ESADEgeo Daily Digest, 09/07/2018

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Politico – Jack Blanchard & Emma Anderson / David Davis resigns as UK’s Brexit secretary

  • Brexit Secretary David Davis resigned late Sunday, creating the biggest crisis for British Prime Minister Theresa May since last year’s general election, and potentially opening the way for Brexiteers in the Conservative party to try to topple her leadership.
  • Davis’ resignation came amid criticism of the prime minister’s new Brexit plan after the Cabinet on Friday formally endorsed May’s idea for a new “UK-EU free trade area” and closely intertwined customs relationship with Brussels which, taken together, will form the backbone of Britain’s future relationship with the EU after Brexit.
  • Despite past disagreements with May, Davis said he had moved forward up until yesterday because at the time he still “considered it was still possible to deliver on the mandate of the referendum.” However, Davis added, “I am afraid that I think the current trend of policy and tactics is making that look less and less likely.”
  • May reiterated that she believed the Friday agreement was consistent with the “mandate” of the Brexit referendum, saying she disagreed with Davis’ characterization of the plan.

Financial Times – Henry Foy, Kathrin Hille & Demetri Sevastopulo / Trump-Putin face nuclear options at Helsinki summit

  • Asked last week what should be on the agenda of the upcoming summit between President Trump and President Putin, Dmitry Peskov, Putin’s spokesman, quickly replied: “Arms control, most definitely!” Jon Huntsman, US ambassador to Moscow, confirmed that would be a “prominent” issue on the agenda.
  • Both sides accuse each other of violations of the Intermediate-Range Nuclear Forces (INF) Treaty, signed by the US and the Soviet Union in 1987.  And the two sides have yet to begin any discussions on what to do when the New Strategic Arms Reduction Treaty (New START) expires in early 2021.
  • “We will have to make a decision on whether or not there be a re-upping for five years, as is written into the agreement — whether the New START agreement will actually be extended by another five years,” said Huntsman.
  • But merely extending old agreements might not be enough, according to experts who cite new threats such as cyber warfare and hypersonic weapons not currently covered. Others argue that Moscow and Washington must include other military powers, such as China, when setting new rules.

Project Syndicate – Joseph S. Nye / Is cyber the perfect weapon?

  • If Russian President Vladimir Putin sees his country as locked in a struggle with the US but is deterred from using high levels of force by the risk of nuclear war, then perhaps cyber is the “perfect weapon.”
  • That is the title of a new book by New York Times reporter David Sanger, who argues that beyond being “used to undermine more than banks, databases, and electrical grids,” cyberattacks “can be used to fray the civic threads that hold together democracy itself.”
  • The brilliance of the Russian innovation in information warfare has been to combine existing technologies with a degree of deniability that has remained just below the threshold of overt attack.
  • Countering this new weapon requires a strategy to organize a broad national response that includes all government agencies and emphasizes more effective deterrence. Diplomacy might also play a role. Even when the US and the Soviet Union were bitter ideological enemies during the Cold War, they were able to negotiate agreements.

South China Morning Post – Raissa Robles / Draft constitution proposes giving Philippine President Rodrigo Duterte sweeping powers that could let him rule indefinitely

  • The draft of a new Philippines constitution that was to be submitted to President Rodrigo Duterte on Monday would grant him sweeping new powers – including rule by decree – that could allow him to stay in power indefinitely.
  • Christian Monsod, a framer of the current 1987 constitution, warned these were the same powers that Ferdinand Marcos gave himself with the 1973 constitution, wielding them to become president for life.
  • Duterte said last week that he would not seek a second term under the new constitution, as he sought to counter suspicions he might seek to thwart the Philippines’ single-term limit.
  • The draft charter would replace the 1987 Constitution with a Federal Republic of 18 federal regions, each with a governor, regional assembly and regional Supreme Court. The Federal Republic would still be presidential in character, with a bicameral congress.

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces.  

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ESADEgeo Daily Digest, 05/07/2018

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The New York Times – David E. Sanger / How Trump went from ‘fire and fury’ to dismissing North Korean nuclear advances

  • The recent revelations of seemingly modest North Korean progress on missile technology and the production of nuclear fuel — including continued work on a new nuclear reactor that can produce plutonium — have not dimmed the enthusiasm of US President Donald Trump after meeting North Korean leader Kim Jong-un in Singapore.
  • Turning the enthusiasm into a concrete, verifiable agreement is now the job of US Secretary of State Mike Pompeo, who is leaving Washington early Thursday for North Korea. It will be his third trip there, but the first to flesh out a timetable and a common understanding of what the Singapore commitment to “work toward denuclearization of the Korean Peninsula” really means.
  • There have been no North Korean missile or nuclear tests since November. But a freeze and denuclearization are completely different things. The big question is whether Kim is truly ready to change course or playing for time with Trump — as his father and grandfather did with the past four presidents.
  • One thing is clear: The Trump administration has not uttered the phrase “complete, verifiable, irreversible denuclearization” in weeks, and Pompeo has also softened his tone. Some US officials say that South Korea urged getting rid of the everything-must-be-dismantled-immediately approach.

South China Morning Post – Yu Jie / How Trump can bring China and the European Union closer, if they can be pragmatic about their wish lists

  • Europe remains disengaged in Asian geopolitical struggles. Brussels has shown no interest or capacity to get involved in the global power struggles between Beijing and Washington. Instead, China is viewed almost exclusively in economic terms.
  • Decision-makers in Beijing are very clear about what China wants from the EU. First, free access to the European single market. Second, a secure home for its investments. Third, a meaningful diplomatic alternative to its increasingly fractious and erratic relationship with the United States of America.
  • The EU has been at odds with all three of these “wants” from China. In particular, Brussels perceives China’s extensive investments with anxiety; a further source of pressure on the bloc’s fragile unity. Although this anxiety may be excessive, China should make genuine attempts to generate positive economic well-being in investment destinations, and not merely treat the involved European partners as vehicles for its benefit alone.
  • China and the EU should not impose their individual “unrequited wants” and return to enmity. Instead, they should find common ground to defend against the belligerent isolationism of Trump’s foreign policy, which threatens economic prosperity across the globe.

Politico – Matthew Karnitschnig / Trump envoy seeks to sweet talk Germany Inc. out of Iran

  • In a bid to coax German companies active in Iran away from the Islamic Republic, US ambassador to Germany Richard Grenell has quietly begun engaging business executives with an offer to help them tap the much larger and lucrative US market, according to people briefed on the talks.
  • Many German companies viewed Iran as an attractive opportunity – in particular, mid-sized companies focused on building and maintaining infrastructure. Iran’s proximity (it’s just a 5-hour flight from Germany) and the lack of major competition made it all the more appealing.
  • The US decision to reactivate sanctions changed that calculus. While the EU has vowed to try to protect European companies, for many, the risks of staying might be too great. In addition to easier access to the US, Grenell is offering German companies another carrot: improved ties with Saudi Arabia.
  • Relations between Germany and Saudi Arabia have been strained over Berlin’s decision to halt weapons exports to all countries involved in the war in Yemen.
  • Politico – Joshua Posaner / German defense minister strikes back on NATO spending target

The Guardian – Ruth Maclean / Foreign troops should not be fighting in Niger, says country’s president

  • The president of Niger, Mahamadou Issoufou, has said American and other foreign troops working in his country should limit themselves to providing training, equipment and intelligence, not fighting jihadists.
  • Issoufou chairs the G5 Sahel, a joint effort by five west African countries (Mauritania, Mali, Burkina Faso, Niger and Chad) to try to bring the vast, arid Sahel under control.
  • “The G5 Sahel’s objective is not just to fight terrorism – it’s also working on development. Why does terrorism arise in certain areas of the Sahel? Because of poverty. Security and development go together,” said Issoufou.
  • According to Issoufou, Niger is doing its part to keep the number of people crossing the Mediterranean low, but Europe should do more to support Niger in addressing the root causes of migration by fighting poverty and creating jobs.

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ESADEgeo Daily Digest, 04/07/2018

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Financial Times – James Shotter & Evon Huber / Protests erupt in Poland over ousting of court judges

  • Protests have erupted in Poland after a bitterly contested law about the country’s judiciary came into effect at midnight. The new legislation will force a swath of Poland’s supreme court judges into early retirement. Those above 65 — almost 40 per cent of the court’s members — must step down today unless Poland’s president Andrzej Duda agrees to extend their terms of office.
  • Among those forced out by the new legislation is Malgorzata Gersdorf, the head of the supreme court, who has accused the government of seeking to “purge” the judiciary.
  • Gersdorf also took aim at the broader series of judicial changes enacted by the Law and Justice party since it took office in 2015, including giving politicians power over the body that appoints judges and a law that allows the justice minister to fire the heads of courts without consultation.
  • All of these changes have led Brussels to take the unprecedented step of launching a probe into whether Poland still complies with the European Union’s fundamental values.

European Council on Foreign Relations – Loïc Tregoures / Macron’s European ambition begins in the Balkans

  • Last week, the EU reached an agreement on opening accession talks with Macedonia and Albania. France was among the countries that were against opening the talks immediately. As a compromise, it was agreed that talks will begin in June 2019 if reforms continue to deliver concrete results.
  • At the EU-Western Balkans Summit in May, French President Emmanuel Macron stated that there could be no enlargement before a deepening of the EU. These words contradicted his speech at the Sorbonne last year, where he made a strong case for a united Europe led by a clear vision which does not back down in the face of anti-European forces.
  • Skopje’s name deal referendum may fail this autumn, which would entail the government’s resignation. Likewise, the 2019 election in Greece could bring to power a government opposed to any deal with Skopje. Therefore, blocking the opening of negotiations is a very risky move for no political gain for Macron, for pro-EU parties and for the EU itself.
  • The Balkans is the only region where the EU has the power to design a new reality, but it is also the region where the EU has failed the most. If the EU is to assert itself as an autonomous and powerful actor, the quest starts in the Balkans.

Haaretz – Chemi Shalev / Israelis support equal rights for reform and conservative Jews – but want U.S. Jews to keep their mouths shut

  • A whopping 84 percent of the Israeli public believes that if the country faced an existential military crisis, the United States would come to its aid. 62 percent believe the special relationship between the two countries will endure, compared to only 24 percent who fear it may weaken or collapse.
  • Confidence in the strength of the US-Israeli alliance is widely shared across the spectrum, including Israeli Arabs, though they may see the alliance in a negative light. Only the ultra-Orthodox harbor doubts.
  • A Pew Research poll conducted last year showed that Israel is the only democratic country in which confidence in the US president ability to handle world affairs remained unchanged following Trump’s election, and actually went up a notch or two.
  • Israeli expectations of Trump’s blueprint for the “ultimate deal” corroborate Palestinian apprehensions. 44 percent of the public expects the plan to be “pro-Israeli,” compared to only 7 percent who fear it might be pro-Palestinian and another 31 percent who think it will be balanced.
  • 68 percent of Israelis approve of Prime Minister Benjamin Netanyahu’s management of the special relationship with the US. Netanyahu gets substantially lower marks, however, for his handling of relations with American Jews.

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces. 

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ESADEgeo Daily Digest, 03/07/2018

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Financial Times – Guy Chazan & Tobias Buck / Merkel and Seehofer reach deal and avert collapse of German coalition

  • Chancellor Angela Merkel and Horst Seehofer, German interior minister, have reached an agreement that should end a dispute that threatened to destroy the near 70-year-old alliance between the CDU and its Bavarian sister party, the CSU, and potentially blow up the coalition government.
  • The agreement calls for the creation of transit centres on the German-Austrian border for asylum seekers who have already been registered in other EU countries. They could then be sent directly from there to the countries that are responsible for them.
  • That represents a compromise: Seehofer had previously insisted that such refugees should immediately be turned away from the German border, a demand Merkel rejected. She said that such unilateral moves would harm the Schengen passport-free travel zone and endanger European unity.
  • But Seehofer and conservative members of Merkel’s party had long campaigned for the creation of transit centres on the border to handle refugees before they actually enter German territory. Therefore, the deal also represents something of a victory for Seehofer.

Foreign Policy – Stephen M. Walt / The EU and NATO and Trump — Oh My!

  • Although a good case can be made for gradually reducing the US role in Europe and letting Europeans handle their own defense, moving in that direction actually makes the EU more rather than less important, because it plays an important role in keeping Europe peaceful and prosperous.
  • There is no potential hegemon in Europe today. Thus, the United States could (and should) reduce its military role and gradually turn European security back to the Europeans. But if Trump wants to do less for NATO, he should be embracing the EU instead of denigrating it.
  • Moreover, from a US perspective, the present level of integration in the EU is close to ideal. If the EU were a true “United States of Europe”, then it would in fact be a third pole in world politics and a potential peer competitor.
  • If Trump showed up to his Helsinki meeting with Vladimir Putin after having driven NATO further into disarray, the Russian President would have already achieved a core strategic goal and would have little reason to do Trump any favors.

Brookings – Samantha Gross / What higher oil prices mean for OPEC and the U.S.

  • The US is signaling that it expects its allies to eliminate oil imports from Iran by November 4. The Trump administration is taking a harsher line than the Obama administration did in the lead up to the Iran nuclear deal (JCPOA), stating that it does not intend to issue waivers on secondary sanctions to those who import Iranian oil.
  • Why is the US looking to OPEC to increase supply? In the US, where private companies undertake oil and gas development, companies do not hold spare capacity in reserve because it does not make economic sense to do so. Saudi Arabia, on the other hand, is generally the world’s main holder of spare capacity, and today the United Arab Emirates, Kuwait, and Russia also have spare capacity owing to the current production cuts.
  • But the growing importance of US oil production is likely changing how OPEC producers think about responding to rising prices. Today, US oil production can respond more quickly to market conditions, meaning that periods of tight supply are likely to be shorter in duration.
  • Ahead of US midterm elections in November, the Trump administration wants low gasoline prices, but also wants to maximize the effect on Iran of the re-imposition of sanctions. The administration will find that actions that pull crude oil away from a tight market have ramifications at home, despite the US emergence as a powerhouse of crude oil production.
  • Al-Monitor – Laura Rozen / Trump administration denies pursuing regime change in Iran

Al-Monitor – Ben Caspit / For Israel, Syrian battles hit too close to home

  • The Israel Defense Forces (IDF) have significantly beefed up their presence in the Golan Heights, and conducted a secret night operation to transfer large quantities of humanitarian assistance to Syrian internally displaced people. Israel is determined not to allow these Syrians to enter its territory and is going out of its way to help them where they are.
  • Israel finds itself torn between helping the rebels, with whom Israel has developed a relationship of sorts, and reluctantly reconciling itself to Assad’s return to the border.
  • The IDF made the decision to accept the return of Assad to the south with two stipulations: that the Syrian army not enter the demilitarized zone in the Golan, and that southern Syria remain free of Shiite militias, Iranians and Hezbollah’s people, in any kind of uniform.
  • In spite of a very long series of painful blows inflicted by Israel, Iran continues its efforts to establish a foothold in Syrian territory. Israel, however, has no intention of letting up its pressure. In addition, together with the American administration, Israel is trying to deepen the gap between the moderate and conservative sectors in Iran that is already quickly widening.
  • Israel wants Trump to be as informed as possible for his summit with Putin, in order to fully present Israel’s interests to the Russian president. In late June, IDF Chief of Staff Lt. Gen. Gadi Eizenkot and the head of the Israeli-Iranian portfolio, Gen. Nitzan Alon, landed in Washington for a series of urgent meetings.

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces. 

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ESADEgeo Daily Digest, 02/07/2018

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The Guardian – Tom Phillips & David Agren / Mexico election: historic landslide victory for leftist Amlo

  • The leftist Andrés Manuel López Obrador – also known as “Amlo” – was elected president of Mexico with at least 53% of the vote, according to a quick count by Mexico’s electoral commission. Voters thus rejected the only two parties to hold the presidency since the end of one-party rule in 2000.
  • Exit polls also suggested the party Amlo founded in 2014 – the Movement for National Regeneration or Morena – had won at least five of nine gubernatorial races, with the winners including Mexico City’s first elected female mayor, Claudia Sheinbaum.
  • Eric Olson, Latin America specialist from Washington’s Woodrow Wilson Centre: “Amlo is not an internationalist … we can expect him to play less of an active role in the region on Venezuela, on Nicaragua and other trouble spots.”
  • Analysts also expect Amlo to pursue a less aggressive and less militarised approach to Mexico’s 11-old “war on drugs”, which has claimed an estimated 200,000 lives.

Axios – Jonathan Swan / Exclusive: A leaked Trump bill to blow up the WTO

  • A leaked draft of a Trump administration bill — ordered by the president himself — would declare America’s abandonment of fundamental World Trade Organization rules.
  • The bill, titled the “United States Fair and Reciprocal Tariff Act,” would give Trump unilateral power to ignore the two most basic principles of the WTO and negotiate one-on-one with any country:
    • The “Most Favored Nation” principle that countries can’t set different tariff rates for different countries outside of free trade agreements;
    • “Bound tariff rates” — the tariff ceilings that each WTO country has already agreed to in previous negotiations.
    • Most officials involved in the bill’s drafting — with the notable exception of hardline trade adviser Peter Navarro — think the bill is unrealistic or unworkable.
    • White House spokeswoman Lindsay Walters: “The only way this would be news is if this were actual legislation that the administration was preparing to rollout, but it’s not … Principals have not even met to review any text of legislation on reciprocal trade.”

Al-Monitor – AFP/ Iran vows to foil US bid to block oil exports

  • Iran vowed Sunday to defeat US efforts to block its oil exports and warned rival producer Saudi Arabia it would never take Tehran’s “place” on the international oil market.
  • “The (Iranian) government has a plan… and God willing we are certain that we will be able to sell as much oil as we want,” said Iran’s First Vice President Eshagh Jahangiri.
  • Jahangiri’s remarks came a day after Trump said that Saudi Arabia’s King Salman had agreed to his request to ramp up oil production.
  • “In this battle, any country that tries to take Iran’s place on the oil market will be guilty of treason against Iran… and surely one day it will pay the price of this treason,” said Jahangiri.

Politico – Mark Scott / The geopolitics of telecoms: The West vs. China in the 5G race

  • More than 600 government officials and telecoms executives agreed in June to a first round of global standards for so-called 5G telecommunications infrastructure – the next generation of mobile networks, which will come online by the end of the year.
  • The agreement turns much of the hype surrounding 5G into reality by creating a worldwide consensus about how the technology should work, from Germany to Ghana.
  • Yet one thorny issue still sticks out: China, and its efforts to dictate the next generation of global telecoms rules. Chinese companies, notably Huawei, have intensified their lobbying efforts in obscure telecoms standards groups that meet regularly to hammer out the technical details for both hardware and software.
  • But China is not yet dominating 5G. According to LexInnova, a research group that tracks the industry, Chinese companies own around 10 percent of global intellectual property for 5G as of 2017. By contrast, American company Qualcomm accounts for more than 15 percent of current 5G patents and Finland’s Nokia garnered a further 11 percent of the global total.

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces. 

 

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ESADEgeo Daily Digest, 28/06/2018

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Project Syndicate – Ricardo Hausmann / Does the West want what technology wants?

  • In a world where technological progress promises large benefits, the capacity to supply “what technology wants” may determine which economies are positioned for success, and which are bound to go the way of the Spanish, Portuguese, or Ottoman Empires. Nowadays, that should worry the West more than it worries China.
  • Technology requires a society that connects to the world, both through trade and openness to talent, in order to exploit the gains from modularization. It also requires a society that is able to develop a shared sense of purpose, one that is deep and powerful enough to direct the government to provide the public goods that new technologies require.
  • Developing these attitudes is not easy. It requires a civic rather than an ethnic sense of nationhood. This is why the stakes in today’s policy debates in the West are not just about values. In a competitive world, societies pay dearly for being unable – or unwilling – to deliver what technology wants.
  • Today’s populist forces may disregard what technology wants and impose their vision on the world. But they will inadvertently leave their societies on a very slow track.

The National Interest – Graham Allison / How JFK would have confronted a rapidly rising China

  • Fifty-five years ago this month, US President John F. Kennedy delivered a the American University one of the most significant speeches of his career, in which he called for “a world safe for diversity”.
  • Rather than demanding that the US bury Soviet-led Communist totalitarianism, JFK stated that the US should now live and let live—in a world of diverse political systems with diametrically opposed values and ideologies.
  • After the Cuban missile crisis, JFK realized that “nuclear powers must avert confrontations that bring an adversary to a choice of either humiliating retreat or nuclear war.”
  • Perhaps this offers a clue for Americans and Chinese today, as we try to cope with a rapidly rising party-driven authoritarian China and a ruling democratic US.

Al-Monitor – Akiva Eldar / How Abbas can tilt Trump’s deal in Palestinians’ favor

  • In an interview on June 24 with the Palestinian Al-Quds newspaper, Jared Kushner (US President Donald Trump’s son-in-law and special adviser on the Middle East) explained, “To make a deal, both sides will have to take a leap and meet somewhere between their stated positions.”
  • Referring to Palestinian President Mahmoud Abbas, Kushner added, “I am not sure President Abbas has the ability to do that.”
  • Palestinian refusal to address the US plan supposed to be presented soon will free Benjamin Netanyahu of the need to respond to it. The Israeli prime minister will not have to deal with his coalition partners and his Likud party members, whose vocabulary does not include the word “compromise.”
  • The Palestinian leaderships fears, probably rightly so, that Trump’s “ultimate deal” is designed to perpetuate the three-state reality: an expanded Israel, a shrunken West Bank and an isolated Gaza.
  • The way out of this reality is in implementing the principle Abbas laid out: “A single authority, a single law, a single weapon.” As long as the Palestinians fail to set their house in order and refuse to enter the diplomatic arena, the governments of the settlers and of Hamas will keep beating both peoples.

The New Yorker – Adam Entour / Donald Trump’s New World Order

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces. 

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ESADEgeo Daily Digest, 27/06/2018

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Al-Monitor – Laura Rozen / Syria cease-fire deal unravels as Trump, Putin prepare to meet

  • As US President Donald Trump and Russian President Vladimir Putin tentatively prepare to meet next month, one of the few tangible successes of US-Russian cooperation since Trump came into office is on the verge of collapse.
  • Syrian army forces, backed by Russian airstrikes, have been advancing against rebels in the southern Syrian city of Daraa, in violation of a southwest Syria de-escalation zone agreement that was negotiated by the United States, Russia and Jordan last year.
  • On June 19, the US Embassy in Amman, Jordan, sent a stark message to rebels in southern Syria, telling them essentially that the United States would not use military force to protect them from the Russian-backed Syrian regime advance.
  • “It’s pretty clear, what they [the US government] are trying to do is send a message to the rebels that there is an international consensus that they need to cut a deal with Assad, and there is no military solution to their problems,” said Nicholas Heras, a Syria analyst at the Center for a New American Security.

The New York Times – Gardiner Harris & Stanley Reed / Roiling markets, US insists world must stop buying Iranian oil

  • The US said on Tuesday that it will impose sanctions against all importers of Iranian oil by November 4.
  • The policy shook financial markets that had become accustomed to waivers for American sanctions that in years past had been granted to companies in countries like India and China as long as they showed steady reductions in their imports of Iranian oil.
  • But a senior State Department official said Tuesday morning that such routine waivers were not likely to be issued by the Trump administration, although he did not rule them out entirely.
  • The Trump administration may be signaling an unusually tough position to gain leverage ahead of the first official meeting in Vienna of the remaining signatories to the Iran nuclear deal since Trump announced in May that he would cease to implement the accord.

Foreign Policy – Jason Bordoff / This isn’t your father’s OPEC anymore

  • Just two years after trying to put a floor under prices, OPEC+ last week was called on to put a ceiling on prices. As oil spiked above $80 per barrel following Trump’s announcement that he would re-impose sanctions on Iran oil sales, the US along with other consuming countries like India and China pressured OPEC+ to open the taps back up.
  • Despite some ambiguity, OPEC reasserted its relevance in Vienna through its willingness to cap prices, underscoring its reputation as a responsible supplier to the market. But, even as OPEC reasserts its traditional role, the organization has been reincarnated in new form.
  • First, Saudi Arabia’s role in the organization is bigger than ever. The price-capping decision in Vienna was effectively taken by Saudi Arabia, not OPEC. After all, only Saudi Arabia has any meaningful amount of spare capacity.
  • The second major change in OPEC is that its second-most important player, after Saudi Arabia, is now Russia, despite not being an official member of OPEC at all. Deepening and possibly formalizing the Saudi-Russian oil alliance marks a potentially historic shift for OPEC, as past attempts to cooperate with Russia have consistently failed.
  • The third major message from last week’s OPEC meeting is that America’s shale energy boom hasn’t increased US influence over global oil markets. Oil remains a geopolitical vulnerability for the US and talks of its “energy dominance” has been overhyped.
  • The OPEC also has its limitations. An output hike would leave OPEC with a very small buffer of spare capacity, so there is a limit to what OPEC can do to keep prices from spiking if Venezuelan production plummets, Iranian sanctions bite, or countries like Libya and Nigeria see further unrest.

Financial Times – Martin Wolf / Work in the age of intelligent machines

  • Adair Turner, former chairman of the UK’s financial regulator and chairman of the Institute for New Economic Thinking, believes intelligent machines will ultimately be able to perform most forms of current work better than people and at lower cost. This, he argues, is a question of when, not if.
  • Turner argues that what is happening explains the “productivity paradox” — rapid innovation, but low productivity growth. Of the 10 US sectors with the biggest forecast growth in employment between 2014 and 2024, which are expected to generate 29 per cent of all new jobs, eight have median wages below the national median.
  • This then is the picture for the medium-term future: sluggish overall productivity growth and worsening inequality. This is inconsistent with stable democracy. The outcome could be plutocracy, populist autocracy, or a blend.
  • So long as there is a reasonable prospect of jobs for people who want to work, the crucial policy will be subsidizing jobs. It is also vital to fund high-quality public services for all, notably, health, education and transportation. Moreover, we will need higher taxation of wealth and top incomes, including land and intellectual property.
  • In the longer term, the world might become techno-feudal, with an owning elite hiring great numbers of cheap human servants not for their value, but for the pleasure of domination.

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces. 

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