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Why is China choosing to partner with Israel and Saudi Arabia?

China’s reaching out to Israel and Saudi Arabia is not a case of selling out to Zionism and Wahhabism. It is the product of a pragmatic conception of statesmanship intended to lay the foundations for a multipolar world.

Andrew Korybko

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Far away from the public eye and amidst relatively little fanfare compared to other official visits of leaders elsewhere across the world, both the Saudi King and Israeli Prime Minister Netanyahu were  both just recently in China to clinch dozens of deals.

The mainstream media reported on these events, though they were conspicuously absent from most coverage by alt-media. There’s a fair chance that it might just be coincidence, and that small teams of journalists with limited resources only chose to focus on the most pressing worldwide issues, of which there are many, or it could be due to something else, and that’s the “political correctness” which has recently become a driving force in the online multipolar information community.

There are a few axiomatic truths which are generally prevalent in most alt-media reporting, and the two most relevant ones are that Israel is a fake, unjustly established, geopolitical entity, and that the Saudis are the main exporters of terrorism all across the world.

I agree with these assertions, but that’s beside the point, because what this article plans to focus on is China’s flourishing partnerships with both Israel and Saudi Arabia, which are practically ignored by the alt-media community.

I suspect that this has something to do with the “politically correct” “thinking” that the “gatekeepers” impose by “reasoning” that it is “bad for overall morale” to focus on these relationships, and that – like with Russia’s excellent ties with Israel – there “must be a secret explanation”, potentially one in which China is just “too smart and clever” for Netanyahu and King Salman, so that it has found an innovative way to beat them at their own game, while wondrously helping the Palestinians at the same time.

As attractive a conspiracy theory as such a narrative might be for the individuals who are drunk on this wishful thinking, alas, it doesn’t at all represent the reality.

The goal of this article is to break through the “political correctness” that alt-media “gatekeepers” have implemented in the community by explaining what China – one of the leading catalysts of the emerging multipolar World Order – sees of benefit in partnering so closely with the US’ two most privileged allies, Israel and Saudi Arabia.

To that end, the first part of this article reviews the latest developments in Chinese-Israeli relations, while the second one looks at the rapidly developing ties between Beijing and Riyadh.

Finally, the last part syncretises the former two in order to produce a set of “politically incorrect” conclusions which describe the real nature of China’s foreign policy in the Middle East.

Netanyahu’s New Friend

(1) Rolling Out The Red Carpet In Red China:

The Israeli leader just concluded his very important trip to China this week, during which time some very symbolic statements of intent were expressed between him and his host.

Reuters reported that Chinese Premier Li Keqiang reminded everybody that “The Chinese people and the Jewish people are both great peoples of the world”, with The Diplomat emphasising Netanyahu’s declaration that Chinese-Israeli ties are “a marriage made in heaven”.

Apart from the high-sounding rhetoric, both sides engaged in talks about boosting their technological-security cooperation with one another, with observers noting that China is one of Israel’s largest trade partners.

Correspondingly, Netanyahu asked his counterparts to allow Israeli companies greater market access for their high-tech goods in the country in exchange for inviting more Chinese investment to Israel.

While no details were revealed about what sort of security cooperation the two sides discussed, it can be assumed that intelligence sharing and general briefings about both parties’ attitude towards relevant regional affairs were on the agenda.

(2) The Silk Road Comes To Israel:

Naïve observers, especially those under the influence of ideological dogmatism, are at a loss for words to cohesively explain why China is striking Silk Road deals with “the devil”, but the “inconvenient truth” is that China makes no value judgments whatsoever in regards to its international partners, hence why Beijing doesn’t see Netanyahu as an evil figure but a “pragmatic and shrewd businessman” presiding over a geo-strategically important strip of territory.

Netanyahu revealed in an interview with the Times of Israel that he discussed the so-called “Red-Med Railway” with China during his trip, which, just as the name implies, will connect the Red Sea with the Mediterranean via Eliat and Ashdod.

I wrote about this route over 2 years ago in a two-part series of articles for Oriental Review about the ties that multipolar countries were cultivating with Tel Aviv, and I suggest that readers take the time to review “Israel And The Multipolar Bag Of TRICs” and “The Russian-Chinese Strategic Partnership Strikes Israel”.

The pertinent point that I expressed in these article was that the Chinese are globally respected for always thinking many steps ahead and for preparing reliable backup plans for all of their investments, and the One Belt One Road (OBOR) global vision of New Silk Road connectivity is no exception.

China is well aware of the geo-strategic vulnerability of the Suez Canal, and thus has an urgent self-interest in building the prospective Red-Med line in order to ensure that Beijing’s maritime connectivity with Europe is never threatened by future hostilities with the US.

The People’s Republic is building the China-Pakistan Economic Corridor (CPEC) as a workaround for avoiding the bottlenecked Strait of Malacca chokepoint, and Beijing’s forthcoming military base in Djibouti will safeguard the Bab el Mandab.

The only missing node in guaranteeing the security of China’s Sea Lines of Communication and “String of Pearls” is the Suez Canal, for which the Red-Med Railway is envisioned as providing the ideal logistical solution.

In addition, the only wars which could disrupt the maritime portion of OBOR and that China predicts it will ever have to worry about would in one way or another concern the US, and it’s absolutely unforeseeable that Washington would militarily turn on Tel Aviv. Therefore Chinese decision makers wisely believe that Israel will remain free from anti-OBOR Hybrid War activity, which explains Beijing’s interest in investing in the Red-Med Railway.

(3) Networking:

China and Israel both expect to gain something intangible from their enhanced partnership with one another.

Tel Aviv wants Beijing to passively support it in the UN, while China might hope that the powerful and perceivably omnipotent Israeli lobby in the West could more convincingly promote China’s interests in that civilisational sphere than its own influence-makers ever could.

In practice, Israel wants China to abstain from voting for hostile UN resolutions against it and to progressively disengage from dealing with the Palestinian issue, whilst China would like Israeli lobbyists to make sure that the EU and US don’t enact any anti-Chinese trade policies.

Both of these goals are highly ambitious and not likely to bear any fruit, let alone in the short term, but they nonetheless remain powerful motivators for bringing Israel and China together in an intangible way beyond their growing New Silk Road cooperation.

Salman Seeks Out The Silk Road

(1) Eastern Allure:

Switching gears and turning towards Chinese-Saudi relations, King Salman just signed $65 billion worth of deals in the People’s Republic. The robust set of agreements covers everything from infrastructure development, military cooperation, finance, and energy, and it was with a sigh of relief that Salman concluded these deals. His country is bleeding tens of billions of dollars each year as a result of the global energy price glut and the costly War of Terror on Yemen, so Saudi Arabia could use all of the help that it can get right now to remain standing on its own two feet and not implode in the coming years.

Although Saudi Arabia is an energy exporting-dependent economy, the Kingdom has sought to begin a lengthy and painful diversification through the unveiling of its structural reform program marketed as “Vision 2030”, which interestingly looks to be a perfect complementarity to OBOR.

Riyadh wants to fundamentally transform its economy into a “normal” one within the next 15 years, and the only way that it can even come close to that is through Chinese investment in the real-sector (commercial, manufacturing) parts of the economy.

I described the general way in which this could happen in the article that I co-authored late last year for the Moscow-based Katehon think tank about how “China Chases Markets In The Mideast”, during which time I highlighted the attractiveness of Saudi Arabia’s Eastern Province for Chinese entrepreneurs. If the workers there can be steadily transitioned out of the energy and public sectors, then they would make up a suitably large enough labour pool to work on New Silk Road projects there.

Aside from anchor investments such as factories and other such production facilities, there are two interconnected initiatives which have really caught the Chinese’s eye.

China is very interested in promoting physical connectivity across countries and regions, and for this purpose Beijing is likely considering expansion of its coastal investments in Oman’s Duqm port in order to link them to the other countries of the Gulf Cooperation Council. The most feasible way in which this could be achieved is by breathing new life into the stalemated GCC Railway project through an influx of Chinese capital.

It might sound like a crazy idea for China to potentially invest billions of dollars into a desert railway, but the logic behind such a decision is driven by concrete economic and strategic factors. As was explained when discussing the Red-Med Railway in Israel, China is always trying to build back up plans to support its main projects, and the spearheading of an overland transport route from the Persian Gulf to the Arabian Sea would circumvent the Strait of Hormuz chokepoint and bestow Beijing with direct and unimpeded access to the GCC’s energy (and, if the New Silk Road plans are successful, commercial/manufacturing) resources.

It was described in an earlier part of this article how China wisely calculates that the greatest global threat to OBOR comes from US-designed Hybrid War schemes, and just as China doesn’t foresee the US ever attacking or destabilising Israel as part of this strategy, so too does China not envisage Washington attacking the Gulf Cooperation Council.  This translates into making the GCC Railway as secure a long-term investment for China as the Red-Med railway is or at least appears to be according to the prevailing logic of the day.

(2) Protecting The Caravans:

The next point that needs to be analysed when discussing Chinese-Saudi relations are the military ties between these two ideologically separate – and it can be argued, even contradictory – countries.

It is here where I’ll do what scarcely any alt-media analyst has done beforehand, and humbly recognise that I was wrong when I analysed this topic almost a year ago for the Russian Institute of Strategic Studies.  In my article “Pakistan And India ‘Trade Off’ Allies, KSA And China Start A Cold War”, I wrote that Beijing and Riyadh were moving onto a collision course with one another, postulating that the US would use its allies in the Wahhabi Kingdom to sow the seeds of disruptive Hybrid war terrorism all across OBOR’s transit states in order to sabotage this world-changing series of projects.

I admittedly was under the influence of “wishful thinking” and had “drank the Kool-Aid” to an extent, in that I sincerely believed that China and Saudi Arabia would never pragmatically cooperate with one another outside of their producer-customer energy relationship.  Like many alt-media individuals are prone to do, I projected my own personal principles and value system onto China, falsely seeing “moral limits” where there were only cold, hard interests.

As time has revealed, my earlier forecast didn’t pan out the way that I originally anticipated, and in fact has since followed the opposite direction, which suggests that the public (and presumably, also private) deals which had been reached between the two countries were sufficient to get the Saudis to ensure that the Wahhabi terrorists under their control (which, to be clear, aren’t all of the terrorists in the world anymore) won’t attack the OBOR projects.

Interestingly, not only is Saudi Arabia poised to give China a Silk Road stake all along the southern shores of the Persian Gulf, but Beijing has even been selling military drone technology to Riyadh, despite the obvious possibility that these weapons could be (and likely already have been) used in the War of Terror on Yemen.

An agreement was struck in September 2016 whereby a Chinese company was tasked with providing these unmanned systems to the Saudis, and King Salman’s recent visit to the People’s Republic netted him a deal which will see Chinese drones produced right inside of his Kingdom.

I have my own personal reservations about the wisdom of this decision, but then again, if Russia is seriously considering selling S-400 missiles to NATO-member Turkey, then how comparatively bad is it that China wants to produce drones in Saudi Arabia?

(3) Forgetting About Yemen:

Both Ankara and Riyadh were, and to an extent still are, the US’ chief allies in executing the War of Terror on Syria, even though each of these countries’ geopolitical loyalties have somewhat shifted to varying degrees since the start of that conflict.

It is not my intent to focus on this imperialist tragedy in the present article.  However, I do feel compelled to make an unpopular but factual point about the War of Terror on Yemen.  This is not intended to “absolve” China’s decision to sell drones to the Saudis or “apologise” for it, but simply to explain how some of the most prominent state actors with the Multipolar Community view what is happening there.

Believe it or not, neither the 2015 nor the 2016 BRICS Declarations contained a single word about Yemen, so it is clear that those five countries don’t collectively care enough about the war in Yemen to allow it to interfere with their “19th-Century Great Power Chessboard” interactions with their peers.

It’s not my job to explain why the BRICS have failed two years in a row to include Yemen in their collective declarations, but one could cynically suggest that it might be because they calculate that it would be risky for them to flagrantly get on the Saudis’ bad side.

Russia’s valiant and effective anti-terrorist intervention in Syria was infinitely more detrimental to Saudi Arabia’s “interests” than any rhetorical BRICS statement about Yemen would be, but the difference is that the Saudis are able to understand the reasons why Russia decided to become involved in Syria (irrespective of whatever claims the Saudis make to the contrary) whereas Russia and the other BRICS states realise that leading the charge in collectively condemning the Saudis for their crimes in Yemen, however morally justified or correct it might be, would be an unnecessary, unacceptable and ultimately pointless provocation of Riyadh.

Since the War of Terror on Yemen has begun the BRICS’ silence on Yemen (in terms of their collective response, not individual statements, of which Russia has issued several powerful ones) might have served some of their Great Power interests.

For example, Russia was able to cut an historic production deal with OPEC, and Sputnik reported in both 2015 and 2016 that Moscow was in talks with Riyadh over possible weapons deliveries, though nothing has been agreed to as of yet. Neither of these discussions might have been possible had the Saudis refused to talk with the Russians because of what could have only been predicted to be their overwhelming anger if Moscow was responsible for a BRICS statement on Yemen.

As for India, Prime Minister Modi has done everything that he can to intensify relations between New Delhi and Riyadh in order to advance his country’s energy interests and to try to wean the Kingdom away from its historical alliance with India’s arch-rival Pakistan. In fact, Prime Minister Modi was even awarded Saudi Arabia’s highest civilian honour during his trip to the Kingdom last year, and earlier this month it was reported thatSaudi Arabia and India will explore possibilities for joint production of defence equipment and technologies.

As for China, I have already discussed its interests in forging closer relations with Saudi Arabia earlier in this article.

As “politically incorrect” as it is to say, and fully accepting that this will trigger dismay amongst many in the alt-media ocmmunity, the harsh truth is that China and the rest of BRICS have largely forgotten about Yemen because it is not to their long-term and high-level advantage vis-à-vis Saudi Arabia to take tangible steps to relieve this beleaguered country’s suffering.  Beijing – and possibly also New Delhi soon – is even going so far as to sell drones to Riyadh which will only make the war worse.

How Multipolar Works With Unipolarity

It’s now time to explain how one of the most effective multipolar engines of the unfolding world order implicitly justifies its growing robust cooperation with two of the unipolar camp’s most steadfast proponents.

It sounds paradoxical, and some people will probably never understand it because they refuse to acknowledge any of the “inconvenient facts” which I elaborated above, but it is indeed theoretically (key word) possible for multipolar and unipolar leaders to engage in (at least perceived) “win-win” cooperation with one another, which I explained in detail in my book-length article series at Katehon about “The Meaning Of Multipolarity”.

The gist is that if both sides find a way to focus on important areas of mutual interests, then they run the chance of expanding their partnership into something much broader and improving the possibility that they can overcome their preexisting bilateral obstacles.

Of course, such a strategic concept works a lot better on paper than it does in real life, but there are still plenty of examples of it occurring within various bounds.

Take for instance how Hugo Chavez’s Venezuela sold oil to the country which its revolutionary leader inferred was ruled by Satan, or how President Putin initially supported the US’ 2001 War on Afghanistan and even allowed the Pentagon to set up bases in Central Asia for this purpose.

There is also China, which had its record-breaking modernisation and economic development greatly facilitated by US investment, after which Beijing turned around and paid back the favour by investing in the US dollar through Treasury bonds.

India on the other hand has gone way too far and can no longer be said to be “balancing” or entering into “pragmatic” relations with the US, but is now instead a de-facto military-strategic ally of Washington through LEMOA and Congress’ related designation of India as the US’s first-ever “Major Defense Partner”.

Being soberly aware of the practical limitations and inherent risks whenever multipolar actors seek cooperation with their unipolar counterparts, let’s take a look at how China applies this policy towards Israel and Saudi Arabia, keeping in mind what was explained earlier in the text in order to form a holistic strategic concept which describes Beijing’s approach to both of them:

1. No Historical-Political Baggage:

For better or (as most of the people in the alt-media community would say) for worse, China does not hold any of its present or future partners to account for their historical or political problems. Beijing does not think that it is up to China to serve justice for perceived or even actual wrongs, let alone halfway across the world and in disputes which China has never had any role in.  As a result China has strictly abided by a uniform policy for decades whereby it avoids interference in the domestic affairs of its partners.

That being said, if a given actor isn’t partnered with Beijing or not on positive terms with it, then the aforesaid rule may not necessarily apply, such as was the context in the Old Cold War when Beijing didn’t have normal diplomatic relations with either Tel Aviv or Riyadh.

The world has dramatically transformed since that epoch, and a series of seemingly never-ending paradigm shifts are taking place all across the globe nowadays, two of which have been the progressive deepening of the Chinese-Israeli and  Chinese-Saudi partnerships. Although beginning to ‘bloom’ at different times in the post-Cold War period, both of these interconnected relationships have begun to finally bear visible fruit during Netanyahu’s and Salman’s visits to the People’s Republic earlier this month.

Since the international situation has so fundamentally changed over the past quarter of a century, all sides appear to have agreed that it is better to “let bygones be bygones” and to move beyond the historical-political baggage of their pasts.

In line with this, China also doesn’t allow the Palestinian, Syrian, Yemeni, or Iranian issues to interfere with its bilateral relations with Israel and Saudi Arabia, preferring to leave such international historical-political “baggage” out of the mix as well.

2. Great Power Balancing:

China’s ability to look past its partners’ historical-political “baggage” (both in terms of bilateral and international relations) enables it to more flexibly engage in Great Power balancing.

The “19th-Century Great Power Chessboard” was alluded to earlier in the work, and it’s now time to describe what exactly was meant by that. I previously wrote about this in an extensive analysis for Regional Rapport when referring to the “worst-case” scenario pertaining to the Russian-written “draft constitution” for Syria.

At the time I explained this term as meaning that Russia (or any Great Power for that matter) cares more about its relations with its similarly sized/influential peers than it cares about the interests of its small- and medium-sized partners, the latter of whom are essentially negotiable pawns in a larger neo-realist game of power and interests that the Great Power is playing in order to advance “the greater good” (as the Great Power perceives it to be at any given moment).

I also referred to this concept in another article for Regional Rapport focusing on Russia’s new Balkan strategy, particularly in regards to its developing rapprochement with Serbia’s arch-enemy Croatia.

With all this in mind, it makes sense why President Xi visited Iran, Saudi Arabia, and Egypt during his Middle East tour last year, since he clearly wanted to avoid the perception that he was favouring one or other of these countries at the expense of the rest but instead wanted everyone to see that China was seeking to strike a balance between the three.

Correspondingly, China’s balancing act on the “19th-Century Great Power Chessboard” – and Russia’s too for that matter – is not aimed against anyone, but is laser-focused on the pursuit of improving bilateral relations for what is conceived to be (as China sees it) “the greater good”.

3. Silk Road Strategies:

Picking up where the last part left off, China’s “greater good” is for the rest of the world to participate in OBOR, which Beijing truly believes will radically transform the nature of international relations by making it more fair, just, and balanced.

The idea is that the more stakeholders there are in this global project, the more secure and resistant to Hybrid War sabotage it will be, thereby boosting its chances of successfully changing the world by connecting all interested parties together by means of Chinese-financed transport infrastructure.

China’s traditional multipolar partners of Russia, Pakistan, and Iran occupy centre stage in this visionary formulation, but per the above Great Power Balancing, this doesn’t mean that Beijing wants to exclude other parties, as OBOR is open for all to take part in it.

This is why China is reaching out to Israel and Saudi Arabia in order to involve  itself in their own nationally relevant projects for the New Silk Road which – as coincidence would have it – in both cases happen to have a very high geo-strategic priority for Beijing. The Red-Med Railway will help to avoid any potential disruptions along the Suez Canals, while the GCC Railway will do the same for the Strait of Hormuz.

China is betting – whether rightly or wrongly, wisely or naively – that bringing Israel and Saudi Arabia onboard OBOR will help to moderate their foreign policies and make them less likely to partake in any of the US’ proposed destabilisation schemes against this ambitious initiative.

It is still way too early to say whether that will ultimately be the outcome or not, but the fact remains that this is Beijing’s most likely intention.

Concluding Thoughts

This article aimed to answer the question about what China has been up to in feting the Israeli and Saudi leaders, something which might seem odd and even surprising to the casual observer, but which upon subsequent examination actually carries with it a very strong degree of strategic foresight.

There is actually nothing which should ordinarily be controversial about Beijing’s latest geo-strategic breakthroughs with Tel Aviv and Riyadh, but the problems begin to appear once ideologically zealous and politically dogmatic “gatekeepers” start to chime in on what is happening. The alt-media community is one in which there are several layers of “access control”, though most of them are in one way or another influenced to varying degrees by the prevailing notion of “political correctness”, which is usually interpreted as opposing Zionism and Wahhabism.

The issue however is that the “gatekeepers” haven’t really defined what the opposite of that is, or in other words, how to qualify one action or another as being Zionist or Wahhabi “collaboration”. Is it conducting trade with their related geopolitical entities?  Is it signing military deals?  Is it in fighting in wars for them? All three of these or maybe none of them?

The reason why uncertainties so powerfully linger and no final say on this has been clearly expressed is because “political correctness” usually isn’t openly described or even recognised as such, since doing so would paradoxically be “politically incorrect”. The shadowy world of symbols and signals that emerges in such a mess means that the “gatekeepers” have a large degree of leeway in liberally and arbitrarily interpreting Zionist and Wahhabi “collaboration” however they want, which could mean all sorts of nasty things such as attacking people who even talk about any multipolar countries’ ties with these ideologies’ affiliated entities.

“Political correctness” can only be sustained in an information vacuum and under conditions of absolute totalitarianism, which are impossible to indefinitely uphold in 2017, so any system of control based on this outdated anti-intellectual tool is bound to come up against multiple challenges sooner than later, especially given the pace at which paradigm shifts are unfolding all across the world right now.

It might have been possible to dismiss or bury Russia’s relations with Israel and China’s relations with Israel and Saudi Arabia in the 1990s or early 2000s, but there’s no way that President Putin’s very close ties with Israeli Prime Minister Netanyahu can be ignored when the latter’s visits to Moscow come in the midst of the Middle East’s meltdown and are widely reported about in “official” (publicly financed) alt-media outlets like Sputnik and RT.

Similarly, it is impossible to ignore Netanyahu and Salman’s visits to Beijing at a time when China is the US’s chief economic rival and is engaged in the globally transformative OBOR initiative, to say nothing of Xinhua and other “official” Chinese alt-media organisations proudly broadcasting the latest news from these trips.

Eventually, the “non-official” alt-media “gatekeepers” will be forced to confront these overlapping pairs of relationships, though they’ll be unable to “excuse” them because they “violate” the “politically correct” ideological dogmas of not “collaborating” with Zionists or Wahhabis.

What I hope to achieve with my article is to provide a calm and sane explanation for why China is all of a sudden prioritizing its engagement with Israel and Saudi Arabia.  I’m not necessarily endorsing each and every facet of Beijing’s policies, but nor am I condemning them. What I want to do is get everyone to think about what China is doing, and why it is doing it, and to arrive at their own conclusions.  It is not for me to dictate how someone is supposed to think.  All I want to do is inform the level-headed, open-minded, and well-intentioned members of the alt-media community (what I would like to believe are the majority of its constituents) about China’s latest moves and how they figure into its global calculus.

But having said that, if anyone thinks for a moment that China is “selling out” to the US by pragmatically working with Israel and Saudi Arabia towards its perceived vision of the “greater good”, or that it is “joining the Zionist and Wahhabi ranks” because it is hosting and signing deals with Netanyahu and Salman, then quite simply they are wrong. These kinds of people need to be removed from the multipolar community before they succeed with the Social Yinon Plan of deliberately dividing it from within and turning it into a Hobbesian collection of fratricidal factions.

DISCLAIMER: The author writes for this publication in a private capacity which is unrepresentative of anyone or any organization except for his own personal views. Nothing written by the author should ever be conflated with the editorial views or official positions of any other media outlet or institution. 

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While US seeks to up the ante on pressure on the DPRK, Russia proposes easing sanctions

These proposals show the dichotomy between the philosophy of US and Russian foreign policy

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The United States last week accused the DPRK of violating refined petroleum caps imposed as a part of UN nuclear sanctions dating back to 2006, and is therefore submitting a proposal to cut all petroleum product sales to North Korea.

The Trump administration is keen on not only preserving pressure on North Korea over its nuclear arms development, but in increasing that pressure even as DPRK Chairman, Kim Jong-Un, is serially meeting with world leaders in a bid to secure North Korea’s security and potential nuclear disarmament, a major move that could deescalate tensions in the region, end the war with the South, and ease global apprehensions about the North’s nuclear arsenal.

Meanwhile, Russia is proposing to the UNSC sanctions relief in some form due to the North’s expressed commitment to nuclear disarmament in the light of recent developments.

Reuters reports:

MOSCOW/UNITED NATIONS (Reuters) – Russia’s envoy to North Korea said on Wednesday it would be logical to raise the question of easing sanctions on North Korea with the United Nations Security Council, as the United States pushes for a halt to refined petroleum exports to Pyongyang.

“The positive change on the Korean peninsula is now obvious,” said the ambassador, Alexander Matsegora, according to the RIA news agency, adding that Russia was ready to help modernize North Korea’s energy system if sanctions were lifted and if Pyongyang can find funding for the modernization.

The U.N. Security Council has unanimously boosted sanctions on North Korea since 2006 in a bid to choke off funding for Pyongyang’s nuclear and ballistic missile programs, banning exports including coal, iron, lead, textiles and seafood, and capping imports of crude oil and refined petroleum products.

China tried late last month to get the Security Council to issue a statement praising the June 12 Singapore meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un and expressing its “willingness to adjust the measures on the DPRK in light of the DPRK’s compliance with the resolutions.”

North Korea’s official name is Democratic People’s Republic of Korea (DPRK).

But the United States blocked the statement on June 28 given “ongoing and very sensitive talks between the United States and the DPRK at this time,” diplomats said. The same day, U.S. Secretary of State Mike Pompeo spoke to his Chinese counterpart Wang Yi about the importance of sanctions enforcement.

U.S. Secretary of State Mike Pompeo is due to informally brief U.N. Security Council envoys along with South Korea and Japan on Friday.

Diplomats say they expect Pompeo to stress the need to maintain pressure on North Korea during his briefing on Friday.

In a tweet on Wednesday Trump said he elicited a promise from Russian President Vladimir Putin to help negotiate with North Korea but did not say how. He also said: “There is no rush, the sanctions remain!”

The United States accused North Korea last week of breaching a U.N. sanctions cap on refined petroleum by making illicit transfers between ships at sea and demanded an immediate end to all sales of the fuel.

The United States submitted the complaint to the U.N. Security Council North Korea sanctions committee, which is due to decide by Thursday whether it will tell all U.N. member states to halt all transfers of refined petroleum to Pyongyang.

Such decisions are made by consensus and some diplomats said they expected China or Russia to delay or block the move.

When asked on June 13 about whether sanctions should be loosened, Russian U.N. Ambassador Vassily Nebenzia said: “We should be thinking about steps in that direction because inevitably there is progress on the track that should be reciprocal, that should be a two-way street. The other side should see encouragement to go forward.”

The proposals of both the United States and Russia are likely to be vetoed by each other, resulting no real changes, but what it displays is the foreign policy positions of both nuclear powers towards the relative position of the DPRK and its rhetorical move towards denuclearization. The US demonstrates that its campaign of increased pressure on the North is necessary to accomplishing the goal of a denuclearized Korean peninsula, while Russia’s philosophy on the matter is to show a mutual willingness to follow through on verbal commitment with a real show of action towards an improved relationship, mirroring on the ground what is happening in politics.

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Europe divided over possible trade compromise with Trump

Even if a European proposal could score a trade cease fire, the war isn’t over

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US President Donald Trump has just lectured NATO on it member’s commitment performance and held a controversial meeting with the Russian President Vladimir Putin and is next week to receive EU Commission President Jean-Claude Juncker, with trade matters being high up on the agenda.

Juncker is expected to present Trump with a package of proposals to help smooth relations and potentially heal areas of division, particularly those surrounding Europe’s trade relationship with America. Those proposals are precisely what is cropping up as another area of divergence between some members of the EU, specifically France and Germany, just after a major contention on migration has been driving discord within the Union.

This gets down to whether Europe should offer concessions to Trump on trade while Trump is admittedly describing the Union as a ‘foe’ and has initiated a trade spat with the Union by assessing trade tariffs on steel and aluminum imports from Europe, spurring retaliatory tariff measures from the EU Commission.

France, specifically, is opposed to any sort of compromise with Trump on the matter, where Trump is perceived as an opponent to the Union and its unity, whereas Germany is economically motivated to seek an end to the trade dispute under the threat of a new round of tariffs emanating from the Trump administration, and is therefore seeking to find some sort of proposal that Trump will accept and therefore back down on his protectionism against the EU, and Germany in particular.

Politico reports:

Only a week before European Commission President Jean-Claude Juncker flies to Washington, France and Germany are divided over how much he should offer to U.S. President Donald Trump to end a deepening trade war, say European diplomats and officials.

But, they add, Germany has the upper hand. Berlin is shaping Juncker’s agenda, suggesting three offers that he could take to Trump on July 25 to resolve the dispute, according to people familiar with the plans.

The French are uneasy about the wisdom of such a conciliatory approach, however, and publicly accuse Trump of seeking to splinter and weaken the 28-member bloc, which he has called his “foe.”

Despite Paris’ reservations about giving away too much to the increasingly hostile U.S. president, the diplomats say that the European Commission’s powerful Secretary-General Martin Selmayr supports the German attempt at rapprochement, which makes it more likely that Juncker will offer some kind of trade fix next week.

“It’s clear that Juncker can’t go to Washington empty-handed,” one diplomat said. He stressed that Juncker’s proposals would be a political signal to Washington and would not be the formal beginning of negotiations, which would have to be approved by EU countries.

European ambassadors will meet on Wednesday to discuss the scope of Juncker’s offer — and indeed whether any offers should be made at all. France’s official position is that Europe must not strike any deal with a gun to its head, or with any country that has opted out of the Paris climate accord, as Trump’s America has done.

While Berlin is terrified by the prospect of 20 percent tariffs on cars and is desperate for a ceasefire deal, France has more fundamental suspicions that the time for compromise is over and that Trump simply wants to destroy EU unity. Paris is concerned that Trump’s next target is its sacred farm sector and is putting more emphasis on the importance of preserving a united political front against Washington.

Two diplomats said Berlin has a broad menu of offers that should be made to Trump: a bilateral deal to cut industrial tariffs, a plurilateral agreement to eliminate car duties worldwide, and a bigger transatlantic trade agreement including regulatory cooperation that potentially also comes with talks on increasing U.S. beef exports into Europe.

Making such generous offers is contentious when Trump crystallized his trade position toward Brussels on CBS news on Sunday: “I think the European Union is a foe, what they do to us in trade. Now, you wouldn’t think of the European Union, but they’re a foe.”

This undiplomatic bombshell came not long after he reportedly advised French President Emmanuel Macron to quit the EU to get a better trade deal than he was willing to offer the EU28.

In announcing Juncker’s visit on Tuesday, the White House said that he and Trump “will focus on improving transatlantic trade and forging a stronger economic partnership.”

Talking to the enemy

Diplomats note that a French-led camp in Brussels reckons Trump’s goals are strategic, and that he’s not after the sort of deal Germany is offering.

A French government official said that Washington quite simply wants to shift the EU off the stage: “Trump’s objective is that there are two big blocs: The United States and China. A multipower world with Europe as a strong player does not fit in.”

France’s Economy Minister Bruno Le Maire this month also issued a stark warning that Trump is seeking to drive a wedge between France and Germany — courting Paris, while simultaneously attacking Berlin’s trade surplus with the U.S. “In this globalized world, European countries must form a bloc, because what our partners or adversaries want is to divide us,” Le Maire said at an economic conference in Aix-en-Provence. “What the United States want, that’s to divide France and Germany.”

Despite these remarks from Le Maire, Anthony Gardner, former ambassador to the EU under the Barack Obama administration, said that he suspects the full magnitude of the threat has not sunk in. “Europe wake up; the U.S. wants to break up the EU,” he tweeted on Sunday. “Remember Belgium’s motto: L’union fait la force. [Unity creates strength]. Especially on trade. No side deals.”

One EU diplomat insisted that Brussels is not blind to these dangers in the run-up to Juncker’s visit.

Trump thinks that Europe is “too big to be controllable by DC, so it’s bad for America. Simple logic. And therefore the only deal that will bring the president to stop the trade war is the deal that breaks up the European market. I don’t quite think that’s the legacy Juncker is aiming for,” the diplomat said.

Europe is source of a deep frustration for Trump, as it runs a massive goods surplus with the U.S., at $147 billion in 2016. In particular, the U.S. president blames Germany’s mighty car exporters for this imbalance.

Leveling the field is not easy, however. With its market of 510 million consumers, Europe not only has the clout to stand up to the United States, but is increasingly setting global standards — particularly on food. This not only limits U.S. exports in Europe but also means that the European model is used in a broader trading ecosystem that includes Canada, Mexico and Japan.

New world order

Marietje Schaake, a liberal Dutch member of the European Parliament, observed that the U.S. trade strategy meshed with Trump’s political agenda.

“You could say there’s a new transatlantic relation emerging, of nationalists, populists and protectionists,” she said, pointing out that Trump’s meeting with Russian President Vladimir Putin has cast doubt on America’s commitment to supporting European security.

Trump’s opposition to the EU partly builds on an long-standing American discomfort about the EU’s economic policies.

“We already saw problems during the negotiations for the Transatlantic Trade and Investment Partnership, where the U.S. didn’t like EU demands such as on geographical indications [food name protections], and certainly didn’t like that we had ambitious requests in areas like public procurement,” said Pascal Kerneis, managing director of the European Services Forum and a member of the now defunct TTIP advisory group.

Kerneis said that Trump’s trade attacks are shifting the tensions to a completely new level: “He’s attacking on all fronts, hoping to break our unity, particularly between Germany and France.”

France particularly fears that Trump’s duties on Spanish olives could only be the first salvo on Europe’s whole system of farm subsidies.

EU lawmaker Schaake said that France is right to worry about a conflagration. “Once we give in in one area, he will attack at the next one,” she said. “If we allow Trump to play Europeans against each other, sector by sector, it will be a losing game.”

Even if Europe goes about capitulating to Trump’s gripes about the Union, whether it gets back to NATO defense spending or the trade deficit, the question remains whether this will satiate Trump’s political appetite and result in an improved trade perspective and politically acceptable position with Washington, and France’s concern that the matter runs deeper and has a foreign policy agenda behind it, and that caving to Trump’s pressure will only end in defeat for the EU would therefore appear reasonable.

But Germany is staring down the barrel of a possible new round of tariffs that would hurt some of their largest industries and is therefore under a lot of pressure to find a solution, or at least some sort of agreement that could deescalate the situation.

However, Germany’s recent record of resolving international issues is such that Germany is really only scoring cease fire agreements, rather than ending the real political conflicts, referring mainly to the immigration issue which recently resulted only in diffusing some inter Union tensions, but without resolving the problem itself.

In this context, Germany could promise the moon and stars to Trump, possibly avert further trade tensions, but yet fail to address the core political and trade conflicts that have already broken out. Essentially, then, such a compromise would only serve to function as damage control, while leaving Germany and the Union at a further disadvantaged political position relative to the States at the political table.

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EU and Japan ink free trade deal representing over 30% of global GDP

The free trade agreement represents a victory for free trade in the face of growing protectionism

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In a bid to preserve free trade and strengthen their trade partnership, the European Union and Japan have finished a free trade zone agreement that has been sitting in the pipeline for years.

The present global economic outlook provided the needed spur to action to get the ball rolling again and now it has finally reached the end zone and scored another point for free and open trade against the growing influence of protectionism, which has been creeping up with alarming rapidity and far reaching consequences in recent months.

Under the deal, Japan will scrap tariffs on some 94% of goods imported from Europe and the EU in turn is canning 99% of tariffs on Japanese goods.

Between the European Union and Japan, the trade deal impacts about 37% of the world’s GDP, making it one of the largest and impactful of such agreements.

The Japan Times reports:

Top European Union leaders and Prime Minister Shinzo Abe signed an economic partnership agreement Tuesday in Tokyo, a pact that will create a massive free trade zone accounting for 37 percent of the world’s trade by value.

European Council President Donald Tusk and European Commission President Jean-Claude Juncker hastily arranged their visit to Tokyo after Abe was forced to abruptly cancel plans to attend a July 11 signing ceremony in Brussels in the aftermath of flooding and mudslides in western Japan.

Japanese officials said the signing is particularly important to counter intensifying protectionism worldwide triggered by U.S. President Donald Trump.

Negotiations on the pact between Japan and the EU, which started in 2013, had stagnated for a time but regained momentum after Trump took office in January 2017.

“We are sending a clear message that we stand together against protectionism,” Tusk said at a joint news conference with Abe after they signed the agreement.

“The relationship between the EU and Japan has never been stronger. Geographically we are far apart, but politically and economically we could be hardly any closer,” Tusk said. “I’m proud today we are taking our strategic partnership to a new level.”

Tusk stressed that the EU and Japan are partners sharing the same basic values, such as liberal democracy, human rights and rule-based order.

Abe also emphasized the importance of free and fair trade.

“Right now, concerns are rising over protectionism all around the world. We are sending out a message emphasizing the importance of a trade system based on free and fair rules,” he said.

The pact will create a free trade bloc accounting for roughly 30 percent of the world’s gross domestic product. Japan and the EU hope to have the agreement, which still needs to be ratified by both parties, come into force by March.

Under the EPA, tariffs on about 99 percent of Japan’s exported goods to the EU will eventually be eliminated, while duties on 94 percent of EU’s exported items to Japan will be abolished, according to the Foreign Ministry.

The EPA will eliminate duties of 10 percent on Japan’s auto exports to the EU seven years after the pact takes effect. The current 15 percent duties on wine imports from the EU will be eliminated immediately, while those on cheese, pork and beef will be sharply cut.

In total, the EPA will push up domestic GDP by 1 percent, or ¥5 trillion a year, and create 290,000 new jobs nationwide, according to the government.

“The world is now facing raging waves of protectionism. So the signing ceremony at this time is particularly meaningful,” a senior Foreign Ministry official said earlier this month on condition of anonymity.

“The impact for Japan is big,” the official said.

Fukunari Kimura, an economics professor at Keio University, said the EU is now trying to accelerate the ratification process.

“This is a repercussion of President Trump’s policies. They will try to ratify it before Brexit in March of next year,” he said in an interview with The Japan Times last week.

But the deal has raised concerns among some domestic farmers, in particular those from Hokkaido, the country’s major dairy producer.

According to an estimate by the Hokkaido Prefectural Government, the EPA will cut national production in the agriculture, fishery and forestry industries by up to ¥114.3 billion a year, with Hokkaido accounting for 34 percent of the predicted losses.

“The sustainable development of the prefecture’s agriculture, forestry and fisheries industries is our top priority. We need to make efforts to raise our international competitiveness,” Hokkaido Gov. Harumi Takahashi said during a news conference July 10.

Japan and the EU had reached a basic agreement on the EPA in December.

Tokyo also led negotiations on the Trans-Pacific Partnership free trade pact after Trump withdrew the U.S. from the deal in January 2017.

In March, 11 countries including Japan signed the so-called TPP11, or a revised TPP pact that does not include the U.S.

“The Japan-EU EPA is another important step for Japan to strengthen its trade relationship with key trading partners, and demonstrate that trade liberalization is alive and well, even if the United States is taking a different stance,” wrote Wendy Cutler, a former acting deputy U.S. Trade Representative, in an email sent to The Japan Times last week.

“The EU deal also reduces Japanese dependence on the U.S. market and thus increases its leverage to resist unreasonable trade demands by the United States,” she wrote.

According to the Foreign Ministry, the EU, which accounts for 22 percent of the world’s GDP, was the destination for 11.4 percent of Japanese exports in 2016. In the same year, the figure for the U.S. was 20.2 percent and 17.7 percent for China.

In 2016, Japan’s exports to the EU totaled ¥8 trillion, while reciprocal trade was ¥8.2 trillion.

The deal provides tariff relief for both parties and can improve the quantity of trade between them, expand the economy and create many jobs. It also helps to further diversify their trade portfolios in order to mitigate the prospect of a single global trade partner wielding too much influence, which in turn provides a certain amount of cover from any adverse actions or demands from a single actor. In this way, current trade dependencies can be reduced and free and diversified trade is further bolstered.

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