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The Trump – Putin call: summary and analysis

“Businesslike and substantive call” between the leaders of the US and Russia

Alexander Mercouris

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Donald Trump and Vladimir Putin – blocked by the US bureaucracy from having a proper meeting with each other at the APEC summit in Vietnam – have instead had the detailed discussion they wanted with each other by telephone.

That is the conclusion one must draw from the unusually detailed summary of this conversation which has been provided by the Kremlin’s website

As agreed in advance, Vladimir Putin had a telephone conversation with President of the United States of America Donald Trump.

Current Syrian issues, in view of the military operation to destroy terrorists in Syria which is winding down, were thoroughly discussed. Vladimir Putin stressed Russia’s willingness to actively facilitate a durable political settlement in that country on the basis of UN Security Council Resolution 2254 and in keeping with the agreements reached as part of the Astana meetings and the provisions of the Joint Statement approved by the presidents of Russia and the United States on November 11 at the APEC Economic Leaders’ Meeting in Vietnam. It was noted, in particular, that this statement met with a positive reaction in the Middle East.

There was discussion of the need to preserve the sovereignty, independence and territorial integrity of Syria, and to achieve a political settlement on the basis of principles that must be worked out as a result of the broadest possible intra-Syrian negotiation process. This is precisely the aim of Russia’s initiative to hold the National Dialogue Conference in Sochi soon.

Vladimir Putin informed Donald Trump about the main outcomes of the November 20 meeting with Bashar al-Assad, where the Syrian leader reaffirmed his commitment to the political process, constitutional reform, and presidential and parliamentary elections. In addition, emphasis was placed on the upcoming trilateral talks in Sochi on November 22 with the participation of the presidents of Russia, Iran and Turkey, during which steps to further normalise the situation in Syria and various aspects of the political settlement process are to be coordinated.

More broadly, the President of Russia once again spoke in favour of joint antiterrorist efforts with the United States, noting the practical importance of coordinating efforts between the special services of both countries. The US President was supportive of this idea.

Vladimir Putin and Donald Trump also exchanged views on the current state of affairs on the Korean Peninsula, emphasising that it would be advisable to find a negotiated solution to the problem by diplomatic means.

Regarding the crisis in southeast Ukraine, the President of Russia pointed to the lack of a real alternative to unconditional compliance with the Minsk agreements of February 12, 2015.

The two leaders touched on the situation in Afghanistan, which is of concern due to the growing terrorist and drug trafficking threats.

The situation surrounding the Iranian nuclear programme was also discussed. Russia’s commitment to full implementation of the Joint Comprehensive Plan of Action was noted, as it is an essential factor in ensuring regional stability and overcoming the challenge of non-proliferation of weapons of mass destruction.

Both sides expressed satisfaction with the businesslike and substantive conversation.

The Kremlin says the conversation was “agreed in advance”.  One would like to know when and by whom?

My guess is that Trump and Putin agreed it during one of their short encounters at the APEC summit, when they realised that a proper summit between them was being blocked.  If so then the conversation is the fruit of their encounters at the APEC summit.

The conversation covered an unusually wide range of issues:

Syria

This was unquestionably the most important topic discussed, and the one which would have taken up the most time.

The Russians are very much at the forefront of the Syrian negotiations, having together with the Iranians effectively won the war in Syria for President Assad.

That has put the Russians in a position of great strength, which they could in theory use to dictate the terms of the settlement at the forthcoming negotiations whilst seeking to exclude the US.

Had positions been reversed, and had the US found itself in such a position of advantage, it is a certainty that it would be not be involving the Russians in the negotiations.  The US after all did not involve the Russians in the negotiations which followed the US “victories” in the 2003 Iraqi war and the 2011 Libyan war.

The Russian approach is the diametric opposite.  Instead of seeking to exclude the US from the negotiations Putin briefed Trump fully on his discussions with President Assad – someone who remains persona non grata for the US and for Donald Trump himself – and set out for Trump the Russian approach to the negotiations.

In doing so Putin followed the classic Russian approach of carefully setting out for Trump the list of international agreements the Russians have negotiated and which they are using as the building blocks of the negotiations.

UN Security Council Resolution 2254 and in keeping with the agreements reached as part of the Astana meetings and the provisions of the Joint Statement approved by the presidents of Russia and the United States on November 11 at the APEC Economic Leaders’ Meeting in Vietnam.

Of these the most important for Trump is the Joint Statement he made with Putin at the APEC summit in Vietnam.

Trump was not involved in the earlier agreements, but will feel that he has ownership of the Joint Statement, and by agreeing to it at the APEC summit and by referring to it in his telephone conversation with Trump, Putin is giving Trump a reason to feel that he is an actual participant in the negotiations and is not just a bystander.

In reality the most important of the agreements Putin referred to during the conversation is UN Security Council Resolution 2254, which was passed unanimously by the UN Security Council on 18th December 2015 following lengthy negotiations between Russian Foreign Minister Lavrov and US Secretary of State Kerry.

The full text of UN Security Council Resolution 2254 can be found here.

Why is it so important to Putin and the Russians to involve Trump in the negotiations?  The clue to that can be found in the topics which were discussed.  For example Putin used the conversation to reaffirm to Trump

the need to preserve the sovereignty, independence and territorial integrity of Syria

(bold italics added)

This language is taken directly from the preamble of UN Security Council Resolution 2254, which reads as follow

Reaffirming  [the UN Security Council’s] strong commitment to the sovereignty, independence, unity and territorial integrity of the Syrian Arab Republic

(bold italics added)

What lies behind this is Russian concern about what I recently called the US’s Plan C: the attempt by some in the US to maintain US influence in Syria by carving out a quasi independent Kurdish statelet in northern Syria.

Plan C is already in serious trouble as a result of the defeat of the Kurds in Kirkuk by the Iraqi army. However Putin used the telephone conversation to remind Trump that Plan C – because it threatens Syria’s territorial integrity – is incompatible with the commitments the US previously took on itself when it negotiated and voted for UN Security Council Resolution 2254.

Putin also used the conversation with Trump to remind Trump of his longstanding proposal – made most famously in his September 2015 UN General Assembly Speech – for a joint struggle by the US and Russia against Jihadi terrorism.

Trump has been consistently receptive to this idea – the Kremlin’s summary says he was “supportive of this idea” – but it has been consistently blocked by the US bureaucracy including especially the Pentagon.

For Putin the attraction of this proposal is not just that such a joint struggle will facilitate the global struggle against terrorism – something Putin cares about as much as Trump does – but because such a joint struggle might provide a tie between the US and Russia which might reverse the downward spiral in US-Russian relations.

Whilst Trump is “supportive of the idea” it remains to be seen whether the resistance to in Washington can be overcome.

In summary, Putin is keeping Trump informed of Russia’s Syrian diplomacy in order to limit as far as possible the danger of the US acting as a spoiler.  The idea is to get Trump to think that the US has some ownership over the eventual outcome, so that it does not act to wreck it.

At the same time Putin hopes to use this as a bridge towards improving relations.

Whether given the pathological hostility to Russia in the US these efforts can be successful is another matter.  However Putin doubtless feels that by trying he is doing his job.

Korea

The Kremlin’s summary tells us little about the discussion on the Korean issue, which suggests that this part of the conversation may have been brief.

It is quite likely that it was Trump who initiated this part of the conversation since he has made achieving a settlement of the North Korean issue the central focus of his foreign policy.

Putin will no doubt have sought an explanation from Trump of Trump’s recent decision to put North Korea back on the list of states sponsoring terrorism, and he will also have sought reassurances from Trump that the recent US fleet and troop movements near North Korea are not intended to set the scene for US military action.

Putin will also have briefed Trump about Russia’s recent negotiations with the North Korean diplomat Choe Son Hui, and he will no doubt have reminded Trump of the Chinese-Russian proposal for a double-freeze.

Trump for his part will no doubt have sought – and received – reassurances from Putin that Russia will enforce the sanctions the UN Security Council has recently imposed on North Korea following that country’s intercontinental ballistic missile and hydrogen bomb tests.

Ukraine

Donald Trump hinted during the 2016 election campaign that for him the conflict in Ukraine came close to the bottom of his list of foreign policy priorities.  However he has encountered fierce resistance from his bureaucracy, which continues to be committed to Ukraine, and which continues to use the conflict there to mobilise opposition to Russia in Europe.

Recently hardliners in the US have been floating proposals to send weapons – notably Javelin anti-tank missiles – to Ukraine, whilst an article in the Wall Street Journal suggested that some US officials were trying to pressure the Russians into agreeing to a force of 20,000 “peacekeepers” to restore the Donbass to Ukrainian control.

Needless to say the Russians have emphatically rejected both proposals, and Putin followed this up by taking the unprecedented step of telephoning Zakharchenko and Plotnitsky – the leaders of the Donetsk and Lugansk People’s Republics – and having details of this call posted on the Kremlin’s website in what was clearly intended as a show of support.

The proposals to flood the Donbass with ‘peacekeepers’ and to send arms to Ukraine are actually inconsistent with the February 2015 Minsk Agreement as the Russians never tire of pointing out, and the Kremlin’s summary of Putin’s conversation with Trump shows that Putin used the opportunity provided by the call to point this out to him

Regarding the crisis in southeast Ukraine, the President of Russia pointed to the lack of a real alternative to unconditional compliance with the Minsk agreements of February 12, 2015.

My impression is that Trump is not interested in the conflict in Ukraine, in which he rightly sees no national or security interest for the US.  Left to himself he would probably gladly walk away from it, as would many of those who supported him in the 2016 election.

With the Russiagate affair still ongoing, that is politically impossible.

What that means in practical terms is that Trump will have listened to what Putin had to say and will have taken note of it, but this will have no immediate effect on US policy.

If Trump is one day able to put Russiagate behind him and consolidate his position in Washington that may change.  However that is not the situation now.

Afghanistan

The last few months have witnessed a drumbeat of accusations in the US that the Russians are covertly assisting the Taliban by sending arms and economic aid to them.  The Russians categorically deny these accusations, though they admit to holding talks with the Taliban who they are gradually coming to see as a bulwark against the spread of ISIS to Afghanistan.

The Kremlin’s summary suggests that the part of the telephone conversation between Trump and Putin which touched on Afghanistan was brief, and that these accusations were not discussed in any detail if they were discussed at all

The two leaders touched on the situation in Afghanistan, which is of concern due to the growing terrorist and drug trafficking threats.

The reference to “drug trafficking threats” possibly refers to the longstanding Russian complaint that the US is not doing enough to suppress heroin production and trafficking in Afghanistan.  A large part of this heroin is transported across Russia to Europe, causing a serious heroin problem in Russia, and the Russians have been placing the blame for this on the blind eye that they say that the US has been turning to heroin production in Afghanistan.

It is quite likely that Putin raised this issue with Trump whilst repeating Russia’s concern that ISIS, as it is being driven out of Syria and Iraq, is now starting to gain a foothold in Afghanistan.

Though these are concerns Trump is known to share, the terse part of the Kremlin’s summary of this section of their conversation makes it impossible to say what his reaction was.

It is not impossible that the reason this part of the summary is so terse is because there were disagreements, which the Kremlin does not want to publicise.

Iran

On the subject of Iran, Trump and Putin have diametrically opposite views.

Trump sees Iran as a hotbed of terrorism; Putin sees Iran as Russia’s strategic partner and ally in the struggle against terrorism.

Trump considers the Joint Comprehensive Plan of Action (“JCPOA”) which placed limits on Iran’s nuclear programme a “bad deal”, and has recently decertified Iran because of its supposed breaches of it.

Putin unequivocally supports the JCPOA and denies that Iran has committed any breaches of it.

The Kremlin’s summary makes no effort to hide the disagreement

Russia’s commitment to full implementation of the Joint Comprehensive Plan of Action was noted, as it is an essential factor in ensuring regional stability and overcoming the challenge of non-proliferation of weapons of mass destruction.

No word is said here of what opinions Trump expressed, though it is a certainty they were the opposite of the ones held by Putin and Russia.  Doubtless Trump and Putin had a forthright exchange of opinions on this issue.

General

Unusually, the Kremlin website tells us something of the atmosphere of the call.

Both sides expressed satisfaction with the businesslike and substantive conversation.

It is a commonplace in the US and Europe that Donald Trump is terrible at diplomacy.

In reality his interactions with world leaders during his recent Asia tour and his conversations with Vladimir Putin and Xi Jinping tell a different story.

Though Trump is extremely inexperienced and many of his ideas about foreign policy are frankly amateur, he nonetheless comes across as warm and approachable in a way that his cold and aloof predecessor Barack Obama never did.

The result is that other world leaders – especially those outside Europe – like him in a way that they never liked Barack Obama, and are prepared to cut him slack, even when they disagree with him.

That suggests that if the US bureaucracy was prepared to work with Trump and not against him, and instead of seeking to undermine him at every turn sought to help him gain the experience and understanding of world affairs he needs to do his job, then he could in time become an extremely effective foreign policy President.

Trump’s interactions with Xi Jinping and Putin are cases in point.  As the leaders of the two other Great Powers they are the two most important individuals in the world with whom the US and its President must deal.

Trump seems to understand this, and despite a catalogue of misunderstandings he seems to be gradually edging towards a better understanding of the Chinese leader.  As for Putin, Trump’s few interactions with him at a personal level have always gone well.  The “businesslike and substantive” telephone conversation he has just had with Putin is a case in point.

As for Putin, his conversation with Trump was just part of a day’s work.  That day was extremely busy.  As well as the conversation with Trump, Putin had meetings with President Assad of Syria and President Zeman of the Czech Republic, and also had telephone conversations with President Sisi of Egypt, King Salman of Saudi Arabia and Prime Minister Netanyahu of Israel.  Today (22nd November 2017) he will be meeting President Erdogan of Turkey and President Rouhani of Iran.

It will take many years of hard learning and hard work before Donald Trump can conduct diplomacy at that sort of pace.

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Russian Il-20 downed by Syrian missile. Russia blames Israel. Israel blames Syria (Video)

The Duran – News in Review – Episode 110.

Alex Christoforou

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The unthinkable has happened in Syria.

The world now teeters on the brink of all out war in Syria as a Russian Il-20 was downed by Syrian missile after Israeli F-16s used it as cover during attack, according to statements made by the Russian Ministry of Defense.

President Vladimir Putin, answering a reporter’s question during a press conference with Hungarian PM Viktor Orban, said the downing of the Russian Il-20 plane looks like “a chain of tragic circumstances.” 

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the tripwire triggered that has the potential to tip the fragile balance in Syria towards conflict between Russia, Iran and Israel.

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The Russian military says an Israeli raid on Syria triggered a chain of events that led to its Il-20 plane being shot down by a Syrian S-200 surface-to-air missile. Moscow reserves the right to respond accordingly.

Russian Defense Ministry spokesman Maj. Gen. Igor Konashenkov said…

“Israel did not warn the command of the Russian troops in Syria about the planned operation. We received a notification via a hotline less than a minute before the strike, which did not allow the Russian aircraft to be directed to a safe zone.”

The statement by the Russian Defense Ministry said that four Israeli F-16 fighter jets attacked targets in Syria’s Latakia after approaching from the Mediterranean.

The Israeli warplanes approached at a low altitude and “created a dangerous situation for other aircraft and vessels in the region.”

The statement further said that 15 Russian military service members have died as a result…

“The Israeli pilots used the Russian plane as cover and set it up to be targeted by the Syrian air defense forces. As a consequence, the Il-20, which has radar cross-section much larger than the F-16, was shot down by an S-200 system missile.”

According to reports from RT, the Russian military said that the French Navy’s frigate ‘Auvergne,’ as well as a Russian Il-20 plane were in the area during the Israeli operation.

Map of the incident on September 17 in Syria provided by the Russian defense ministry.

The Russian ministry said the Israelis must have known that the Russian plane was present in the area, but this did not stop them from executing “the provocation.” Israel also failed to warn Russia about the planned operation in advance. The warning came just a minute before the attack started, which “did not leave time to move the Russian plane to a safe area,”the statement said.

The statement gives a larger death toll than earlier reports by the Russian military, which said there were 14 crew members on board the missing Il-20. It said a search and rescue operation for the shot-down plane is underway.

A later update said debris from the downed plane was found some 27km off the Latakia coast. The search party collected some body parts, personal possessions of the crew, and fragments of the plane.

Meanwhile Israel has come out to blame the Syrian government for the downing of the military plane, according to an IDF statement.

Israel said that it “expresses sorrow for the death of the aircrew members” of the Russian plane. However, it stated that the government of Bashar Assad “whose military shot down the Russian plane,” is “fully responsible” for the incident.

Israel further blamed Iran and Hezbollah for the incident.

The Israel Defense Forces (IDF) explained that its jets were targeting a Syrian facility “from which systems to manufacture accurate and lethal weapons were about to be transferred on behalf of Iran to Hezbollah in Lebanon.”

Israel claimed that the weapons were “meant to attack Israel.”

Via RT

The IDF assumed that the Syrian anti-air batteries “fired indiscriminately” and didn’t “bother to ensure that no Russian planes were in the air.” The Israelis said that when the Syrian military launched the missiles which hit the Russian plane, its own jets were already within Israeli airspace. “During the strike against the target in Latakia, the Russian plane that was then hit was not within the area of the operation.”

According to the Israeli military, both IDF and Russia have “a deconfliction system,” which was agreed upon by the leadership of both states, and “has proven itself many times over recent years.” The system was in use when the incident happened, the IDF stated. The IDF promised to share “all the relevant information” with Russia “to review the incident and to confirm the facts in this inquiry.”

The military presented a four-point initial inquiry into events in Latakia. It insisted that “extensive and inaccurate” Syrian anti-aircraft fire caused the Russian jet “to be hit and downed.”

The Russian Il-20 aircraft, with 15 crew on board, went off radar during an attack by four Israeli jets on Syria’s Latakia province late Monday. Later on Tuesday the Russian Defense Ministry said that an Israeli raid on Syria triggered a chain of events that led to its plane being shot down by a Syrian S-200 surface-to-air missile.

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Trump Orders Immediate Release Of All Text Messages, Carter Page FISA Application From Russia Investigation

Trump has ordered the DOJ to release all text messages related to the Russia investigation with no redactions.

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Via Zerohedge

President Trump has ordered the Department of Justice to release all text messages related to the Russia investigation with no redactions, of former FBI Director James Comey, his deputy Andrew McCabe, now-fired special agent Peter Strzok, former FBI attorney Lisa Page and twice-demoted DOJ official Bruce Ohr.

Also released will be specific pages from the FBI’s FISA surveillance warrant application on former Trump campaign aide Carter Page, as well as interviews with Ohr.

The statement reads in full:

“At the request of a number of committees of Congress, and for reasons of transparency, the President has directed the Office of the Director of National Intelligence and the Department of Justice (including the FBI) to provide for the immediate declassification of the following materials: (1) pages 10-12 and 17-34 of the June 2017 application to the FISA court in the matter of Carter W. Page; (2) all FBI reports of interviews with Bruce G. Ohr prepared in connection with the Russia investigation; and (3) all FBI reports of interviews prepared in connection with all Carter Page FISA applications.

In addition, President Donald J. Trump has directed the Department of Justice (including the FBI) to publicly release all text messages relating to the Russia investigation, without redaction, of James Comey, Andrew McCabe, Peter Strzok, Lisa Page, and Bruce Ohr

***

As we reported last Monday, Trump had been expected to release the documents any time – with specific attention to the Page documents and the “investigative activities of Justice Department lawyer Bruce Ohr” – who was demoted twice for lying about his extensive relationship  with Christopher Steele – the former MI6 spy who assembled the sham “Steele Dossier” used by the FBI in a FISA surveillance application to spy on Page.

Republicans on the House Intelligence and Judiciary committees believe the declassification will permanently taint the Trump-Russia investigation by showing the investigation was illegitimate to begin with. Trump has been hammering the same theme for months.

  • They allege that Bruce Ohr played an improper intermediary role between the Justice Department, British spy Christopher Steele and Fusion GPS — the opposition research firm that produced the Trump-Russia dossier, funded by Democrats. (Ohr’s wife, Nellie, worked for Fusion GPS on Russia-related matters during the presidential election — a fact that Ohr did not disclose on federal forms.)
  • And they further allege that the Obama administration improperly spied on Carter Page — all to take down Trump. –Axios

Ohr, meanwhile, met with Russian billionaire Oleg Deripaska in 2015 to discuss helping the FBI with organized crime investigations, according to The Hill‘s John Solomon. The meeting with the Putin ally was facilitated by Steele.

Last month Trump called Ohr a disgrace, while also tweeting: “Will Bruce Ohr, whose family received big money for helping to create the phony, dirty and discredited Dossier, ever be fired from the Jeff Sessions  “Justice” Department? A total joke!”

Trump’s threat came one day after two tweets about Ohr, noting a connection to former FBI agent Peter Strzok, as well as a text sent by Ohr after former FBI Director James Comey was fired in which Ohr says “afraid they will be exposed.”

According to emails turned over to Congressional investigators in August, Christopher Steele was much closer to Bruce Ohr and his wife Nellie than previously disclosed.

Steele and the Ohrs would have breakfast together on July 30, 2016 at the Mayflower Hotel in downtown Washington D.C., days after Steele turned in installments of his infamous “dossier” on July 19 and 26. The breakfast also occurred one day before the FBI formally launched operation “Crossfire Hurricane,” the agency’s counterintelligence operation into the Trump campaign.

“Great to see you and Nellie this morning Bruce,” Steele wrote shortly following their breakfast meeting. “Let’s keep in touch on the substantive issues/s (sic). Glenn is happy to speak to you on this if it would help.”

“After two years of investigations and accusations from both sides of the aisle about what documents indicate, it is past time for documents to be declassified and let the American people decide for themselves if DoJ and FBI acted properly,” Freedom Caucus chairman Mark Meadows told Axios earlier Sunday.

In early August, journalist Paul Sperry tweeted that Trump may use his presidential authority to declassify “20 redacted pages of a June, 2017 FISA renewal, “and possibly” 63 pages of emails and notes between “Ohr & Steele,” and FD-302 summaries of 12 interviews.”

President Trump threatened to declassify documents two weeks ago – one day after the New York Times allegedly published an anonymous Op-Ed claiming to be from a White House official claiming to be part of an unelected “resistance” cabal within the Trump administration.

“The Deep State and the Left, and their vehicle, the Fake News Media, are going Crazy – & they don’t know what to do,” Trump tweeted earlier this month, adding: “The Economy is booming like never before, Jobs are at Historic Highs, soon TWO Supreme Court Justices & maybe Declassification to find Additional Corruption. Wow!”

Trump’s threat comes as calls by frustrated GOP legislators to release the documents have hit a fevered pitch. Spearheading the effort are Republican Reps. Meadows, Jim Jordan, Matt Gaetz and Lee Zeldin – who have repeatedly asked Trump to declassify more of the heavily redacted FISA surveillance warrant on former Trump campaign aide Carter Page in late 2016.

In June, Republicans on the House Intelligence Committee asked President Trump to declassify key sections of Carter Page’s FISA warrant application, according to a letter obtained by Fox News.

Carter Page, the DOJ/FBI’s person of interest, weighed in on the matter in late August, tweeting: “The Corrupt DOJ, co-conspirators in the DNC and their high-priced consultants correctly believed they had American democracy and the FISA Court over a barrel in 2016.”

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De-Dollarization Tops Agenda at Russia’s Eastern Economic Forum

The Eastern Economic Forum (EEF) was held in Vladivostok on Sept.11-13. Founded in 2015, the event has become a platform for planning and launching projects to strengthen business ties in the Asia-Pacific region.

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Via Strategic Culture

This year, the EEF brought together delegations from over 60 countries to discuss the topic “The Far East: Expanding the Range of Possibilities”. A total of 100 business events involving over 6,000 participants were held during the three days.

1,357 media personnel worked to cover the forum. Last year, the number of participants was 5,000 with 1,000 media persons involved in reporting and broadcasting. The EEF-18 gathered 340 foreign and 383 Russian CEOs. Nearly 80 start-ups from across South-East Asia joined the meeting.

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This year, a total of 175 agreements worth of 2.9 trillion rubles (some $4.3 billion) were signed. For comparison, the sum was 2.5 trillion rubles (roughly $3.7 billion) in 2017.

They included the development of the Baimsky ore deposits in Chukotka, the construction of a terminal for Novatek LNG at Bechevinskaya Bay in Kamchatka and the investment of Asian countries in Russia’s agricultural projects in the Far East.

Russian Direct Investment Fund (RDIF), Mail.Ru Group, Megafon and Chinese Alibaba inked an agreement on establishing AliExpress trade joint venture. Rosneft and Chinese CNPC signed an oil exploration agreement.

The Chinese delegation was the largest (1,096 people), followed by the Japanese (570 members). The list of guests included the president of Mongolia and prime ministers of Japan and South Korea.

It was also the first time Chinese President Xi Jinping attended the event to meet his Russian counterpart. The issue of de-dollarization topped the agenda. Russia and China reaffirmed their interest in expanding the use of national currencies in bilateral deals.

During the forum, Kirill Dmitriev, the head of RDIF, said the fund intends to use only national currencies in its transactions with China starting from 2019. It will cooperate with the China Development Bank.

This “yuanification” is making visible progress with Shanghai crude futures increasing their share of oil markets up to 14 percent or even more. China has signed agreements with Canada and Qatar on national currencies exchange.

READ MORE: Eastern Economic Forum opens new chapter in US-Russia dialogue

De-dollarization is a trend that is picking up momentum across the world. A growing number of countries are interested in replacing the dollar. Russia is leading the race to protect itself from fluctuations, storms and US-waged trade wars and sanctions.

Moscow backs non-dollar trade with Ankara amid the ongoing lira crisis. Turkey is switching from the dollar to settlements in national currencies, including its trade with China and other countries. Ditching the US dollar is the issue topping the BRICS agenda. In April, Iran transferred all international payments to the euro.

The voices calling for de-dollarization are getting louder among America’s closest European allies. In August, German Foreign Minister Heiko Maas called for the creation of a new payments system independent of the US.

According to him, Europe should not allow the United States to act “over our heads and at our expense.” The official wants to strengthen European autonomy by establishing independent payment channels, creating a European Monetary Fund and building up an independent SWIFT system.

Presenting his annual program, European Commission President Jean-Claude Juncker called on Sept. 12 for the European Union to promote the euro as a global currency to challenge the dollar.

According to him, “We must do more to allow our single currency to play its full role on the international scene.” Mr. Juncker believes “it is absurd that Europe pays for 80 percent of its energy import bill – worth 300 billion euros a year – in US dollars when only roughly 2 percent of our energy imports come from the United States.” He wants the raft of proposals made in his state of the union address to start being implemented before the European Parliament elections in May.

70% of all world trade transactions account for the dollar, while 20% are  settled in the euro, and the rest falls on the yuan and other Asian currencies. The dollar value is high to make the prices of consumer goods in the US artificially low. The demand for dollars allows refinancing the huge debt at low interest rates. The US policy of trade wars and sanctions has triggered the global process of de-dollarization.

Using punitive measures as a foreign policy tool is like shooting oneself in the foot. It prompts a backlash to undermine the dollar’s status as the world reserve currency – the basis of the US economic might. The aggressive policy undermines the US world standing to make it weaker, not stronger.

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