responsible for bringing us here today. this program is at the center of one of the great debates in american politics today which is how to craft economic strategy in a more dangerous world. what level of trade and economic integration is important to our national service and which is important to commanding our innovation today. u.s., and what level of resilience is necessary in what industries and technologies, what is the right mix of subsidies, tax incentives, protection, investment, and export restrictions. we were the leader -- the u.s. we were the leader -- the u.s. the u.s.a. was theth leader in e first microchips. 's, and that waa mixture of private capital and government support. a messy mix, a messy process

that would change what we think we know -- challenge what we think we know about governments and markets and what works and what doesn't. we gave up part of it in manufacturing, and we are now in the process of trying to figure out how to regain the ability to build a meaningful share of the world's mr. vance chips in the u.s. this -- world's most advanced chips in the u.s. this is complicated and hard and consequent. we have three great people together through the topic. mike schmidt, who is responsible for deciding how to allocate the dollars and the terms and conditions of the grants. chris miller is the author of "chip war," the definitive, excellent history of how we got here. and greg ip is correspondent for "the wall street journal," and he will moderate. [applause]

greg: it really is a privilege to be appeared to be speaking to chris and mike, 2 excellent people have gotten to know studying this topic. my last hands-on experience with chips was their use ago when i was editor of our college paper and i got to open an open take the memory card out. since then i've basically blank on everything related. but i corrected that problem by picking up chris's book. i paid him the ultimate compliment, irc went and bought the book --i actually went and bought the book. it is very informative and readable. i want the question about how we care about semiconductors so much. we make a lot of things can we outsource a lot of things. international trade is about specializations. how are chips different from oil, cars? how are semiconductors special

and why do we have to have a domestic supply of these things when we don't feel that way about anything else? >> chips are like oil in some ways and that everything relies on them. we need energy for every aspect of our economy and we need chips for every aspect of the manufacturing base, for microwaves to dishwashers to a new car, which has an average of 1000 chips inside. it is basically everything manufactured which one often requires. but they are different from oil in an important way, which is that oil is basically all the same, whereas chips are all different. there are different types of chips produced by different factories. some factories produce one, other countries produce others. you dig into the supply chain of chips, they found that they were sourcing chips from dozens of companies in a number of different countries, and they found that the world is increasingly reliant on a smaller number of countries that provide their chips, and the most important example is taiwan which produces 90% of

chips, in your phones, pcs, data centers. and 100% of the gpu chips that make artificial intelligence possible. there is no other industry that is simultaneously critically important to the entire economy and concentrated in one country. greg: why is it important that we have our supply in the? chris: my view is if there are multiple suppliers that are resilient, we don't have to worry about earthquakes or wars, i would be much more comfortable even if they weren't produced in the united states. but that is not the reality. there is one company and one country producing all of them, and that is a situation that becomes even more concentrated as time has passed. we have more concentration today than we did a couple years ago. it is a we government policy that is going to change. greg: speaking of government policy, you and i have talked about it a number of times over the years. why is it important that the

united states has its own supply chips and not relying on family countries? --friendly countries? give us a progress report on how the program is doing. michael: i like chris's frame. i think the goal is a more resilient global supply chain. and then the question is what is the u.s.' role in achieving that outcome. the way think about it is the u.s. has a really important role to play. why? we are a big part of a global economy, about a quarter of the global economy. so that is just an important starting point. and then we have tremendous national assets to bear on solving the problem. tremendous workforce, abundant natural resources, and very importantly, we are the location of the world's major buyers of chips, particularly on the leading edge.

so all of that works together to say the united states has a really important role to play, and being a source of more diversified global supply chain. and i think you are seeing that in how the chips program is unfolding. i think the results thus far are pretty extraordinary. we have, fi -- we have the first set of investments happening at an extraordinary scale, more than $300 billion of committed investments. those are investment that have not only been announced, but actual money going into the ground. since the chips act passed, there's more investment in electronic manufacturing happening in this country than in the previous 26 years combined. you see a hockey-stick impact in terms of actual investment as a result of the chips act. intel's investment program, over $100 billion, the largest fight

a company in the history of this country. $55 billion in arizona, the largest foreign direct investment in history. roughly $45 billion in texas, the second largest. the scale of what we're doing here is truly extraordinary. i think the diversity of the firms that we are attracting to nest in the united states is truly extraordinary. chris talked about concentration. concentration is not only geographic, it is in firms. there are only five firms in the entire world capable of producing leading-edge chips at scale, on the logic side and memory side. we have agreements in place with four of them to expand dramatically here. one just announced a packaging project in indiana. so i think the diversity of firms is remarkable. the last thing is the technologies are really

important. each of these firms is bringing the most advanced technologies to our shores. and we have advanced packaging, which is usually important. we can get into that. we have r&d investments happening. intel's investments in oregon have long been a kind of color of american r&d--pillar of american r&d. as result of the chips act we have samsung building r&d in texas. there are only three in the world that do leading processing technology already, taiwan, korea, oregon. we now have a fourth, samsung is doing it in texas. i think the results are extraordinary. greg: on the work you do, where are we in terms of actual money going out the door, chips being made? when will the first american- made chips start appearing? michael: so first of all, there

are chips made in america now. what we don't have is any chips on the leading edge being made right now. as result of our investment, we've said -- set a goal of 20% of leading-edge production by the end of the decade. projecting 28%, so somewhere in that range. we -- if you go to these facilities, what you see is extraordinary. 10,000 construction workers driving in and out every day, 50 cranes, some of the biggest cranes in the world at these facilities. just remarkable progress. and i think we will see chips being produced out of chips- funded facilities at the end of this year. greg: wow, and of this year --

end of this year? when might that be? michael: eh, i'm not going to get into it. greg: we are in a very aggressive industrial policy and i want to ask questions on that. the u.s. was once the leader in a lot of things, a lot of electronic, not just chipmaking. a lot of that migrated to east asia. for a while we lost our leadership in semiconductors to japan, which launched a huge push, like china is now, a lot of companies with a lot of capacity. there was a panic in the united states very similar to what we see today. and yet 10 years later, japan has more or less lost leadership again, as the industry moved from memory to logic. intel was on top. it kind of looks like a panic was overdone. united states today has done

well having pursued a model that more or less turned its back on the industrial policy that is so popular among countries that are not doing well. i guess i want to ask the question, why can't we just trust the market to fix this problem? why are we so fixated on the idea that we have to get in there and steal this incentive allowing the market-- steer this incentive allowing the marketer because it has in the past? chris: i think that assumes a world without any wars. the reality is the international environment is grim. anybody reading the headlines out of singapore this weekend where the chinese ministry of defense and the u.s. secretary of defense were speaking, it is hard to be reassured about the situation between china and taiwan. the difference between the u.s. trade disputes with japan in the 1980's and early 1990's and u.s.-china today is the economic considerations are secondary to the political considerations, what happens if there is a conflict. the reality is we have almost all the leading edge chipmaking in taiwan and a lagging share in

china, all of which get knocked off-line the moment a potential escalation begins. that is what is behind all of this. to use the phrase "duster policy" ike -- "industrial policy" turns it into an economic problem, and first in the minds of those in congress who pushed the chips act through, what happens when we lose access to these critical supplies of chip making? michael: right now the u.s. produces zero percent of the global supply of leading-edge chips. there is no way that changes, absent a public policy intervention. so you can decide we are ok with that. we have the world's foundational technology critical to militaries -- we haven't talked about ai yet. you are looking at decades where national security, public policy, geopolitics will be

shaped by ai. united states is a leader in so much of ai. our workforce, our firms, our ecosystems. we produce enough chips to fuel that boom. again, you can decide that is ok, or you can decide there's security value as a country in building greater resilience. greg: i guess i would also -- has there ever been a free market in chips, or is it always been heavily government-influenced? chris: certainly in history has been government-influenced, and if you look at subsidies going to the chip industry, you can look at our friends in asia, but you can look at the largest subsidizer, china. my economist friends talk about a level playing field. that's great. . i asked them to put -- that's a great theory. i can ask them to put that in practice.

if that is your starting point, get back to what mike was mentioning, you can opt into the world and live with the security ramifications of that. greg: ok, you made the case for why semiconductors are special and this is a place where we should industrial policy. one of the reasons we don't do much industrial policy in this country is we don't have a good track record. we've had like the jones act to protect shipping for a century now. we make less than 1% of the world's ships as a result, and americans pay extraordinarily high prices for shipping. supersonic transports, god knows how many industrial policy adventures we had an energy, all of which ended up being gigantic white elephants. what did you learn looking from that history, how do we make sure that the industrial policy with chips does not repeat the mistakes of the past? what do you figure we did wrong in the past that we make sure we don't do now?

michael: well, i was the first employee of the chips team back in september 2022. you don't think about this, but major government program starts, there is no infrastructure, there is no model. tim might do this with his adventures in government. but your starting with a blank slate. by the way, from the craft of government standpoint, that was one of the most exciting things about it. the legislation provides flexibility. a lot of discretion of the executive branch. it is a question of whether you can make it work. secretary raimondo felt -- i would say we had to focus on three things early on. number one was people. have to get a good team in place. secretary raimondo in particular is a magnet for talent, and we built this extraordinary group of people in the chips office. from all walks, private sector, investors, industry, government

backgrounds, national security back rents, workforce backgrounds, etc. impossible to do without that. the second thing really important is setting a vision. when you -- it is very easy -- you see this a lot in developing programs that make a whole bunch of investments and try to step back and discern a strategy. i call it like you put the stars in the sky and draw the constellation. we really wanted to take a different approach, which was not the full constellation, but you should have a sense of what it is going to look like. and we felt accountable for explaining that to the public. we put out what we call our vision for success that talks about in reasonably concrete ways what our objectives are going to be. that required a lot of work, a

lot of deep thinking early on, while we were hiring the team and building the department, etc., but we felt it was that important to put that stake in the ground. it's been a really important device for engaging our applicants. our applicants respond to it, they understand what we are trying to achieve, they help us effectuate that vision, but also important internally. internally as we are sitting in investment committee meetings and we are consulate coming back to that vision. -- we are consulate coming back to that vision. we are anchored in what we need to do energy for the country. the last thing is, once you have the team and division in place, you have to build the pipes of the program, the nitty-gritty, programmatic details that effectuate against those goals. focusing on those three pillars, we have been able to build an operation that at this point at least is on the right track. greg: you mentioned success.

what does success look like, and where it is being proximal rank in the criteria of things you look at as a measure of success? michael: it's usually important. i think -- it is usually important.-- it is hugely important. i think it is important that our funding opportunity outlines a set of evaluation criteria. chief among those is economic national security. but right among that are emotional viability and financial strength. we are providing a subsidy -- most of the capital is still coming from the companies. it's really important that it's on a beyond sustainable economic footing. that is the chips act itself, a requirement that we look at that. that is how we will get to a point where hopefully we are

creating effective ongoing investment that we need to achieve our objectives over time. chris: i would add two things. first off, the decision was made early on to provide a small shareholder capital was critical. chips, on average 10ish percent of the capital, which means 90% is borne by the company. they have a strong incentive to get it right. the second is a decision made in the writing of the chips act to fund u.s. firms would also foreign firms investing in the united states, which is not normally when you think of with industrial policy but is critical to having real competition among companies. we have three when it comes to -- producing the best chips sufficiently, that preserves as much of the market as we can get in the program. greg: so from my read of where the industry is on this, all of the design firms, the apples, the qualcomms, the amazons, they

are enthusiastic about this, but they are kind of ambivalent about their willingness to actually buy the output of these plants. i feel like this is where the rubber hits the road. you can build a plant, but for that planted to be self-sustaining in the long-term, it needs customers. the company needs to make a good margin. is it the case thati the customers are there and are willing to pay the cost differential for an american-made chip that ensures that these companies will be self sustaining a profitable over the long term and will not be demonstration plants putting out tiny eyedrop full of chips to prove their american bona fides? chris: from a company perspective, once they put forward the capital expense sure, they have a very strong incentive -- greg: but they've also been very careful not to put that money up front, so their own in a very

measured white -- their own capex in a very measured way, their building (s) the into their own plants so they can pull the plug if isn't going to be there in a few years time. chris: you can talk about the way you are writing the contracts, but it seems to me that that is a positive sign. companies are thinking about this with market dynamics very clearly in mind. they look at the smartphone market, the pc market, and went to move tools into the factory. to me it seems very predictable if you ask a big customer of companies, would you commit to buying x or y facility, they will say we will not commit to it because there are negotiations. i'm not of allspice we have not had many big announcements from customers saying we will -- i am not at all surprised we have not had many big announcements from customers saying we will buy in advance.

there is a lot of examine about a more diverse supplier base. the companies don't want to mark richards when there is one 90% supplier and they have cash market -- the companies don't want to market chips when there is one 90% supplier and there isn't a lot of flexibility. michael: our awards are milestone-based. the money goes out over time as chips are produced. we are making sure that as taxpayer money is spent, it is spent as attacks. objectives a -- spent as taxpayer objectives are being met. the point you raise is a good and important one, which is that the purpose of chips in part is to close the cost gap so that it is attractive to buyers of the chips. and i think not just in chips, but across the world, we all have a role to play in creating

more awareness than there has been in challenges associated with supply-chain resilience. i truly believe that over time, the cost of fragile supply chains can be priced in. that requires awareness -- telling this story that it requires investors playing that role. i think that's something i hope to see more and more over time. you see it most acutely in chips right now because chips got -- the narrative out of the pandemic was so immediate and concrete. but i think it's something that needs focus across the economy. greg: to expand on the profitability question, to what extent are yours in the industry's interests aligned? meaning when you put out your

requests for proposals, there were a lot of criteria in there that were not explicitly connected to making the ultimate project possible. requirements for on-site daycare for construction workers, union scale wages for unionized workers. cannot use funds to buy back stocks, licensing agreements with china, a lot of things that were very constraining on the freedom -- the degrees of freedom these operators and manufacturers have. and i know thatmanufacturers --m talking to all that there was a lot of grumbling about that and some republicans voted for the chips act and had buyers request when they saw what they thought were progressive priorities layered into this. is that not get in the way of ultimate success? chris: in terms -- michael: in terms of alignment, in some sense we both wanted to be successful.

in others, they wanted more money. so, the leading edge companies, that was more than $70 billion. more than we had. it took a while to work through that. beyond that, i think, you know, we've been able to work really well together to execute against some shared objectives. as one anecdote, we were at one of the leading edge sites. we were there for the big announcement and looking over this massive -- like a single one of these sites, they are all bigger than such part massive plots of land. 11 football fields.

with 130 football fields in this country? tens of billions of dollars. by the way, that's where we are putting the childcare facility, you know? and by the way, a lot of these areas are kind of remote. if i had a kid, if i were trying to figure out childcare, that would probably be helpful in attracting a work worse. i think that in that sense, it's been working out pretty well. greg: chris? michael: the result -- chris: in any program there is a lot of political interest involved in a big part of that is separating it from the -- domestic policy. taiwan, they did really good job of that. metrics advocacy, to the extent that we can keep these programs insulated from politics, the better that challenge is for

congress and a challenge for the administration as well. greg: you wrote in your book -- there were two angles i remembered. getting rich, that was one of the major motivators for the foundation of the industry. other words, nonunionized. do you think those foundational principles have been diluted by this administration's insistence on profit sharing and union scale? we have seen the reports on how construction in arizona was held up because of conflict with the building trade. i've -- chris: i think the union issue is nuanced. on the one hand, the critique of being overly burdensome has its affinity. on the other hand, if you talk to the contractors involved and ask them which constrict -- which specific instruction trades they are interested in getting, they will talk about

unique skill sets where unionization is not problematic and could even be helpful. my view has been more nuanced than a yes or no. i think it is it depends, probably nothing answer you're looking for, but the truth. historically, one of the reasons that ship industry was driving towards less and less regulated markets was because historically labor costs really mattered. today labor costs don't matter that much. that's they reality. these are super automated facility and labor is a small share of your long-run costs. even at the construction level, labor is a moderate part of the costa burton. we over index labor costs as to why the u.s. is more expensive than other locations. it's a part of the story. the treatment of capital investment and other factors, they are just as in and our

sources of core comparative advantage are policy advantages. chris: prevail -- michael: prevailing wage is a part of the statute and a part of a lot of the federal statutes involved in construction work. just one thing i would say is what we are talking about, and i keep talking about the scale, when each of these sites has 10,000 workers showing up every day, to access that pool of qualified construction workers, i think pulling the industry, labor, all of these resources together to help achieve this critical national objective is kind of what we should be doing. greg: of course a lot of this is being done with china in mind. china's not sitting still. i want to dig in as we make

these strides on advanced chips, the chinese production share in the lagging edge chips is growing. i think it was 17% in 2015, now around 21% is the number i have. it was 17%, now 31%, contract 39% in a few years. these are the chips that we ran out of during. cars sitting unfinished. notwithstanding the progress that has been made, looks to me we are becoming ever more dependent on china for a crucial park here. another piece that is important, chinese companies are not required to bring back the costs of capital and just the other day we read that the elliott investment hedge fund is pressuring texas instrument on cap x. that's not happening to these chinese competitors.

can we seriously like come out ahead in a contest with a country like that, that does not require the primary players to actually make money? michael: i think -- chris: i think that's why we should assume the free market and act on the basis of reality. china just announced they closed their third investment fund, $45 million in capital. there have been local government funds and provincial government funds and supposedly private equity funds around all of state owned firms. the aggregate what's been put the state owned street in the last decade has been multiple times higher, vastly higher. the thesis that we should just attend this is a market we should let trade is disruptive to the facts and that's why i wouldn't be surprised if the biden administration increased a freight on input from china with

terrace going up a few weeks ago . most chips are imported from the u.s., sent to vietnam, thailand, assembled into goods sent to the u.s. i think we will end should see more effort on that front to deal with the trade issues. like you said, the company is facing calls to reduce. but there's also economic security. china has imposed sanctions on nearly all of its major -- major trading partners in the last decade. we want the manufacturing base to be reliant on chips that are sourced from china? doesn't seem like a smart policy to me. greg: how do you fix that? michael: i think that the problem is real, let me say that. our team is very much in the market, day to day. and here, you know, how what we are seeing from china is

actually impacting prices. it's going to be real and i think it is an issue that buyers serious attention. it's not a complicated issue, because as we said, these are often, chips are often small components of other products that end up being imported. so, what the exact tools are, chips are a part of that. we should say, you're making investment not only on the leading edge, talking about that today, but we have a sick if it can investment in global foundries that will build the first new greenfield -- not really greenfield -- it's a new fab on their site in new york. a currently mature facility in a couple of decades in this country. you know, it's a part of the agreement, the technology that's particularly critical.

national security, like that 22 fdx technology, for example. we have a role to play that and i think we have to look at a broader set of tools. they put out a survey, these are what the supply chains look like. there's a lot of data that needs to be integrated. it's important that we have a software conversation about this issue. i think there's kind of more to come there. greg: thinking through the chinese calculus here, why is that the china is racing forward to self-sufficiency in chips? your biggest ever year is semi conductors imported from strategic adversaries, taiwan, korea, japan, the united states. it's clear that there is an effort to become self-sufficient case of war, china will have the

chips that the manufacturing base requires. i think we should think hard about why china is trying to do that. not only in terms of dollars and cents, companies getting return on capital investment, insulating them in case of the war. maybe it's a sign that we need to do the same. greg: do we need a second chips act? do we need a second chips act to meet additional challenge? chris: the oec did a study in 20 that at least one chipmaker was receiving more subsidies from foreign governments. no surprise where they were choosing to invest. this is an unacceptable status

quo. as far as other governments continue to subsidize, we kept hours impacted. we can debate the right mechanism. greg: mike? michael: for me, personally, one chips act is enough. [laughter] yeah, look, the other what i would make on this, it's a stunning level of demand for resources, right? we are going to end up, you know, providing far less subsidies then requested in many instances. we are going to say no like i'm disappointed, folks, to projects that are worthwhile.

we would be strengthening the plot base of the country. in that sense, i do think that additional funding could definitely be put to use productively and i agree with chris, the tax credits are important as well. greg: we are nothing only ones doing this. numerous countries have announced similar things since the chips act came out. japan, they are up to 20 billion. france, 5 billion. germany, 17 billion. is it time to worry about a race to the bottom here where everybody is subsidizing this thing and we end up with too much capacity, too much unprofitable capacity in the entire experiment is a disaster? chris: i worry about overcapacity at the leading edge. greg: let me add, it strikes me

that all of this is happening in an uncoordinated fashion. bleeding edge, lacking edge, altering the same thing. i worry about that. chris: new facilities every year or so, technology improves every couple of years. structural, such that we have never seen before. i worried a lot about the lagging edge. china, that's where we have no control. who was winning, it was beijing. that's one way to look at the coordination -- problem. japan, european countries, discussed in a way that we could speak to them. looking at who is investing,

there hasn't been a lot of overlap. u.s. investment in the leading edge, with semiconductor's fitting the industrial basis demand. zooming out, is there a lot of overlap? you would be satisfied with the labor. michael: i totally agree and those are conversations that we have had actively with 1000 partners. in the chips office we had a team dedicated to international engagement to build those relationships. build them directly. i think that the coordination is something we will build up. something that is really important. it's a good start.

at the u.s. euro trade technology council, it has been a consistent theme at the principal level. i think you are seeing a lot of constructive progress on that. if you look at what is happening across the globe, you know, where the investments are happening, it kind of makes sense where the industrial base of each geography is right now. we will continue to work on that overtime. greg: i do want to have time for questions, but i want to ask one more before we go to our guests here, it's about workforce. getting into policy, it's not just making sure the demand is there for the supplies, but in terms of the workforce, you need skilled, dedicated people with the right training, the right attitude, the right culture, all that stuff.

there have been a lot of examples, like tsmc, supposedly the americans don't want to work for long hours that the taiwan he and -- taiwanians do. that was top of mind for them there, south korea, taiwan, they have the criminal background. every -- creme de la creme. but that's not the case here. i had a conversation with a young gentleman doing a phd in science at purdue, born and raised in taiwan. why study here? worklife balance is important to me, i don't want to work in taiwan where they just assume you will work there for the rest of your life. even the taiwanese are coming here because they have like different things. that's a real challenge. the question to you is, are we ready to meet the workforce

challenge? seems like a pretty big deal. michael: i think it's an interesting dichotomy that i perceive. one is yes, of course, it's a new industry essentially from scratch on the leading edge. you've got to roll up your sleeves and get it done. work with local institutions, community colleges coming, workforce organizations to build the pipeline. the good news about them as they take a while to build them, so while you are doing that you can build that workout and we as a government have a role to play. all of our mutual investments include 40 million, 50 million dollars in investments. we will work with local stakeholders to make it happen, right? that is of course a short-term challenge in one that i think we can address.

that's one part of the dichotomy. the other piece is, when you zoom out and talk to executives, the strength of the american workforce, the strength of our institutions of higher education, frankly the strength of our economy that just kind of homes along -- hums along in a remarkable way, when you look around the world, all of that is a major asset nationally as companies make investment vision . if you are buying a plot of land that is larger than central park to build fabs, you are not only thinking about the next three years or five years. you are thinking about the next 20 or 30 years. chris: i would say that an interesting perspective on this question for the u.s. you can get by visiting tokyo or taipei,

elsewhere, because every ceo in the world says the biggest problem is workforce. south korea, no one wants to do the chip industry, everyone wants to be a doctor. japan, average age is 55. everyone has a workforce complaint or challenge. when i do step back, i look at where you have the best combination of chip manufacturing in town. the u.s. is by far the world's leader. end-users, the u.s. is by far the most attractive ways, which is part of why you see some of these firms opening facilities in places like their. greg: so, we have a couple of folks with microphones here. let's start with steve, over there.

>> thank you so much. i'm really, lay out their top 10 industrial targets for the nation. i have never seen a better orchestration get a hold of government cross finance sectors and industrial planning. my worry about what we are trying to do, having gone from the obama administration review couldn't say it to being all in, it's not just about chips and a small sliver. you have to create an ecosystem that completely surrounds that. what i am failing to see are the other dimensions of the u.s. government focused on this. if you talk to samsung, they

will tell you they cannot get the people into the country easily that they feel they need to manage and operate, train within the facilities they are building. i'm interested in what's happening with the whole of government approach, the only way to you make a real industrial policy scheme and vetted, work, and continue across administrations. michael: well, let me start with , i will start with where chris left off. starting with the ecosystem, it's pretty good, right? we have incredible natural resources and abundant energy. a fair amount of water. we have a strong workforce.

we have a predominant global position in the acquisition of chips on the leading edge. all of that conspires to give us retail ones we are building off of. the question is, what can we do as a government to make sure that we are fueling that oath where the incentive is an important role. but we have done is build what we call our thruster support operations. we've decided, we have a few clusters that will be important to us. let's roll up our sleeves and figure out what we need to do. that could be working with state and local stakeholders on things like appropriating or could be

pulling in other federal reserve. >> [inaudible] that ended up at a dutch firm [inaudible] a lot of the other national lab partnerships [inaudible] out of the environment [inaudible] so, i don't know what the next [inaudible] but it seems to me that how do you see that in a healthy way in the u.s. ecosystem? greg: i guess that part -- michael: i guess that part would be another pillar of chips, which we haven't talked about today. 11 billion is focused on building the natural -- natural

semiconductor center. the fundamental premise there is to be investing in kind of pre-paradigm shifting technologies with the united states, which the u.s. continues to be at the forefront of in. it all fits together as a part of a broader strategy greg: question back there? >> yes, my name is roger, editorial contributor on technology policy for "the hill," recently did an op-ed on this subject. two questions i raised the sort of touched on but didn't really get to, at the highest level of extraction and then the lowest,

for decades the united states lectured countries like argentina, brazil, protectionism being ethically and practically bad, hurting your consumers and it doesn't work. what do we tell countries today, like india, turkey, brazil, argentina? should they also -- obviously germany, britain, japan can do it they want. should they not strive to protect their economies on high-end chips but on other things? jet aircraft, things that they feel are essential. abstractly, what is our orientation on the concept of protectionism after the chips act. at the lowest level of practicality how do we avoid a situation where the companies favored by the u.s. government don't just hire enough admirals,

congressmen and whatnot, to ensure that they keeping avery by the u.s. government. isn't this a death spiral you can get into here, there you have a lot of reason to protect that, keep that. chris: there's the economic framework of protectionism being about tariffs and a wartime scenario in which our entire manufacturing base shuts down, leaving this abstract theorizing to my colonist friends. we are in a situation where after 30 months of work in russia in the ukraine, the entire western war is being up to buy the russians. we've got an extraordinarily severe problem in our industrial base, the entire industrial base

being something going wrong between china and taiwan. in my list of priorities in the morning, i were a slightly less about the implications of tariff rate changes and this and that economic. and more on what happens if something goes wrong in the taiwan straits and by the way, it looks like the earlier everyday in the newspaper and that's the overriding focus in the -- of what we are talking about hearing and we can leave these theoretical debates to future professors to analyze. greg: and how do you avoid a scenario where firms are just winning through lobbying, i guess, would be the way to put it. michael: a couple of things. one, you need to design an extremely rigorous process, which we have done at the chips office. the rigor of commercial

scrutiny, strategic scrutiny, financial scrutiny, that is what a lot of us sit across the table from with these companies, saying that we know you can be successful with less than. it's harder to do, but the chief investment officer at 25 years, they are an investor. the whole team that we've built is capable of the conversation. it's a part of the program. as chris said, we are at the end of the day -- the

the fact that living standards have struggled to keep up with the rate of growth. that they have corporate sectors and investment projects that have low return if any return. none of that is more complicated. but i think when you're in the midst of a competition that's not primarily between companies but also in large part between country, you can't have your head in the sand act that fact. i think to our credit, we're going to be much more transparent than china is we're going to have processes that people have designed, it's going

to be out in the public view, scrutiny from congress, from the media. all of that is very good. i want all that. but it is certainly the case that if your primary trading partner and primary competitor is mixing economics and politics you can't pretend you can keep them accept ravment >> you'll have 26% leading edge capacity at the end of the process 10 years from now. but there are people who think taiwan could become us within a year or two depending on how you read the signals from china. at what point are we truly self-sufficient and no longer vulnerable? is that an achievable goal? >> we're never going to be self-sufficient. we're never going to be self-sufficient in the united states or just the western hemisphere or just our g-7 friends. it's a spectrum. how much less reliant, how dangerously reliant are we on potential conflict zones in

places like the taiwan straits. we're already beginning to see movement on that. if you look at the new facility in japan, talk about allies. we had u.s. firms publicly say they're going to shift their chip production from taiwan to japan. to give themselves more resilience in case of these snarees. >> i think self-sufficiency is -- has never been the objective. the semiconductor supply is the most intricate, sophisticated, international almost miraculous invention to exist. and that is not something you can just oh, it's all here we're shut off from this. that's not how it works. the question of resilience, it's

not an on-off switch you build it over time. and i think that -- i'll come back to the statistic i shared at the outset which is the since the chips act passed you had more capital investment in electronics manufacturerring in this country than you saw for the previous 26 years combined. the effect that we're seeing that is resilience being built. and our job is to make sure that continues. >> thank you, chris. thank you, mike. incredibly insightful discussion. really appreciate you coming and spending time with us. thank you to the audience. [applause] [captions copyright national cable satellite corp. 2024] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]

>> welcome, everyone. if could you please find your seats once again so that we can get on to the next exciting portion of today's arms control association annual meeting. jenny. thank you, everyone. all right. hello and welcome back to the

second half of the 2024 arms control association annual meeting. to this point, our speakers and panelists have reviewed some of the many reasons why this is a pivotal moment in the long struggle to reduce the threats posed by nuclear weapons. and as we heard from the secretary general in his remarks, the world is on a knife's edge. and he said we need to disarm it now. all countries need to step up, but nuclear weapons states need to lead the way, he said. here at the arms control association, we would agree that indeed they do. but there are others who need to do some things, too. and as an organization based in the united states, with members and friends across the world, but we're based in the united states, we along with our partners and friends here including you, i think, have a special responsibility to do all

we can to move us back from the brink and back on the right path. our next speaker is going to talk about some of the things that we need to be thinking about as we try to do so. the next speaker is my friend in the arms control association's board chair, tom countryman. he's going to offer his thoughts on his behalf and i think they reflect those of the board and the association's members on what we need to do now to respond to that moment. so tom, if you could come up. tom has sort of -- on the board since 2017. he's provided a jolt of energy and a lifetime of experience as a diplomat, a communicator, and practitioner to a.c.a.'s work. so thank you, tom. we look forward to your comments and the floor is yours. [applause]

mr. countryman: before i begin my comments, i think this is the only moment in the program where we have a chance to speak on behalf of hundreds here and thousands more and in fact millions to express our appreciation and our admiration for darrell kimball's dedicated leadership of this organization. thank you, darrell. [applause] now, for a number of reasons, many of which have already been discussed today, this is a difficult, dangerous, pivotal moment in the long journey to address the dangers posed by nuclear weapons. so what kind of a talk can i give you today?

well, this is not a graveside eulogy. reports of the death of arms control are greatly and deliberately exaggerated. this is not a religious service where the pastor tells the faithful in gory detail what awaits the sinners who are not in church today. it's also not a cable news show where pundits bemoan the parlous state of the world or of an election and ask plentiively won't somebody -- maintenancively won't somebody do something? i think it's a little more like a football coach's locker room pep talk, fine tuning the game plan for the second half. so today, i'll offer some thoughts not just on what we want from the possessors of nuclear weapons, what they must do, but also what this community and others need to do to effect

a change in direction. the moment is dangerous not because world governments have forgotten the risk of nuclear war but because too many world leaders no longer see it as the overriding existential risk. after the cuban crisis of 1962, two superpowers recognized that if nuclear destruction were not averted, no other national goals mattered. it's different today. at least moscow views the risk of nuclear war as secondary to the risk of failing in its goal of territorial expansion. and this drives reactive decisions in other capitals. as secretary general gutierrez noted in his remarks, the primary responsibility for

addressing nuclear risk continues to lie with the owners of the two supersized arsenals, the united states and the russian federation. the refusal of russia to engage in any kind of bilateral discussion is not just irresponsible. it's inconsistent with a history in which arms control dialogue continued, even at times when one side's weapons were killing the other side's soldiers, in vietnam or in afghanistan. just as unfortunately in response to moscow's refusal, some officials in this city shrugged their shoulders and said we tried arms control. now let's rebuild our arsenal. that ignores a central lesson of the 50 years in which arms control negotiations improved america's national security.

that lesson is that the indispensable ingredient is american creativity, american persistence, american leadership. note that leadership does not lead american dominance or control of a process. it simply means tireless determination. at this moment it means refusing to take no as the final answer. as pavel ludvic writes in arms control today, there exists both a consensual basis and an historical basis for washington and moscow to reach a successor agreement to new start that addresses both state's national security interests. as he notes, the political change that would make negotiation possible may seem

distant today but it may be closer than it appears. that that still exists a place where russian and american officials speak to each other on nuclear issues, the p-5 process. at a moment when bilateral dialogue is not possible, the p-5 dialogue should assume greater importance. in a private dialogue, new ideas, new steps, small or large can be explored without the posturing and the point scoring that marks the public debate in geneva or new york or vienna. china will soon assume for one year the chairmanship of this process. recall that last year, presidents biden and gi agreed

that proliferation was one topic on which two sides need to cooperate. it is my deep home that china will show some ambition equal to the importance that it claims in world affairs that it will increase the frequency of p-5 meetings, elevate their level and expand their agenda. they don't need to focus on reaching consensus among the five on every issue. they do need to focus on listening and on mutual understanding. as i noted, the primary responsibility for progress lies with washington and moscow. france and china and the united kingdom are not off the hook, however. they do not have the option of sitting on the sideline waiting for the u.s. and russia. they must recognize and respond to the overwhelming view of

non-weapon states that the p-5 are failing to meet and even consciously ignoring their obligations under the non-proliferation treaty. let me say a little bit about what we should expect and demand from the non-nuclear weapon states. i'm impressed by the way that the non-weapons states parties to the n.p.t. have stepped up in recent years. they correctly concluded that arms control initiatives are urgently needed, so urgently that the initiative should not rest only with the p-5. one result was the treaty on the prohibition of nuclear weapons,ed a admirable if imperfect document. non-weapon states need now to step up higher if we are to preserve the essential norms of

global security. as the late michael crapon described them, these are the norms against use or threats of use, against nuclear testing, and against the transfer and proliferation of nuclear weapons. so let's be specific. when president putin and his being a lights -- acolytes make nuclear threats there is no audible pushback in the non-nuclear world, only a deafening silence. saying out loud that such threats whether subtle or explicit are unacceptable to the international community, that's not taking sides over the war in ukraine. it's simply living up to the principles that non-nuclear states proclaim in the sound proof chambers in geneva and new york. mr. putin does not expect anyone

to endorse his methods. but because he does not hear anyone outside of nato criticizing his threatening words, he will continue to speak them. let's be more specific. the level of the speaker matters. when i was an assistant secretary of state, i took the statements of my counterparts to represent accurately the positions of their governments. but presidents and prime ministers do not listen to their own assistant secretaries and assistant ministers as closely as they listen to other presidents and prime ministers. if arms control concerns are not conveyed at a higher level, directly to the leaders of the p-5 states, those leaders will conclude, correctly perhaps, that nuclear issues are of lower

importance to the rest of the world. putin is not the only leader who needs to hear directly from other world leaders. but his is the right address to begin. non-weapons states have a duty to preserve the non-proliferation pillar of the n.p.t. at a moment when several states speak openly about leaving the treaty or developing their own nuclear arsenal, non-weapon states need to speak with one voice. they should declare jointly and publicly that any such move would make it impossible to continue normal political and economic relations with a new weapons-possessing state. so all of these are ideas that we have to convey loudly to the world's governments. and since we are here in washington, we need to start

with the united states government. our public statements need to support the white house when it says or does the right thing. and the best example was the statement jake sullivan made right here one year ago when he said the nuclear arsenal was sufficient for deterrence for the foreseeable future and declared that the u.s. wanted bilateral dialogue with russia without pre-conditions. sadly, at least a few people in the u.s. government seemed to believe that mr. sullivan's offer has been overtaken by events and is now no longer relevant. at the same time, we have to be vocal about backward steps and persistent in convincing this government and others that there are alternatives to a new nuclear arms race. our work to reduce and to

eliminate the threat of nuclear weapons must be informed by the catastrophic humanitarian impacts of nuclear war. but our dialogue with policymakers must also recognize the validity of genuine national security concerns made more and more obvious by threatening rhetoric from nuclear-possessing states. we can critique the flaws in deterrence theory and postures, but we can't simply dismiss deterrence as a concept without offering realistic alternatives sufficient to provide security. now, the arms control association, this tiny but mighty team, with great analytic contributions from so many of you in this room, has worked to analyze and address the

questions that should be discussed among governments. can our national security be better protected by concepts of sufficiency rather than symmetry? are we tied to ratified treaties as the best new form of -- as the best form of agreements? or can we find new forms which sometimes means old forms of bilateral and multilateral agreements, focusing as much on behavior and on transparency as they do on numbers? how do we achieve the goal that presidents xi and biden agreed to pursue, maintaining human control of nuclear decisions? it's also important as we push back against those who argue that arms control is dead or dying, that we do one thing better than government spokesmen

or dip mats. we have to speak with an air of civilitiy even when those who disagree with us are con descending or insulting. as in diplomacy, anyone in or out of government who is trying to solve the same vexing issues should be seen as a potential partner, not an eternal adversary. our target audience is broad, perhaps mobile broad for the size -- impossibly broad for the size of our community. in washington as in other countries it comprises political and military leadership and workers, thousands of dedicated specsists as well as the congress. we need new ways to appeal to public opinion and to mobilize public engagement. and that door is more open at

this moment when more citizens are aware of the nuclear risk than at any time in the last 40 or perhaps 60 years. we can't avoid the awareness that elections matter. since the 1950's, every u.s. president except one has acknowledged that arms control is national security. that it can be win-win, not zero sum. that's speaking to an adversary is a sign of confidence, not of weakness. that insisting on absolute american sovereignty or american dominance in arsenals is a recipe for tragic conflict. the results here on november 5 will affect the strategy of our efforts but not their urgency.

in particular, we have to look to younger people, the generation from which i draw my daily dose of optimism. are we doing enough to raise their consciousness to equip them with the concepts and analytic tools to address the dilemmas that my generation is leaving to them? now, i was pulled kicking and screaming into the 21st century and i sure don't know how to get meaningful news and analysis from tiktok or other social media. but millions of young people do. and we have to meet them as bill henigan said where they are, where they read, where they watch, where they think. in one way, i'm nostalgic for the 1980's when millions of

people in the u.s. and abroad mobilized in support of saner nuclear policy and arms control diplomacy to halt and reverse the arms race. their activism convinced national leaders that sensible national security pays political dividends. we live in a different time that requires new alliances and strategies. i am heartened, but i confess also envious when i see millions of people, primarily young people, demanding responsible action on climate change, the other e. extension threat that we face -- the other e. extension threat that we face. i want to recommend an article in "arms control today" in november by ambassador kenneth brill. he notes there should be, there must be a common cause between

climate change activists demanding a secure and prosperous future and nuclear activists who are simply demanding a future. it's a long list of tasks. and it can be discouraging. setbacks have been frequent and advances have been only at the margins. the issues are many. and our numbers are not. as fishermen traditionally prayed the sea is so wide, lord, and my boat is so small. the total annual budget for all the organizations working in this field in the u.s. andelsewn governments spend on nuclear weapon in half a day. but as john kennedy said about

going to the moon, we choose to do this not because it is easy because it is hard. because the goal organize and measure the best of our energies and skills, because the challenge is one that we are unwilling to postpone. i still believe despite all evidence to the contrary that humans are better at solving problems than at creating problems. in september of 1962, nobody would have predicted that within a few months, moscow and washington initiate decades of world changing negotiations making both nations safer. today we both need to work to prevent the breakdown moment when the guardrails against nuclear catastrophe evaporate

and be prepared to seize a breakthrough moment where we can advance again in the security of a world free of nuclear weapons. your contributions now whether in time, money, analysis or activism will be crucial as we head toward that moment. now i realize that this was more like a church sermon than a locker room peptalk. i can tell because i see a couple people dozing off. i want to simply thank you today for your attention and above all , thank you tomorrow for your commitment. god bless. [applause]

>> well tom, i'm ready to jump into the football field or the soccer pitch with a new plan and work even harder. >> see you in church. >> mixed metaphors abound here. we have a couple questions. how do we successfully dropped russia and china into the nuclear risk reduction dialogue? what helps? what's not so help? the microphone is here. -- what's not so helpful? microphone is up here. >> it's not easy. part of it is persistence. i really was not impressed, i'm sad to say, by the way that the u.s. government followed up mr. sullivan's speech here by year ago. it's as if there is offer on the

table, call us back when you pick it up. i think that it requires -- you've got to knock on the door more than once if you want to the skeptical householder to answer and i don't think we've done enough of that as a government. i do think in the numerous track two's that aca and others are pursuing with china, we can at least demonstrate indirectly to those governments that there is a real agenda. it's not a trap. it's not an effort to undermine your other goals. it's not an effort to subvert our cooperation or our competition in other areas. and i think they only hear that if we say it on a nearly daily

basis. i do detect resistance within this government, certainly within the congress, to continue to try on that same point. dialogue without preconditions. and that concerns me that the degree of commitment does not match the explicit statement that mr. sullivan made. >> thanks. here's a related question. you recall the p5 statement in january 2022 on the eve of the russian invasion, reaffirming the reagan-gorbachev line. that's an example of what the p5 can do. how could they given where things are built on that, especially with china taking control of chairmanship later this year? what advice would you be whispering into chinese

colleagues hears about this? >> i already whispered it with a megaphone on another occasion. let's talk about that statement from january of 2022. we realize that the genuine power of reagan and gorbachev saying that one sentence together was that above all, it was one sentence. when the p5 sat down to negotiate a very worthwhile initiative to repeat it coming from the lips of five presidents and prime ministers, you know diplomats. they could not keep it to one sentence. all five had suggestions for how to explain what we meant by that one sentence. and that's why the one sentence morphed into war than a page.

it was still a valuable statement. it should be repeated. i don't have expectations that the p5 can make a better statement than that before the review conference in 2026. but i do expect that they can do a couple of things. number one, find other smaller areas where they have agreed to work together. right now formally the only issue they are committed to discussing his methods of nuclear risk reduction. very valuable, but only one of a very wide range of issues that they could be discussing. secondly, a lot of the nonnuclear world takes some comfort in the fact that the p5 continue to talk to each other. not at the same high level as we did for many years, and only

intermittently and only on one topic, but it matters to the rest of the world. and if we are able not to open up what should closed dialogues but to at least say to the rest of the world, we are talking more frequently, we are talking at a more senior level and we are addressing more topics than before. that in itself creates a better atmosphere for the review conference in two years and a better opening for dialogue between nuclear and non-layer states. -- nonnuclear states. >> thanks for the inspirational comments. it's a pleasure to work with you and all of my team. that's all the time i have for tom. we will take a two minute shift. don't go away. please join me in thanking tom

for his service ship. [applause] and if i could ask second panel to join us here on stage. just get them settled. the foreign affairs correspondent editor for reuters will moderate this a on preventing further proliferation in the middle east. -- this panel on preventing further proliferation in the middle east. >> over to you. >> thank you. i'm arshad muhammad, a reporter

with reuters. pleased to moderate this discussion on further proliferation in the middle east. we have an excellent panel. to my left is kelsey davenport, director of nonproliferation policy at the arms control association. next to her is professor of international affairs at george washington university's elliotts coil -- elliott school. next to her is a senior fellow at the center for international policy and the host of the iran podcast. we will make some very brief introductory remarks and then we will start in on the discussion among the four of us and wrap up with questions from all of you. to start, let me make four points that i fear are very well-known to the people in this

room. first, nuclear proliferation has been an issue in the middle east for decades. with one presumed nuclear power, israel, iran currently at threshold status in the sense of having the capability to produce fissile material in very short order and saudi arabia clearly seeking to keep its nuclear weapons options open. since the trump administration pulled out of the iran nuclear deal and reimposed u.s. sanctions, iran after waiting for about a year began curtailing its compliance with that agreement, the joint comprehensive plan of action, and has steadily increased its capability to produce bomb grade nuclear material and although it

has not actually done so, and it has steadily reduced to the international atomic energy agency's access to its facilities. third, regional tensions have increased thomas -- hamas's october 7 attack on israel and israel's subsequent military operation in gaza. and it's worth noting that israel's april 1 unacknowledged but i think undisputed attack on the iranian embassy complex in damascus and iran's unprecedented until then decision to attack israel from iranian soil. that was a first. and then finally as i bet you all are very well aware, the

united states and saudi arabia are discussing what might be termed a megadeal, one in which there would be potentially a u.s.-saudi civil nuclear deal. there would be some form of u.s. security guarantee to the kingdom. there would be some pathway to palestinian state. and there would be in theory normalization of relations between israel and saudi arabia. biden administration is exploring that civil nuclear agreement despite the fact that saudi arabia is of course a massive oil producer and has obvious immediate need for new power. and despite the saudi crown prince's position that if iran developed a nuclear weapon, saudi arabia would have to, too.

>> thank you also much for being here and thank you for agreeing to moderate. if you weren't moderating, i probably would be. i have the most -- much easier job of telling you what i think. i also want to thank -- for joining us on very short notice. >> my pleasure. >> those of you who know my work at the arms control association will not be surprised that i'm going to focus my remarks on iran's nuclear program. but first just to look at iran's nuclear advances, we really need to recognize that iran's nuclear program is in a fundamentally different place than it was in the lead up to negotiations on the jcpoa. because the advances that iran

has made since the deal was finalized to have really brought iran to the threshold of nuclear weapons and much of the work cannot be fully reversed even if we are able to reengage iran diplomatically and reach an agreement that limits its nuclear program. in particular i would highlight two areas where iran has clearly invested a lot of time and energy in recent years. it has mastered enrichment up to 60% which is a level that technically can be used for nuclear weapons. it isn't considered weapons grade but it's pretty close. similarly iran has invested a lot of money in its advanced centrifuge capabilities. this allows iran to enrich uranium much more quickly than it could in the past 10 and it means that if iran ever needed to reconstitute its nuclear program, it could build its capacities up much more quickly by focusing on developing and operating just these more efficient centrifuge machines

that were stringently limited under the jcpoa but now that iran is employing and operating en masse. this has fundamentally changed the nature of iran's nuclear program. there are three significant applications these developments have on proliferation risk. first, iran is now much closer to weapons grade uranium than it ever has been in its history. this is a time that we frequently refer to as breakout. and that breakout timeframe for the first weapon is about one week. the breakout timeline for five or six nuclear weapons is about a month. that's really quite crucial because we are getting into these time frames where there's a real risk that iran could try to produce weapons grade material for a bomb between iaea inspections. or more quickly complete the

process up to 90% in that parallel program. the other aspect of proliferation risk i would highlight is that because of these advances that iran has made, it can now reconstitute its nuclear program much more quickly. so while i personally do not believe there is a viable military option to addressing the iranian nuclear risk, as we heard, force does remain on the table for the united states. but even if we did resort to force, iran could reconstitute its capabilities relying on these advanced machines. it would not need to build up the same size of infrastructure to oppose again a risk from a proliferation perspective. it is another significant difference that changes proliferation risk. the third is iran's advances have opened up new pathways to

nuclear weapons if the decision were ever made to do so. i would say the sneak out risk, trying to use undeclared facilities is more viable given the advancements and the shortened time frame. how iran would proceed in enriching to weapons grade levels, it has different options now. all of this changes our overarching understanding of iran's nuclear program and the risk it poses. unfortunately, these advances cannot be fully reversed. a deal that rolls back stockpiles or centrifuges could mitigate the risk posed by these developments, but we are looking at a future where even if we have a nuclear agreement with tehran, it is likely to be closer to a bomb then in the past from a technical perspective. unfortunately layered on top of this is the increased risk posed by the lack of monitoring and

access. which iran has limited over the last several years. currently around still is implementing its comprehensive safeguard agreement so inspectors are regularly in facilities where around is enriching uranium. as we know from past experiences, this comprehensive safeguard agreement is insufficient to defend against determined proliferators. right now the iaea does not have access to key facilities like the workshop iran is making centrifuges, concentrating and producing uranium or concentrate. the iaea does not have a good idea about what inventory in these areas looks like. the iaea cannot say where all of iran's centrifuges are.

so this just increases the risk or the speculation of risk that iran may be diverting materials to some type of illicit program that it could use later as it makes the decision to pursue nuclear weapons or to retain that covert capacity. the other risk amplified by this lack of monitoring has that the longer these gaps persist, the more challenging it's going to be for the agency to try to reconstitute the history of iran's nuclear program which could be very beneficial and necessary if we do get to the point where we negotiate a new nuclear deal with iran. if the iaea cannot say with reliability how many centrifuges iran has, it's very challenging to verify future limits that might be imposed in a future deal. that has implications for the sustainability of a deal, for effectively verifying limits and

also the u.s. domestic context. the president has to certify that the iaea can verify any future agreement with iran. so these monitoring gaps pose a risk in the long-term and short-term when we talk about being able to ensure that we could quickly detect breakout, and in the long term trying to understand these gaps and reconstituted history of iran's nuclear program. that brings me to what we can do about it. i am still an optimist that there is time, space and interest in tehran. we need to acknowledge up front that the 2015 nuclear deal is dead. as a big supporter of the deal, it pains me to say that.

iran's program technically has advanced to the point where the jcpoa would be less effective from a nonproliferation standpoint it politically the deal is very toxic in both washington and tehran. if we look at time frames going forward, reconstituting it really isn't an option given the political realities we face with the u.s. election but also some of the time frames and expiration dates. if we move past the jcpoa, what does that leave us with. given the short timeframe between now and the u.s. election, i think strategy should be focused on reciprocal actions that more immediately de-escalate risk. the u.s. should be looking at ways to incentivize iran to allow inspectors back into some

of these facilities like the centrifuge workshops where the uranium or concentrate is produced. and start to rebuild those gaps. this would be useful in deterring any diversion going forward preventing iran from trying to move materials to a covert program. monitoring should be the number one priority. in return, the u.s. should put something tangible on the table for a run in exchange for these options. that could be unfreezing more iranian assets and transferring them to qatar. something that demonstrates to iran that there are still tangible realizable benefits for engaging diplomatically with the united states. ideally this type of de-escalate

or package could bide time and space for the comprehensive negotiation we are going to need to begin immediately after the u.s. presidential election. and i'm happy to talk more about this in the question and answer, but i think the u.s. is going to have to approach these negotiations with a new framework in mind. i think the jcpoa demonstrated that there are challenges to this transactional approach to nonproliferation. not only does the u.s. face a credibility deficit, but we know better understand that there are significant challenges to actually realizing sanctions relief. ensuring a country benefits once the sanctions are lifted is more difficult. maybe we shouldn't even just be looking at iran. maybe this is multiple agreements that includes countries in the region that try to capture some of the

challenges we are facing and other spaces like saudi arabia. i will turn it over to the next speaker. >> actually i didn't prepare opening remarks. bear with me. let's start with what we know, which is not a whole terrible amount. we have been negotiating with the kingdom of saudi arabia for 15 years on the nuclear cooperation agreement. this is kind of a long time. in other cases perhaps with japan or south korea at various times, it has taken a few years but not 15 years. and why is that. first in the early years, saudi arabia was very hesitant to do

certain things that we wanted them to do in a nuclear cooperation agreement. the additional protocol. they had a small quantities protocol. sorry for getting into all the technical stuff. but this latest round of negotiations with saudi arabia has gotten tangled up in this strategic deal. i see this as another chapter in some not very successful attempts by the u.s. to dangle nuclear energy for strategic purposes. i would call this a special deal for a special ally. only in the case of saudi arabia, what a special ally. we know that our special nuclear deal with india at least so far

and it's been at least 15 years, has perhaps not yielded what we wanted from that. we still don't have nuclear contracts with india, but maybe they are a little more amenable to pressure when it comes to china. but in the case of saudi arabia, there is an odd precedent and i wrote about this in the december 2023 edition of arms control today. i was surprised when i started researching it. the precedent was egypt and the camp david accords. i almost get the sense that the u.s. government sort of craft of this policy with very little input from the nonproliferation community. the camp david accords paved the way for a peace treaty between egypt and israel which has been quite successful for the most part. and as a result of that, we

signed what we call it a 123 agreement, section 123 of the atomic energy act, with egypt. egypt at the time did not have any nuclear assets or very few. egypt wanted to reprocess spent fuel. we have had a long-standing, decades long-standing policy against the spread of both reprocessing technology and enrichment technology, two technologies that have dual uses, very sensitive. egypt was also interested in nuclear cooperation with russia at the time. what we did in the nuclear cooperation agreement was to get the egyptians to say no, we won't reprocess. on our soil. this is actually the origin of

what has come to be known as the gold standard. what you don't often hear and see in the press is that the gold standard begin as a regional policy from the u.s. we didn't want in particular to spread enrichment and reprocessing technologies in the middle east. so our 2009 agreement was the uae, which has often held up as the gold standard, that wasn't the beginning. why is this important? because those agreements -- now our agreement with egypt has lapsed. i wonder why. they are now in the arms of russia's nuclear technology. those agreements in the middle east all have a clause that is

basically a no undercut clause. it says if another party in the region, if you conduct an agreement with another party in the region that provides other capabilities, you kind of have the right to renegotiate. this is a problem. we don't have a lot of agreements with countries in the middle east. we have one with the uae and we have one with turkey. so if the press reports are correct that one of the benefits we are dangling in front of the saudi's is the uranium enrichment capability and we don't know the contours of that. is it a u.s. built and operated facility, is there some kind of black box technology but keeps the saudi's from getting access

to to sensitive information. -- too sensitive information. critics we are now at a point where the united states is -- the possibility of uranium facility for saudi arabia. >> if that is the case, this will overturn not just one but two policies. what is -- one is we don't want enrichment technology to spread to additional countries. and goodness knows we have spent a lot of effort and the policy community over the years trying to enforce that the second one is this regional policy to maintain the equal terms and conditions for nuclear cooperation in the middle east. so that's the first problem with this approach. the second problem is that it

raises risks from other countries. what would iran's reaction be? and i endorse your notion of perhaps coming up with a regional solution. what about south korea? we are almost in a double bind with south korea because of the august deal. and they have been pressuring us and so far we have would say staved off the request both in the nuclear cooperation agreements but also in other bilateral arrangements. but the pressure could certainly grow from south korea and that raises to get either a similar deal as saudi arabia, or maybe they decide to go it alone. are there constraints against this? yes. how good are those constraints? the nuclear suppliers group says

if an agreement includes the spread of enrichment to a new country that the country has to have an additional protocol. south korea has an additional protocol. my guess is that saudi arabia will also have an additional protocol as part of this arrangement. is that good? absolutely. is that enough? no. i almost want to take a poll of those of you in the audience. did you feel better with the jcpoa in effect with iran's enrichment? >> let's do that actually. >> raise your hand. did you feel better when the jcpoa was in effect? yes. and why is that? because the nonproliferation treaty does not prohibit enrichment or reprocessing. but it is enforced through all of these bilateral nuclear cooperation agreements enforced

through working with our allies in the nuclear's pliers group and we also try to get our allies, south korea is a good one because they have been very good on this in terms of putting such restrictions in their nuclear cooperation agreements. you could even get more creative and say what other countries might be interested? poland? australia? in any event, i think i will stop there. i have a host of things i would like to recommend both in the cooperation agreement. i see a lot of problems. many of you know i worked for the congressional research service for a while and analyzed this for a living. but there are definite weaknesses in the atomic energy act that i think we could clog. the question is how urgent to

members of congress or the administration see this. i will say one last thing. for 15 years we have been negotiating with the saudi's on this and for 11 years, they have insisted they would get the same capabilities that iran has. and so we really need to ask the question and this is why i feel like the nonproliferation community has not been really cold -- polled on all of this. should you be sharing enrichment technology in any shape or form with a country that has openly said it would acquire nuclear weapons capabilities in a specific scenario which doesn't look that far off actually in the middle east. >> thanks so much. let me also thank -- who stepped

into the breach at the last moment because one of our panelists was ill. i would like to ask you two questions. why didn't israel's attack on the iranian embassy complex in damascus and then the subsequent direct iranian retaliation, why didn't that erect into a wider conflagration? question two, do you think that exchange has changed the balance of power or changed iranian strategic thinking and made it any more or less likely that they someday might choose to pursue nuclear weapons? >> thank you, great to be here filling in for my colleagues. i think first talking about iran and israel and then we can come

back to this discussion. i think that episode although it could be a dangerous escalation, is really attack on the consulate in damascus, a number of iranians killed. for the first time attacking israeli soil from its soil and then israel also retaliating in the same fashion. i think and i will try to explain the view from tehran more, the israeli attack came on the heels of years of a shadow war and this was way before october 7 between iran and israel so they have been engaged in this shadow war mainly in syria across the region and the