Launch Economic Security Agreements

• The Trump administration should launch a new type of trade agreement to advance shared economic security objectives with close U.S. partners and to strengthen alignment between proactive, market opening policies and defensive, protective policies.
• The administration should ask Congress for a new trade promotion authority that prioritizes economic security objectives.
• It should launch exploratory economic security agreement talks with close security partners.
• Finally, it should leverage the renegotiation of the U.S.-Mexico-Canada Agreement to experiment with new economic security commitments in the context of a broader free trade deal.

Economic and national security concerns are increasingly merging and governments around the world are more actively intervening in markets to advance their economic security objectives. The rise of China, the massive sanctions levied on Russia, and the supply chain fragilities exposed during the pandemic have led to a prioritization of economic security alongside more traditional economic goals of efficiency or openness. Yet, the existing international economic order fails to account for these fundamental shifts in the geopolitical context.¹ The current system does not sufficiently distinguish between trading with adversaries and trading with close security allies. It also fails to advance cooperation on international economic issues that have become central to U.S. interests, such as the use of export controls to constrain the military advances of adversaries.

The new administration can lead a restructuring of the global economic order to reflect today’s geopolitical realities and to more effectively advance U.S. economic security interests. Economic security can be understood as the idea that governments should intervene more assertively in the economy to improve resiliency and address national security risks, as a necessary complement to the efficiency and growth benefits of an open market system.² While the United States has developed a growing playbook for implementing domestic authorities related to economic security (see Geoffrey Gertz and Emily Kilcrease, “Publish an Economic Security Strategy,” in this series), it has yet to set a vision for how to advance an economic security–centered approach internationally. The new administration can set out an ambitious strategy to achieve this through the following actions.

Set a vision for economic security agreements. The administration should develop a new type of economic agreement to advance shared economic security objectives with close U.S. partners, the goals of which could be announced in a major policy speech from one of the administration’s leading economic officials. Economic security agreements could be negotiated as stand-alone agreements, or the core obligations could be integrated into more comprehensive trade deals, such as a revised U.S.-Mexico-Canada Agreement (USMCA).

An economic security agreement should focus on strengthening market integration and export opportunities in critical sectors, including those where the United States is seeking to lessen its reliance on China. For these critical sectors, an economic security agreement should include binding trade and investment rules intended to create market opportunities between partners to offset competitive losses from reduced access to the China market and to strengthen shared supply chains for critical goods. Economic security agreements also should enhance cooperation on cross-cutting issues, such as combating trade coercion and addressing shared concerns with nonmarket economies.

A key element of an economic security agreement will be the integration of defensive, national security–focused tools and proactive market access tools. Traditional trade deals have prioritized opening markets while treating national security issues as wholly unrelated to the trading relationship. In contrast, a new economic security agreement model would recognize that policy tools such as export controls and investment screening are central to the trust that trading partners can have in each other, and it will develop specific modalities for strengthening alignment on these types of policies.

Ask Congress for a new trade promotion authority. The administration should ask Congress for a new trade promotion authority (TPA) that prioritizes economic security objectives. A TPA provides congressional guidance to the executive branch on the objectives of any new trade negotiation, as well as a fast-track congressional vote on trade agreements negotiated according to TPA parameters. The most recent TPA was enacted in 2015 and expired in 2021. The Biden administration decided not to pursue a new TPA and consequently was constrained to negotiating watered-down deals designed to avoid congressional approval requirements. This approach failed to advance U.S. economic and security interests and frustrated U.S. partners eager for more meaningful engagement. The new administration should request a new TPA to facilitate new trade deals, including the novel types of economic security agreements proposed here. A new TPA will facilitate the anticipated renegotiation of the USMCA in advance of that agreement’s 2026 mandatory review deadline. The TPA also can provide the roadmap for launching talks with a broader range of close partners, while giving assurance to negotiating partners that talks will lead to a meaningful outcome.

Announce exploratory economic security agreement talks. The administration should launch exploratory economic security agreement talks with close security partners. Initial candidates should include the United Kingdom, Australia, and Japan. The UK has been eager to strengthen economic ties with the United States since Brexit, and the close security relationship already has resulted in some cooperation on economic security issues, such as investment screening and the trilateral AUKUS security partnership with the United States and Australia. The administration should relaunch the trade deal talks that started under the first Trump administration, incorporating new chapters on economic security issues. Australia will be a crucial partner in diversifying critical mineral supply chains away from China and is well experienced in fighting Chinese trade coercion. The administration should explore launching an update of the U.S.-Australia free trade agreement, which was signed in 2005 and requires updating across the board, including to address economic security priorities that have emerged in the past two decades. Japan is a key player in the critical chips industry, has long sought to ink a trade deal with the United States, and plays an important role in promoting economic security issues in the G7.

Europe will also be a key economic security partner. Negotiating binding rules with Europe, however, will be a lengthy process, given the complex mix of authorities across the 27 European Union member states and the European Commission. While a formal economic security agreement should be a midterm goal for the new administration, it can make more immediate progress by establishing a regular forum for economic security dialogue with European counterparts, at both the member state and Commission levels. The current U.S.-EU Trade and Technology Council (TTC) has been a helpful forum for building working relationships between U.S. and EU officials across a range of trade and technology issues, but it requires a hard reset to ensure that it delivers concrete and timely actions. The new administration should reboot the TTC under a new mandate, contingent upon agreement with the EU on identifying a narrower set of issues to drive to resolution within specified time periods. The forum also must be structured to compartmentalize issues, so that tariff disputes do not obliterate the possibility of advancing progress on shared economic security priorities.