Google, China and U.S. Foreign Policy

Now that Google has stepped out and taken an aggressive stance against the government of China, arguably the second or third most powerful country in the world, we may be witnessing a new stage in U.S. international relations.
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Sitting in the lobby of the Taj Hotel in Mumbai, reading the front page of the local Economic Times, I was hit with a one-two-punch: the news that Google may quit the huge Chinese market in a dispute over serious cyber attacks to its facilities in the PRC, and the feeling that I was watching the opening salvo of a new, major trend in American foreign policy that has been quietly building for several years. The reality is that Google and the other huge information and communications (ICT) companies that now dominate the U.S. economy have always punched below their weight in foreign affairs. But now that Google has stepped out ahead of the pack and taken an aggressive stance against the government of arguably the second or third most powerful country in the world, we may be witnessing a new stage in U.S. international relations: what might be called Silicon Valley's new foreign policy.

For the Indians, it was a geo-strategic and geo-economic question of whether a Google - US. - China fracas would open up space for India to attract more foreign investment from the West as a safer haven than China, and whether Indian firms could jump into the market, too. Some of the four or five articles in the paper also wondered if this weakened or strengthened the hand of the Obama administration toward China. For Americans, this is also an important story, but one that most U.S. commentators have missed. Most of the American press reports focused on Google's impact on markets and politics inside China. But they ignored what may be the biggest really important story, which is Google's impact on the future of U.S. international relations in the coming decades.

Historically, a nation's foreign policy reflects the perspective of the core economic sector at any moment in time. Throughout most of the nineteenth century, America's agricultural interests dominated foreign policy, and the great debates were over duties and tariffs on imported and exported farm products. In the industrial age, U.S. Steel, Ford and International Harvester (and their bankers and lobbyists) were big players in the halls of Congress, in D.C.'s "Gucci Gulch," the Council on Foreign Relations and the think tanks.

Now, in today's information economy, the content producers -- movie makers, software companies, gaming and even educational services -- rule the market. However, though these companies are today's economic heavyweights, they haven't packed as much punch in international affairs as their agricultural and industrial predecessors. The major exception has been the cowboy behavior of the big movie studios, which have had decades to hone their domestic and international political skills through bodies like the Motion Picture Association of America led by legendary figures like Jack Valenti. Their lobbying skills helped re-write U.S. copyright laws to extend the privileges of copyright holders internationally. But even the MPAA hasn't been as aggressive or effective abroad as one might expect. Meanwhile, in Silicon Valley, Microsoft has developed some clout, but mainly through the Gates Foundation's visibility in developing countries. Most of the major foreign policy concerns of the big companies like Microsoft, Intel and Cisco have been conventional matters such as market access, security, privatization, and intellectual property rights. Overall, the foreign policy lobbies in Washington are decidedly old school. A quick indicator: the auto industry maintains scores of lobbying offices in Washington. As recently as two years ago, Google and other ICT companies had less than a dozen.

The new contenders in the rising information economy sector of the late twentieth and early twenty-first century has been hands-off for a variety of reasons. Their sparse presence in Washington First, for the risk-taking founding fathers of the Silicon Valley firms, government is -- at best -- a necessary evil. Second, the 3,000 miles separating them from Washington places congressmen and agency heads out of sight and out of mind. Third, satisfying local U.S. demand has proven challenging enough without getting involved in the foreign market, even as it became clear that foreign sales were contributing to growing shares of total revenue and profit. Rarely did the captains of the new digital industries, or their senior staffs, deign to show up for meetings of the Council on Foreign Relations in New York nor the Pacific Council on International Policy in LA. Finally, the 'digital media' companies are a pretty heterogeneous bunch -- there are equipment makers like Cisco, software makers like Microsoft and search engine firms like Google. Intel produces chips, and Dell produces computers. This is not your granddaddy's Detroit where a collective of automobile makers could more easily agree on the protectionist and promotional policies they wanted Washington to enact.

A consequence of the digital economy's timidity is that the U.S. foreign policy agenda has not changed very much in substance or tone. But now, if other major content producers follow Google into the ring, the strategic and diplomatic gravity of big Silicon Valley firms may finally match their economic weight. Of course, traditional matters like military strategy, state-to-state diplomacy and the like will always remain important elements of a nation's statecraft. But moving forward we may see a couple of changes that suggest we have reached an inflection point.

First, changes in substantive issues. The high tech companies are clearly engaging in issues of real sensitivity for all parties -- freedom of information, freedom of speech and the like are increasingly central to the international policy agenda, pressed partly by the boundary-breaking technologies of Twitter and blogs. Second, there may be some process changes too. Google was willing to take bold steps on sensitive issues that in some ways outflanked the Obama administration. It's interesting to note that in a long-planned speech by the Secretary of State on international technology issues including the Internet, Ms. Clinton used some of the harshest language to date directed at China's leaders. We have to assume Google's independent moves ratcheted up the temperature of her remarks; the leaders of the PRC noted as much and launched their own salvo against US interference in their affairs. Third, Google's action has prompted a lot of conversation among the groups that see themselves as stakeholders in these issues -- human rights organizations, think tanks, universities and big corporations. New multi-stakeholder organizations like the Global Network Initiative, which has been quietly meeting for several years seeking ways to align the different perspectives of companies and human rights groups, may feel emboldened to become more assertive in their engagement with U.S. foreign policy.

We can only imagine the future contours and content of Silicon Valley's new foreign policy. But it is worth looking at how the economic information and communication powerhouses will pursue their international interests. What would their new activism mean for trade policy? Security affairs? Regional policies? Does this buttress 'public diplomacy' policies of governments, or make them less relevant? Stay tuned to find out.

There's been a lot of talk about the impact of Google's actions in China. The biggest impact of their policy innovation may be right here in the US of A.

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