP, the Trans-Pacific 
Partnership.
    Senator Gardner.  And ARIA embraces a lot of the language 
and the trade of TPP and puts it into the language.
    Mr. Hadley. Exactly. And that is why I think it is a 
wonderful vehicle to allow us to embrace in a different 
framework perhaps those very principles and connections that we 
need to strengthen if we are going to be able to manage the 
emergence of China in Asia. So I think it is a terrific 
initiative.
    Senator Gardner.  Thank you.
    Ambassador Burns?
    Ambassador Burns.  I agree absolutely. It seems to me that 
dealing with the rise of China across the Indo-Pacific is, as 
you said, Senator, the principal strategic challenge we face. 
There are several dimensions to a smart strategy. One is to try 
to reshape the terms on trade, investment, and other issues. 
And here I think what the administration is doing is right, and 
a lot of those efforts are long overdue. We ought to try to do 
it I think in concert with other countries, whether in Asia or 
Europe. We share a lot of the same concerns.
    But the second dimension of the strategy is exactly what 
you are talking about and that is an affirmative vision for an 
Indo-Pacific region in which China's rise does not come at 
anybody else's expense. And as Steve suggested, that would 
require in my view taking another look at the Trans-Pacific 
Partnership because that provides a framework that is going to 
shape China's own incentives and disincentives for how it 
operates economically across Asia.
    So I applaud the effort and I just hope that it will be one 
important building block in an effort to not only lay out that 
affirmative vision, but then build a web of alliances, 
partnerships, new institutions that gives us the leverage to 
help deliver on it.
    Senator Gardner.  The focus today is on Vietnam and what is 
happening in Vietnam. I think the opportunity for us to 
continue building that strategic balance for the region is 
important. Obviously, Vietnam had a long a history with China, 
obviously a neighbor to China. There are certain things that 
they are going to be tied together on forever. But to provide 
U.S. leadership, provide this kind of legislation, an 
opportunity for strategic balance with Vietnam, business 
opportunities, to work with Vietnam on certain democracy, human 
rights values is incredibly important.
    And I hope that we can continue engaging the administration 
on funding this effort because to have another great term of 
rhetoric, rebalance or pivot, simply is not enough. We have to 
provide actual leadership on the ground with real face and real 
dollars involved.
    Mr. Hadley, you talked a little bit about the United States 
should test this proposition by engaging China and embracing 
appropriate Chinese suggestions and initiatives. I am 
concerned, though, when you look at the opportunity they have 
with North Korea. Obviously, North Korea has relied on China 
for its economy, for its resources, for its aid. We know China 
continues to turn a blind eye to the violations of U.S. 
sanctions, ship-to-ship transfers, some of which have occurred 
at least in open source reports in Chinese territorial waters.
    I do not know how we are going to engage them when they do 
not want to and they are reluctant to. They could be a critical 
player when it comes to denuclearization of North Korea, but 
yet they have refused to be that leader.
    I am out of time. I am going to stop. But I am skeptical of 
China's willingness to engage in a responsible global capacity.
    The Chairman.  Thank you so much, Senator. And that raises 
a lot of issues that are probably appropriate for another 
hearing. There are a lot things, moving parts there.
    Senator Cardin?
    Senator Cardin.  Well, thank you, Mr. Chairman. I thank you 
very much for holding this hearing.
    I want to thank both of our distinguished witnesses for 
their service to our country and their being here today.
    Both the chairman and ranking member, both witnesses have 
mentioned that American values are our strength, that promoting 
good governance, rule of law, human rights, and our global 
leadership working with international partners will give us a 
more stable international community, is in our national 
security interest.
    So that is being challenged today by many of the policies 
of this administration. We could talk about the Kingdom of 
Saudi Arabia. We could talk about the Philippines. We could 
talk about Russia. We could talk about China. But both of you 
have mentioned the importance of Asia in your statements and 
response to your questions. The President today is in Hanoi 
meeting with Kim Jong-un of North Korea. So I want to talk and 
get your response in regards to that second summit meeting 
between Kim Jong-un and President Trump.
    Senator Menendez has already questioned whether America is 
committed to the future agreements with Russia in regards to 
INF and New START. We know that the Trump administration has 
withdrawn from the Iran nuclear agreement. And when you try to 
look at Iran and North Korea, you see some similarities between 
those between countries. North Korea was much further 
advanced--is much further advanced on the nuclear weaponization 
than Iran was, and they continue to promote a nuclear program. 
North Korea has been judged to be in worse violations of human 
rights towards its own citizens than Iran is. So the President 
withdraws from Iran without the support of our international 
partners and is now having a second summit with the leader of 
North Korea.
    We had a hearing in this committee in the last Congress 
that said the first step needs to be a declaration of the 
program if you are going to have denuclearization. And to my 
knowledge, there has been no declaration by North Korea of its 
program and no game plan to understand where they are today so 
that we can have a road map to denuclearize.
    So my question to you, with a second summit between the 
President of the United States and the leader of North Korea, 
are we just giving Kim Jong-un international legitimacy? And 
what have we accomplished by having a second summit?
    Mr. Hadley. I think we do not know. We will have to see 
what comes out of the summit.
    But I think the point you made is a good one. You know, 
three administrations have done sort of top-down agreements 
with North Korea to try to get it to denuclearize, and none of 
those administrations were able to keep North Korea in those 
deals. And while there has been a lot of criticism of President 
Trump, those of us who were involved in those efforts that were 
unblemished by success I think we ought to give the President's 
approach a chance.
    And I think it is going to look different because, as you 
said, Senator, North Korea is different than Iran. And I think 
rather than some kind of big overall framework agreement, I 
think the road they are on is to try to get North Korea to take 
steps in the direction of denuclearization in return for steps 
that we would take that over time build some kind of 
relationship between the United States and North Korea and 
gradually degrade their nuclear weapons capability and their 
ballistic missile program capability and to try to get Kim 
Jong-un to the point where he will make a strategic shift and 
decide that he is better off rather than being isolated--
    Senator Cardin.  Compare that to what has happened in Iran 
with the U.S. pulling out of the nuclear agreement that was 
being enforced, an agreement, by the way, that I did not agree 
with initially, but disagreed with pulling out. I do not quite 
get the rationale here that we are going to give North Korea a 
long lead time to make incremental progress where we had 
significant progress with another country and we pull out. How 
does that gibe?
    Mr. Hadley. Well, I think it is because the reasons the 
administration gave for getting out of the Iran deal were, one, 
because they did not like the terms. They did not think the 
terms lived up to the promise of preventing Iran from finding a 
way to be a nuclear weapons State and it did not deal with 
other--
    Senator Cardin.  Well, we had inspections. We had limits on 
what they can enrich, and we have nothing in North Korea.
    Mr. Hadley. I agree.
    Senator Cardin.  Mr. Burns, do you have any--
    Ambassador Burns.  No. The only thing I would add is if you 
will recall, Senator, the interim agreement that we did with 
the Iranians at the end of 2013, which froze their program, 
rolled it back in some significant respects in return for very 
limited sanctions relief, we preserved almost all of our 
sanctions leverage for the later comprehensive talks. And we 
were able to introduce some quite intrusive verification and 
monitoring measures as well. If you could get something like 
that as a first significant step in dealing with North Korea, 
setting aside the irony of this, given the administration's 
view of the Iranian nuclear agreement, that I would suggest 
would be a significant tangible step forward.
    The risk, as you have suggested, is that we end up getting 
caught up in triumphalist rhetoric and give too much too soon 
in return for too little. I hope that is not the case. I hope 
we are able to make some hard-nosed, tangible progress. That 
would be a good thing if we can.
    Senator Cardin.  Thank you, Mr. Chairman.
    The Chairman.  Thank you, Senator Cardin. Well thought-out 
remarks.
    I would just observe that dealing with North Korea and Iran 
are two different situations in that they both have nuclear 
problems, as far as we are concerned, but Iran's problems go 
way beyond that when it comes to dealing with the terrorists 
and that sort of thing.
    Senator Cardin.  I would just argue both countries go well 
beyond their nuclear problems.
    The Chairman.  There is no question about that. I agree 
with that 100 percent. But the meddling they are doing in the 
Middle East is a very bad situation for us.
    So with that said--and thank you. Well thought-out.
    Senator Romney?
    Senator Romney.  Mr. Hadley and Mr. Burns, thank you so 
much for being here. I appreciate the service that you have 
given to our country and the wisdom that you provided this 
morning.
    Thank you also to Chairman Risch and Ranking Member 
Menendez for your comments and questions and your leadership of 
this committee. This is in my view a critical time for this 
committee's work, and under the leadership of these two 
gentlemen, I hope we are able to make the kind of progress that 
the country needs.
    Following the Second World War, Dean Acheson, Harry Truman, 
and others worked together--George Kennan--to establish a 
foreign policy for our nation, objectives and a strategy, if 
you will, that we followed quite consistently over the many 
decades. We now live in kind of a very different world than 
that that existed following the Second World War. And there are 
some, like myself, who believe that we have not devised a new 
strategy or even set objectives for what we hope to accomplish 
over the coming decades or century.
    One, I question is that right? Is it we are sort of 
flailing with an uncertain path in the face of nations like 
Russia and China that apparently do have very clear objectives 
and strategies? China has even published them. And if that is 
the case, let me ask you, how do we go about the process of 
establishing a clear set of objectives and strategy for our 
foreign policy going forward? And do you have any suggestions 
of an element or two or three or whatever that ought to be part 
of the strategic thinking for the vision for America over the 
coming decades?
    Ambassador Burns.  Well, thanks, Senator.
    I think the first step is to understand the landscape and 
the way in which it has changed not since the era of Acheson 
and others, but since the end of the Cold War, which launched a 
moment of 20 years or so in which we really were the singular 
dominant player in the international system. I think we have to 
recognize that that landscape is more competitive now and 
recognize also our strengths. I do not think we need to be 
defeatist about this at all. We still, as I suggested in my 
opening remarks, have a better hand to play than any of our 
rivals. The question is how we play it. And I think recognizing 
that one of our great assets is our ability to draw in 
alliances, to build partnerships with new emerging countries 
like India, for example, and then to think strategically about 
our priorities which, as both of us suggested, I think has to 
start with Asia. It does not end there. And ironically I think 
that makes transatlantic ties more rather than less important 
because we both share concerns--we and our principal European 
allies--about Chinese rise, about Russia's resurgence.
    And at the same time, my last point is we also have to take 
into account that range of truly global challenges well beyond 
the reach of any one State, whether it is the revolution in 
technology, climate change, just as two profound examples, and 
look for ways in which we can take the lead in mobilizing other 
countries to address them because those are going to be, 
especially with regard to climate, I think a truly existential 
challenge.
    Senator Romney.  Thank you.
    Mr. Hadley. Senator, I would say we need to revise and 
adapt the international system to reflect the new changed 
circumstances. The question is, is it going to be based on our 
principles or somebody else's? And that is why one of the first 
steps--something we did at the Atlantic Council was to roll out 
a declaration of principles that takes the traditional 
principles under the old order but revises and adapts them for 
the new situation. That begins the process.
    We are going to engage China on these principles, and I 
think whether we are going to successfully adapt that 
international system is going to depend a lot on our 
relationship with China. And that is why I focused so much on 
China in my testimony. I think we know the problem. I do not 
think we have a strategy at this point on China. I think it is 
one of the things that this committee could really do to have 
an intensive set of hearings on China strategy because I think 
we know the problem. I do not think we have a strategy.
    I think it starts by getting ourselves in a position so 
that we can compete successfully with China. And I think if we 
do that, there are selective things on which we can get China 
to cooperate with us. But first we have got to fix I think--our 
foreign policy begins at home. We have got to have a firm 
foundation here at home. Engage with China but make it clear to 
China that we are also prepared to compete with it, and if they 
are not willing to cooperate, they will be on the short end of 
the stick.
    Senator Romney.  Thank you, Mr. Chairman.
    The Chairman.  Thank you, Senator.
    Senator Coons?
    Senator Coons.  Thank you, Chairman Risch, Ranking Member 
Menendez.
    And I would like to thank Ambassador Burns and Security 
Advisor Hadley. Thank you for your decades of service and your 
very insightful framing comments that have led to this 
conversation.
    I will just note that both of you made the point that the 
single best thing we can do to promote and protect democracy 
abroad is to get our act together here at home. I will just 
comment that all of us are engaging in a broad and searching 
and constructive and important hearing with you. Yet, our 
nation is glued to the television watching testimony in the 
other chamber about stuff that does not necessarily advance 
democracy. Can I put it that way? Transparency does. But we 
just had a government shutdown of 35 days that, as best I could 
tell, amounted to a fight over the world "wall" versus "fence."
    In Munich, I heard grave concern about our drift and our 
lack of reliability. I really appreciated the broad group that 
put out these principles to reassert our engagement and our 
commitment to them. Later today the Senate Human Rights Caucus 
will hold another event focusing on the bipartisan effort to 
combat human trafficking and human slavery globally. I think 
central to our pushing back on China and Russia is continuing 
to reassert our commitment to core principles like human 
rights.
    I could not agree more with you that coming up with, as a 
full committee, a thoughtful, well reasoned strategy for 
confronting and engaging and potentially partnering with China 
is the most important thing we can do.
    But I would like to ask you for a minute, if I could, about 
fragile states and your engagement and role in delivering a 
report yesterday. So the United States Institute of Peace 
convened an impressive, broad working group that both of you 
served on to come up with a strategy for engaging fragile 
states and preventing extremism. 18 years after 9/11, we have 
spent almost $6 trillion on combating extremism, not 
exclusively of the Islamic variety but mostly. And we should be 
able to pivot to Asia and engage with China, but we will not if 
we cannot find a better path forward for conducting preventive 
investments on a multilateral basis to confront terrorism. I 
would be grateful if both of you could briefly speak to your 
work on that task force on extremism in fragile states and the 
recommendations that came out of it.
    Ambassador Burns, why do you think the U.S. Government can 
do a better job than we have done to ensure that fragile states 
do not become failed states, that we do not have, for example, 
Somalia be repeated in Ethiopia or Kenya or South Sudan?
    And, Mr. Hadley, if you would, the report calls for the 
creation of an international fund with a different approach to 
preventing fragile states becoming failed states. I would be 
interested in your thoughts on how that fund would work, why 
there is a compelling role model, and how you see that going 
forward. If you would, in order. Thank you.
    Ambassador Burns.  Well, thanks so much, Senator. And I was 
privileged to join Steve and a number of others on the task 
force that you mentioned.
    I think briefly we have all learned I think over the last 2 
decades since the terrible shock of 9/11 that the use of 
kinetic action of military resources are absolutely essential 
in dealing with the al Qaedas or the ISISes of the world. But 
that kind of terrorism, as profound a threat as it is, is 
oftentimes a symptom of a deeper extremism which thrives in 
fragile or collapsing societies.
    And so one thing I think we both agree is on the need--it 
will not surprise you as a recovering diplomat that I believe 
in this on prevention, on looking at places where you have 
partners in place who are committed to good governance--and 
that is not going to be in every fragile place in the world--
both in governments and in civil society with whom we and other 
international partners can work to try to create some models of 
success. Over the last 20 years, Colombia is one example of 
that where through administrations of both parties, the United 
States working with some courageous leaderships in Colombia was 
able to make real progress. We need to look for other places 
where we can make that kind of long-term investment, not just 
the United States on its own but working with other 
international partners who share that concern.
    Mr. Hadley. Fragile states are places where terrorists 
recruit and other powers meddle. They are the problem. The 
problem in fragile states is governance. And the model we talk 
about in the report is to go with the Millennium Challenge 
account kind of model where you partner with leaders of States 
who understand the problem is governance and want to deliver 
more for their people. Partner with them in a program they 
embrace and develop to advance their societies. Then go to the 
Global Fund, as we did for the Global Fund for AIDS relief, get 
the international community to contribute and then fund that 
kind of program. It is really a combination of the MCC, the 
Global Fund, partnering with local states and leaders who are 
willing to address the problem of governance that is the 
problem in fragile states.
    Senator Coons.  And you can think of lots of challenges we 
face that would be addressed or reduced if, for example, the 
nations of El Salvador, Honduras, Guatemala actually had a 
successful decade-long progress towards stability, 
transparency, rule of law or if the countries of the Sahel had 
a decades-long progress towards transparency and stability. And 
we could then focus on the bigger challenges that all of us 
agree we have to focus on. There is more extremism. There are 
more fragile states today than there was 18 years ago. And we 
have spent $6 trillion.
    We need a different strategy. And I am reintroducing a bill 
in this Congress with six members of this committee that would 
authorize this new strategy and move us towards funding a 
preventive strategy to dealing with failed states.
    Thank you, Mr. Chairman.
    The Chairman.  Thank you, Senator Coons.
    Senator Young?
    Senator Young.  Mr. Burns, Mr. Hadley, thanks so much for 
your service to our country and for being here today and for 
your thoughtful testimony.
    Both of you have provided some thoughtful commentary in 
your written submissions, as well as your words here today, 
with respect to our strategic competition with China.
    I am particularly concerned with our economic competition. 
This is something I credit the administration for elevating, 
the predatory economic practices of the Chinese, as have my 
colleagues on the other side of the aisle. I think all 
Americans recognize that we have to deal with intellectual 
property theft and forced technology transfer and the dumping 
of manufactured goods into this country and other illicit 
behaviors that violate the liberal international order that we 
invited China into back in 2000.
    With that said, I am concerned that a bilateral approach to 
addressing these matters is not going to be effective. I think 
we will end up ultimately with some sort of agreement with 
respect to terrorists and the tit for tat that we have seen 
that does not address the root issues of intellectual property 
theft and some of the other things. And I think we need more 
leverage, candidly, or perhaps another international forum 
outside of the WTO because it is so difficult to reform the WTO 
in order to address these matters.
    And I just wanted to open up the floor to you gentlemen to 
see if you have some ideas that we ought to entertain here on 
this committee and encourage the administration to adopt, 
working with our international allies and partners, to help 
address this what will be probably a multigenerational issue.
    Ambassador Burns.  Thanks, Senator, very much.
    I mean, I think I really appreciate the question, and I 
think in terms of American strategy, it does have to have two 
dimensions and both of those dimensions cannot be purely 
bilateral. The defensive dimension, just as you said, is the 
overdue effort to push back against Chinese practices which 
disadvantage us.
    The one missing element I think our strategy so far over 
the last couple years has been not working more energetically 
with lots of other countries who share those same concerns, and 
instead we have launched off on kind of second flank trade wars 
in steel and aluminum, whether it is with the European Union or 
with Japan or others, rather than making our priority trying to 
push back against Chinese practices.
    The second dimension is the affirmative, and that is where, 
as both of us said, I do think it was a mistake for the United 
States to pull out of the Trans-Pacific Partnership because if 
you want to deal effectively with China and its predatory 
economic practices over time, you have to create an affirmative 
framework for the kind of Asia that we want to see and lots of 
our friends and partners want to see across Asia with a set of 
high-end international standards that reflect our values and 
also are going to position American business to compete 
effectively in the future.
    So I agree with you. I think this is not just a question--
important as bilateral efforts are, it has got to be within a 
wider framework.
    Senator Young.  Mr. Hadley?
    Mr. Hadley. I think it is great that there is bipartisan 
support for the proposition that these structural elements of 
China's economy that take advantage of us need to be addressed. 
I think they are dealing with these structural issues so far as 
I can tell in the bilateral negotiations going on. We are going 
to be at this for a long time to get China on the right sheet 
of paper in terms of these things.
    So I would say view this as kind of a pump primer or a jump 
start. I would hope that we would then bring other allies in 
behind the effort. I think WTO reform is something that we need 
to be doing and we need to be leading on. So I would hope that 
this would start a process that would be an inclusive one that 
you described.
    Senator Young.  So I know these core issues of intellectual 
property theft and the others are on the agenda, and to that 
extent, I think they will be addressed. Some laws will be 
promulgated in China. Some new rules will be put in place.
    But the key is enforcement mechanisms. And it strikes me 
that we are going to need some new enforcement mechanisms. 
Perhaps the administration is working on that. I am not aware 
of what new enforcement mechanisms might be included in a 
potential agreement. But do you agree that is what we should be 
looking for?
    Mr. Hadley. Absolutely. We have heard this rhetoric out of 
China before. It is always where the rubber meets the road, 
that things do not seem to happen. That is why I think we are 
going to be in a long process for this. We need enforcement 
mechanisms, and we need others to join with us in using those 
mechanisms.
    Senator Young.  Thank you.
    The Chairman.  Thank you, Senator Young.
    Senator Murphy?
    Senator Murphy.  Thank you very much, Mr. Chairman.
    Thank you both for being here and for your years of 
service. Thank you for challenging this committee to find some 
enduring common ground on the challenges and priorities that we 
are talking about. I agree that that is more important than 
ever, and I hope that we take up your call to action.
    Ambassador Burns, I wanted to ask you to expand on your 
comments about the future of the EU and NATO. Secretary Pompeo 
gave a really remarkable speech in Brussels in December that 
got very little attention here but had serious reverberations 
throughout the continent, in which he engaged in a pretty 
remarkable broadside against multilateralism in defense of 
sovereignty. And you combine that together with the cheering of 
Brexit, cheerleading of some of the nationalist movements on 
the continent, and I worry. I think many of us worry about the 
work that we are doing both quietly and loudly to undermine the 
European Union and NATO as well.
    Tell us about the status of both of those alliances and how 
this committee can do work to try to make clear that this is in 
the long-term interest of the United States to support both.
    Ambassador Burns.  Thanks, Senator.
    Well, the first point I would make is I think with all of 
our focus on Asia, which makes perfect sense as you look out 
over the next couple of decades, it does make transatlantic 
ties more rather than less important because we share a lot of 
common interests and we certainly share values in ways which 
makes that transatlantic relationship unique.
    Second, I think we do have to recognize that many of our 
closest allies in Europe and the European Union in particular 
are in the midst of an existential crisis. I mean, they are 
having a nervous breakdown at the same time as in some ways we 
are on this side of the Atlantic. And while we do not get a 
vote on issues like Brexit, the United States certainly has an 
interest in those issues, has an interest in a vibrant European 
Union on whom we can rely and on whom Europeans can rely when 
they look at their relationship with the United States.
    You know, Europe faces challenges of uncertainty about 
whether they can rely on the United States, and I do not think 
the Secretary's speech in Brussels helped that. I think they 
face uncertainties as they look across the Mediterranean at the 
south and the insecurities that come out of the Middle East and 
Africa. And certainly there is the specter of a resurgent 
Russia and Putin's belligerence as well.
    So for all those reasons, we ought to be paying a lot of 
attention to investing in those alliances.
    And with regard to NATO, as Steve said, of course, we need 
to push for more burden sharing. That is not a novel insight 
for this administration. Its predecessors have also pushed. 
Maybe we did not do it as hard as we should have. But there 
does need to be a better balance. But at its core, I think that 
relationship, both with the EU and with NATO, is as or more 
important than ever for the United States.
    Senator Murphy.  You cannot combat the growing hegemony of 
China without the United States and Europe being together in 
that project.
    Mr. Hadley, I wanted to point you to a really interesting 
turn of phrase that Ambassador Burns used at the end of his 
testimony. He asked whether we can recover, quote, a sense of 
diplomatic agility out of the muscle-bound national security 
bureaucracy that we have become in recent years. I thought that 
was a really interesting challenge to us.
    And I think about that in the context of Syria where we 
have been told over and over by experts before this committee 
that this is a political problem without a purely military 
solution. And yet, the United States has had 2,000 troops 
inside Syria and virtually no diplomats in part because 19-
year-old marines are pretty well equipped to go very quickly 
into conflict zones and 50-year-old diplomats are not. You put 
that side by side with Russia and China who, if nothing else, 
are much more nimble than the United States in taking advantage 
with pace of opportunities and weaknesses around the world.
    What are your recommendations in a short amount of time as 
to how we try to make diplomacy more nimble, how we try to get 
people who can solve complex political problems into those 
places as opposed to what we do today, which is put very 
capable warfighters into these places who may not be as well 
equipped as others in our national security infrastructure?
    Mr. Hadley. I will give you a short answer. I think the 
appointment of Jim Jeffries as Special Envoy for Syria, an 
experienced diplomat, is an effort to put someone at the front 
of our diplomacy who is not chained by the bureaucracy, can be 
more nimble. But in order for him to succeed, he has to have 
leverage. And the problem we have had in Syria is we have not 
been present in a form that gives us leverage remotely similar 
to what the Russians and the Iranians have. So it is great to 
have an agile, flexible diplomat, but if we do not give him the 
gravitas behind him and the leverage behind him to achieve a 
good result that serves our interests, he will fail.
    Senator Murphy.  Does leverage only come through military 
deployments?
    Mr. Hadley. No, it does not only. But in a place like Syria 
in a combat zone--
    Senator Murphy.  Thank you, Mr. Chairman.
    The Chairman.  Thank you, Senator Murphy.
    Senator Portman?
    Senator Portman.  Thank you, Mr. Chairman. And I appreciate 
your holding this hearing. A great way to kick off your tenure 
to have a broad-based look at America's role in the world. The 
problem is we only have 5 minutes to ask 5 hours' worth of 
questions.
    The Chairman.  We are going to have some more hearings, 
Senator. You will get a shot.
    Senator Portman.  But these two are great diplomats in 
their time and great public servants, and we appreciate your 
service to our country and your continued advice to us. Hadley 
in particular. I had a chance to meet one of his colleagues. So 
I saw the kind of advice he gives the President of the United 
States and the great respect he has among his peers.
    So many issues. And let me just focus on Russia and China 
quickly.
    One, Steve, I read your piece recently in "Foreign Policy" 
with regard to the Kerch Straits and what we should be doing. 
You advocated a much more aggressive response to Russia and 
talked about the fact that after Crimea, there was very little 
response, and even on the eastern border, not an adequate 
response in Donbass.
    What should we do specifically right now with regard to 
their obviously illegal activities in the Kerch Strait?
    Mr. Hadley. The article suggested that we should have 
sanctions in response to--
    Senator Portman.  Specific sanctions just as to that issue?
    Mr. Hadley. Specific sanctions tied to the incident in 
Kerch where basically Russia broke an agreement that they had 
with Ukraine that there would be joint sovereignty over that 
strait.
    Secondly, we need to take steps that are preventive so that 
Russia does not mistake the lack of response for an invitation 
to do more. There are areas north of there that are important 
for water supplies for Crimea, a concern that the Russians 
might take another chunk out of Ukraine.
    Senator Portman.  Fresh water reservoirs.
    Mr. Hadley. We should be putting observers and forces there 
to ensure that Putin is not tempted. And I think we need 
greater naval operations in that area and in the Baltic Sea for 
the same reason.
    Senator Portman.  And pushing NATO to do more in the region 
with regard to the naval presence.
    So quickly on another Russia issue, and this is one 
actually Senator Murphy and I have worked a lot on over the 
last several years, and we now have this Global Engagement 
Center at the State Department. We have promoted and funding 
disinformation, propaganda.
    Ambassador Burns, when you were in Russia, you saw this. 
But I would imagine you would say that between the period you 
were there, which I think was around 2005, and today that 
things have changed dramatically.
    What should we be doing that we are not doing to push back? 
And do you all have information about the Global Engagement 
Center? How do you think that is being set up?
    Ambassador Burns.  Well, thanks, Senator.
    No. I think it is a very smart initiative. I think there 
are lots of things that we can do. I mean, first is to 
recognize the severity of the problem, and the 2016 elections I 
think drove that home to all of us as well. But that is not the 
end of it. I mean, that challenge is continuing not just for us 
but also for our allies in Europe where Putin and the Kremlin I 
think are past masters of trying to meddle in problems there as 
well.
    So I think there are things that we can do that help 
identify, working not only as a government but with the private 
sector to identify efforts, whether it is using bots or others, 
to infiltrate into our systems as well. There are things we can 
do to help strengthen and safeguard our own electoral processes 
as well. There are examples and experience that we can share 
with the Europeans who face many of those same challenges.
    So, again, I think this is an area where making common 
cause with some of our transatlantic partners on the Russian 
disinformation threat is a really smart long-term investment.
    Senator Portman.  Steve, any thoughts?
    Mr. Hadley. I agree.
    Senator Portman.  Moving on to China quickly, we are doing 
a hearing tomorrow with regard to Chinese influence here in our 
country with regard to our colleges, universities, and our K 
through 12 institutions. These are the so-called Confucius 
Institutes. A report is coming out today. They spend about 150 
million bucks since 2006 through really a propaganda arm of the 
Chinese Government to fund these institutes, colleges, and 
universities. About a hundred of them are happy to take the 
money and work with Confucius Institutes. My understanding is--
and we will talk about this tomorrow--more that these 
individuals who come from China have a contract with the 
Chinese Government, including the application of Chinese law. 
And there are visa issues. There are issues with regard to 
transparency, universities not reporting the payments, which 
they are required to do after it meets a certain threshold.
    Any thoughts about that issue broadly and then more 
specifically, with regard to influence here in this country 
through our university system, research, technology transfer 
with regard to China?
    Mr. Hadley. I think one of the things that is important is 
to expose what is going on. People are very sensitive to 
Russian interference in our country internally, not so aware of 
what the Chinese are doing. So the first step is exposure.
    Second of all is a balanced reaction. The solution in my 
view is not to exclude all Chinese graduate students from any 
American graduate school. There is a lot of value added we get 
from being an open society where students from all over the 
world can come and study in our institutions. But having 
guidelines and restrictions that keep China from using these 
students as a source of stealing intellectual property and 
national security secrets is just common sense.
    So the question is expose the problem, get people aware, 
but then avoid an overreaction, and try to craft a sensible set 
of policies that in some sense take a little bit of a middle 
road and balance competing considerations that are at stake 
here.
    Senator Portman.  My time is up. I like your idea of 
strategic competitors and strategic partners, and that would be 
consistent with that.
    Thank you, Mr. Chairman.
    The Chairman.  Senator Kaine?
    Senator Kaine.  Thank you, Mr. Chair.
    And thanks to our witnesses.
    Jumping right in, you have each testified to the value of 
NATO and the importance of a strong nation having strong 
alliances versus a strong nation being a lonely nation.
    I have a bill that Senator Coons, Senator Gardner, Senator 
Rubio--we have introduced together to clarify that we would not 
withdraw from NATO unless there would be an act of Congress or 
a Senate vote on that. NATO was a treaty ratified by the 
Senate. The Constitution says treaties must be ratified by the 
Senate. The Constitution is silent about how treaties come to 
an end. But there is a general understanding that when the 
Constitution is silent about that, it is an area where Congress 
can legislate.
    Would specifying that we would not withdraw from NATO 
absent a vote of the Senate or Congress send a positive message 
about the importance of that alliance to the United States?
    Ambassador Burns.  Yes, it certainly would, Senator.
    Mr. Hadley. I completely agree.
    And I want to commend the Senators who joined what I think 
was the largest congressional delegation ever at the Munich 
Security Conference. I think it was critically important to put 
the Congress and the American people on record as supporting 
NATO. I salute you for having done it. I think this would be 
very worthwhile legislation for the same reason.
    Senator Kaine.  Mr. Chair, I would hope we might have some 
opportunity to discuss that in committee, especially given the 
70th anniversary in April.
    Second, should the United States policy still be to promote 
a two-State solution between Israel and Palestine? Have the 
facts, Israeli settlements on the one hand or the fractured 
nature of Palestinian leadership, especially between Gaza and 
the West Bank--have they made it essentially an unrealistic 
goal, or is it a realistic goal that we should continue to 
promote, and if so, how?
    Ambassador Burns.  I mean, Senator, it is a really good 
question because I think the chances of producing a two-State 
solution have become more and more elusive over time for lots 
of different reasons. You mentioned most of them.
    I still think it is an extremely important aspect of 
American policy to promote that. I think if you look at the 
reality of what a one-State solution would look like, in other 
words, the reality in which our friend and ally in Israel and 
the land that it controls from the Jordan River to the 
Mediterranean has a political reality in which Arabs, as you 
look out over the next 4 or 5 years, are likely a majority in 
that area, it is hard to see how you sustain the kind of Jewish 
democratic state that all of us have been committed to for so 
long. And I think that is the reality, quite apart from the 
legitimate aspirations of the Palestinians for a state of their 
own.
    So as elusive as the goal is--and it is getting more 
elusive every day--I think there remains a sense of urgency 
about that. I do not underestimate the obstacles in the path of 
it, but I think we will all regret it if we wake up 5 or 10 
years from now and it turns out that that outcome is 
impossible.
    Senator Kaine.  Mr. Hadley?
    Mr. Hadley. I do not know what the administration's long-
promised initiative on Middle East peace is going to look like. 
I think we will need to see that.
    I would think it would be very useful for this committee to 
focus on a study that was done by the Institute for National 
Security Studies in Israel, which is a proposal for concrete 
steps on the ground that would improve the life of the 
Palestinians but, at the same time, would preserve the 
possibility for a two-State solution down the road because I 
agree with Bill. I just do not think the politics in either 
community, either Israel or the Palestinian community, are 
ready for a two-State solution now. But this was a very 
interesting set of proposals to try to help the Palestinians 
build institutions, improve livelihood, improve economic 
activity, and keep open the option for a two-State solution. I 
think that is the best we can do right now.
    Senator Kaine.  One of the things that I hear on the Armed 
Services Committee often is that we should avoid activity that 
tends to drive our adversaries together. And occasionally we 
will hear testimony there about Russia and China cooperating 
more together. There were Russian military exercises recently 
that the Chinese participated in.
    From your vantage point, do you worry about Russia and 
China cooperating more, or do you think there are natural 
limits to that cooperation and we need not worry about it?
    Ambassador Burns.  No. I think it ought to be an object of 
concern for us. I think it is more than just a marriage of 
convenience right now between China and Russia. I think they 
share a broad interest in chipping away at an American-led 
order around the world.
    Having said that, I also think you are right, Senator, that 
if you play this out over the next 5, 10, 15 years, I do not 
think Russians are going to be any more comfortable being 
China's junior partner than they were being the junior partner 
of the United States in the immediate post-Cold War era. And so 
I think whether you look at the Belt and Road Initiative by 
China and the likely political collisions at least in Central 
Asia that you can see, there is going to come a time I think 
when Russians probably beyond the Putin era see more of an 
interest in a healthier relationship with Europe, with the 
United States as a hedge in a way against China's rise. So I am 
not predicting that is coming anytime soon, but it is something 
that we ought to at least be aware of as we look at longer-term 
strategy.
    Senator Kaine.  Excellent.
    Well, I am over time. Thanks, Mr. Chairman, and thanks to 
the witnesses.
    The Chairman.  Thank you, Senator Kaine.
    Senator Rubio?
    Senator Rubio.  Thank you both for being here.
    I think this is a really important conversation. We spend a 
lot of time talking about tactics around here, but if tactics 
are not driven by a strategic aim, then I think it is difficult 
both to justify to the American people and ultimately you just 
lose yourself in why you are doing things. And I think this is 
a long overdue conversation, and I am very happy that the 
chairman and the ranking member chose this topic because we 
have got some decisions to make about our strategic view that I 
think could be a bipartisan one and a strong consensus in our 
foreign policymaking in this new era.
    There are a lot of challenges, but there are two I want to 
ask you about. The first is this rise of autocratic regimes who 
go through some of the rituals of democracy. They have an 
election but nobody can run against them, and there is no free 
press and things of this nature. And they also have elements of 
state-controlled capitalism. And so the rise of these--and they 
are sort of out there arguing to people look how stable we are, 
we are prosperous, and we have stability. And then they point 
to the West and the upheaval we are facing across the developed 
nations of the West. Some of it is a function of technology and 
globalization that have impacted the working class and the 
middle class and leading to real upheaval that is manifested 
politically.
    The other interrelated is we have our first near-peer 
competitor in China since the end of the Cold War. I mean, yes, 
Russia is a strategic competitor in key parts of the world, 
largely as a spoiler and increasingly as an aggravator, but not 
like China. In fact, I would argue they pose a comprehensive 
challenge. Unlike even the Soviet Union was never an industrial 
or technological challenger in that realm. And the Chinese are 
spreading their model of authoritarian capitalism, and they are 
trying to shape these post-World War II institutions in a way 
that is sort of beneficial to them. And then you also see them 
in these efforts to dominate the Asia-Pacific region, most 
certainly be a dominant power there. They view that as their 
right historically. And then, of course, challenge the U.S. 
across multiple domains across the world.
    And so I think there are two big strategic decisions we 
need to make. The first is are we going to defend liberal 
democracy and in particular the value of individual human 
rights because if we are not pushing back on that, both in 
words and in action--it is not just a nice thing to do. Right? 
There is a strategic value to doing that, but if there is no 
counterbalance to this authoritarian movement.
    And then the other is China where we have kind of been told 
there are only two choices at least in the broader scheme. One 
is that we either try to modify their rise or we try to stop 
their rise. And I think the question is whether there is a 
third option there and that is some level of strategic 
equilibrium since we do not want there to be an imbalance in 
the relationship because it could very well lead to conflict. 
And that is why we have to be careful about things like Made in 
China 2025. They want to dominate these 10 key industries from 
aerospace to agriculture machinery and technologies and the 
like.
    And just back on the first point on the pushing back on 
this autocratic rise, it also explains why we should care about 
the internment of Uighur Muslims in China or why we should 
support those in Venezuela that are demanding democracy through 
their constitutional order. That is why we should care about 
the murder of Khashoggi. You do not chop people up in 
consulates. And because we do not push back, we have completely 
surrendered that.
    So just on those points, first of all, I think you would 
agree that it is important for there to be sort of a strategic 
consensus in order to drive our tactics and our policies.
    And particularly on the China point, is the right way to 
frame it or is it the right view that this is not about 
constraining? They are going to be a great power. It is about 
ensuring that there is a strategic balance between the 
countries because the absence of that balance could lead to 
conflict.
    Mr. Hadley. I think you got it just right. You know, after 
the end of the Cold War, we thought the ideological struggle 
was over and we had won. And I agree with you that in the 
emergence of China, we see a competitor like we have never 
known before in terms of its scale across the board, 
diplomatic, economic, militarily.
    They do have a different model than we do. They are 
competing actively advocating that model in the international 
system. We are hardly in the game. We need to start affirming 
our confidence in our model and fix our problems at home so the 
brand looks good internationally because it is working 
effectively at home and then compete in the ideological 
struggle with China. I think in the end of the day if we do 
that, we will win. But I think at this point we are not in the 
game.
    I agree with you on China. That is why I tried to say can 
we be strategic competitors and strategic cooperators at the 
same time. And that means in some areas we are going to have 
to--for example, like the digital infrastructure where I think 
we are going to have to make sure that China does not 
monopolize or dominate that area. There are other areas that I 
think are less strategic to us where we can cooperate. We are 
going to have to try and find some balance.
    Ambassador Burns.  Just two quick comments, Senator, if I 
could add.
    First, on China, I absolutely agree with you. This is not 
an issue in my view so much of constraining China because its 
rise is going to continue. But the question is into what world 
does it rise. And we have the capacity through the rejuvenation 
of ourselves, our political and economic system at home, and 
then working with friends and allies across the Indo-Pacific 
and around the world and adapting institutions to help shape 
that world into which China's rise occurs and to help shape its 
own incentives and disincentives for its actions in that world.
    And then finally on human rights, I could not agree with 
you more. This is not just a moral issue, as important as that 
is for the United States. It is a practical source of our 
influence in the world especially if we are consistent about 
this and we are willing to call to account not just 
adversaries, which is easier to do, but also friends of ours 
because it is not as if they are doing a favor to us by 
listening to those kind of concerns. State after state around 
the world--it is particularly true in the Middle East, and we 
saw this in the Arab Spring--that do not pay attention to those 
basic indignities or human rights become brittle and break, and 
they do not become reliable partners over time. So I could not 
agree with you more. It is very important for us to factor that 
in for practical reasons to the way in which we deal with other 
societies.
    The Chairman.  Thank you, both.
    Senator Isakson?
    Senator Isakson.  Thank you, Mr. Chairman.
    You know, when you are last, everything has been said. You 
just have not said it. I have been sitting over here trying to 
remember my days with Steve and others to ask some intelligent 
questions, and I want to make a couple suggestions.
    First of all, I think that Senator Coons was right on 
target. We embarrassed ourselves in the shutdown, we being 
Republicans and Democrats. A lot of things we said and were on 
TV at a time when all the other things were going on I think 
sent the wrong signal to our friends and neighbors and probably 
to our adversaries too.
    I think also what everybody did in going to Munich--I did 
not go to Munich, but that was a great message to send. I have 
been to that conference, and at the particular time we are in 
now, that sent a positive message on NATO.
    I would like to make a couple suggestions. There is one 
thing out there that we could bring up in this committee, do 
thorough hearings on, and challenge ourselves to either adopt 
it or not adopt it. And that is the Law of the Sea. That 
affects China. That affects Russia, and that affects the United 
States more than any other thing that is out there. And it is 
controversial. And on the conservative side, there are a lot of 
people who do not like it. But the Seabed Authority in Jamaica 
oversees the distribution of the fees that are paid to the UN 
body that does the management of this and gives you access to 
rare earth minerals in the South China Sea, the Arctic changing 
on the North Pole, things that are big issues, the North Pole 
with Russia and the South China Sea with China.
    So I think a great way to bring something up that is laying 
there for us to talk about that affects our relationships with 
Russia and China is to bring up the Law of the Sea somewhere 
down the line and talk about that vis-a-vis us being in the 
world and not being a part of that treaty. It is very 
interesting that only Iran and Venezuela and a couple others 
and us are not members of it. Everybody else has already signed 
it. So we are a little late to the party, but it would be 
perfect timing to accomplish what you want to and engage more 
in discussions that we should have.
    Mr. Burns, in your statement, I took it that you did not 
think using tariffs and using trade negotiations vis-a-vis 
foreign relations is a good thing to mix. Was I right with that 
or wrong with that?
    Ambassador Burns.  No. I mean, I think there are instances 
where we can use tools like that to get better ends. My only 
point, at least with regard to China, was that I think we get 
farther in addressing some of the structural problems, real 
problems we have with China when we are working with other 
countries who share those same concerns. And my comment was 
more about us. While at the same time we are pushing the 
Chinese rightly to reverse some of those trade and investment 
practices that disadvantage us, it would make sense to try to 
make common cause with Asian allies, with European partners as 
well rather than start sort of second and third front tariff 
conflicts with them at the same time. That was my only point.
    Senator Isakson.  I agree with you on the TPP. I was sorry 
that we dropped out of that. But I have to admit it had some 
positive effect too by getting people thinking. Now, we still 
need to engage with China. Not having a trade agreement in that 
part of the world is dangerous for our country I think, and I 
think we need to do it.
    I have found that some of the strategy that has been used 
in those tariff negotiations have been pretty neat to get 
people to the table and other things that they were not at the 
table before.
    My last thing for the chairman is I will make you an offer, 
Mr. Chairman. This past weekend I entertained two couples in 
Atlanta from the northeastern part of the country, one of them 
a professor. I took them to the Museum of Civil Rights and 
Human Relations in Atlanta, one of the most moving experiences 
they had had. And I think we could have a 1-day CODEL sometime 
this year for the committee and go to Atlanta and go through 
that three-story museum, which includes all the King papers, 
but lots of other things too, all about human rights and all 
about civil rights, and then take some of the programs that 
have come from the Carter Center and from Emory University and 
from Georgia Tech. Sam Nunn's institute is at Georgia Tech, and 
his Nunn-Lugar initiative is managed out of that location. You 
could put together a great one day for the committee, fly down 
and come back, but learn a lot about human and civil rights and 
also about what we have been doing through other mechanisms, 
both Nunn and others in terms of foreign relations. So I will 
be happy to volunteer as a tour guide if you decide that is a 
good thing for us to do.
    The Chairman.  Thank you.
    Senator Isakson.  I yield back.
    The Chairman.  Well, that completes our first round, but I 
will yield to Senator Menendez.
    Senator Menendez  Thank you, Mr. Chairman. I just have one 
question I want to follow up.
    But I want to say to my dear colleague, Senator Isakson, I 
agree with you on the Law of the Sea. I conducted hearings when 
I was the chairman of the committee towards the Law of the Sea. 
I think it is critical in so many ways to our national security 
and strategic interests to be part of the Law of the Sea at a 
time in which America is an Atlantic State, it is a Pacific 
State, it has its nexus in the Arctic. I mean, it has critical 
interests. And I would embrace that. I would just hope that we 
could overcome the ideological issues of some of these treaties 
and move forward in our own national interests. So I want to 
second your call.
    And certainly we would love to take a trip down to see the 
center.
    On China, as part of devising a strategy, is a critical 
element of that not an embracing of--and reforming it, fine--
but embracing of multilateralism? You know, when the European 
Union and the United States joined together in an economy, it 
begins to rival China. When the United States joins with Asian 
and South Asian communities, it begins to challenge China. When 
China spends unlimited amounts of money in ways to influence 
its not only economic interests but its foreign policy 
interests, we are not going to go dollar for dollar or euro for 
euro, but that is not where our competitive advantage is 
either.
    So is it not critical for us, as we think about the 
strategy, that we need to create the strategic relationships 
with others in order to be able to more successfully ultimately 
meet the challenge of China and by that rebalancing of economic 
and other interests be able then to compete more effectively 
with China and bring it closer to it being part of a new 
international world order? I think that is critical because on 
our own, despite being a great nation, I am not quite sure that 
we can meet that challenge just strictly on our own.
    Do you have perspectives on that?
    Mr. Hadley. I would agree with you. And I think it is one 
of the things that is useful that the administration has what 
they call the Indo-Pacific Strategy because what that tells me 
is that to manage China, we and our friends and allies are all 
going to have to work together.
    And I think we can use multilateral institutions to put 
pressure on China. They announced the Asia Infrastructure 
Investment Bank. A lot of people thought that was just a 
strategic play by China. It turns out it is a pretty good bank. 
China's influence is declining. It is fairly professional. It 
partners with the other international banks and development 
banks. I think we should try the same thing with the Belt/Road 
Initiative, to use the fact that some of the countries that 
receive Chinese funds are having buyer's remorse and push China 
to put that in an international multilateral framework too that 
meets professional standards of transparency, fiscal 
responsibility, environmental responsibility, benefiting the 
recipient countries. I think we need to use the entire 
international community to try to manage this problem that we 
have never seen before, which is the emergence on the world 
scene of somebody with the weight that China now has and is 
increasingly going to have. So I agree with you.
    Ambassador Burns.  Senator, all I would add is I think the 
United States' great strategic advantage, as you look out as 
far as I can see into the 21st century, is our ability to work 
with and mobilize others.
    You know, China by comparison is a relatively lonelier 
power today for all of its strengths and for all of its 
inevitable rise. So if you look at trade issues, if we had been 
able to remain in the Trans-Pacific Partnership, knit together 
40 percent of the global economy, if in future years we had 
added to that a kind of transatlantic analog to that around the 
same high-end standards, you could have mobilized two-thirds of 
the global economy around a set of standards which inevitably 
shapes China's choices, its incentives and disincentives.
    The same is true with regard to the Law of the Sea. We are 
in a much stronger position in the South China Sea against 
pushing back against the Chinese if we are able to point to 
those rules and we are a part of that system as well. So I 
agree.
    Senator Menendez  Thank you, Mr. Chairman.
    The Chairman.  Senator Cruz?
    Senator Cruz.  Thank you, Mr. Chairman.
    Thank you to each of the witnesses for being here this 
morning. Thank you for your testimony.
    Let us start with what you were just addressing in the last 
set of questions, which is China. In my view, China is the 
greatest geopolitical long-term threat to the United States, 
both economically and militarily. I want to ask both of you. Do 
you share that assessment, number one? Number two, if so, what 
should we expect from China in the next decade?
    Mr. Hadley. I worked for President Bush, and each morning 
we would come in at about 5 after 7:00 and tell him of all the 
terrible things that had happened overnight. And he would 
always say, well, your job, gentlemen, is to take each problem 
and challenge and turn it into an opportunity. And I think that 
is what we need to try to do with China, and I think that is 
what Senator Rubio was talking about. It is a huge challenge.
    I do not think we know where China is heading, and that is 
why I think the point Bill made is right about trying to 
condition the environment in which China is emerging, to try to 
influence its behavior, because the trends are troubling. If 
you look at the extent of the increasing control that the party 
is exercising over the society, if you look at the social 
credit scheme and using data to really incentivize party-
approved behavior from the citizenry, it is the kind of tool 
that Stalin would have loved to have had in his era.
    We do not know where they are going economically. They 
clearly have some trouble. I think there is a tension between 
their political system and their economic system, that you 
cannot have the kind of political control and have the kind of 
economic reform and opening up China needs if it is going to 
achieve its objectives for its own self.
    So I think there are all kinds of dilemmas in terms of 
where China is heading, and the most we can do is to try to 
condition the environment, shape as much as we can Chinese 
choices, but put ourselves in a position that if it comes to a 
head-to-head competition, we are going to win.
    Ambassador Burns.  Senator, I agree with you. I think we 
have to be clear-eyed about what Chinese ambitions seem to be, 
and I think China wants to be a global economic peer of the 
United States and it is well on its way to that outcome. And 
second, I think it wants to recover across the Chinese 
political elite what it sees to be its accustomed role as the 
dominant player in Asia.
    Now, both of those ambitions carry with them the seeds of 
collisions with the United States. I mean, history is full of 
collisions between rising powers and established powers. I do 
not think there is anything foreordained about that, and that 
is why, as both of us have said, I think that has a lot to do 
with how forward looking, how nimble we are in trying to shape 
the conditions in which China rises so that we can limit the 
risks of collisions over time. I think that is possible. But 
that is the single biggest strategic challenge we are going to 
face.
    Senator Cruz.  So in your judgments, what should our 
objectives be with regard to China and dealing with China in 
the next decade? And what tools do we have to accomplish those 
objectives? And I would ask that you include in your answers 
some assessment of the Chinese investments in propaganda, 
whether it is in countries across the globe or here in the 
United States through organizations like Confucius Institutes 
that are funded by the PRC and designed to spread a particular 
message that is agreeable to the government of China.
    Mr. Hadley. I think we start by preparing to compete with 
China in those areas where it is in our national security and 
economic interest to do so and put ourselves in a position to 
compete and win in those areas. At the same time, to try to put 
a framework around that competition so that it does not swallow 
up the entire relationship and push us from competition to 
confrontation and even conflict. And by so doing, open a space 
for cooperation because, as I said in my testimony, there are a 
lot of issues on which it is in China's and the United States' 
interest to cooperate. We need to find a way to strategically 
compete, bound the competition so it does not overwhelm the 
relationship, and still have a space to cooperate in those 
areas where it is in our interest to do so.
    Finally, we need to take on the ideological challenge. We 
have got to show the world again that authoritarian state 
capitalism is not the route to a stable, prosperous, secure 
society, and that our model works. I think we have lost some 
confidence in that, and we need to reaffirm our commitment to 
it and then demonstrate it in our own society.
    Ambassador Burns.  I agree. I mean, I think a lot of this 
has to do with the power of our example in the world. We get a 
lot further with the power of example than we do with the power 
of our preaching. I have always found in many years overseas it 
has to do with restoring our ability to compete effectively, 
and we ought not to be defeatist about this. The United States, 
as you well know, Senator, has enormous strengths to bring to 
bear. They are not the same singular dominance that we had for 
15 or 20 years after the end of the Cold War, but they are 
still a better hand to play than any of our rivals'. But we 
have a window within which we can play that wisely because 
windows do not stay open forever. And if we do not try to shape 
that environment, others are going to shape it for us. And I 
think that is the challenge right now with China and more 
broadly in the world.
    Senator Cruz.  Thank you.
    The Chairman.  Thank you, Senator. A good line of 
questioning.
    Senator Markey?
    Senator Markey.  Thank you, Mr. Chairman, very much.
    Kim Jong-un and President Trump are meeting in Vietnam and 
the stakes are very high. There is a Kim family playbook going 
back to his grandfather where they extract U.S. rewards. They 
then delay meaningful concessions from their side, and then 
they exploit ambiguities in any understanding. And as he 
arrives, the President has a bit of excessive exuberance going 
into this meeting. And my concern is that the President can 
give away the farm while not, in fact, receiving real 
concessions from the other side.
    So my question is, has North Korea taken sufficient 
denuclearization steps thus far to warrant significant U.S. 
concessions? And are the promises of future North Korean steps 
towards denuclearization, of which we do not even have an 
agreed-upon definition yet, sufficient for significant U.S. 
concessions at this summit?
    Mr. Hadley. I think that they do have a playbook. They are 
very tough to negotiate with. We have had three administrations 
have agreements with them to denuclearize, and none of those 
administrations were able to keep them into it.
    And President Trump has tried an unconventional approach. 
He initially saber-rattled and everybody said, oh, my gosh, we 
are going to war. It turns out he was probably right because he 
got Kim Jong-un's attention. He has got the Chinese attention.
    Senator Markey.  But did he get any concessions?
    Mr. Hadley. He has got a cessation of their missile 
testing, a cessation of their nuclear weapons testing, some 
dismantlement of facilities. The significance of that is that 
while the program is ongoing--he is still generating fissile 
material and ballistic missiles--it is not--
    Senator Markey.  Right. He is developing nuclear ballistic 
missiles. He is still producing fissile material.
    Mr. Hadley. It is a step on what will be a long road. Does 
it justify some response on the U.S. side? Yes. Does it justify 
significant concessions? Your question. Probably not at this 
point. Those need to be down the road. And I think what the 
administration is trying to do is have some narrow steps they 
can take like a declaration about the end of hostilities and 
maybe some diplomatic opening.
    Senator Markey.  Which is very important to the North 
Koreans. That is a big concession from their perspective.
    Mr. Hadley. That is right, and we ought to get some further 
dismantlement and degradation of their nuclear and missile 
program in return.
    Senator Markey.  And if we do not get that?
    Mr. Hadley. I think we need to proceed step by step, and 
let us see what the President comes up with.
    Ambassador Burns.  Senator, I guess I would just add a 
couple of points.
    I mean, first, as Steve said, any of us who have worked on 
this issue for the last 25 years start from a point of humility 
because it is not like our record is exactly pristine in 
dealing with North Korea's nuclear and missile threats.
    Second, I do think it is really important that we be 
careful in not giving away too much too soon because, as Steve 
said, the North Koreans are practiced masters at dangling 
things, which then turn out to be easily reversible. I have 
never thought this was an argument against engaging at the 
highest level of leaders. It is not a problem with talking to 
one another. The problem is talking past one another. And that 
is why I think this is a classic challenge of really hardnosed 
diplomacy, step by step, to ensure that we do not give away too 
much even if it is in terms of a declaration of the end of 
hostilities, which is something, as you said, the North Koreans 
would really value because there is a lot at stake in that. If 
we can get something practical for it in terms of freezing 
fissile material production and rollback, that is a good thing.
    But we also have to be careful in light of the long-term 
strategic competition with China because North Korea's playbook 
is pretty clear. They would like to sow the seeds of 
uncertainty about the U.S. commitment to our alliance with 
South Korea, our alliance with Japan, and that also happens to 
suit a long-term Chinese calculus as well.
    So it is not an argument against a declaration of that 
sort, but we need to be careful to make sure we get something 
very tangible in response.
    Senator Markey.  Now, the UN Panel on Experts on North 
Korea is set to publish an assessment of the Kim regime's 
continued illicit behavior. It has got three things in it: 
engaging in sanctions of Asians to sell natural resources and 
to procure oil at levels above the UN caps; two, sending North 
Korean technicians to Syria, possibly to assist with ballistic 
missiles and chemical weapons programs; and three, selling 
military equipment and expertise using the Syria connection as 
a conduit to the Middle East and Africa, including sales to 
Libya, Sudan, and the Houthis in Yemen.
    How can the United States provide significant concessions 
to a North Korean regime that is engaging in those types of 
activities?
    Mr. Hadley. Well, it is interesting you should mention it 
because that was exactly the problem that a lot of Republicans 
had with the Iran nuclear deal. How can you do a deal on 
nuclear when Iran is one of the great State sponsors of terror 
and is destabilizing its neighbors?
    So this is a dilemma. And I think the proper approach is to 
put all the issues on the table even though you might work 
through them incrementally in terms of getting this process 
started with North Korea. And I do think one of the things we 
are not making the most of is the human rights issue, which we 
should be raising for its own self, but also because it 
embarrasses Kim Jong-un and is actually a source of leverage on 
Kim Jong-un.
    So I think we need to be cognizant of all these problems 
with the regime and have a strategy to begin to address all of 
them but also use all of our instruments of influence to try to 
get the kinds of substantial response that you are calling for.
    Senator Markey.  And again, my only point is that if you 
look at the totality of his conduct, as the Panel of Experts is 
going to be reporting back, it is actually less cooperation and 
intensifying the conflicts that we, the United States, are on 
the other side of around the world.
    So we thank you.
    Thank you, Mr. Chairman.
    The Chairman.  Thank you.
    Senator Rubio?
    Senator Rubio.  And I just wanted to ask both because of 
the expertise and experience that both of you have to ask you 
briefly about ongoing events with Venezuela, which is a part of 
the world that we have not really talked a lot about in the 
last 20 years.
    First, I think one of the things we perhaps need to spend 
more time on is explaining why we should care. And I think one 
of the issues is what we had discussed in my first round of 
questions, the autocracy versus democracy debate. But this is 
in our own hemisphere becoming even more pronounced.
    And the other is it is in our national interest. I mean, if 
things in Venezuela do not improve the migratory crisis, 
another 2 million to 3 million people are projected to leave 
which would potentially collapse social services in Colombia 
but also Peru, Ecuador, even Brazil. So it becomes a regional 
disaster. The drug flights sponsored by their government--these 
planes are literally flying out of their air space protected by 
their armed services. They turn right into Central America. 
They land in Guatemala or Honduras. They are trafficked into 
the U.S. It is a fuel for the gangs that are terrorizing people 
and causing migration from that part of the world, not to 
mention the drugs headed to us. They harbor terrorist groups 
openly. The ELN, as an example, just killed 20 police cadets 
about a month in Colombia, openly harbored in Venezuelan 
territory.
    And something that has not been covered, the environmental 
destruction that is occurring in the gold mining, just absolute 
catastrophic degradation of once pristine areas.
    So a couple observations because I want your insight given 
your years of experience. The first is all this talk about 
multilateralism. In many ways the administration's approach to 
this has been sort of the model of that, the OAS, the Lima 
Group, virtually all the EU countries. In fact, the EU would be 
there if it was not for Italy and I believe Greece that are 
refusing to come on board, but everybody else is there, 60 
countries sort of aligned with this position and the like.
    And the assessment I have is that this is a regime core 
made up of cronies who are isolated from reality and a lot of 
other people, a lot of yes-men around them when you are in that 
level of power. But they are able to provide incentives to the 
security forces, by the way, are multilayered down to street 
gangs that they are using to protect them. But they are still 
able to provide incentives to the security forces to protect 
them and to spy on each other. And hence, I think the policy 
approach has been to target those incentives that they are able 
to provide by going after hard currencies through the sale of 
oil, none of which benefited the Venezuelan people, and of 
course, the diplomatic isolation as well.
    But what strikes me is this has been going--the crisis has 
been going on for a long time, but from the moment the interim 
president swore in to today it has been 4 weeks and a couple 
days. So it has not been 4 years or 4 months. 4 weeks. And 
everybody wants to know why is it not over yet.
    First of all, your observation of the general situation 
and, second, the value of some level of strategic patience. 
These sanctions and this pressure, both the international 
isolation and the economic, take time to build in before you 
begin to see the security forces and the elites that are 
supporting them crack. It does not happen from one day to the 
next, and sometimes they are unpredictable. They happen very 
quickly. And embedded in that too is the notion that we do want 
to see some of the institutions there, as flawed as they may 
be, survive because if the police officers do not show up the 
next day, there is no security, and then it gets really bad. So 
just your general observations on how long it takes to do this, 
the strategic patience part of it, and anything else with 
regard to it.
    Ambassador Burns.  Three quick comments, Senator.
    First, I absolutely agree with you on what is at stake. 
Through administrations of both parties, we have tended not to 
pay as consistent strategic attention to our own hemisphere as 
we should have. And you are right about the spillover dangers 
too for Colombia, a success story in the last 20 years, but 
which could really be badly affected by this.
    Second, I think in terms of our approach, you are right. I 
think the reliance on multilateralism, on diplomacy, on working 
with partners in the hemisphere, as well as Europe, is exactly 
the right approach.
    Strategic patience is I think the right frame for thinking 
about this. It takes time for that kind of pressure to take 
effect. As you know better than I do, there are all sorts of 
challenges which would arise in terms of military intervention 
given the history of our involvement in the hemisphere and the 
baggage that comes with that. So I think it is the right 
approach to build up that kind of pressure.
    And the only last comment I would make is that I hope we 
are being very careful about, in a sense, preparing for success 
because the day after can bring huge challenges, just as you 
suggested, in Venezuela. If you end up in a situation where all 
the institutions are broken and you have got lots of people who 
have an incentive to breed further insecurity, it is a huge 
challenge as well. So a lot of attention needs to be put into 
that.
    Mr. Hadley. Two quick points.
    I agree we do need patience. I agree it should be 
multilateral. The problem is I do not see that we have got 
enough leverage to get Maduro gone. And I think where the 
committee can focus and where I hope Elliott Abrams is focusing 
is what is the strategy that gets us more leverage that will 
actually crack this regime.
    Secondly, on Bill's point, one of the things John Allen 
said, you know, when you plan a major intervention that is 
going to perhaps crater or change a regime, you need to start 
with phase four and work backwards. What do you want the 
situation to be after you have succeeded and then work 
backwards in your planning so the things you do now to achieve 
that result are not working at cross purposes with where you 
want to end up. I do not think we have done that kind of 
deliberative planning with respect to Venezuela given how it 
came up. I think we need to start it now.
    The Chairman.  Thank you.
    Well, gentlemen, thank you so much for your time here 
today, and I know I speak on behalf of both myself and the 
ranking member that we were honored to have the two of you. You 
were chosen specifically for this as our initial hearing here 
this year. And we look forward to working with you in the 
future. Again, you have our thanks. Thank you so much.
    And this hearing is adjourned.
    [Whereupon, at 12:05 p.m., the hearing was adjourned.]
                              ----------                              


              Additional Material Submitted for the Record


  Response of The Honorable Stephen Hadley to Questions Submitted by 
                           Senator Todd Young

    Question. How can the United States maintain its position as the 
leading global innovator? Which technologies do you see as vital for 
the U.S. and how can the U.S. construct a framework for fair 
international competition in those sectors?
    Answer. The United States will be able to maintain its position as 
the leading global innovator if our technology sectors continue to 
focus on key developments in artificial intelligence (AI), robotics, 
augmented reality/virtual reality (AR/VR) and financial technology 
(fintech). The United States should be most focused on the dual use 
technologies: VR for gaming, AI, robotics, and virtual reality will be 
foundational so that many applications or end-use technologies will be 
built upon them. These foundational technologies will be component 
technologies for future innovations much the same way that 
semiconductors have been components in all electronics. For example, 
facial recognition and image detection for social networking and online 
shopping has real application in tracking terrorists or other threats 
to national security and much of today's commercial autonomous vehicle 
technology and drone technology solutions find their genesis in DARPA 
programs.
    China aims to dominate the same key industries, to reduce reliance 
on foreign technology, and to foster indigenous innovation. Through 
published documents such as 5-year plans and Made in China 2025, 
China's industrial policy is clear in its aims of import substitutions 
and technology innovation. Currently the US does not have a 
comprehensive policy or the tools to address this massive technology 
transfer to China. CFIUS is one of the only tools in place today to 
govern foreign investments but it was not designed to protect sensitive 
technologies. CFIUS is only partially effective in protecting national 
security given its limited jurisdiction. The USG does not know what 
technologies we should be protecting and because competition is likely 
to be particularly intense in the technologies that will define the 
world economy in the next decade--artificial intelligence, cyber 
autonomy, biotech, quantum computing, and information technology, it is 
important that the USG construct a framework for fair international 
competition in these sectors.

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