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Here’s how Iran explains the Russian military deployment

Iranian officials confirm Tehran asked Moscow to deploy military aircraft to Iran as a gesture of support for Iran. Despite the pull out they hint at further deployments and call Russia an “ally”.

Alexander Mercouris

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A flurry of Iranian statements over the last few days have all but confirmed the point made in an article I wrote for The Duran.

The Russian deployment to Shahid Nojeh base near Hamadan was first and foremost intended to be a political statement of support by Russia for Iran.  This is what I said in my article which I wrote on 16th August 2016:

“This is primarily a political not a military act.  TU-22M3s have the range to strike anywhere in Syria from their bases in southern Russia and have repeatedly shown their capacity to do so.  There is no operational reason for them to fly to Syria from Hamadan.  That Russia has chosen to fly its TU-22M3s out of Hamadan is therefore a political statement by Russia that Russia and Iran are military allies in the joint fight against Islamist terrorism in Syria.”

Compare that with what Ali Shamkhani, Secretary of Iran’s Supreme National Security Council, is reported by the semi-official Iranian Fars news agency on 24th August 2016.  After confirming that it was Iran not Russia that asked for the Russian aircraft to deploy to Shahid Nojeh base, supposedly “to render logistical support for ground operations in Aleppo” Ali Shamkhani is quoted by Fars as saying

“Today, Iran has allied with Russia given its need to cooperation with powerful Russia and resistance front to confront the Takfiri plots and it is using Russia’s capabilities in air operations alongside the ground operations whose planners and military advisors are from Iran and it is a sign of might and not dependence…….

The close coordination among Iran, Russia and Syria in conducting the recent operations against the Takfiri terrorists in Syria brought into failure the US protracting strategy for imposing its will on the security equations in Syria….

Certain western and Arab countries which have the illusion of changing the regional equations, have been paralysed by the Islamic Republic’s political, defensive and security initiative in the recent operations……

The all-out relations between Iran and Russia which are based on the national interests and within the framework of strategic cooperation are not merely limited to the fight against terrorism and have more extensive aspects.”

(Bold italics added)

In other words Iran asked for the deployment of Russian aircraft to Shahid Nojeh base in order to demonstrate Iran’s alliance with Russia.  Note how Shamkhani refers to Russia as Iran’s “ally” and talks of their “all-out relations” and of how “the framework of strategic cooperation are not merely limited to the fight against terrorism and have more extensive aspects”.

Since the purpose of the deployment was primarily political – to signal to the world that Iran now has Russia for an ally – we can dispense with the idea that it was Russia’s “showing off” about its use of the base that caused the deployment to called off.  

Far from the Iranians being annoyed because the deployment was made public, the whole point of the deployment from the Iranian point of view would have been to make it as public as possible. 

That all but proves that it was the Iranians who tipped off Al-Masdar about the deployment and who provided Al-Masdar with the pictures of the Russian aircraft at Shahid Nojeh base that Al-Masdar published.

Not surprisingly in light of all this the Iranians are now going out of their way to say that the Russians might return to Shahid Nojeh base, with Ali Larijani, the powerful Speaker of the Iranian parliament the Majlis even hinting (wrongly) that they might still be there

“The Russian fighter jets’ flights from Hamadan airbase have not stopped and we and Russia are united in fighting against terrorism and this unity benefits the regional Muslims.”

The fact that it was the Iranians who originally asked for the deployment makes it more likely (though it does not prove) that the decision to withdraw the aircraft was made by Moscow. 

That this is so is further suggested by the way Levan Djagaryan, Russia’s ambassador to Iran, seems also to be going out of his way to make statements that there might be future Russian military deployments to Iran. 

The fact that Fars is quoting these statements at length suggests that Djagaryan’s comments are intended to reassure the Iranians that the Russian pullout does not signal any weakening of Moscow’s support for Tehran

“Moscow sees no obstacles to the further use of Iranian infrastructure, including the air base in Hamadan, for strikes against terrorists in Syria….The Russian aerospace forces may resume operations from Iranian base Hamadan when it is expedient, and by the decision of leaders of Russia and Iran…Interaction with Tehran on Syria has positive perspective…”

As an aside, it is interesting that the diplomat Russia has sent to Tehran to act as its ambassador there is as shown by his name an Armenian.  Armenia and Iran are close neighbours and have had an intense and centuries long interaction with each other.  There is still a sizeable Armenian community in Iran.   

An Armenian might be expected to know Iran well – and certainly far better than the vast majority of Russians (and Americans) do – and to be especially sensitive and knowledgeable about Iranian culture and Iranian concerns.  He might also by mere virtue of the fact he is Armenian to some extent deflect Iranian memories of past humiliations by Russia.

There have been some suggestions over the last two days that the Russians are insufficiently sensitive to Iranian concerns and have failed to appreciate the importance of using “soft power” in Tehran.  The fact Russia has chosen an Armenian to represent its interests in Tehran argues otherwise.

None of this of course explains why the pullout happened.  The Iranians – as might be expected – are going out of their way to deny that it was due to any outside pressure.  Fars quotes Shakhmani as having

“dismissed foreign pressures as the reason behind the Russian fighter jets’ leaving the Iranian territories”.

It is possible the Iranians underestimated the domestic reaction in Iran and asked the Russians to pull out so that they could prepare Iranian public opinion more thoroughly.  Certainly Shakhmani’s comments could be interpreted in that way.

However it is also possible that the Russians acceded to an Iranian request to deploy some of their aircraft to a base in Iran as a gesture of support for Iran, but made it clear that the deployment would be a short one limited to just 3 days in order to avoid complicating Moscow’s relations with Saudi Arabia and Israel.

 If so then that would mean there was no row between Tehran and Moscow after all, though it would also mean that the public relations part of the pullout was badly botched.  However if the deployment was intended as a signal to Washington, Riyadh and Jerusalem rather than the wider public, perhaps the Russians and the Iranians don’t care about that.

One way or the other it is clear that there is no major rift between Tehran and Moscow.  Whilst it will probably be some time before we know the exact truth of this affair, the key point is that Russia has deployed military aircraft to Iran with Iran’s agreement, and that both the Russians and the Iranians are going out of their way to say it may happen again.

The Iranians are going even further, with some Iranian officials like Shakhmani now calling the Russia Iran’s “ally”.  No Russian official has gone that far.  However despite the longstanding complexities and contradictions in their relationship, step by step that is what the Russians and the Iranians are edging towards becoming, and what one day they might indeed become.

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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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The man behind Ukraine coup is now turning Greece against Russia (Video)

The Duran – News in Review – Episode 57.

Alex Christoforou

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On July 11, Greece said it would expel two Russian diplomats and barred the entry of two others.

The Duran reported that the formal reason is alleged meddling in an attempt to foment opposition to the “historic” name deal between Athens and Skopje paving the way for Macedonia’s NATO membership. Moscow said it would respond in kind.

Nothing like this ever happened before. The relations between the two countries have traditionally been warm. This year Moscow and Athens mark the 190th anniversary of diplomatic relations and the 25th anniversary of the Treaty of Friendship and Cooperation between the Russian Federation and the Hellenic Republic. They have signed over 50 treaties and agreements.

Greek news daily, Kathimerini says the relationship started to gradually worsen behind the scenes about a couple of years ago. What happened back then? Geoffrey Pyatt assumed office as US Ambassador to Greece. Before the assignment he had served as ambassador to Ukraine in 2013-2016 at the time of Euromaidan – the events the US took active part in. He almost openly contributed into the Russia-Ukraine rift. Now it’s the turn of Greece. The ambassador has already warned Athens about the “malign influence of Russia”. He remains true to himself.

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris connect the dots between the Ukraine coup and Greece’s recent row with Russia, and the man who is in the middle of it all, US Ambassador Geoffrey Pyatt.

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Via Sputnik News

Actions similar to the expulsion of Russian diplomats from Greece do not remain without consequences, said spokeswoman for the Russian Foreign Ministry Maria Zakharova.

“We have an understanding that the people of Greece should communicate with their Russian partners, and not suffer from dirty provocations, into which, unfortunately, Athens was dragged,” Zakharova said at a briefing.

“Unfortunately, of course, we are talking about politics. Such things do not remain without consequences, do not disappear without a trace. Of course, unfortunately, all this darkens bilateral relations, without introducing any constructive principle,” she added.

On July 11, the Greek Kathimerini newspaper reported that Athens had decided to expel two Russian diplomats and ban two more from entering the country over illegal actions that threatened the country’s national security. The publication claimed that the diplomats attempted to intervene in a domestic issue, namely the changing of the name of the Former Yugoslav Republic of Macedonia (FYROM) to the Republic of North Macedonia, the agreement for which was brokered by Skopje and Athens last month.

The Russian Foreign Ministry has vowed to give a mirror response to Greece’s move.

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Russia just DUMPED $80 billion in US debt

The US Treasury published a report naming those countries that are the largest holders of US bonds. The list includes 33 countries, and for the first time Russia is no longer in it.

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Russia has stopped “inching towards de-dollarization” as I wrote about on July 3rd, and has now energetically walked out of the list of largest holders of US government bonds, hence this update. For the two months ending in May 2018, Moscow has offloaded more than $80 billion in US Government debt obligations.

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The $30 billion “minimum” listing Rubicon has been crossed by Russia.

As of the end of May, Russia had bonds worth only $ 14.9 billion. For comparison: in April, Russia was on the Treasury list with bonds totaling $48.7 billion. Even then it was offloading US$ debt securities as Russia owned in March over $96 billion. At the end of 2017, Russia had US treasury securities worth $102.2 billion. It is anyones guess what Russia will own when the June and July figures are released in August and September – probably less than today.

This simply serves as a confirmation that Russia is steadfastly following a conservative policy of risk diversification in several areas such as financial, economic, and geopolitical. The US public debt and spend is increasingly viewed as a heightened risk area, deserving sober assessment.

So where have all the dollars gone? The total reserves of the Russian Central Bank have not changed and remain at approximately the equivalent of $ 457 billion, so what we are seeing is a shift of assets to other central banks, other asset classes, just not US$ government bonds.

During the same time (April-May) as this US$ shift happened, the Russian Central Bank bought more than 1 million troy ounces of gold in 60 days, and continues.

For comparison sake, the maximum Russia investment in US public debt was in October 2010 totaling $176.3 billion. Today it is $14.9 billion.

The largest holders of US government bonds as of May are China ($ 1,183.1 billion), Japan ($ 1048.8 billion), Ireland ($ 301 billion), Brazil ($ 299.2 billion), Great Britain ($ 265 billion).

Using the similar conservative metrics that the Russian Central Bank has been rather successfully applying through this geopolitically and economically challenging period with the US and the US Dollar, it may not stretch the imagination too much that other countries such as China may eventually follow suit. Who will finance the debt/spend then?

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