South China Morning Post—T. Phillips / Beijing, US reach trade deal to boost American imports to China in wake of Xi-Trump summit
- Washington and Beijing have reached a trade agreement that will boost exports of American liquefied natural gas, beef and other products, while improving U.S. financial services’ access to the Chinese market.
- The U.S. will facilitate the entrance of Chinese banks into the U.S banking market, and will allow the sale of Chinese cooked poultry.
- The deal follows pledges by President Trump and President Xi Jinping to address a US$350 billion trade imbalance in China’s favor.
- U.S. Secretary of Commerce Wilbur Ross called the agreement “a herculean task”, claiming that “this is more than has been done in the whole history of US-China relations on trade”.
Brookings—S. Maloney / Under Trump, U.S. policy on Iran is moving from accommodation to confrontation
- Under Trump, neither restraint nor continuity can be expected in U.S. policy towards Iran.
- While Obama opted for greater engagement, the critics of the Iran nuclear deal argue that the prospect of Iranian moderation is an illusion. The view of the Trump Administration is that any gains are offset by the concessions given to Iran and the intensification of this country’s regional reach.
- Trump’s views are supported even by some Democrats, and have been well received by Israel and authoritarian Sunni states of the region.
- There appears to be little impetus to dismantle the Iran deal, but Trump’s administration is trying to find ways to tighten its constraints on Iran’s nuclear activities. There will also be a reversal of Obama’s efforts to facilitate Iran’s post-sanctions reentry to the global economy.
- The outcome of the May 19 presidential election in Iran could make or break Trump’s efforts to turn the tables on Tehran.
POLITICO—A. Gardner / OPINION: How to revive TTIP
- The recent meeting between Wilbur Ross and European Commissioner for Trade Cecilia Malmström suggests that Washington may be open to pushing ahead on a trade deal with the EU.
- Trump’s protectionist convictions can be an obstacle on the way to reaching a deal, but U.S. frictions with other countries could help the TTIP regain momentum.
- If negotiations were to be restarted, some key recommendations should be kept in mind: emphasize the “partnership” aspect of the deal, manage expectations, share facts instead of projections, treat TTIP as a political campaign and improve outreach, embrace transparency, and be honest about globalization.
- European leaders in particular should be more straightforward with citizens about their support of TTIP, trying to ensure consistent messaging.
Foreign Affairs—Paul R. Williams & J. Trevor Ulbrick / The Right Way to Create Safe Zones in Syria
- U.S. military planners are right to be wary about Trump’s support for establishing safe zones in Syria. However, safe zones may prove to be an effective answer to Syria’s humanitarian crisis, enhancing civilian protection while also being diplomatically feasible.
- If not enforced correctly, as was the case in Srebrenica, safe zones can do more harm than good. But political will (with robust rules of engagement) and clear messaging (reframing the Syria policy of the U.S. in humanitarian terms) can make them successful.
- Military experts have said that safe zones in Syria would need a no-fly zone in order to effectively protect civilians. These measures might make Assad see renewed value in pursuing a negotiated settlement.
- Trump could draw on international law and the Responsibility to Protect doctrine to justify safe zones.
- The U.S. would need a sound exit strategy, linking withdrawal to a nationwide ceasefire or peace agreement featuring international peacekeepers.
The Guardian—J. Borger / Sergey Lavrov’s White House visit reveals little about Trump and Russia
- The morning after firing FBI director James Comey, U.S. President Donald Trump met with Russian Foreign Minister Sergey Lavrov, and he later had an unannounced visit by Richard Nixon’s Secretary of State Henry Kissinger.
- “Was he fired? You’re kidding! You’re kidding!” Lavrov exclaimed theatrically when a journalist asked him whether Comey’s downfall might throw a shadow over the Russian’s visit.
- U.S. media were denied access to the Oval Office meeting with Lavrov, although the Russian press was let in. Sergey Kislyak, Russian ambassador to Washington, was also in the meeting.
- At a press conference in the Russian embassy, Lavrov praised Trump and Tillerson, repeatedly calling them “businesslike” and comparing them favorably to the Obama administration and what he called its “dirty tricks”.
- “Our dialogue right now is free from the ideology that was very typical for Obama’s administration”, said Lavrov. “It must be humiliating for the American people to realize that the Russian federation is controlling the situation in America. How is it possible for such a great power and such a great country?”
- The U.S. State Department gave no briefing.
Foreign Policy—R. Gramer / Russia’s controversial European gas project is under fire, again
- Nord Stream 2, meant to pipe natural gas from Russia to Germany, has hit another obstacle.
- The pipeline starts on the Kurgalsky Nature Reserve in the Leningrad Oblast in western Russia. But building on nature reserves violates Russian local and national laws, and contravenes the 1992 Helsinki Conventions protecting the Baltic Sea and the 1971 Ramsar Convention protecting wetlands.
- If Finland, Sweden, and Denmark move forward with the project, environmental experts say, they’ll be knowingly violating international environmental conventions. “The Nordic countries indeed have a record of taking environmental concerns seriously,” said Tim Boersma, an energy expert with Columbia University’s Center on Global Energy Policy.
- The project is in line with Gazprom’s declared plans to bypass Ukraine as a transit route for Russian gas headed west to Europe.
- There are disagreements in the EU about the project: although it runs counter to Brussels’ plans to diversify its sources of energy, it has the support of countries like Germany.
Financial Times—G. Wildau / China new ‘Silk Road’ investment falls in 2016
- Some hard data suggest the hype surrounding Chinese President Xi Jinping’s signature “Belt and Road Initiative” (BRI) may exceed the substance.
- Foreign direct investment from China to countries identified as part of the BRI fell 2 per cent in 2016 year on year and has dropped an additional 18 per cent so far in 2017.
- Xiao Yaqing, chairman of the State-owned Assets Supervision and Administration Commission: “Let’s not look at year-on-year growth but at the development of the investment and the projects themselves. Over the long term, I believe investment into BRI countries will rise.”
- Some bankers and state enterprises are privately complaining that they feel pressured by the government to undertake BRI projects that are not profitable.
Brookings—W. McCants / Trump should push the Saudis to scale back proselytizing—they may be more responsive than you think
- In Trump’s visit to Saudi Arabia at the end of this month, the U.S. President has the chance to pressure the Saudi government to stop the country’s exports of religious extremism.
- Although Saudi rulers often scorn Wahhabi teachings, they have been slow to reform the creed and to limit the influence of the clerical establishment that promotes it at home and abroad.
- According to the U.S. Commission on International Religious Freedom, there are fewer intolerant passages in school textbooks than a decade ago, but there is a long way to go.
- Diplomats and generals surrounding Trump likely agree that American partnership with Saudi Arabia is crucial for maintaining the stability of energy prices, gathering intelligence on jihadists, and checking the ambitions of Iran. But there are signs that the new Saudi leadership is unusually responsive to complaints about the deleterious effects of Saudi proselytizing, and Trump should not fear taking advantage of that.
The New York Times—P. Baker / In Trump’s firing of James Comey, echoes of Watergate
- Not since Watergate has a president dismissed the person leading an investigation bearing on him.
- Comey had said publicly that the FBI was investigating Russia’s meddling in last year’s presidential election and whether any associates of Trump’s campaign were coordinating with Moscow.
- Democrats rushed to condemn the move, despite last year’s investigation of Hillary Clinton’s private email server. A few Republicans also expressed misgivings about the firing.
- The appointment of Comey’s successor could distract the White House at a time when it wants the Senate to focus on passing legislation to repeal Obamacare.
Al-Monitor—J. Pecquet / Congress unsure what’s next after Trump decides to arm Syrian Kurds
- U.S. Congress broadly supports Trump’s decision to arm Kurdish forces in Syria.
- Senate Foreign Relations Committee Chairman Bob Corker: “I’m glad they’re finally following through on what they’ve known for some time: This is the only course that appears to be feasible relative to Raqqa.”
- The decision to arm the Syrian Kurds had long been expected but was postponed until last month’s referendum in Turkey to avoid ginning up anti-American sentiment. U.S. and Turkish interests, said Corker, “are not aligned right now.”
- Lt. Gen. Stephen Townsend, the head of the U.S. coalition against ISIS, said in March that he had seen “absolutely zero evidence” linking the Kurdish YPG (People’s Protection Units) in Syria to the PKK.
- Aaron Stein, senior fellow at the Atlantic Council: “”That’s the basic trade-off: Do you slow the Raqqa campaign and search for an alternative approach, which is the McCain-Graham approach, and thereby try to preserve a stronger relationship with Turkey? Or do you go with the CENTCOM [US Central Command] approach, which is you need to do Raqqa fast while you have the momentum against the Islamic State, and Turkey cannot generate the forces it needs to take the city?”
Financial Times—V. Mallet / South Korea’s new president will be no pushover
- Moon’s election as new South Korean President should be attributed mostly to domestic issues, rather than geopolitical concerns.
- Moon is perceived as a solid leader of the left who represents a break from 9 years of conservative rule, marked at the end by the corruption scandal involving President Park.
- The hawkish critics of Moon fear that he will be a soft touch for the North Koreans, and that he will be eager to make economic and diplomatic concessions to Pyongyang.
- However, Moon will be no pushover for North Korea. He has expressed his willingness to improve relations with China and his doubts about the US military shield in South Korea, but also said he is “on the same page” as Trump.
South China Morning Post—M. Chan / China’s missile tests in Bohai ‘aimed at THAAD in South Korea’
- In a rare public statement, the Chinese defense ministry announced that Chinese rocket forces tested a new type of missile aimed at the country’s waters west of the Korean peninsula.
- Military analysts claim that the statement came in response to the deployment of the US-built Terminal High Altitude Area Defence (THAAD) anti-missile system in South Korea.
- Hong Kong-based military analyst Liang Guoliang: “Given the landing area, the test is obviously aimed at THAAD in South Korea.”
POLITICO—C. Kroet / Manuel Valls to back Emmanuel Macron’s En Marche in parliament
- Former French PM Manuel Valls has announced his intention to join Macron’s En Marche (renamed as “En Marche la République”) in the legislative elections.
- Valls: “The Socialist party is dead”.
- The party will announce on Thursday the names of its 577 candidates that it will field in the parliamentary elections.
Financial Times—S. Wagstyl, A. Beesley & D. Robinson / Merkel rules out eased Eurozone spending rules to help Macron
- German Chancellor Angela Markel has dismissed the idea of relaxing Eurozone rules in order to help Macron.
- Merkel: “German support cannot replace French policymaking […] I don’t see why — as a priority — we should change our policy.”
- However, Germany’s socialist Foreign Minister, Sigmar Gabriel, called for ending “financial policy orthodoxy”, adding that “whoever launches reforms [as Mr Macron plans] should not at the same time be forced into strict fiscal austerity.”
- No major policy changes by the German government are expected before elections in September, and until then the focus will be on Macron’s domestic reform agenda, whose success depends on his ability to form a stable government.
Foreign Affairs—D. Kim / What the South Korean Election means for Trump
- Ahead of today’s South Korean Presidential election, polls have shown Moon Jae-in of the progressive Democratic Party to hold a comfortable lead.
- After Trump’s recent remarks that Seoul should pay for a U.S. anti-ballistic missile system (called Terminal High Altitude Area Defense or THAAD) recently deployed in South Korea, many voters perceive that Washington has bullied Seoul into accepting THAAD and then shoved the bill at them. This may increase the progressives’ chances in the election.
- A win by the progressive candidate could spell turbulent times for the partnership, because of completely divergent views on how to deal with Pyongyang. If a conservative candidate won, Trump’s “maximum pressure and engagement” approach would be expected to prevail.
- The U.S. administration needs a grand design and clear strategy that resolves the North Korean nuclear-missile problem in the context of intertwined regional challenges.
South China Morning Post—M. J. Valencia / On the South China Sea, the US and Asean are increasingly on different pages
- Differences between the U.S. and Asean regarding the South China Sea are becoming more and more visible, although they keep being ignored by some analysts.
- Southeast Asian claimants – Brunei, Indonesia, Malaysia, the Philippines and Vietnam – want to avoid getting caught up in a China-U.S. struggle for preeminence and be forced to choose sides, which could worsen the current climate of domestic instability in those countries.
- The U.S. government argues that Chinese interference with probes by U.S. military vessels violates freedom of navigation. However, these are two different things, and Asean countries are not worried that China is actually seeking to undermine freedom of navigation in the region.
- If the U.S. is serious about maintaining a rules-based order in the South China Sea, it should ratify the U.N. Convention on the Law of the Sea.
Financial Times—W. Münchau / Emmanuel Macron gives Europe — and the eurozone — hope
- Münchau: “I can think of no other politician in any EU country who has managed to win an election with an explicit eurozone-reform agenda.”
- Macron might fail, but if an optimistic scenario for the Eurozone is to prevail, it has to begin this way: with a leader from a large country obtaining a clear reformist mandate.
- Macron’s European agenda will be put on hold until the resolution of the German and Italian elections. In the meantime, he has to prove that he’s serious about following the treaty’s financial rules. The economic cycle in the EU is on his side.
- Germany is happy about Macron’s win, but virtually nobody in Berlin is talking about his idea of a common Eurozone budget and finance minister.
South China Morning Post—S. Zheng / China’s ‘Belt and Road Initiative’: what is it, who’s paying, who’ll benefit and who might lose out
- The “Belt and Road Initiative” tries to create a modern Silk Road spanning some 65 countries. It includes both an economic land “belt” through Eurasia, and a maritime “road” to connect coastal Chinese cities to Africa and the Mediterranean.
- Some observers argue that the initiative could establish China as a regional power, surpassing the impact of the Marshall Plan.
- Neither China nor Japan have joined the China-led Asian Infrastructure Investment Bank, which will provide the initiative with funding. Although some European countries are as wary as the U.S. about Chinese intentions in Asia, many others see in the initiative a good opportunity for attracting Chinese investment.
- A “Belt and Road Initiative” summit will take place on May 14-15 in Beijing. Top leaders from at least 28 countries have confirmed their attendance, including major southeast Asian leaders, as well as Russian President Vladimir Putin. From the G7 countries, only Paolo Gentiloni is expected to show up.
Al-Monitor—U. Savir / What are European Union’s plans if Trump fails on Mideast peace?
- Netanyahu’s refusal to meet German Foreign Minister Sigmar Gabriel has been interpreted, in both Brussels and Berlin, as a slap in the face of European leadership and as a signal that Israel rejects European involvement in any further US-led peace initiatives.
- The EU is concerned about Netanyahu’s combative attitude since Trump took office and fears unrest in Palestine, partly due to settlement construction.
- The EU expects Washington to initiate a regional peace conference on the Israeli-Palestinian issue and on the war on terror, without EU participation.
- Any efforts to pursue a two-state solution will receive EU support, whether or not it is directly involved in the negotiations. If US President Donald Trump fails to advance his Middle East conference initiative, the EU will advance its own initiative for a third Paris conference.
POLITICO—H. Cooper & M. Solletty / ClientEarth targets European governments — and wins
- NGO Client Earth is bringing American-style environmental activism to the European lobbying landscape, taking a more legalistic approach than most other NGOs.
- Sixty ClientEarth lawyers across London, Brussels and Warsaw are holding governments accountable for their failures on air pollution, chemical regulations and transparency. ClientEarth has defeated the British government twice in British courts and once in the European Court of Justice over its failure to limit air pollution.
- The case law ClientEarth helped develop is now closely watched by EU lawmakers.
- James Thornton, ClientEarth: “What I’m trying to do is to make [the Commission’s] aspirations real. We want to take the aspirations of Europe and make them real and felt.”
Financial Times—Anjli Raval / Oil extends tumble to hit lowest price since November
- The oil price’s slide accelerated in Friday morning London trading, taking Brent crude to its lowest level since November ($47.41).
- West Texas Intermediate, the US marker, weakened to $44.45. The price has gone down by more than 6% in the last two days.
- Oil market participants have been losing faith in the ability of Opec and rival producers, such as Russia, to shrink the excess crude inventories.
- Opec and non-Opec ministers are set to meet again at the end of this month in Vienna. Participants are ultimately expected to extend the supply cut beyond an initial six-month period that runs until the end of June.
- “Shale growth makes the sizeable but too small a cut completely lose its potency,” said Jamie Webster, a fellow at the Center on Global Energy Policy at Columbia University.
The New York Times—M. Landler & P. Baker / Saudi Arabia and Israel will be on itinerary of Trump’s first foreign trip
- “Tolerance is the cornerstone of peace,” Trump said at a ceremony in which he announced his intentions to travel to “Saudi Arabia, then Israel, and then to a place that my cardinals love very much, Rome.”
- Trump is considering a side trip to Bethlehem to meet with Mr. Abbas again. There are also reports that Trump hopes to convene a summit meeting of Israeli and Arab leaders, perhaps in the summer.
- The U.S. President will also attend a NATO meeting in Brussels that opens on May 24 and then fly to Sicily, where the leaders of the Group of 7 will meet starting May 26.
- Contrary to the recent tradition, Trump will not visit Canada or Mexico before venturing elsewhere.
- Trump is expected to talk to leaders behind closed doors, rather than giving public speeches. Potential disagreements about human rights would be dealt with in private.
Project Syndicate—D. Gros / Europe’s new hope?
- Macron brings hope that renewed Franco-German leadership of the European Union may be on the horizon.
- If he becomes President, Macron’s initial move may be to try to reform the Eurozone. He may find that to be a tall order, particularly considering Germany’s different economic philosophy, which focuses on keeping deficits low. However, Macron does recognize the need to balance the budget in the long term.
- There are signs of economic convergence between France and Germany, which may make it easier for them to reach an agreement.
- A reform of the monetary union should include completing the banking union, with a strengthening of the common deposit areas. In this and other policy areas (such as the management of refugee flows), problems concern Germany and Italy more than Germany and France.
- A Macron Presidency should push for policy packages that take into account the priorities of both Germany and Italy, the biggest obstacle to EU reform.
Foreign Policy—N. Hauer / Putin has a new secret weapon in Syria: Chechens
- Moscow has said it plans to reduce its presence in Syria. But while some Russian forces did initially depart in early January, Moscow is actually expanding its role in the country through an expansion of military bases and the use of private contractors.
- Putin also deployed an unprecedented Russian weapon to Syria: several units of Chechen and Ingush commandos. Until the deployment of these Sunni commandos took place, Moscow’s ground operations in Syria had been minimal.
- Using nonethnic Russian special personnel might protect Putin from a public backlash sparked by rising battlefield casualties, while also helping Moscow to increase its influence in Syria, not least through religious ties.
The Economist / Hamas announces a new policy platform
- Khaled Meshal, soon to be the ex-leader of Hamas, unveiled a policy document that amends the organization’s 1988 founding charter.
- The policy document endorses the creation of a Palestinian state just in the Gaza Strip and the West Bank, moving the militant group’s position a bit closer to a two-state solution.
- The anti-Semitic language of the founding charter is not repeated, and neither is the declaration that Hamas is a wing of the Muslim Brotherhood.
- However, reasons for skepticism remain. The document states that “no part of the land of Palestine shall be compromised or conceded.” Furthermore, Meshal may be replaced by a hardliner, and Hamas’ military wing continues to restock its arsenal.
- A spokesman for Israeli PM Benjamin Netanyahu called the document an effort to deceive the world. As the Palestinian Authority seems to have abandoned the goal of regaining control over Gaza, Hamas sees an opportunity to win recognition as the strip’s legitimate ruler.
Financial Times—Martin Wolf / Asia’s dynamism at risk in US and China’s competing visions for global trade
- The US commitment to liberal trade has provided the environment within which Asia has prospered. The GATT and the WTO have provided an institutional framework that has supported this growth.
- The world economy is not yet deglobalizing. But it is no longer globalizing.
- The IMF argues that weak demand is the main reason for the slowdown of global trade, which means that it could pick up the pace again, as long as trade policy is also conducive to it.
- Trump’s intent to promote a bilaterally balanced trade is a primitive idea in a world of market-driven multilateral commerce. China will take advantage of the U.S. withdrawal of the TPP by pressing forward with the Regional Comprehensive Economic Partnership and the “One Belt, One Road” initiative.
- Does this signal the beginning of a chaotic era or the dawn of a new order led by China? In any case, it is a transition marked by both danger and opportunity.
POLITICO—J. Hanke & H. Von Der Burchard / Macronomics: French front-runner seeks to reinvent EU trade
- Contrary to what Le Pen suggests, Macron is no radical free-trader. In fact, he has taken a surprisingly defensive stance on trade, although he is no protectionist either.
- “Reciprocity” is set to become the buzzword for the strategy underpinning the trade agenda in the post-Brexit EU, with France and Germany firmly in command.
- Macron’s initial focus may be on raising tariffs on the imports from countries (namely, China) flooding Europe with goods priced below the cost of production.
- Both the CDU and the SPD are looking forward to working with Macron. However, Michael Fuchs (CDU/CSU deputy whip in the Bundestag) has warned about “stepping too much on the feet of the Chinese”.
- In addition, the European Commission and many politicians in Berlin oppose that most contentious element of “Macronomics”: the “Buy European Act”.
CEPS—M. J. Nieto / Banks and Environmental Sustainability: Some reflections from the perspective of financial stability
- There is growing evidence suggesting that climate change risks have important implications for financial stability.
- Direct loan exposure to elevated environmental risk sectors of the largest banks in the EU, Switzerland, the US, Japan and China is estimated to be on average at between 0.3 to 3.7% of total banking assets and €1.35 trillion in total as of December 2014.
- Better understanding the direct exposure to high environmental risk sectors demands a reliable and harmonised statistical framework that allows for detailed identification of sectors exposed to high environmental risks.
- Credit registers should be developed as tools to facilitate the assessment of environmental risk drivers in ‘carbon stress tests’.
- Environmental aspects should be considered in the revisions of the assessment methodology of the Basel Core Principles for Effective Bank Supervision.