Jeanne Shaheen Leads Senate Foreign Relations Committee Hearing About The Future Of Europe

5 months ago

The Senate Foreign Relations Committee held a hearing and received testimony from James O'Brien, the Assistant Secretary of State for European and Eurasian Affairs.

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Transcript

00:00:00This meeting of the Senate Foreign Relations Subcommittee

00:00:06on Europe and Regional Security Cooperation will come to order.

00:00:09I want to thank Ranking Member Ricketts for agreeing to sit

00:00:14and hold this hearing on this important topic.

00:00:17I also want to thank Chairman Cardin, who is the chair

00:00:20of the full committee, for being here today.

00:00:24And I know that we have some Ukrainian parliamentarians

00:00:28in the audience, so we very much appreciate your visit here.

00:00:32And thank you for all of the work that you are doing

00:00:36in your country.

00:00:37And I understand that you're going to Manchester,

00:00:39New Hampshire when you leave here.

00:00:41So we hope to give you a very warm welcome in New Hampshire.

00:00:47Over the past four years, there's perhaps no continent

00:00:51that has experienced such significant political security

00:00:54and economic shifts as Europe has.

00:00:57Putin's miscalculated decision to launch a full-scale invasion

00:01:00of Ukraine in 2022 upended the world,

00:01:04but not in the way that he thought it would.

00:01:06Putin thought his efforts to drive divisions within Europe

00:01:09and build its reliance on Russian oil

00:01:11and gas would thwart a unified, coordinated response

00:01:16to its illegal invasion in Ukraine.

00:01:18Instead, it upended European policy toward Russia

00:01:22and its attitudes toward the rest of the world.

00:01:25And today, the transatlantic alliance is stronger than ever.

00:01:29Most notably, Ukraine is standing firm

00:01:32in its fight for freedom.

00:01:34Putin thought Kiev would fall in a day,

00:01:37but today we have much of Ukraine is still standing strong

00:01:42in the face of Putin's disillusional imperial campaign.

00:01:47For two and a half years, Ukraine has defied all odds

00:01:50by valiantly defending its sovereignty,

00:01:53holding the Russian military to account for its actions,

00:01:56and launching multiple successful military operations

00:02:00to degrade Russia's naval assets

00:02:02and military capabilities in the Black Sea.

00:02:05And Europe has come together in other ways.

00:02:07In addition to the United States,

00:02:09many European countries have signed bilateral security

00:02:12agreements with Ukraine to provide long-term support

00:02:16as Ukraine defends its freedom.

00:02:19The fight for Ukraine's independence

00:02:21has been championed by NATO allies.

00:02:23The response to Russia's invasion,

00:02:25led by the Biden administration in coordination with NATO,

00:02:28the European Union, and our Indo-Pacific partners,

00:02:32waged the most effective and coordinated response

00:02:34to Russian actions and made it clear to President Putin

00:02:38that his unprovoked aggression to undermine a sovereign country

00:02:42will come at a hefty price.

00:02:44Despite Putin's efforts to prevent the enlargement of NATO,

00:02:47he was directly responsible for the addition of Sweden

00:02:51and Finland to our NATO family,

00:02:53increasing the alliance from 30 to 32 allies.

00:02:57And since Putin's unjust invasion,

00:02:59NATO allies have significantly increased defense spending.

00:03:03Twenty-three allies are now meeting

00:03:05the 2% defense spending target,

00:03:08with others on pace to hit the goal in the coming years,

00:03:11compared to just 6% to just 6 countries

00:03:15prior to the invasion of Ukraine.

00:03:17Now, we recognize that the tough decisions

00:03:19undertaken by our European allies and partners

00:03:22have had significant political and economic costs.

00:03:26Europe's overdue decision to end its reliance on Russian gas

00:03:30resulted in a significant hike in energy prices,

00:03:33in addition to record inflation rates

00:03:35due to Russia's blockade of Ukrainian grain exports

00:03:38on the Black Sea.

00:03:39And despite these significant economic shocks

00:03:42being felt deeply by Europeans,

00:03:44there is strong, continued public support in Europe

00:03:48for Ukraine and a broader recognition

00:03:51that Putin must be stopped in Ukraine

00:03:53before his imperialist ambitions

00:03:55threaten other parts of Europe and NATO.

00:03:59We recognize, however, that recent elections

00:04:02that have taken place across Europe,

00:04:04from the European parliamentary elections

00:04:06to the elections in France,

00:04:09illustrate that some political groups

00:04:11are willing to capitalize on discontent

00:04:14to fuel their far-right agendas.

00:04:16So although we should celebrate our achievements

00:04:18in strengthening within our alliance,

00:04:21this hearing is an opportunity to understand

00:04:23how we can further consolidate our transatlantic unity

00:04:27to address future challenges,

00:04:29such as addressing the economic challenges faced by China.

00:04:34Most importantly, we must continue to ensure

00:04:36that our citizens see the benefit of alliance unity

00:04:40by strengthening both our trade ties and our democracy.

00:04:44In just my home state of New Hampshire,

00:04:47we do about $3 billion in exports to Europe each year,

00:04:51and that shows just how much we are dependent

00:04:55on a stable and prosperous Europe.

00:05:00Assistant Secretary O'Brien, in your testimony

00:05:03and in questions from members today,

00:05:05I hope you can address some of the most pressing questions.

00:05:09How can we ensure that our U.S. and EU citizens

00:05:12are both informed and collectively benefit

00:05:15from our increased economic coordination?

00:05:18How do we ensure that the U.S. public understands

00:05:20the importance of addressing the threats

00:05:22faced by Russia and China?

00:05:25How can we continue to sustain strong support for Ukraine

00:05:28so that victory is defined under its own terms

00:05:31and not by dictators like Putin or Viktor Orban?

00:05:35And how can we continue to support aspirant countries

00:05:38in the Western Balkans who are withstanding

00:05:41significant domestic political headwinds in their efforts

00:05:45to seek EU and NATO membership?

00:05:48And how do we continue to support

00:05:50the spirit of democracy in countries like Georgia,

00:05:53where the government has taken efforts

00:05:55to undermine its own EU membership ambitions,

00:05:58despite the overwhelmingly pro-EU aspirations

00:06:01of its people?

00:06:03Assistant Secretary O'Brien, we are

00:06:05grateful that you've agreed to testify today.

00:06:08Your role is critical to ensuring

00:06:10that our partnerships with Europe

00:06:11continue to make the United States more

00:06:13prosperous and more secure.

00:06:16And before I end, I just want to say thank you

00:06:18to Morgan Kennedy, who is here, who

00:06:21has served in my office for the past year

00:06:23as a Pearson Fellow on loan from the Department of State.

00:06:26It's a great program, and we appreciate that,

00:06:30and we appreciate all of the great work

00:06:31that Morgan has done in our office.

00:06:33So next month, she'll be rejoining

00:06:36the Department of State, focusing on Europe and support

00:06:39for Ukraine.

00:06:41Now, before I introduce Assistant Secretary O'Brien,

00:06:44I will turn it over to Senator Ricketts

00:06:46for his opening remarks.

00:06:49Thank you, Madam Chair.

00:06:50We often refer to the war in Ukraine

00:06:52as Putin's war of aggression.

00:06:55And that might have been true on February 24, 2022.

00:07:00But that framing is not accurately really described

00:07:03now the war today.

00:07:05And it's because this war isn't just

00:07:07about Putin's war of aggression.

00:07:09It's an opening salvo in a larger protracted fight

00:07:13that an axis of authoritarians is leading,

00:07:16including the PRC, People's Republic of China, Russia,

00:07:19Iran, and North Korea.

00:07:21And they're waging on the West.

00:07:24The winner will not only define the future of Europe,

00:07:28but also the future of the entire free world.

00:07:32For those in Europe who want to focus squarely on Putin,

00:07:35but not apply the same level of fervor

00:07:37to the other partners in the axis,

00:07:39that would be a strategic blunder.

00:07:43Iran has supplied thousands of weaponized drones

00:07:45that have been used to attack Ukrainian cities

00:07:48and exhaust Ukrainian air defenses.

00:07:50But it doesn't end there.

00:07:52From plots targeting Jewish and Israeli targets

00:07:54to devastating cyber attacks, Iran

00:07:56wishes to inflict only terror and chaos across Europe.

00:08:01Too frequently, North Korea's role in the axis is minimized.

00:08:05However, its new mutual defense treaty with Russia,

00:08:07combined with millions of artillery shells

00:08:09and ballistic missiles it has sent to Putin,

00:08:12showcases the true threat Kim Jong-un poses to Europe.

00:08:18Still, of Russia's partners, none of them

00:08:21pose a greater threat to European security

00:08:23than the People's Republic of China.

00:08:25Xi and Putin's no-limits partnership

00:08:27has led the PRC propping up Russia's war economy

00:08:30and delivering critical weapon components

00:08:32necessary for Russia to maintain its aggression.

00:08:36And while the PRC has not sent lethal aid yet,

00:08:40last month we saw PLA soldiers conduct joint military exercises

00:08:43for the first time in Belarus,

00:08:45mere miles away from NATO's border.

00:08:49Let's be clear.

00:08:50Xi Jinping wants and is invested in Putin winning.

00:08:54No amount of diplomacy from the US, Europe, or even Ukraine

00:08:57will change this or make the PRC

00:09:00play a positive role in ending this war.

00:09:04I was pleased to see NATO allies strongly and unequivocally

00:09:07call out the malign aggression of all four of these Axis

00:09:11members in a recent summit here in Washington.

00:09:14But strong words don't deter dictators.

00:09:16Only strong actions do that.

00:09:18That's why it's important that NATO allies

00:09:20spend more on their defense and security.

00:09:24There are some who want to make a victory lap

00:09:26that we've got 23 allies that met the 2% target,

00:09:28and that is improvement.

00:09:31Yet it's unclear whether some of these allies, notably Germany,

00:09:35have plans to be able to sustain this level of spending

00:09:37for the long term.

00:09:39And we still have allies like Spain and Belgium

00:09:42that 10 years after the 2% pledge

00:09:45can still barely muster up 1.3% of their GDP on defense.

00:09:50This is even more concerning given that 2% benchmark

00:09:53made in 2014 does not come close to matching

00:09:56the new threat environment that we have today or in the future.

00:10:01The NATO alliance has been rejuvenated,

00:10:04but its sustained success comes down

00:10:06to increased capabilities, lethality, and manpower,

00:10:09all of which can only be met with more spending.

00:10:13We can no longer afford to give participation trophies

00:10:16to free-riding allies unwilling to do their part.

00:10:20I want to address another theme expressed

00:10:21by some European officials at the NATO summit,

00:10:24the need to Trump-proof the alliance.

00:10:27Just like the recent elections in Europe,

00:10:28the upcoming elections in November

00:10:30and a potential Trump administration

00:10:32would bring about differences in policy and strategy.

00:10:35That's how democracies work.

00:10:37However, if President Trump does win,

00:10:39I would encourage Europe to this time

00:10:40adopt a more constructive approach.

00:10:43It goes without saying that had Europe listened

00:10:45to the Trump administration on the need

00:10:47to increase its defense spending

00:10:49and its dangerous reliance on Russian energy,

00:10:51Europe would have been in a much stronger position

00:10:53both before and after Russia's invasion of Ukraine.

00:10:56The Trump administration earned a right

00:10:58to say to Europe, I told you so.

00:11:01Regardless of the outcome of the election in November,

00:11:03however, our collective success depends

00:11:05on uniting against the threats posed

00:11:09by this burgeoning Axis and comes down to two facts.

00:11:13First, the United States cannot win this fight alone.

00:11:17And second, our allies, particularly in Europe,

00:11:19must radically evolve their security posture

00:11:21against all Axis members to match the nature of the threat.

00:11:26This means ensuring Ukraine is successful

00:11:28instead of allowing a fear of a Russian escalation

00:11:31to force us into maintaining the status quo.

00:11:34This means aggressively de-risking

00:11:36from the Chinese economy instead of being enticed

00:11:38by short-term economic gains

00:11:40at the expense of long-term security losses.

00:11:43This means reimposing strong sanctions on Iran

00:11:46that deprive it of the revenues it uses

00:11:48to fund terrorism in Europe and around the globe

00:11:50instead of banking on the false hope

00:11:51that the Iranian regime will fundamentally change.

00:11:55And it means increasing our economic

00:11:56and diplomatic pressure on Pyongyang

00:11:58instead of allowing Kim Jong-un's rogue regime

00:12:02to grow more dangerous in the shadows.

00:12:05Ultimately, Europe's future will be defined

00:12:06on whether we can together adapt quickly enough

00:12:10to meet the moment.

00:12:11For the sake of Europe, the transatlantic alliance,

00:12:13and the future of the free world,

00:12:15I hope and believe we can.

00:12:18Thank you, Madam Chair.

00:12:19Thank you, Senator Ricketts.

00:12:21Now it's my pleasure to introduce our witness.

00:12:24Jim O'Brien is Assistant Secretary of State

00:12:27for Europe and Eurasian Affairs,

00:12:28which is a position he began

00:12:30after being confirmed earlier this month.

00:12:34Mr. O'Brien was previously a career State Department officer

00:12:38and served two previous administrations

00:12:40as a special presidential envoy.

00:12:42Notably, he was the first presidential envoy

00:12:46for hostage affairs from 2015 to 2017,

00:12:49and helped establish the office

00:12:51and work for the safe return

00:12:52of about 100 American citizens.

00:12:57Over the course of his career at the State Department,

00:12:59he led a large and successful sanctions program

00:13:02and advised on a range of issues,

00:13:04including peace negotiations in Europe,

00:13:06scientific and environmental agreements,

00:13:08and initiatives to investigate

00:13:10and prosecute persons responsible for war crimes.

00:13:14With that, Mr. O'Brien,

00:13:15I turn it over to you for your opening statement.

00:13:19Thank you, Madam Chair, Mr. Ranking Member,

00:13:21and Mr. Chairman.

00:13:23I know you've had a long day

00:13:25of State Department testimony already,

00:13:28so I'll try to just add to what you both said

00:13:30in your excellent opening statements.

00:13:34With Europe, we've built a platform

00:13:37that lets us project power

00:13:39and promote our values and security.

00:13:43What we've been doing over the last year

00:13:47is strengthening that platform

00:13:49and extending it to new areas.

00:13:52Now, we see Russia pushing back hard against it,

00:13:55and that's one theme in every country we'll talk about.

00:13:58Sometimes, Russia's aided by local elites

00:14:01who find benefit in sitting just outside the rule of law.

00:14:06And through all this, as Senator Ricketts, as you mentioned,

00:14:09China is looking to see if it can benefit

00:14:12from weakening the platform that we have with our allies.

00:14:16And it's important that we impress on our partners

00:14:19and our allies that they have to face up

00:14:22to what China is doing.

00:14:24And I think we're making some progress there,

00:14:26and I'll talk a bit about that.

00:14:28So I'll mention three areas that are of special importance,

00:14:31and I know that questions will take this much deeper.

00:14:34The first is Ukraine.

00:14:37As you noted, Russia is an imperialist,

00:14:40aggressive, revanchist power.

00:14:43Ukraine is fighting to preserve its independence,

00:14:47in part so we don't have to have this fight,

00:14:50even though Putin threatens other allies of America.

00:14:54So we want Ukraine to win,

00:14:56and we are providing Ukraine with the material to win.

00:15:01In the last month or two, the platform we're discussing

00:15:06has gotten much stronger and has reached out to Ukraine

00:15:10in three particular ways.

00:15:11The EU has begun membership negotiations with Ukraine

00:15:16that will encourage reform

00:15:17of the kind Ukraine's people have demanded,

00:15:21and will begin to open up markets for Ukraine

00:15:24so that it's able to participate

00:15:27in a much more lucrative, high-value economy

00:15:32than had been the case before.

00:15:34The G7 leaders together agreed

00:15:38that Ukraine would have the benefit

00:15:40of earnings from Russian sovereign assets,

00:15:44giving it this year, we anticipate, $50 billion

00:15:48to spend on defending itself and rebuilding its society

00:15:53from the damage Russia has brought.

00:15:55And NATO, of course, has said Ukraine is welcome

00:15:59once it takes a few steps across the bridge to NATO

00:16:02that was built at this last month's summit in Washington.

00:16:07This is the fastest way to peace,

00:16:10that Ukraine is able to win the war,

00:16:12or say to Putin, we're able to negotiate from confidence.

00:16:16Everything else is a chimera.

00:16:19So with this, we see Ukraine making some progress

00:16:22on the battlefield,

00:16:24and I'm happy to address that more in questions.

00:16:27We have, at the same time, strengthened our platform,

00:16:30and in particular, NATO.

00:16:31And you both mentioned the various ways

00:16:32in which that is true.

00:16:34And Senator Ricketts, I completely agree

00:16:37that we can't win this war alone.

00:16:40So we are working with others,

00:16:42and we are making sure that our spending

00:16:43is not just higher, but smarter,

00:16:45with regional defense plans,

00:16:47so we can measure the progress that we're making

00:16:49and hold each other to account.

00:16:53NATO's also going to be developing a new strategy

00:16:55toward Russia over the next months,

00:16:58and that will hold our allies together

00:17:02as we go forward in dealing with Russia.

00:17:05And here, all the NATO allies agreeing

00:17:08that the PRC is the decisive enabler of Russia's war

00:17:12is a significant step,

00:17:14and one that will allow us to build

00:17:16on the platform that we have.

00:17:18At the same time that we're focused on Ukraine,

00:17:21we're working to confront what I would call

00:17:24the arc from the Caspian to the Adriatic,

00:17:28a group of states that are looking to have less Russia,

00:17:31but to be much closer to the rule of law

00:17:35that is offered by membership in the EU and NATO,

00:17:37or by closer relationships.

00:17:39And across this area, over the last two years,

00:17:42we've consistently seen a desire

00:17:45to have less Russia in place.

00:17:47And now we are seeing some pushback,

00:17:50sometimes fueled by Russia, sometimes by local elites,

00:17:53who like to be close to European banks,

00:17:55but not European rule of law.

00:17:58And we are working in each one of those places,

00:18:00and each one has its own particular idiosyncrasies,

00:18:04but we're working in each one of those places

00:18:07to try to strengthen the platform that we've built.

00:18:11And finally, we're making sure that Americans benefit

00:18:14from this work we do with Europe.

00:18:17Europe is our largest trading partner.

00:18:20We are half of global GDP.

00:18:22Five million Americans are employed by European countries.

00:18:26And we will work through every mechanism we have

00:18:29so that Americans see in their pocketbooks

00:18:32the benefit of closer cooperation with Europe.

00:18:36So thank you for the time,

00:18:37and I look forward to your questions.

00:18:40Thank you very much for that testimony.

00:18:43I'm gonna defer to Chairman Cardin for his questions.

00:18:46Well, thank you, Senator Shaheen.

00:18:48And thank you for holding this hearing.

00:18:51Senator Ricketts, thank you very much.

00:18:53We are very fortunate, the leadership we have

00:18:56on this subcommittee and the work that you all do

00:18:59in a very bipartisan manner, so we appreciate it very much.

00:19:02Secretary O'Brien, welcome.

00:19:04Thank you for your service.

00:19:06I wanna welcome our Ukrainian parliamentarians

00:19:09who are here.

00:19:10It's a pleasure to have you in our committee room.

00:19:13It's clear to all of us that the future of Europe,

00:19:16the subject of today's hearing,

00:19:17very much depends upon Ukraine's success

00:19:20against Russia's invasion.

00:19:21That's our top priority

00:19:23and will continue to be our top priority.

00:19:25So I wanna talk a little bit about how we got here.

00:19:30And it'll connect to your last point, Secretary O'Brien,

00:19:34dealing with places that want less reliance on Russia

00:19:37that are reaching out to us.

00:19:39What happened in this attack on Ukraine's sovereignty

00:19:43started with the invasion of Crimea and taking over Crimea,

00:19:47and we didn't do anything about that.

00:19:49And before that, Russia invaded Georgia,

00:19:53and we didn't do much about that at all.

00:19:56Russia took over Moldova, Transnistria area.

00:19:59We didn't do much about that.

00:20:01So we have seen Russia's aggression,

00:20:05and we're drawing a line right now in Ukraine, as we should,

00:20:08because they're trying to really take over

00:20:10the entire country, but that's not the only place.

00:20:14Since the Russian invasion of Ukraine,

00:20:17we found another area that Russia's been engaged in,

00:20:20maybe not directly, but certainly as an enabler,

00:20:24and that's Armenia.

00:20:26I was recently in Armenia at the border of Nakharnakaraba.

00:20:29Now, I can't go to the border

00:20:31because in that area of Armenia that's on the border

00:20:35is now controlled by the Azerbaijanis.

00:20:39How did they get control of that area?

00:20:41Through Russia, Russia allowing them

00:20:43to take that control of territory.

00:20:46What has the international community done about that?

00:20:48Haven't seen very much at all.

00:20:51Haven't seen even a lot of comments about it.

00:20:54So as you talk about countries

00:20:56that are trying to get closer to the United States,

00:20:58Armenia is one of those countries,

00:21:00and yet they are now have a real security threat

00:21:04to their borders by being taken by force by Azerbaijan

00:21:08with the complicity of Russia.

00:21:11So tell me what we're doing in order to show our support

00:21:17for the principles that countries

00:21:19cannot change borders by force

00:21:22and that countries that are reaching out

00:21:23to the United States or the West

00:21:25for a closer relationship, such as Armenia,

00:21:28are not going to be subject to retaliation by Russia

00:21:32without the support of the West.

00:21:37Thank you very much, Mr. Chairman.

00:21:39So Armenia is a subject we spend a great deal of time on.

00:21:42So with Secretary Blinken and President von der Leyen,

00:21:46we met with Prime Minister Pashinyan several months ago,

00:21:50established a new platform

00:21:52to help Armenia reduce its dependence on Russia.

00:21:56It's almost entirely dependent on Russia

00:21:58for its energy and its economy.

00:22:00We need to diversify that so that it's able to...

00:22:02And for its border security.

00:22:04And I'll come to security in just a second.

00:22:07So making it possible for them to make the brave steps

00:22:11that Prime Minister Pashinyan is leading them on,

00:22:13which is a break with Russia.

00:22:15Now, as you point out,

00:22:17Russia had guaranteed Armenia's security

00:22:20after the 2020 war with Azerbaijan

00:22:23and for a long time before that.

00:22:25And it failed, it turned its back

00:22:27as Azerbaijan retook the territory around Nagorno-Karabakh.

00:22:32And that has led to a severe break

00:22:35where much of the population of Armenia

00:22:38wants to get further from Russia.

00:22:40So we're creating the conditions for that to happen.

00:22:43A significant deadline will come later this week

00:22:47when several thousand Russian troops, FSB troops,

00:22:52have been requested to leave.

00:22:54And those are really significant for a number of reasons,

00:22:57in part because they manned the border

00:22:59at the international airport.

00:23:01And that's where some of the sanctioned

00:23:03smuggling evasion takes place.

00:23:05So we'll see whether Russia is really willing to honor

00:23:08the sovereign wishes of Armenia that it leave

00:23:12so that Armenia can build the relationships that it wants.

00:23:15We're also strongly supporting the peace effort

00:23:18that Prime Minister Pashinyan has been developing

00:23:21with President Aliyev in Azerbaijan.

00:23:23Russia is trying to make sure it doesn't happen.

00:23:26Russia is trying to make sure that anything

00:23:29that happens there happens on its terms.

00:23:32And I think both of those two countries

00:23:34are a bit frustrated by the involvement, to be honest.

00:23:40And we are working very hard so that the expressed desire

00:23:44of peace can be manifest in an agreement.

00:23:47And I'll just say one more thing

00:23:48about why that matters so much.

00:23:51You look at a map from Central Asia,

00:23:54which is not a part of this committee,

00:23:56but Central Asia all the way through,

00:23:58the Central Asian countries are incredibly rich.

00:24:01And right now their only options to the global markets

00:24:04fundamentally are through Russia or China.

00:24:06If we can open up a route that goes through Azerbaijan

00:24:10and Armenia, then they will have access to global markets

00:24:14and much less dependence on Russia and China.

00:24:18So this is all a part, again, of allowing countries

00:24:22to choose their own paths to the global markets.

00:24:24I appreciate that and I support everything you just said,

00:24:27but it still begs the question that without much complaint,

00:24:33Azerbaijan is now occupying part of Armenia,

00:24:37strategic part of Armenia.

00:24:39And there has been no real protest

00:24:42about their controlling the highlands

00:24:45next to Nakharna Karabakh that puts Armenia

00:24:48at tremendous risk of the corridor

00:24:51that could divide the country or lose its southern edge.

00:24:55And I haven't seen much of a fuss made

00:24:58by the international community.

00:25:01Yes, please, go ahead.

00:25:04No, I appreciate it and you're making a fuss here

00:25:06and I appreciate that.

00:25:08It's good to lay down the marker.

00:25:10The two sides have agreed to a border demarcation process.

00:25:16They've agreed on what the lines are and you're right,

00:25:19there are some territories that each side still occupies

00:25:23that according to the line they've agreed

00:25:25will probably end up going back the other way.

00:25:28The highlands are a particular interest.

00:25:31But that's a process that the two sides are working on.

00:25:33We've been very clear that any adjustment

00:25:38that the border they've agreed

00:25:40is the one that they should end up with

00:25:41unless the two sides agree that they don't.

00:25:44I'll just, I don't wanna.

00:25:46My understanding, the peace process does not deal with that.

00:25:50Well, it does.

00:25:53I mean, there is a peace agreement under negotiation

00:25:57that defers the border demarcation

00:25:59to another channel in the peace process.

00:26:02So you can't just hide this all.

00:26:03And I support that,

00:26:05but whether we'll ever get to that point,

00:26:07my concern is gonna be years down the road

00:26:10and we're gonna have another Moldova and another Georgia.

00:26:12Thank you, Madam Chair.

00:26:14Thank you, Senator Cardin.

00:26:15Senator Ricketts.

00:26:17Thank you, Chair.

00:26:19Two years ago, President Biden issued a red line

00:26:21to the PRC not to provide material support

00:26:24for Russia's war in Ukraine or face consequences.

00:26:27And as I mentioned, while we don't see any lethal aid yet,

00:26:31certainly China is keeping the Russian economy afloat

00:26:35with energy purchases

00:26:36and providing a number of dual use materials and so forth

00:26:40to Russia to be able to continue this war.

00:26:43At the NATO summit, the alliance made a clear rebuke

00:26:46of Beijing for underwriting Putin's war in Ukraine.

00:26:50In the Washington declaration,

00:26:51allies threatened that, quote,

00:26:53PRC cannot enable the largest war in Europe

00:26:56in recent history without this negatively impacting

00:26:59its interests and reputation, end quote.

00:27:02And this level of clarity is encouraging.

00:27:05However, without subsequent actions

00:27:07to ensure further PRC support,

00:27:09these words are likely to achieve little.

00:27:11Since the start of the war,

00:27:12the US and the EU have sanctioned numerous Chinese companies

00:27:15and individuals to stem the flow of PRC dual use goods.

00:27:19While this has led to a recent decline,

00:27:21it still is estimated that hundreds of millions of dollars

00:27:23in dual use goods continue to flow from the PRC to Russia.

00:27:27Secretary O'Brien, NSA Sullivan recently said

00:27:32that the administration is prepared to tighten the screws

00:27:34on the PRC support for Russia,

00:27:36including potential sanctions against PRC banks.

00:27:40Given the time is of the essence,

00:27:41when can we expect a decision to move forward on this?

00:27:44Will Chinese banks be sanctioned?

00:27:49Thank you, Senator.

00:27:50So two years ago, we talked to the Chinese,

00:27:53not about just material assistance,

00:27:55but specifically focused on lethal assistance.

00:27:58And that line's held.

00:28:00Now we are talking to them about the material amounts

00:28:03of dual use goods that they are providing.

00:28:07And it is disturbing and wrong.

00:28:09They are providing 90% of the electronics

00:28:12that Russia depends on, 70% of the machine tools.

00:28:17This has had an effect of our European partners

00:28:21now recognizing that China is stoking the war machine

00:28:25that threatens Europe.

00:28:26And that's forcing China now to recalibrate

00:28:30some of its basic policies.

00:28:31How long it takes them to do that,

00:28:33that is something we will work to hasten,

00:28:37but that's a real exercise in daily diplomacy.

00:28:40On sanctions, as you said, we've sanctioned,

00:28:44I don't know the specific number.

00:28:46The Europeans earlier this summer

00:28:49began sanctioning a few Chinese entities as well.

00:28:52That was a significant step for them to take.

00:28:55We will continue to work on this.

00:28:57We don't preview exactly when we roll things out,

00:29:00but I assure you this is an area of real focus.

00:29:04And any information you've got, please provide to us,

00:29:07but it is something we'll keep working on.

00:29:09All right, so but you can't give me a timeline

00:29:11for when there may be sanctions on Chinese banks

00:29:13that are facilitating these transactions?

00:29:15I'm not gonna promise a date,

00:29:17but I will tell you we work on this every day.

00:29:20Well, also complicating this is the fact

00:29:22that Chinese banks are like half the Chinese transactions

00:29:26with these Chinese companies that Russia's doing

00:29:28are made through intermediaries in the UAE,

00:29:31Kazakhstan, Kyrgyzstan, other countries.

00:29:35What are you doing to address that aspect of it?

00:29:37Is this also part of what you're working on?

00:29:39Yeah, it's, I mean, and someone from Treasury

00:29:43can walk through some of the difficulties,

00:29:45but there's been a real effort to reach out,

00:29:47particularly, say, in the Emirates,

00:29:49which has a deep banking sector.

00:29:52One of the challenges is that a lot of this trade

00:29:55is kind of closer to cash and carry.

00:29:57It's not like an infrastructure project

00:29:59where there's lots of documentation and research.

00:30:02It's just people kind of Venmoing each other money.

00:30:06So we have to make clear to banks

00:30:08that they have a higher duty of care

00:30:11to know their customers.

00:30:12And there's been a real effort in this.

00:30:14It began when I was in my previous role,

00:30:16and we're seeing some progress on this

00:30:18in some of these third country banks,

00:30:20particularly Turkey and the Emirates.

00:30:22And you also mentioned about, for example,

00:30:24I think you said 70% of the machine tools

00:30:27imported to Russia are coming from the PRC.

00:30:29Where are the other 30% coming from?

00:30:33Probably the U.S. and Europe.

00:30:36I don't have the exact breakdown.

00:30:39The difficulty with many of the products we're discussing,

00:30:42whether it's electronics or machine tools,

00:30:45is that they're sold on to brokers,

00:30:48and then they're sold on and sold on in commerce.

00:30:51So knowing the end user is difficult for the companies.

00:30:55We have been speaking with American companies

00:30:58and our European colleagues have been speaking

00:31:00with their companies about understanding

00:31:02who they're really selling to so that nothing new moves.

00:31:05And there are some new restrictions,

00:31:07and we'll take more steps to get at these shadow brokers.

00:31:11Can you give me an example of just what

00:31:12some of the new concrete steps we can take

00:31:14to cut off the supply of this other 30%?

00:31:16Yeah, well the first thing is getting on,

00:31:19having our companies understand

00:31:21that when they're getting new customers,

00:31:23those may well just be proxies

00:31:25for an old customer who's now illegal.

00:31:28So working our way through that's important.

00:31:30The second is identifying some of the key brokers.

00:31:34This is maybe more an issue for the electronics,

00:31:38but often the sales are just made to a giant wholesaler

00:31:42who then holds the goods and then sells them on.

00:31:46Having those held to a higher standard is important.

00:31:49A third is in Europe particularly

00:31:52to deal with land crossings.

00:31:55So the EU just, what happens is somebody

00:31:59in a Western European country makes a sale,

00:32:02their national authority will check it,

00:32:05but often not be fully aware of the situation

00:32:09at the end point, and then the goods will be routed

00:32:12through Belarus or Russia by land,

00:32:15and they fall off the back of a truck.

00:32:17So we need those border crossings to be toughened.

00:32:19The EU just gave those countries the authority

00:32:23to stop suspicious trucks, and now it's an exercise

00:32:26of putting in the enforcement muscle

00:32:29to make sure they can carry that out.

00:32:31Great, thank you, Mr. Secretary.

00:32:34Thank you, Senator Ricketts.

00:32:36Earlier this year, Congress passed

00:32:37the $95 billion National Security Sample Biddle,

00:32:4195 billion plus.

00:32:44Passed with strong bipartisan support,

00:32:46and much of the funding is critical

00:32:48to supporting Ukraine defend itself.

00:32:51Now, with long-range strike capabilities

00:32:54such as the ATAKMS provided by the U.S. and our allies,

00:32:57Ukraine has seen success in halting Russia's advances

00:33:00on the front lines and destroying

00:33:02Russian central command systems.

00:33:06I personally believe we should allow Ukraine

00:33:08to conduct the war in the manner that they say fit

00:33:12with our weapons, but can you talk about

00:33:15how the U.S.-Ukraine bilateral security agreement

00:33:19is allowing for increased intelligence sharing

00:33:21to improve Ukrainian targeting,

00:33:23and is the administration considering a policy change

00:33:26to allow the Ukrainian armed forces

00:33:28to service targets in range of the ATAKMS?

00:33:31And how does this compare with the UK's policy

00:33:35on the storm shadow?

00:33:41Thank you, Madam Chair.

00:33:42So the overall strategy, we want Ukraine to win.

00:33:46So we want them to use the weapons they have,

00:33:49both their own and the ones that are provided

00:33:52in the way that's most effective.

00:33:55Right now, that means holding in the east,

00:33:57and despite some of the headlines in recent days,

00:34:00I was just talking to Ambassador Brink,

00:34:02that we think those lines will stabilize.

00:34:05We don't see Russia making a major breakthrough,

00:34:08but we'll keep watching it.

00:34:10It means clearing away the Russian firing positions.

00:34:14You know, during the time that the supplemental

00:34:16did not pass, Russia really had the opportunity

00:34:20to bring enormous weaponry up really close

00:34:24to the front lines, and use it to devastate

00:34:27Ukraine's defenses and communities.

00:34:30And it means keeping the economic centers open.

00:34:33That means providing more air defense.

00:34:35So President Biden announced several weeks ago

00:34:38that the US and our allies have agreed to provide Ukraine

00:34:41with substantially more strategic air defense systems.

00:34:45That will let Ukraine's economic centers work.

00:34:48And that then pays off because Ukraine,

00:34:51using its own weaponry, with some help from ours,

00:34:54has cleared out the ability to trade through the Black Sea.

00:34:59All of those things have to come together.

00:35:01And the weaponry we're providing

00:35:04is a piece of doing those things.

00:35:06So it's a constant discussion about where

00:35:09the weapons can be best used.

00:35:12And I realize some of this may be better

00:35:14done in another setting, but what

00:35:16Ukraine has done to clear out a lot of the Russian capacity

00:35:21that was in close has been remarkable,

00:35:25using its weaponry and using weaponry we've provided.

00:35:28I don't have an exact comparison to what

00:35:30that is with the Storm Shadows.

00:35:32I know that I was just in London talking with their government.

00:35:35I think there's some public lack of clarity around how they're

00:35:39using the Storm Shadows.

00:35:40So maybe we can, I'll get an answer.

00:35:42We can talk about that off.

00:35:44That'd be great.

00:35:46Can you also talk about how the National Security Supplemental

00:35:50Bill has been important to advancing

00:35:53our own economic and national security interests?

00:35:58Yeah, thank you for that question.

00:36:00I testified before you just when the bill was first

00:36:04submitted last year.

00:36:06And I think there are a few key points.

00:36:08The most important is we are helping

00:36:10Ukraine fight for its freedom so that we

00:36:14don't have to have this fight there or sometime later.

00:36:17And I come from a family that's had several generations

00:36:20of adults men before me fight, and in some cases

00:36:23die, in European wars.

00:36:25So I appreciate how much that means to us.

00:36:29The second thing is that has a direct economic impact

00:36:33on the United States.

00:36:34So just one thing.

00:36:36Senator Ricketts and I are both from Nebraska.

00:36:39Grain prices, and I know it's not a great year for farmers

00:36:42now anyway, but for 150 years, they've

00:36:45been really decided by the back and forth

00:36:47between the American Midwest and Ukraine's exports

00:36:51through Odessa.

00:36:52Like that's kind of the fundamentals

00:36:55of the global grain market.

00:36:56And so if we allow Russia to control the Odessa

00:37:01or to control Ukraine's grain markets,

00:37:04then we have Russia in control of more than 20%

00:37:07of the global grain market, able to dump it at low prices

00:37:10when it wants or sell it at high prices or take away by.

00:37:13Like that's the kind of monopoly against us

00:37:18that we really don't want to see.

00:37:20And then finally, a lot of the money in that bill

00:37:24is spent in the United States in order

00:37:27to make the things that Ukraine needs.

00:37:29So I think $30 billion was dedicated

00:37:32to buy things made in the US.

00:37:35Another $15 or so billion was spent

00:37:37so that we were able to provide the kind of advice

00:37:41and assistance that Ukraine wanted.

00:37:43And that's not profiteering.

00:37:45That's buying the best stuff in the world

00:37:47and putting it to the best possible use.

00:37:50And while we're still on this topic,

00:37:53can you also talk about how much our European allies

00:37:57have contributed to the war in Ukraine?

00:37:59Because I think there's a misperception in some quarters

00:38:02that the United States has given all of this equipment

00:38:07and support and Europe has not done much.

00:38:10So the basic numbers, ours are,

00:38:13and we'll get you the precise numbers.

00:38:15I've got them in my voluminous materials.

00:38:18We've provided around about $87 billion

00:38:21of humanitarian, economic,

00:38:23and security assistance to Ukraine.

00:38:27Our European allies alone have provided around,

00:38:31what is it, 110 billion to this point?

00:38:34And that doesn't count much of what they have done

00:38:37for Ukrainians.

00:38:39There've been millions of Ukrainians

00:38:40have made second homes or first homes in Poland, Germany,

00:38:45and in other countries across Europe.

00:38:47And that money's in addition.

00:38:49So we see our European allies spending

00:38:52much more than we are.

00:38:53And going forward, the Europeans have committed

00:38:57to spend a great deal of their money on defense

00:39:01to support Ukraine.

00:39:03So it's just one example.

00:39:04In Germany, and Senator Ricketts,

00:39:06you mentioned a concern about Germany,

00:39:08they are strong backers of the plan

00:39:10to spend some of the Russian sovereign asset,

00:39:14windfall profit, with Ukraine.

00:39:17And they say a majority of that money

00:39:19likely will go for munitions.

00:39:21And frankly, a lot of that will be spent

00:39:24on American munitions,

00:39:25because ours is the best stuff available.

00:39:27But that's not the purpose,

00:39:29but that is what happens when the Europeans

00:39:32come to support Ukraine.

00:39:35Senator Ricketts.

00:39:37Great, thank you, Madam Chair.

00:39:38I wanna keep building upon one of the things

00:39:40we touched upon a little bit earlier

00:39:41with regard to missiles.

00:39:43At the Washington NATO Summit,

00:39:46the Biden administration announced

00:39:47they're gonna start deploying long-range missiles

00:39:49to Germany beginning in 2026.

00:39:53Secretary, do you agree

00:39:54that deploying these conventional missile systems,

00:39:56capable of threatening military targets

00:39:58deep inside of Russia,

00:39:59strengthens NATO's defense posture

00:40:01and complicates Russian planning efforts?

00:40:04Absolutely.

00:40:05So since Putin began his illegal war in Ukraine,

00:40:08Russia's fired numerous cruise and ballistic missiles

00:40:12into Ukraine, oftentimes targeting civilians

00:40:15from deep inside Russian territory.

00:40:17The Biden administration has actually prevented Ukraine

00:40:21from using a lot of the U.S. weapons

00:40:22to strike back at these military targets in Russia.

00:40:25In May, the administration reluctantly

00:40:27eased some of these restrictions,

00:40:28allowing HIMARS strikes on targets

00:40:33across the border as Russia was posing

00:40:35a significant threat and making gains in Kharkiv.

00:40:38However, these restrictions on Ukraine's use

00:40:39of long-range attack on targets inside of Russia remain.

00:40:43If deploying long-range missiles in Germany

00:40:47is critical to NATO's deterrence

00:40:48by threatening military targets deep inside of Russia,

00:40:51then why doesn't the same logic apply to Ukraine

00:40:53and its ability to do the same with U.S. weapons

00:40:55and other Western-provided weaponry?

00:40:58Why shouldn't they be allowed to strike

00:41:00these targets inside of Russia?

00:41:02Senator, I think some of this is probably best

00:41:05for a military briefing,

00:41:07but I'd just say as a general principle,

00:41:09we want Ukraine to use the weapons it has

00:41:13in the places they can do the most damage.

00:41:15For the last several months,

00:41:17that has been driving Russian firing positions back

00:41:21and denying it the ability to use Crimea

00:41:23essentially as a giant aircraft carrier

00:41:26threatening Ukraine.

00:41:28And Ukraine's been incredibly successful

00:41:31in that as a strategy.

00:41:33What the president said, and when asked about this

00:41:36at the end of the NATO summit,

00:41:38was that we'll continue to talk with Ukraine

00:41:41about the best way to use the weapons,

00:41:43given the situation on the battlefield at the time.

00:41:47Well, you know, at the NATO summit,

00:41:49the president, I think, also said,

00:41:51when he was defending his unwillingness

00:41:52to expand this policy, saying,

00:41:54if Zelensky had had the capacity to strike Moscow,

00:41:58strike the Kremlin, that wouldn't make sense, would it?

00:42:00But to your knowledge, is Ukraine asked

00:42:03to be able to use U.S. weapons to strike Moscow?

00:42:06If I knew that, I couldn't talk about it in this setting.

00:42:12No, I think the conversation that happens

00:42:15in military channels is very professional

00:42:20and focused on the actual situation in the battlefield.

00:42:23And again, we are looking for the use of these weapons,

00:42:26which there's not an infinite number of these weapons,

00:42:28so we're looking for them to be used

00:42:31in the sequence that does the most damage

00:42:33and in the places that will protect the most people.

00:42:39Where I'm going with those, not necessarily military,

00:42:41what I'm talking about is, how do we deter Russia

00:42:44from these kinds of things in the first place?

00:42:47And if we believe that having long-range weapons

00:42:50is gonna help deter Russia, and we give Ukraine

00:42:53the ability to start striking targets deep inside of Russia,

00:42:56doesn't that seem to make sense,

00:42:58that would also help deter Russia?

00:43:00And if we provide them the ability to do this,

00:43:03doesn't mean that they even have the capability

00:43:05to strike Moscow, but would give them the ability

00:43:09to strike targets such as air bases, ammunitions,

00:43:12and all that sort of thing, that would help us there.

00:43:14And my question would then be,

00:43:16by allowing some of these things,

00:43:18are we seeing a significant escalation from Putin?

00:43:21Do we see that with some of these things?

00:43:24We're seeing an escalation from Putin

00:43:25if we're giving the Ukrainians more freedom

00:43:27to be able to prosecute the war?

00:43:31To this point, the escalation we've seen

00:43:36from President Putin is a willingness

00:43:38to strike civilian targets,

00:43:41including children's cancer hospital,

00:43:45places that are known to be schools.

00:43:48So that is the escalation we're seeing.

00:43:52The reason we adopted the policy we have is,

00:43:56I know some people talk about escalation, ladder, concern.

00:44:01I've gotta say, inside the government,

00:44:04the conversation is about

00:44:05where can these things be effective?

00:44:08And Ukraine has its own weapons,

00:44:11which occasionally have been used

00:44:12to strike well beyond the limitations,

00:44:14even the physical limits, range limits,

00:44:17of the weapons the U.S. has.

00:44:20And there, they choose sometimes to use them

00:44:24in these long-range areas,

00:44:25and sometimes they focus nearer to hand,

00:44:28because that is the immediate need.

00:44:30And as the President said, we'll keep at this.

00:44:33Well, so what I hear you saying is that

00:44:35it's really not about the escalation,

00:44:36though the President said along the lines

00:44:39of it wouldn't be a good idea

00:44:40to allow Ukraine to be able to strike Moscow.

00:44:42So to me, that says that is about escalation,

00:44:44even though I don't believe Ukraine has plans

00:44:46to try to use our weapons,

00:44:48or even capability to strike Moscow with it.

00:44:52And I think what we ought to do

00:44:54is allow the Ukrainians to be able to fight this war

00:44:58so they can win by hitting those military targets

00:45:01deep inside of Russia, let them use the ATACMs

00:45:04in a way that can be the most effective

00:45:05as hitting those targets,

00:45:07and stop slow-rolling this,

00:45:10give them the opportunity to be able to win,

00:45:11and I encourage the administration to do that,

00:45:15because I think that's the fastest way

00:45:16to be able to get a victory here.

00:45:19So I've run over my time, I'll turn it back over.

00:45:22Thank you, Senator Van Hollen.

00:45:25Thank you, Madam Chairman.

00:45:26Mr. Assistant Secretary, great to see you

00:45:28and in your new capacity.

00:45:31Let me first say that given the limited time,

00:45:34there's some questions I'm gonna submit for the record

00:45:36regarding Cyprus and the fact that Turkey,

00:45:40under Erdogan, has made clear they do not wanna go back

00:45:44to UN negotiations, which, in my view,

00:45:50is something that the United States

00:45:52should be strongly opposing.

00:45:54I also wanna associate myself with some of the comments

00:45:56I understand Senator Cardin made

00:45:57with respect to Azerbaijan and Armenia,

00:46:00but I'd like to focus my questions on your current job

00:46:04and also the connection to your previous one

00:46:07on sanctions issues, and I understand

00:46:09we have some parliamentarians from Ukraine here.

00:46:12Great to have them with us.

00:46:15This morning, in the full committee,

00:46:16we had Deputy Secretary Campbell before us,

00:46:19and I asked him about our efforts to enlist support

00:46:23from our European allies, our NATO partners, EU members,

00:46:28also partners in East Asia, with respect

00:46:31to imposing sanctions on Chinese firms

00:46:36that are supporting the Putin war industrial complex.

00:46:40Not direct arms shipments, but high technologies

00:46:44that are helpful to them.

00:46:45Can you give us an update on how successful we are being

00:46:49in terms of getting our European allies to impose sanctions?

00:46:53Because, as you well know, they're far more effective

00:46:55when they're done collectively than alone.

00:46:59So, a couple of things, and Senator Ricketts probed

00:47:02on this topic, so we'll see if I improve the answer.

00:47:06The first thing is to have a clear political commitment

00:47:10to do so, and I think we've seen that over recent months,

00:47:14evident in the NATO summit communique

00:47:17that said China's the decisive enabler of this war,

00:47:21and we hear this privately from all our European colleagues.

00:47:25In Europe, the EU did put its first sanctions

00:47:29on some Chinese entities, it was a difficult process,

00:47:33but they managed to get through to it.

00:47:36We'll continue this work with them on all of the ways

00:47:40in which China keeps Russia on the battlefield.

00:47:43We see our European partners saying that they understand

00:47:49China is helping Putin build a military machine

00:47:52that threatens Europe.

00:47:54Now, there's a subtle distinction here

00:47:56in that sanctions are sometimes difficult for Europe

00:47:59because they require unanimity, and that allows one state,

00:48:03either out of actual disagreement or posturing,

00:48:07to disrupt or delay an entire package.

00:48:11There is room to do some work

00:48:12around the export control space,

00:48:14because that often, that just requires a qualified majority,

00:48:18and so there may be some activities there.

00:48:21Senator Ricketts asked when will we have the next package,

00:48:25and that's something I won't try to predict in this setting,

00:48:28but it is a process we work on every day,

00:48:30and we talk to our European colleagues about every day.

00:48:33Got it, no, I appreciate that,

00:48:35and look forward to following up with you

00:48:37on that other secondary mechanism that you talked about

00:48:40that doesn't require a unanimous agreement.

00:48:44On the oil price cap that we've now had in place

00:48:49a couple of years now, you know,

00:48:52my understanding from talking to Secretary Yellen

00:48:55and others at Treasury has been,

00:48:58overall, we have succeeded

00:49:00in driving down Russian oil revenues.

00:49:03They still have an awful lot of oil on the market,

00:49:05and countries like India and others are benefiting,

00:49:09but from the lower prices,

00:49:11but I know there's, this is always constantly something

00:49:15where there's efforts to get around our price cap,

00:49:18and that includes development of the Shadow Fleet tankers,

00:49:23and I know there's an ongoing discussion

00:49:25about whether or not we should take that next step,

00:49:28pursue more measures

00:49:30against some of the Shadow Fleet tankers.

00:49:32Can you talk about how we can make

00:49:34that price cap more effective?

00:49:37And I know it's partly in Treasury's jurisdiction,

00:49:40but also, obviously, in yours as well.

00:49:43It's a all-of-government approach.

00:49:47So our sense is that the price cap

00:49:49drives down the price of Russian oil

00:49:51by about $9 to $20 for each barrel.

00:49:55That's kind of on average,

00:49:56and obviously different grades

00:49:58and buyers may have a different result.

00:50:03That's largely because now Russia has to sell

00:50:07to two very large buyers who are savvy negotiators,

00:50:10China and India.

00:50:12So with that, we're lowering the amount of cash

00:50:15available to Putin.

00:50:17The harder side of the equation

00:50:19is that we believe we are driving up

00:50:21the expenses Russia has to export as well,

00:50:24so there's less profit.

00:50:26That's more difficult for us to get our hands on

00:50:28because of the opaque way that Russia sells its oil.

00:50:32One thing that is true is Russia and Iran

00:50:35have built these Shadow Fleets.

00:50:36They're almost entirely unregulated.

00:50:39A lot of our work over the last years

00:50:41has been to try to build a system of regulation

00:50:45to capture these ships,

00:50:46because the way sanctions work

00:50:48is that it's the insurance companies,

00:50:51the crew registries, the flag registries,

00:50:54who refuse to service sanctions violators,

00:50:57and these ships are old, creaky,

00:50:59and often without any of those protections.

00:51:02So we are layering in new requirements for ships,

00:51:06new warnings, port cities are beginning to refuse

00:51:10to accept certain ships.

00:51:12India did with a particular Russian tanker,

00:51:15and just yesterday, the UK and EU,

00:51:18after a lot of discussions with us,

00:51:21made some announcements about restricting access

00:51:23for the Shadow Fleet to their ports,

00:51:25and I can get you more information on that.

00:51:27And I think those are the kinds of things

00:51:29we'll be working on as we go forward.

00:51:31I appreciate that.

00:51:33As you say, you want to work at both ends of the equation,

00:51:36the expense as well as the profit end.

00:51:38Appreciate your efforts,

00:51:39and I look forward to following up.

00:51:42Madam Chair.

00:51:43Thank you, Senator Van Hollen.

00:51:45Secretary, Assistant Secretary O'Brien,

00:51:49one of the things you did early in your career

00:51:51was to help draft the Date and Peace Agreement.

00:51:55Now, 30 years later,

00:51:56I think the situation in Bosnia and Herzegovina

00:51:59is as dangerous as it has been at any time

00:52:01since that agreement was signed.

00:52:04And one of the big reasons for that

00:52:06is that Republika Srpska president, Milorad Dodik,

00:52:12continues to refuse to support

00:52:18a unified government in the country,

00:52:20continues to talk about seceding with the republic

00:52:25from the rest of Bosnia-Herzegovina,

00:52:28continues to deny the genocide in Srebrenica,

00:52:33and not much seems to be happening to him

00:52:37as the result of all of those efforts and antics.

00:52:41So can you talk about what we're trying to do

00:52:45to hold him accountable?

00:52:50Thank you for your consistent support

00:52:52of Bosnia and Herzegovina over the years.

00:52:56In general, in the Western Balkans,

00:52:58the last two years, there's a real opportunity

00:53:01that was never there in the time since Dayton.

00:53:04It's an opportunity to join at least a single market

00:53:08of the EU, but also have real progress toward accession.

00:53:13So I hope that we're able to see

00:53:16that our three NATO members in the region

00:53:20starting with Montenegro and Albania make real progress.

00:53:23So that will change the political situation

00:53:27in the region considerably.

00:53:29In Bosnia, a difficulty is that Dayton

00:53:32was really a ceasefire among three factions,

00:53:36each one at the time dominated

00:53:38as a kind of ethno-nationalist group.

00:53:42And we see Mr. Dodik has decided

00:53:44that's a good model for him.

00:53:45He doesn't want to be part of the single market

00:53:48or have more of the rule of law.

00:53:52Where I disagree with you

00:53:53is that nothing's been done to him.

00:53:56So he's largely isolated.

00:53:58He doesn't have political support

00:54:00when he talks about secession.

00:54:03Croatia openly says it won't recognize,

00:54:06and that's one neighbor gone.

00:54:07And quietly, Serbia says,

00:54:09no, we're not changing these borders.

00:54:11We stick by original Dayton.

00:54:13And you've seen now President Vucic

00:54:15begin to say something like that publicly.

00:54:17So Dodik is alone.

00:54:19And if you just listen to him

00:54:20in his most recent press conference today,

00:54:25the sanctions are battering his finances.

00:54:28And so he has less and less money.

00:54:31What he's forced to do,

00:54:33because he refuses to engage

00:54:35through the central government mechanisms

00:54:37that should be part of paying for governance,

00:54:39he goes and tries to borrow money

00:54:41from China, from Russia, from Hungary,

00:54:43and occasionally from Serbia.

00:54:46And that is becoming more and more difficult for him.

00:54:50He used to be able to get favored banks

00:54:52to run government bonds,

00:54:54and that, he complained today,

00:54:55is shut off to him because of our sanctions.

00:54:58So all of this has to come together

00:55:00in a political strategy then

00:55:02that says Bosnia and Herzegovina

00:55:05has the chance to move forward

00:55:07if they adopt the reforms

00:55:09that the EU is asking for the single market.

00:55:11They just missed their deadline last week

00:55:14because a different one of the groups

00:55:17sought a little extra advantage

00:55:18and wouldn't sign off on the package.

00:55:21But President Dodik is feeling a lot of pressure,

00:55:24and I think we can work using our sanctions,

00:55:27using the bond powers,

00:55:28and using the pressure of this EU accession

00:55:31to begin to change the political incentives.

00:55:34Right now, it rewards him.

00:55:35The more outrageous he is,

00:55:37he has to be rewarded.

00:55:38The more he delivers for his citizens.

00:55:41Well, I appreciate that.

00:55:42I think anything that we can do

00:55:46to encourage him to behave in a way

00:55:49that's more helpful to the central government

00:55:53and the people of the country would be positive.

00:55:57You talk about EU accession.

00:56:00Senator Ricketts and I,

00:56:01and some other senators during the NATO summit

00:56:05had a chance to meet with the prime ministers

00:56:06of Albania, Montenegro,

00:56:10and the foreign minister from North Macedonia.

00:56:13Maybe it was the prime minister of North Macedonia

00:56:16and the foreign minister of Montenegro.

00:56:18And what we heard from them

00:56:22was some real frustration with the EU accession process.

00:56:26Feeling like the boundary keeps moving

00:56:30in terms of what they're being asked to do,

00:56:32particularly with respect to North Macedonia.

00:56:35So can you talk about what more we can do

00:56:38to encourage the Europeans

00:56:40to actually make good on the promise,

00:56:43to help once some of the Western Balkan countries

00:56:47have done the reforms that were asked them

00:56:50to stop moving the goalposts

00:56:52and actually allow the accession to move forward?

00:56:58Yeah, and thank you for having that meeting.

00:56:59It was important to the countries.

00:57:01This is a bit of a problem.

00:57:03So the first, it's a daily challenge

00:57:06to be a friend of the process,

00:57:08while often not being part of the process.

00:57:11But it means encouraging countries

00:57:13to make painful reforms,

00:57:16political factions within countries

00:57:18not to make outrageous demands

00:57:19that would derail the progress forward.

00:57:23It also means suggesting alternative paths.

00:57:26So one thing I worked on in and out of government

00:57:29was an effort to bring countries

00:57:31into a common regional market,

00:57:33but also into the single market ahead of full accession.

00:57:38Because with accession,

00:57:39it's the sitting at the EU council table

00:57:41that's so problematic,

00:57:43whereas the economic side can come much earlier.

00:57:46And that now is the EU's policy with the growth plan.

00:57:50So that's an American effort that we support,

00:57:52or American encouraged idea that we fully support.

00:57:58And it brings reforms and benefits early.

00:58:01And then in the accession process,

00:58:03there are two kinds of problems.

00:58:04There's actually delivering the reforms

00:58:07that are required.

00:58:08And then there are good neighborly relations.

00:58:11So North Macedonia has suffered

00:58:14because of disagreements with its neighbors,

00:58:16which does change the requirements for it constantly.

00:58:20And part of our work diplomatically is to prepare a path

00:58:25so that it maintains the agreement it has with Greece.

00:58:29And I think your meeting and others

00:58:31have helped keep that there

00:58:32so that Greece becomes a friend

00:58:34of North Macedonia's path forward,

00:58:38rather than a critic.

00:58:39Same with Albania.

00:58:40But also the main issue is an agreement

00:58:44North Macedonia has with Bulgaria.

00:58:46And once Bulgaria has a more stable government,

00:58:50there will have to be discussions

00:58:51about the exact way that gets implemented.

00:58:54So that'll be an area where I expect us

00:58:56to be very active as well.

00:58:59Senator Ricketts.

00:59:02Secretary, as the leaders were meeting in Washington

00:59:04for the NATO summit,

00:59:06the People's Republic of China and Belarus

00:59:09were holding military exercises

00:59:10just a few miles from the Polish border.

00:59:13And I might note Belarus is the newest member

00:59:16of the Shanghai Cooperation Organization as well.

00:59:19This signals not only increased cooperation

00:59:21between the PRC and Belarus,

00:59:23but also China's increased ambition militarily in Europe.

00:59:29And since 2015, the PRC and Russia

00:59:32have had joint naval exercises,

00:59:34both in the Mediterranean and in the Baltic Seas.

00:59:37The PRC is using dual use activities

00:59:40and partnering with Russia to expand its military presence

00:59:43and capabilities in the Arctic region.

00:59:44In fact, now it's declaring itself an Arctic power.

00:59:48What is this China participation in these exercises

00:59:52so close to NATO's border during the NATO summit signal

00:59:56about its military ambitions in and around Europe?

01:00:00I think for the interpreting China's perception of this,

01:00:03and I send you back to Deputy Secretary Campbell,

01:00:07who has a lot more insight to that than I do.

01:00:10So I'll get back to you with an answer on that.

01:00:13But what I will say is it was the most counterproductive

01:00:16thing China could do if it was attempting to say

01:00:21to our European partners that China poses no threat.

01:00:26So China's entire strategy coming out of COVID

01:00:30was to separate the US from our European partners.

01:00:33And with actions like that,

01:00:35it has told them that China is an active threat.

01:00:39So it makes it much easier for us now to advance issues

01:00:43like trusted vendors,

01:00:45like making sure critical infrastructure

01:00:47is free from surveillance

01:00:49and from illegally subsidized goods.

01:00:53All of the things that we have been working

01:00:55across administrations on,

01:00:57we are able now to make the case because of what China did.

01:01:01What possessed them to think this was a real show

01:01:05of strength, I think, is something I'll get back to you

01:01:08with an answer on, I don't want to speculate.

01:01:09Well, I also want to build on that just a little bit as well

01:01:11with regard to these military exercises.

01:01:14Was this something that is reducing Russia's

01:01:17sphere of influence in Europe?

01:01:19Or is this something that Russia's military

01:01:21or is this something that Putin and Xi coordinated

01:01:25as part of their no limits partnership?

01:01:27I mean, is this something that was planned?

01:01:29How do you assess that?

01:01:32I don't know what discussions they had on this

01:01:36and we'll get back to you on that.

01:01:38I think it's hard to imagine that if

01:01:43President Xi wanted to assert his power in Europe

01:01:48or assert a new capability,

01:01:50that seems an odd thing to do over the objections

01:01:55or to the surprise of President Putin.

01:01:57But why don't we, we'll get you something more.

01:02:00What about Belarus's entrance into the SCO?

01:02:03What are the implications for that?

01:02:06Yeah, it's a suggestion that Belarus wants to be part

01:02:09of this block that is not moving away from Russia.

01:02:13I think part of our effort with Belarus is to make clear,

01:02:17remember just a few years ago,

01:02:18the people of Belarus opposed the stolen election

01:02:23and went out in the hundreds of thousands

01:02:26and there are 1500 political prisoners left

01:02:29when we try to get out of prison regularly.

01:02:32There is a very active democracy movement in exile

01:02:37with, we think, a legitimate president.

01:02:39And we strongly support their efforts to prepare Belarus

01:02:43for the day when it, like Ukraine has,

01:02:46turns against this Russian effort

01:02:48to create an Easter-ward-looking block.

01:02:52President Erdogan recently said Turkey

01:02:54was interested in joining the SCO.

01:02:55What would that mean for a NATO ally to join that

01:02:58and what can we do to discourage that?

01:03:02Well, so Turkey is a very interesting ally.

01:03:06We have, at the moment, really effective cooperation

01:03:09in a number of fields.

01:03:12And a move like that would be very difficult to accept.

01:03:17So I don't know what he had in mind,

01:03:19if there was some element of it.

01:03:21We haven't seen a serious sign, at least expressed to us,

01:03:24and we've been very clear that sharing the kinds

01:03:28of information that NATO allies have to share

01:03:30with each other is incompatible

01:03:32with the belonging to some other group.

01:03:36The same thing with Turkey,

01:03:38its primary trading partner is Europe.

01:03:40That's 70% of its trade.

01:03:43It's in a customs union with Europe.

01:03:44So joining a trading group that looks another direction

01:03:48is incompatible with the undertakings it's already made.

01:03:52And I think, I don't know if that was just

01:03:55a rhetorical slip or more,

01:03:57but it's not something that would be easy to tolerate.

01:04:00So by your comments, though, I take it we have been

01:04:02in engagement with President Erdogan

01:04:03with regard to the things you just covered

01:04:05about why that would be unacceptable for a NATO ally.

01:04:09We speak with Turkey often on a lot of subjects,

01:04:13and I think in the last months,

01:04:15we've been very effective in having discussions,

01:04:19even about issues where we disagree,

01:04:21and I'm encouraged by the direction of the partnership.

01:04:24So a step like that is one that would be hard

01:04:26to reconcile with where we're headed.

01:04:29Great, thank you very much.

01:04:32I would like to do one more round of questions.

01:04:34I'm not sure what Senator Ricketts would like to do, but.

01:04:39Well, I got lots of questions.

01:04:42I was hoping I had tired you out.

01:04:45Nice try.

01:04:48Since you mentioned Belarus,

01:04:50one of the concerns I wanted to raise

01:04:53is that Lukashenko has allowed Belarus

01:04:58to be used by Russia to transfer Ukrainian children

01:05:02kidnapped from their families in Ukraine

01:05:04through Belarus and into Russia.

01:05:07Are we working with Ukraine and our European partners

01:05:10to track those Ukrainian children who have been kidnapped?

01:05:14And I use the word kidnapped

01:05:16because I think the term that's being used

01:05:19is the filtration of Ukrainian children,

01:05:21which I think is very much underplays

01:05:27what's really happening.

01:05:28These are children who have been kidnapped

01:05:30from their families, and can you speak

01:05:33to how Belarus is contributing

01:05:34to Putin's efforts in that respect?

01:05:37Yeah, the particular issue was that

01:05:39at least a few summers ago, Belarus ran summer camps

01:05:43for Ukrainian children who were taken from their families

01:05:47and then later often renamed as Russian

01:05:50and forcibly adopted.

01:05:52And as far as I know, Belarus continues

01:05:55that kind of engagement.

01:05:58So this is a crime.

01:06:00It's in fact the reason that President Putin

01:06:02was indicted by the International Criminal Court.

01:06:06We work to promote accountability for Russia's crimes

01:06:10through a number of mechanisms,

01:06:12both ones that are established

01:06:13by certain international bodies and Ukraine's domestic ones.

01:06:17So we try to provide support to Ukraine's activities

01:06:21wherever we can, including with the children.

01:06:24I'm happy I can get you a more comprehensive breakdown.

01:06:27But I think that this is a great example

01:06:31of why this war matters.

01:06:34The people who say we should have peace now

01:06:37are signing up for everyone in the occupied territories

01:06:41being filtered into becoming Russian citizens.

01:06:44So we saw in Bucha, that meant torture and random killings.

01:06:48We see thefts of children.

01:06:50And we see then thefts of property and grain

01:06:53and resettlement of Russian populations

01:06:56into occupied territory.

01:06:58All of those are crimes.

01:06:59So peace is not quiet.

01:07:02Peace is a violence that goes on by a state

01:07:05against the citizens who live there.

01:07:07And that I think is unacceptable.

01:07:10I totally agree and I appreciate

01:07:11your being so focused on that.

01:07:17I'm also very concerned about Georgia,

01:07:20about the backsliding in Georgia,

01:07:22about the Georgian parliament's passage

01:07:24of the foreign agents law

01:07:27that is really mirrors a similar Russian law.

01:07:33They've done that despite the opposition

01:07:35from the Georgian people.

01:07:38Now, can you, I think it's really important

01:07:41that we are clear, and I think we have been in Congress,

01:07:45there is bipartisan opposition

01:07:47to what's happening in Georgia.

01:07:49And I hope that the government of Georgia

01:07:52understands that this is a bipartisan issue.

01:07:57But I think it's important that our government

01:07:59use the authorities at its disposal

01:08:02to impose financial sanctions on individuals

01:08:05who are responsible for corruption

01:08:06and other actions that have contributed

01:08:08to the situation there.

01:08:10Can you provide an update on this effort

01:08:13and where we are in that,

01:08:15and whether there's more that Congress should be doing?

01:08:18Yeah, this was an issue we discussed

01:08:26in my confirmation hearing last summer.

01:08:29I think it was a year ago, just a couple days ago.

01:08:33We seem to have in Georgia some elites

01:08:35who are looking for a different population.

01:08:38They are turning their backs on a path to EU and NATO.

01:08:43This party, in fact, wrote commitments

01:08:47to join the EU and NATO into their constitution,

01:08:51and now is turning the other direction.

01:08:54And why is a little bit difficult to sort out.

01:08:59So we are trying to be very clear about what must be done

01:09:03and how important it is.

01:09:06Because Georgia is asking to join clubs,

01:09:09one of which we are a member,

01:09:11and the other one is our key partner.

01:09:14And they don't get to rewrite the rules of those clubs,

01:09:17so they get to join.

01:09:20Now, we are first off reviewing

01:09:22all of our assistance to Georgia.

01:09:25We very much want to support everything

01:09:27that will contribute to free and fair elections this fall,

01:09:30when they have parliamentary elections.

01:09:34But we need to make clear to the party

01:09:37that there will be real competition.

01:09:39We've already postponed a major military exercise,

01:09:42and we'll continue to review what we are doing

01:09:46as opportunities arise.

01:09:48And I expect we will have something to say about that soon.

01:09:52The EU has said that Georgia's path to joining the EU

01:09:56is largely suspended now,

01:09:58and that may be then formally reviewed

01:10:00in a couple of months.

01:10:02You asked about sanctions.

01:10:03We are actively considering our options there.

01:10:07I won't preview anything.

01:10:09But we are looking at it.

01:10:10It's not only those who benefited from corruption,

01:10:13but those who are involved in violations of human rights,

01:10:17as under the Global Magnitsky Act

01:10:19that Chairman Cardin has championed for so long.

01:10:23But all of those, we have announced a policy

01:10:27that restricts access to the United States

01:10:30already in that area.

01:10:32Two things.

01:10:34One is, it should be clear to the governing party in Georgia

01:10:39that there is a path back,

01:10:40that having free and fair elections

01:10:43without violence against civil society,

01:10:47making whatever transparency requirements they want,

01:10:51this foreign agent law,

01:10:52make it compatible with EU law

01:10:55rather than compatible with Russian law,

01:10:58and not have China develop a deep water port in Anaklia.

01:11:03These are steps that are really important

01:11:06for Georgia to take.

01:11:08Now, what can Congress do?

01:11:09I know you're developing legislation,

01:11:12and when that makes its way through the process,

01:11:15we'll, of course, work with you on this,

01:11:18just as we'll work with you

01:11:19on the broader Black Sea strategy,

01:11:20where Georgia could be an important part

01:11:22if it's a reliable partner.

01:11:25But I also, I wanna praise the effort

01:11:28of members of Congress to get out there

01:11:30and deliver the message that, on a bipartisan matter,

01:11:34longtime friends of Georgia

01:11:35believe this is the wrong path.

01:11:38A year ago, we saw signs of the wrong path,

01:11:41and then the governing party reversed its course

01:11:44and made enormous strides,

01:11:46and I'm hopeful that that can happen again

01:11:48in the next months.

01:11:50Well, thank you, I appreciate that.

01:11:52It's particularly hard to understand

01:11:55why the government is taking this approach,

01:11:57given how much of their territory

01:11:59is being occupied by Russia,

01:12:03and what I heard in the time that I was in Georgia

01:12:07was great concern about the security

01:12:10of the rest of the country from Russia,

01:12:12about the poverty and the depression

01:12:17of human dignity and benefits and rights

01:12:21that existed in South Ossetia and Abkhazia,

01:12:26and so it's really hard for me to understand

01:12:30why the government isn't listening

01:12:32to the people of Georgia who clearly don't want

01:12:35the path that they're headed down.

01:12:37And I should have mentioned,

01:12:38I think you're absolutely right,

01:12:39the one group that seems very happy

01:12:41about this turn is Russia.

01:12:43If you look at the recent statements

01:12:45by their chief propagandists,

01:12:47they are welcoming this turn,

01:12:49and Russia has moved its Black Sea fleet into Abkhazia.

01:12:53So the suggestion by the leadership

01:12:57that this is a neutral move is, I think,

01:13:00belied by what's happening.

01:13:03Senator Ricketts.

01:13:05Mr. Secretary, when you mentioned Bucha,

01:13:07you reminded me, you were talking earlier

01:13:09about the escalation from Russia in targeting civilians,

01:13:14but Putin was targeting civilians

01:13:17from the moment this war began.

01:13:19It's not an escalation for them to start firing

01:13:21at schools and hospitals and things like that.

01:13:23They've been targeting the civilian population

01:13:24since this war began, since they invaded Ukraine.

01:13:29And since the invasion of Ukraine,

01:13:31they've had this no-limits partnership with China.

01:13:34And we've seen European relations shift

01:13:37with regard to the PRC.

01:13:39However, Europe is slowly awakening to these threats

01:13:43that the PRC poses to European security,

01:13:48and understands now that they've got to de-risk.

01:13:50It's the policy to support Taiwan

01:13:51has been a little bit slower to materialize

01:13:53than some of us would hope.

01:13:56And despite the fact that PRC's malign aggression

01:13:58and hostile rhetoric towards Taiwan

01:14:00has only increased many European countries,

01:14:02are reluctant to outwardly show support for Taiwan.

01:14:06It's possible Xi takes military action

01:14:08against Taiwan this decade,

01:14:09but it still remains uncertain

01:14:11what Europe's response will be.

01:14:13And that's why I introduced the Bolster Act

01:14:15with Senator Xi Jinping,

01:14:17which aims to increase the coordination

01:14:18with the EU and European countries

01:14:21on sanctions in various Taiwan contingencies,

01:14:24and encourage stronger European support

01:14:26for Taiwan's democracy, economy, and self-defense.

01:14:30As part of her bid for a second term

01:14:32in the European Commission,

01:14:33President Ursula von der Leyen said,

01:14:36she was very clear, she said,

01:14:37she will deploy the full range of EU combined statecraft

01:14:41to deter China from unilaterally changing the status quo

01:14:44by military means, particularly over Taiwan.

01:14:47How do you assess both the EU

01:14:49and individual European governments' evolving postures

01:14:51toward the threats posed by the PRC

01:14:55and toward Taiwan?

01:14:58How do you see this going?

01:15:02Thank you, Senator.

01:15:03I'd say it's a work in progress,

01:15:06but moving the right direction.

01:15:08And I wanna thank you for your strong advocacy

01:15:12of having our European allies and partners be with us

01:15:16as we stand up against security threats in the Asia Pacific.

01:15:21So we saw at the NATO summit,

01:15:23the one session that was not about Europe

01:15:25was about the Asia Pacific

01:15:27with New Zealand, Australia, Korea, Japan there.

01:15:30And the increasing comfort and communication,

01:15:34cooperation that we'll see in those areas,

01:15:37I think will make it easier to have discussions

01:15:40about the threat posed by China.

01:15:43We obviously will stand with Taiwan.

01:15:46Our policy is very clear,

01:15:48and there's been no wavering on that.

01:15:51I think a measure of how far Europe has come

01:15:55when the Biden administration began,

01:15:58it was part of the official EU agenda

01:16:01to have a new investment treaty with China.

01:16:06And this was after years of American criticism

01:16:09of European work with China.

01:16:12That stopped soon after,

01:16:16I think in part because of strong American engagement.

01:16:19And now you have President von der Leyen

01:16:22making clear that it'll be EU policy to stand with Taiwan.

01:16:28And for that kind of a change in just a few years

01:16:32is I think a remarkable statement

01:16:34of what focused leadership and attention

01:16:37to the kinds of problems China poses can bring.

01:16:41And so what are some other things we can do

01:16:43to encourage the EU to continue down this path

01:16:46of de-risking with China?

01:16:48And what are some of the things we can do

01:16:50with NATO along the same lines?

01:16:52So for example, there had been talk

01:16:54about opening up an office, for example, in Japan

01:16:57for NATO to be able to help increase communication.

01:17:01Can you give me some examples of things

01:17:02that the administration wants to push forward

01:17:05on both the EU level and the NATO level?

01:17:08So on NATO, I think coming out of this NATO summit,

01:17:12we now have agreement

01:17:14on a much more robust Asia-Pacific engagement strategy.

01:17:17We agreed on four, we call them flagship projects,

01:17:21that will allow allies to get comfortable

01:17:24working with our key partners in the Asia-Pacific.

01:17:29And these touch on areas that may seem removed

01:17:33from the immediate kinetic threat,

01:17:35but actually are very important

01:17:37for the way that we work together.

01:17:39So areas like cyber, actually, frankly,

01:17:44battlefield medical care,

01:17:46and several other items like that.

01:17:48Whether that will turn into some institutional framework

01:17:51like an office is something we'll have to keep talking about

01:17:54within the alliance.

01:17:56With the EU, we have a really active discussion

01:18:00about the approach toward China.

01:18:01And I've already indicated one of the key markers

01:18:04is where do people look for investment?

01:18:06I think President Xi's trip to Europe this past May

01:18:10produced some reams of paper,

01:18:12but very little in the area of actual investments.

01:18:17And so keeping Chinese investment

01:18:20away from critical infrastructure,

01:18:22working toward trusted vendors,

01:18:24working with our European partners

01:18:26to develop alternatives to Chinese technology.

01:18:29I mean, one of the real problems we had

01:18:32was allowing cheap Chinese technology

01:18:34to become the industry standard,

01:18:36all the way from renewable energy to telecommunications.

01:18:39And now we're addressing that,

01:18:41and that's part of the investments

01:18:43in our own manufacturing base.

01:18:45So with that, we can show ordinary European citizens

01:18:49the benefit of bringing the jobs home, the work home,

01:18:52and keeping it in this sphere

01:18:54where we share a platform, share an agreement

01:18:58with our European partners,

01:18:59as well as Canada, Japan, Korea, Australia, New Zealand.

01:19:03That space is where we can make enormous strides

01:19:06with the EU.

01:19:09Thank you very much, Assistant Secretary O'Brien.

01:19:13I think both Senator Ricketts and I

01:19:15could spend all afternoon with questions

01:19:17and back and forth, but we won't.

01:19:19I'm willing.

01:19:21We have votes coming up soon,

01:19:23and so we will have to let you go.

01:19:26But I wanna, again, thank Ranking Member Ricketts

01:19:29for his partnership on this issue and this hearing.

01:19:33Thank you to Assistant Secretary for your testimony

01:19:38and to all of the senators who were here

01:19:39with the questions.

01:19:41The record will remain open until the end of the day

01:19:43tomorrow, Wednesday, the 31st of July.

01:19:47Again, thank you.

01:19:48This hearing is now closed.

01:19:51Thanks to you.

Jeanne Shaheen Leads Senate Foreign Relations Committee Hearing About The Future Of Europe

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