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SYRIA UPDATE: Russia negotiating with Turkey to withdraw Jihadis from Aleppo

Russian and Turkish military chiefs meet in Moscow today as Russia publicly demands withdrawal of all Jihadis from Aleppo.

Alexander Mercouris

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Following the failure of the Al-Qaeda attempt to break the siege of the Jihadi held district of Aleppo, Russia’s President Vladimir Putin is giving the Jihadis in eastern Aleppo what is effectively an ultimatum.

The terms of this ultimatum have been set out by General Valery Gerasimov, the Chief of the Russian military’s General Staff:

“Taking into account that our American colleagues are incapable of separating the opposition from terrorists, we appeal to all the leaders of armed groups directly to stop combat actions and leave Aleppo with their arms.”

(bold italics added)

To this end two corridors have been opened to enable the Jihadis to retreat, one heading towards the Turkish border, and the other heading to the Al-Qaeda controlled western Syrian city of Idlib.

In addition there are a further six humanitarian corridors for civilians to use if they want to leave.

Gerasimov is currently engaged in meetings in Moscow with General Hulusi Akar, the Chief of the Turkish military’s General Staff, who is currently visiting him in Moscow.

Having despaired of getting the US to separate Al-Qaeda/Jabhat Al-Nusra from the other Jihadis in Aleppo, and getting them to withdraw, it is likely the Russians are trying to agree the same thing with the Turks.  Indeed Gerasimov’s comments today essentially say as much.

Given that the Jihadis fighting in Syria totally depend on Turkey for their supplies, if the Turkish leadership tells them to quit eastern Aleppo there is a possibility that they may finally accept that the game is up and heed the call.  The same thing has after all recently happened in other Syrian towns and cities, including in the formerly Jihadi controlled suburbs of Damascus.

Note that Putin’s ultimatum is phrased differently from the way it was before. 

The Kerry-Lavrov agreement of 9th September 2016 offered the non Al-Qaeda Jihadis the option of staying in eastern Aleppo after they had separated themselves from Al-Qaeda/Jabhat Al-Nusra, who the agreement implicitly required to leave.

In the subsequent discussions in the UN Security Council that took place around the proposed French Resolution, the Russians made it clear that the Al-Qaeda/Jabhat Al-Nusra was required to leave, and this was the demand the UN envoy Staffan de Mistura supposedly supported, though as I have discussed previously the terms under which he did it actually nullified it.

Now Putin through Gerasimov is demanding that all Jihadi fighters in eastern Aleppo leave, irrespective of whether they belong to Al-Qaeda/Jabhat Al-Nusra or not.

In other words over the course of the autumn, as the US has hesitated and reneged on its promises, the Russians have quietly raised their demands.  They now want Aleppo totally rid of Jihadi fighters and handed over entirely to the Syrian government.

This was surely the Russian objective all along, but it has now been made clear.

As to what happens if the Jihadi fighters in eastern Aleppo reject this demand, Gerasimov pointed it out to them:

“The militants’ efforts to break loose from the city have failed. The terrorists have suffered huge losses in manpower, weapons and equipment. They are unable to pull out of the city.”

In other words the Jihadis in eastern Aleppo are trapped with no way out and no-one is coming to their rescue.  According to RT’s Arabic service (as reported by the Iranian news agency Fars) the Jihadis have themselves admitted that they suffered casualties (dead and wounded) numbering between 2,200 and 2,500 men in their failed attempt to break the siege of eastern Aleppo over the last few days. 

Meanwhile the Syrian aligned Al-Masdar news agency is reporting that it has been told by a Syrian army source that following the deployment of elite and Special Forces troops to Aleppo, if the Syrian army returns to the offensive  “unlike the previous offensives in Aleppo City, this assault will not be halted for any reason.”

Gerasimov is reported to have said that the ceasefire to enable the Jihadis to retreat from Aleppo will take effect at 9:00 am local time on Friday 4th November 2016, and will expires at 7 pm on the same day.  However if the Jihadis agree to leave Aleppo and take actual steps to do so, that period will presumably be extended.

Much will probably depend on the outcome of the talks General Gerasimov is having with General Hulusi Akar today.

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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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