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Addressing Supply Chain Disruption: A Conversation With Jose Fernandez, Under Secretary For Economic Growth, Energy, And The Environment

Under Secretary Jose Fernandez

U.S. Department of State

As a follow up to President Biden’s 2021 Global Supply Chain Summit, the U.S. Department of State and Department of Commerce co-hosted the 2022 Global Supply Chain Ministerial this July. The goal of this forum was to discuss near-term supply chain bottlenecks and building long-term supply chain resilience – and small business was front and center.

Jose Fernandez, Under Secretary for Economic Growth, Energy, and the Environment for the State Department led this effort, which brought together 16 foreign partners across six continents to explore solutions to supply chain challenges. As the global economy improves and the US continues to outpace other developed nations, there is a sense that work needs to continue.

Prior to his current role, Under Secretary Fernandez was a partner at Gibson Dunn & Crutcher LLP in New York and he was named “World’s Leading Lawyers” by Chambers Global. I recently had the opportunity to speak with Under Secretary Fernandez about the work he is leading and his work supporting American businesses at home and abroad. Below is our discussion.

Rhett Buttle: Tell us about your role at the State Department and how your past experience as a lawyer and professor prepared you?

Under Secretary Fernandez: As the Under Secretary of State for Economic Growth, Energy, and the Environment, I lead a wide-ranging portfolio that promotes the State Department’s efforts to develop and implement international policies related to economic growth, energy, agriculture, the ocean, the environment, and science and technology. I work on topics ranging from food security and energy security to promoting the necessary transition to clean energy and strengthening supply chains, among many others.

A commercial lawyer’s job is to get to a deal while protecting the client’s interests. A professor must explain the course material in a way that inspires and motivates the students. These are useful skills for a diplomat to have.

Rhett Buttle: Given that there are 195 countries in the world, what are the overarching priorities of the State Department as it relates to the economy? What does the State Department think about the private sector, small business, and entrepreneurship?

Under Secretary Fernandez: The State Department is working to keep the U.S. competitive for the 21st century. We are supporting the transition to clean energy, working to end the Covid pandemic and preventing future pandemics, strengthening supply chains to make them less vulnerable to disruptions, and guarding against and responding to economic coercion by strategic competitors and adversaries.

The private sector is an essential partner in the State Department’s economic statecraft. Small business drives innovation and job creation, not only in our country but around the world. Entrepreneurship provides job growth and opportunity for people around the world. It drives positive change in societies when everyone – including women and historically underserved communities – have a chance to start and grow their own businesses.

Rhett Buttle: The Secretary of State and Commerce Secretary have talked about foreign policy for the middle class? What does this mean?

Under Secretary Fernandez: The President has talked about growing our economy from the bottom up and middle out. The Biden Administration believes in inclusive economic growth – growth that does not leave anyone or any community behind. We are pursuing the same objective with our allies and partners. It means we do not just invite large companies to the table, we also include small business – women and minority-owned and native-owned business, along with unions, workers, and civil society to develop policies that work for everyone. It means that when we talk about creating a level field for U.S. exports, we make it clear that we will not compete on the backs of our workers by pursuing policies that lead to a “race to the bottom” in terms of wages and working conditions. It also means investing in solutions for all communities to make our country and our economy stronger. We are taking this approach with both foreign and domestic policy.

Rhett Buttle: Can you describe the State Department’s efforts to address supply chain disruption issues?

Under Secretary Fernandez: We have seen supply chain shocks and disruptions from the Covid pandemic, Russia’s war in Ukraine, extreme climate impacts, and natural disasters. They hurt ordinary American families and drive inflationary pressures.

The State Department has been working with businesses, foreign partners, and U.S. Embassies to monitor supply chain disruptions. We are teaming up with the White House and other U.S. government agencies to find solutions to get products to the American people. These products range from COVID test kits and microchips to specialty infant formula. We are also working with allies, partners and the private sector for the long-term by encouraging more diverse and resilient supply chains to reduce and prevent future supply chain disruptions by improving transparency through information sharing, promoting supply chain diversification through investment, boosting security through cooperation, and sharing best practices. We aim to ensure this sustainability through adherence to high labor and environmental standards.

The State Department now has ongoing supply chain and economic dialogues all over the world on a bilateral, regional, and global basis.

Rhett Buttle: You recently convened a Supply Chain Ministerial Forum. How was the event and what sectors did you bring together?

Under Secretary Fernandez: On July 19-20, Secretary of State Blinken and Secretary of Commerce Raimondo convened a global meeting with 16 foreign partners to discuss supply chain challenges. The participants included Canada, Mexico, Brazil, the European Union, Japan, South Korea, Australia, India, Indonesia, and the Democratic Republic of Congo, among others. The U.S. and its partners agreed to cooperate on crisis response, working together to reduce and to end supply chain disruptions and promoting supply chain resilience. The United States and our foreign partners also vowed to engage the private sector – business, labor, and civil society – to seek solutions to supply chain challenges.

The ministerial featured breakout sessions led by U.S. and foreign partner academic experts. More than a hundred U.S. and foreign partner private sector stakeholders took part, including associations representing large and small businesses, women and minority-owned businesses, labor unions and civil society organizations, and local officials. They provided recommendations on crisis response, investment and enabling environments, transportation and logistics, and workforce development that were presented to Foreign Ministers and Ministers of Commerce.

Rhett Buttle: What are the next steps coming out of this event?

Under Secretary Fernandez: Secretary Blinken invited other countries to join our global effort to cooperate on supply chains. Costa Rica has already agreed to join and we expect others to do so in the coming weeks and months.

We will be engaging in a series of global supply chain follow-on sessions with foreign partners and other departments and agencies such as the U.S. Departments of Labor and Energy and the U.S. International Development Finance Corporation. These sessions will allow us to deepen our foreign partnerships on supply chains in critical sectors and areas.

In the coming months, we will also have opportunities to push forward on more information sharing and investment in supply chain diversification through regional efforts like the U.S.-EU Trade and Technology Council, the Indo-Pacific Economic Framework, and the Americas Partnership for Economic Prosperity. I believe our supply chain diplomacy will result in concrete results and stronger supply chains for companies and consumers in the future.

Rhett Buttle: Is there anything else you would like to add?

Under Secretary Fernandez: It is important to remember that supply chains are run by the private sector. We know governments need to listen to and work with the private sector to succeed. We are in this together and will not solve these challenges alone. At the same time, supply chains are also global, so we need to work with our allies and partners to find real solutions.



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