EU trade chief proposes mutual tariff freeze to Washington

Brussels suggested the EU and its major overseas partner suspend tariffs imposed on billions of dollars of imports for six months, EU trade chief Valdis Dombrovskis told Germany’s main news platform, Der Spiegel.

The measure would go beyond the latest four-month suspension of import duties that the parties agreed in March.

“We have proposed suspending all mutual tariffs for six months in order to reach a negotiated solution. This would create a necessary breathing space for industries and workers on both sides of the Atlantic,” Dombrovskis said.

Last month, the two transatlantic partners agreed to suspend mutual tariffs that had covered $7.5 billion of EU imports of American goods and some $4 billion of US products shipped to the bloc. The freeze is set to expire in four months.

The bitter EU-US trade dispute over aerospace subsidies to plane makers Airbus and Boeing dates back to 2004. Then Washington challenged European subsidies of Airbus that reportedly had “adverse effects” on the US.

The EU filed a retaliatory complaint against the direct support given to Boeing in the form of regional tax breaks and government grants.

So far, tit-for-tat duties on various goods have affected nearly $50 billion in mutual trade. The list of EU products on which the US imposed taxes came in at $25 billion. $7.5 billion was authorized by the World Trade Organization (WTO). In comparison, the EU’s list totaled a mere $20 billion. WTO approved $3.99 billion.


US axes Trump-era Scotch whisky tariffs for four months in bid to resolve aircraft trade war with UK

The US said on Thursday it will suspend 25 percent tariffs on Scotch whisky and retaliatory import taxes on other UK products in a bid to resolve the two parties’ on-going transatlantic trade row due to aircraft subsidies.

Then-US President Donald Trump slapped the UK and other EU member states with tariffs on whisky, wine, cheese and other foodstuffs in 2019 in return for European plane maker Airbus being given illegal subsidies by the bloc. 

The World Trade Organization (WTO) ruled in 2018 that EU governments had failed to comply with US requests to stop funding Airbus, which had caused its American rival Boeing to lose $7.5 billion a year.

Airbus had already filed a similar complaint with the WTO against Boeing in a dispute between the two manufacturers stretching back to 2004.

On Thursday the US and the UK said in a joint statement that “the United States will now suspend retaliatory tariffs in the Airbus dispute from March 4, 2021, for four months.”

The move is the latest of Trump’s policies to be overturned by President Joe Biden, whose administration will now turn its focus toward rising civil aviation powers “such as China,” the statement says.

Reacting to the news, UK Prime Minister Boris Johnson hailed the tariff climbdown as “fantastic news” for the transatlantic trading relationship, as well as for Scotch whisky distillers and other businesses.

In December the UK International Trade Secretary Liz Truss announced Britain would suspend retaliatory tariffs against the US, ahead of Brexit and the expected new trading relationship with the US under Biden.

As well as whisky, Trump’s original tariffs in response to the WTO ruling targeted UK cashmere, German coffee and tools, Spanish olive oil, as well as cheese, meat and other products from various EU nations.

Akademik Chersky headed for Nord Stream 2

The Akademik Chersky pipe-layer headed towards Nord Stream 2. The Danish Energy Agency has reported, citing the operator’s schedule, that the vessel plans to begin completing the second string of the gas pipeline in Danish waters at the end of March

The pipe-layer Akademik Chersky left the area of ​​the Curonian Spit near Kaliningrad and headed towards Nord Stream 2. According to the Vesselfinder navigation portal, this afternoon, March 30, the vessel left the area where it was undergoing sea and pre-operational tests. It went along the route that it had previously taken to Germany.

Illustration: vesselfinder.com.
Illustration: vesselfinder.com.

The supply vessels Vengery and Ivan Sidorenko left the Curonian Spit before the pipe-layer in the direction of Nord Stream 2. “Akademik Chersky” has indicated since March 4 that he is at work at sea. Therefore, the exact direction of movement is unknown.

Also, something else is known. The Danish Energy Agency reported that completion of the second string of Nord Stream 2 in Danish waters will begin in March.

“I can confirm that we have received an updated timetable from Nord Stream AG 2 for branch A. It says that work on the pipeline will begin this month”. It is reported EADaily head of the press service of the Danish Energy Agency (DEA) Tour Falbi-Hansen .

Branch A contains the longest unfinished section of Nord Stream 2. 68.5 kilometers in Danish waters and 16.5 kilometers in German waters. Earlier, in early March, the ship left the German port of Wismar and arrived at the Curonian Spit near Kaliningrad. Operator Nord Stream 2 AG announced that the pipe-layer will undergo sea trials and pre-operational tests and begin work in Danish waters.

Meanwhile, as reported by EADaily , the barge Fortuna has already covered half – 24.5 km – of the unfinished section of Line B in Danish waters.

In February, the Danish Maritime Office clarified in a warning to seamen that work on Nord Stream 2 (the second string) is planned to be carried out by the end of September and the pipelayer Akademik Chersky will participate in them.

USA continue pressure with illegal sanctions

The Akademik Chersky is a more technically suitable vessel for Nord Stream 2 and can lay up to two kilometers per day after retrofitting. Therefore, obviously, the deadline for completing the completion of branch A in Danish waters was taken with a gap, and the pipe-layer will be able to complete it at the same time as “Fortuna” – at the end of May – June. In this case, Nord Stream 2 may be ready to launch by autumn.

Recall that the United States has imposed sanctions against the vessels of the project and the vessels of Russian companies are used on it. In addition, Washington has banned companies involved in the retrofitting of ships, insurance, inspection, testing and certification of gas pipelines from participating in Nord Stream 2. It is not known whether Gazprom solved this problem. German media reported that Washington offered Berlin conditions under which it would not impose sanctions on project participants. 

Among them are guarantees that the gas pipeline will be cut off if Gazprom stops Ukrainian transit; an increase in Russian gas supplies through Ukraine; and investment in Ukrainian infrastructure for the production and transportation of hydrogen.

Alternative to Suez: The Northern Sea Route

Finnish designers have developed a container ship for the Northern Sea Route

Suez Canal was blocked for one week by the giant container ship Ever Given. Alternative routes from Europe to Asia are increasingly being discussed. The Northern Sea Route (NSR) is no exception.

On March 22, the day before the incident in the Suez Canal, the Finnish design bureau Aker Arctic , specializing in ice technology, presented a project of an Arctic container ship for the NSR. Detailed information is contained in the corporate publication of a Finnish company. 

Prototypes

The concept design of a container ship with a capacity of 8 thousand TEU for year-round operation on the NSR is based on previous developments by Aker Arctic for the region. A series of reinforced ice-class container ships of the Norilsk Nickel type and LNG carriers of the Arc7 class for the Yamal LNG project.

The container ship for the NSR will differ from other vessels of a similar type with an ice-reinforced hull. As well as icebreaker-type bow lines, and equipment for protecting cargo from the cold.

Two options

According to Luigi Portunato, shipbuilding engineer at Aker Arctic, the vessel can be built in two versions.

The first assumes the use of the “double acting ship” technology. It is due to the hull lines and the propulsion complex higher than the nose. In this case, the hybrid propulsion system consists of one shaft line with a central propeller and two rudder propellers along the sides.

The second , more traditional option, involves the use of two shafting with propellers and two rudders.

The container ship with rudder propellers will be able to operate on the NSR all year round. It would be moving stern ahead in difficult ice conditions. A container ship with propellers in difficult conditions will need the help of an icebreaker.

A special feature of the double-acting container ship will be an additional wheelhouse located in the aft part of the mooring deck. That will be used when moving aft forward. In addition, due to low operating temperatures, the bridge between the engine room and the wheelhouse with living quarters will be located below deck.

Container ship for work on the Northern Sea Route / Illustration: Aker Arctic

Specifications

At the moment, the following technical characteristics of the container ship from Aker Arctic are known:

  • container capacity – 8000 TEU;
  • length – about 300 m;
  • width – 46 m;
  • draft – 13 m;
  • power (option 1) – 56 MW (propeller 1×22 MW, rudder propellers 2×17 MW);
  • power (option 2) – 44 MW (propellers 2×22 MW);
  • icebreaking capacity (option 1) – 2.3 m (at 3 knots, nose forward);
  • icebreaking capacity (option 2) – 1.9 m (at 3 knots, nose forward)

Project economics

When developing the project of the container ship, two options for the use of Arctic container ships on the Northern Sea Route were calculated. From Asian ports to European ports. As well as only in the section between the supposed container hubs in Murmansk and Kamchatka.

As a result, the designers came to the conclusion that the cost of transportation of a conventional container decreases with an increase in the vessel’s capacity for all options. At the same time, it is difficult to pinpoint the point when the options for transportation along the NSR become more profitable than the route through the Suez Canal. This is influenced by many factors, including the cost and type of fuel, the degree of loading of the vessel, etc.

According to Luigi Fortunatto, in the current market conditions, using an Arctic container ship is slightly more expensive than crossing the Suez Canal. The economic efficiency of Arctic container ships could be increased by switching to liquefied natural gas (LNG). At the same time, the shorter route from Asia to Europe along the NSR gives a gain in time. If earlier the speed and adherence to the schedule could only be guaranteed in summer, then with the new container ship we can already talk about the winter-spring period.

It is worth noting that the Aker Arctic publication does not mention the customer for the new vessel. It can be assumed that it is a subsidiary of Rosatom, Rusatom Cargo, which is implementing a project to create the Northern Sea Transit Corridor (SMTK). Earlier it became known about the company plans to start pilot operation of Arctic container ships of the Arc7 class as early as 2024.

The EU wants to impose carbon tariffs on Australian exports

What Australian politicians call carbon tariffs, the European Union labels a carbon border adjustment mechanism.

While one sounds bad (the WTO has rules that restrict tariffs) the other sounds understandable. If the EU is imposing a carbon tax on its own products, surely it is reasonable to impose it on products from overseas.

The argument is that if a German steel manufacturer has to pay a tax of, say, $77 a tonne for the carbon it emits while making the steel, an Australian manufacturer should be charged the same when its product enters the country, unless it has already paid the same tax here.

To do otherwise would give the Australian product an unfair price advantage — it would create “carbon leakage” of the kind Australian businesses used to warn about in the leadup to Australia’s carbon price.

The European Union approved the idea in principle on March 10.

The details are less than clear. In part because it is possible that carbon tariffs are not permitted under the rules of the WTO.

WTO rules might help Australia…

The rules say taxes or “charges of any kind” can only be imposed on imported products the same way as they are domestically.

That appears to mean that they can be imposed on importers but not on producers. However it isn’t quite what the European Union has in mind.

Ideally the WTO would be able to provide guidance. However, (in part because of the actions of the US Trump administration) it isn’t really in a position to do.

…if only they were enforceable

The WTO has a new director general in Ngozi Okonjo-Iweala. He took office this month. However it will remain unable to make rulings for as long as its appellate body is unable to hear disputes.

Under Trump, the US kept vetoing appointments to the appellate body until the expiration of terms of its existing members meant it no longer had a quorum.

Disputes can still be initiated by countries such as Australia, forcing consultations. But without final determinations.

EU says it wants to ensure that its adjustment mechanism complies with the WTO’s rules. However, it hasn’t ruled out the possibility of relying on provisions that allow exceptions.

Both sides could make a case

Exceptions are allowed for the protection of human, animal or plant life or health or the protection of an exhaustible natural resource.

The catch is these exceptions are not allowed to discriminate between countries and must not be disguised restrictions on trade.

It is arguable that an adjustment mechanism designed to protect the competitiveness of European industries will breach these provisions.

Russia holds the key to German sovereignty

A more sovereign Germany closer to Russia and China may be the straw that breaks the US hegemon’s back

By PEPE ESCOBAR

In an interview with popular talk show host Vladimir Solovyov – with the full transcript published by the Russian Ministry of Foreign Affairs – Lavrov said Moscow “must be ready” for a possible “break with the European Union.”

The ominous break would be a direct result of new EU sanctions, particularly those “that create risks for our economy, including in the most sensitive areas.” And then, the Sun Tzu-style clincher: “If you want peace, prepare for war.”

Kremlin spokesperson Dmitri Peskov, afterwards, made sure to explain that Lavrov was taken out of context: the media, predictably, had seized on a “sensational” headline.

So Lavrov’s full, nuanced answer to a question about rocky EU-Russia relations must be carefully examined:    

“We believe we would be ready for this. We are neighbors. Speaking collectively, they are our largest trade and investment partner. Many EU companies operate here; there are hundreds or even thousands of joint ventures. When a business benefits both sides, we will continue. I am sure that we have become fully self-sufficient in the defense sphere. We must also attain the same position in the economy to be able to act accordingly if we see again (we have seen this more than once) that sanctions are imposed in a sphere where they can create risks for our economy, including in the most sensitive areas such as the supply of component parts. We don’t want to be isolated from the world, but we must be prepared for this. If you want peace, prepare for war.”

It’s quite clear that Lavrov is not stating that Russia will unilaterally cut off relations with the EU. The ball is actually in the EU’s court: Moscow is stating that it will not exercise a first-strike option to break relations with the Brussels eurocracy. And that in itself would also be quite different from breaking relations with any of the 27 EU member-states. 

The context Peskov referred to is also clear: EU envoy Josep Borrell, after his disastrous trip to Moscow, had raised the issue that Brussels was weighing the imposition of further sanctions. Lavrov’s response was clearly designed to drum some sense into the thick heads of the European Commission (EC), run by notoriously incompetent former German defense minister Ursula von der Leyen and her foreign policy “chief” Borrell.

Plenary session at the European Parliament. Brussels on 09/02/2021. Session pleniere au Parlement Europeen. Bruxelles le 09/02/2021.

Earlier this week, Peskov was forced to come back incisively to the volcanic saga: “Regrettably, Brussels keeps talking about sanctions, so does the United States with maniacal persistency. This is something we will never welcome. It is something that we do not like at all.”

Talk about diplomatic euphemism. 

So the stage is set for a raucous – to say the least – meeting of EU foreign ministers next Monday, where they will discuss – what else? – possible new sanctions. Those most probably would include travel bans and asset freezes on selected Russians, including people very close to the Kremlin, blamed by the EU to be responsible for the jailing earlier this month of right-wing blogger and convicted fraudster (a scam against Yves Rocher) Alexei Navalny.

The overwhelming majority of Russians see Navalny – with a popularity rate of 2% at best – as a lowly, expendable NATO asset. The meeting next week will pave the way for the summit of member state leaders at the end of March, where the EU could – and that’s the operative word – formally approve new sanctions. That would require a unanimous decision by the EU’s 27 member states.

As it stands, apart from the stridently Russophobic usual suspects – Poland and the Baltics – it doesn’t appear Brussels is aiming to shoot itself in the back.  

Remember Leibniz

EU observers obviously have not been observing how Moscow’s pragmatic view of Brussels has evolved in the past few years.

Russia-EU trade will continue, no matter what. The EU badly needs Russian energy; and Russia is willing to sell it, oil and gas, pipelines and all. That’s strictly business. If the EU doesn’t want it – for a basket of reasons – no problem: Russia is developing a steady stream of businesses, energy included, all across East Asia.

The always relevant Valdai Discussion Club, a Moscow-based think tank, for instance, is carefully tracking the trade aspect of the Russia-China strategic partnership:

“US policy will continue to seek a split between China and Russia. Europe remains an important partner for Moscow and Beijing. The situation in Central Asia is stable, but it requires the building up of Russian-Chinese cooperation.”

Putin, laterally, also weighed in on the EU-Russia saga, which is a subtext of that perennial battle between Russia and the West: “As soon as we began to stabilize, to get back to our feet – the policy of deterrence followed immediately… And as we grew stronger, this policy of deterrence was being conducted more and more intensely.”

I hinted last week at the intergalactic-distant possibility of a Berlin-Moscow-Beijing axis.
Media and telecoms analyst Peter G. Spengler in a lengthy email to me elegantly qualified it as belonging to Robert Musil’s sense of possibility, as described in his masterpiece The Man Without Qualities.

Peter Spengler also called attention to Leibniz’s Novissima Sinica, and particularly to an essay by Manfred von Boetticher on Leibniz and Russia, represented by Tsar Peter the Great, in which the role of Russia as a bridge between Europe and China is emphasized.

Even though Leibniz, in the end, never met Peter the Great, we learn that “it was always Leibniz’s goal to get practical application for his theoretical findings. Throughout his life, he was looking for a ‘great potentate’ who was open to modern ideas and with whose help he could realize his ideas of a better world. In the age of absolutism, this seemed to be the most promising perspective for a scholar for whom the progress of science and technology as well as the improvement of education and economic conditions were urgent goals.”

“Tsar Peter, who was as powerful as he was open to all new plans and whose personality fascinated him anyway, must therefore have been an extraordinarily interesting contact for Leibniz. Since Western Europe had come into closer contact with China through the Jesuit mission and Leibniz had recognized the importance of the millennia-old Chinese culture, he also saw in Russia the natural link between the European and Chinese cultural spheres, the center of a future synthesis between the Orient and the Occident. With the emerging upheavals in the Russian Empire, his hopes seemed to be fulfilled: Full of expectation, he followed the changes in Russia, as they were emerging under Peter I.”

Yet to evoke Leibniz at this stage is to dream of heavenly spheres. The pedestrian geopolitical reality is that the EU is an Atlanticist institution – de facto subordinated to NATO. Lavrov might want to behave like a Daoist monk, or even pull a Leibniz, but it’s hard when you’re forced to deal with a bunch of dummies. 

It’s all about sovereignty

Rabid Atlanticists argue that non-entity Navalny is directly related to Nord Stream 2. Nonsense: Navalny was built (italics mine) by the usual suspects as a battering ram to undermine Nord Stream 2.

The reason is that the pipeline will consolidate Berlin at the core of the EU’s energy policy. And that will be a major factor in the EU’s overall foreign policy – with Germany, at least in theory, exercising more autonomy in relation to the US.

So here’s the “dirty” secret: it’s all a matter of sovereignty. Every geopolitical and geoeconomic player knows who does not want a closer Germany-Russia entente.

Now imagine a hegemonic Germany in Europe forging closer trade and investment ties with not only Russia but also China (and that’s the other “secret” inbuilt in the EU-China trade-investment deal).

So whoever is lodged in the White House, there’s nothing else to expect from the US Deep State apart from the “maniacal” push towards perennial, accumulated sanctions. 

The ball is actually in Berlin’s court, much more than in the court of eurocratic nightmare Brussels, where everyone’s future priority amounts to receiving their full, fat retirement pensions tax-free.

Berlin’s strategic priority is more exports – within the EU and most of all to Asia. German industrialists and the business classes know exactly what Nord Stream 2 represents: increasingly assertive German sovereignty guiding the heart of the EU, which translates as increased EU sovereignty.

An immensely significant sign has been recently delivered by Berlin with the approval granted for imports of the Sputnik vaccine.

Is Musil’s sense of possibility already in play? It’s too early to tell. The hegemon has unleashed a no-holds-barred hybrid war against Russia since 2014. This war may not be kinetic; roughly, it’s 70% financial and 30% infowar.

A more sovereign Germany closer to Russia and China may be the straw that breaks the hegemon’s back.

Either the EU ditches neoliberalism or its people will ditch the EU

John Wight has written for a variety of newspapers and websites, including the Independent, Morning Star, Huffington Post, Counterpunch, London Progressive Journal, and Foreign Policy Journal.

We live in a world fashioned by Washington, and as 2019 approaches the dire consequences remain woefully evident.

In 1948 US State Department mandarin George Kennan – the man credited with devising the policy of containment vis-à-vis the Soviet Union at the end of WWII, – laid bare the focus of US foreign policy in the postwar period:

We have about 50 percent of the world’s wealth, but only 6.3 percent of its population…Our real task in the coming period is to devise a pattern or relationships which will permit us to maintain this position of disparity. To do so, we will have to dispense with all sentimentality and daydreamings…We are going to have to deal in straight power concepts.”

The “pattern of relationships” advocated by Kennan is embodied in the panoply of international institutions that have governed our world and dominated the planet’s economic, geopolitical, and military architecture in the seven decades since.

The World Bank and the IMF came out of the Bretton Woods Conference in 1944, along with the establishment of the dollar as the world’s primary international reserve currency.

The Truman administration’s 1947 National Security Act gave birth to a US military-industrial complex that married the nation’s economy to what was destined to become and remain a vast security and intelligence apparatus.

NATO, an instrument of US imperial power, was established in 1949, the year after the Marshall Plan (European Recovery Program) was rolled out with the objective of creating markets and demand in Europe for US exports; Washington having emerged from the war as a global economic hegemon and creditor nation without peer.  A similar plan was also rolled out to rebuild the Japanese economy on the same basis.

Pausing for a moment, it has to count as a remarkable feat of forward thinking on the part of US policymakers, embarking on a plan to not only affect the economic and industrial recovery of its two defeated enemies, Germany and Japan, immediately after the war, but turn them into regional economic powerhouses.

Subsidizing Europe’s postwar recovery was not only of immense economic importance to Washington, it was also of vital strategic importance in pushing back against Soviet influence in Europe. Immediately after the war, this influence was riding high on the back of the Red Army’s seminal role in liberating the continent from fascism, buttressed by resistance movements across occupied Europe in which Communist partisans had been most prominent.

A portion of Marshall aid money – in total some $12 billion (over $100 billion today) over four years between 1948 and 1952 – was diverted to fund various covert operations under the auspices of the CIA, designed to penetrate and subvert those governments and political parties that elicited a leaning towards socialist and communist ideas. 

In their titanic work ‘The Untold History of the United States’, co-authors Peter Kuznick and Oliver Stone reveal that one of those operations involved “supporting a guerrilla army in Ukraine called Nightingale, which had been established by the Wehrmacht in the spring of 1941 with the help of Stephan Bandera, head of the Ukrainian National Organization’s more radical wing OUN-B. The following year, Mikola Lebed founded the organization’s terrorist arm, the Ukrainian Insurgent Army…made up of ultranationalist Ukrainians, including Nazi collaborators.”

Given the nefarious role of Washington and its allies in aiding and abetting the rebirth of ultra-nationalism in Ukraine in our time, Marx’s dictum – History repeats itself, first as tragedy, second as farce – is hard to avoid.

Another institution that was established with US economic and strategic objectives in mind was the European Coal and Steel Community (ECSC) in 1951, the forerunner of today’s European Union. Yes, that’s right; the original incarnation of the EU was a triumph not of European diplomacy but US diplomacy.

In his 2011 book ‘The Global Minotaur’, left-leaning economist Yanis Varoufakis writes:

Students of European integration are taught that the European Union started life in the form of the ECSC. What they are less likely to come across is the well-kept secret that it was the United States that cajoled, pushed, threatened and sweet-talked the Europeans into putting it together…Indeed, it is indisputable that without the United States’ guiding hand the ECSC would not have materialized.”

He goes on:

There was one politician who saw this clearly: General Charles de Gaulle, the future President of France…When the ECSC was formed, de Gaulle denounced it on the basis that it was creating a united Europe in the form of a restrictive cartel and, more importantly, that it was an American creation, under Washington’s influence.”

Washington’s influence over the European Union continues to this day. Most prominently the economic model that underpins this crisis-ridden economic and increasingly political bloc, neoliberalism, is one made in America.

From inception as the lodestar of Western economic thought in the mid 1970s, prior to its adoption as the economic base of the US and UK in the early 1980s, neoliberalism has functioned alongside Washington’s military might and overweening cultural values as part of an architecture of imperialism to which European elites have signed up as fully-fledged disciples, consciously or otherwise.

De Gaulle, as mentioned, was no slouch when it came to understanding that the major threat to European independence and security lay in Washington not Moscow. He championed a ‘Europe of Nations’ after WWII, not supranational institutions that were established with the primary purpose of servicing US economic and strategic interests. As he famously proclaimed: “From the Atlantic to the Urals it is Europe, all of Europe, that will decide the fate of the world.”  De Gaulle’s great fear was a “Europe of the Americans,” which alas is what transpired with the establishment of neoliberalism as the economic foundation of European integration three decades or so later.

De Gaulle took a dim view of the UK in the postwar period, considering London a proxy of Washington. It was a view that gained common currency within French political circles after the debacle known to history as the Suez Crisis, when in 1956 the French and British entered into an ill-fated military pact with Israel to seize control of the Suez Canal from Egypt and effect the overthrow of the country’s Arab nationalist president Gamal Abdul Nasser.

President Eisenhower forced the British into a humiliating retreat, threatening a series of punitive measures to leave London in no doubt of its place in the so-called special relationship. The French had been eager to continue with the Suez operation and were disgusted at London’s craven climb down in the face of Eisenhower’s intervention.

In 1958, two years after the Suez debacle, De Gaulle entered the Elysee Palace as French president. Thereafter, the humiliation of Suez still raw, he embarked on an assertion of the country’s independence from Washington that contrasted with Britain’s slavish and unedifying subservience. The French leader withdrew France from NATO’s integrated command and twice blocked Britain’s entry into the European Economic Community (EEC) – the previous incarnation of today’s EU – on the basis that London would be a US Trojan horse if admitted.

There is, given this history, delicious irony in the fact that the country responsible for injecting the poison of neoliberalism into the EU – the UK under its fanatical leader Margaret Thatcher – is currently embroiled in a messy divorce from the bloc.

The EU in its current form is a latter-day prison house of nations locked inside a neoliberal straitjacket and single currency. Not only can’t it survive on this basis, but it also does not deserve to. Ultimately, either Europe’s political establishment decouples from Washington and its works – the Trump administration notwithstanding – or its peoples will decouple from them and theirs.

As things stand, the latter proposition is far more likely.

Source: https://www.rt.com/op-ed/446788-eu-us-ditch-neoliberalism/

How the New Silk Roads are merging into Greater Eurasia

Russia is keen to push economic integration with parts of Asia and this fits in with China’s Belt and Road Initiative

By PEPE ESCOBAR

The concept of Greater Eurasia has been discussed at the highest levels of Russian academia and policy-making for some time. This week the policy was presented at the Council of Ministers and looks set to be enshrined, without fanfare, as the main guideline of Russian foreign policy for the foreseeable future.

President Putin is unconditionally engaged to make it a success. Already at the St Petersburg International Economic Forum in 2016, Putin referred to an emerging “Eurasian partnership”.

I was privileged over the past week to engage in excellent discussions in Moscow with some of the top Russian analysts and policymakers involved in advancing Greater Eurasia.

Three particularly stand out: Yaroslav Lissovolik, program director of the Valdai Discussion Club and an expert on the politics and economics of the Global South; Glenn Diesen, author of the seminal Russia’s Geoeconomic Strategy for a Greater Eurasia; and the legendary Professor Sergey Karaganov, dean of the Faculty of World Economy and International Affairs at the National Research University Higher School of Economics and honorary chairman of the Presidium of the Council on Foreign and Defense Policy, who received me in his office for an off-the-record conversation.

The framework for Great Eurasia has been dissected in detail by the indispensable Valdai Discussion Club, particularly on Rediscovering the Identity, the sixth part of a series called Toward the Great Ocean, published last September, and authored by an academic who’s who on the Russian Far East, led by Leonid Blyakher of the Pacific National University in Khabarovsk and coordinated by Karaganov, director of the project.

The conceptual heart of Greater Eurasia is Russia’s Turn to the East, or pivot to Asia, home of the economic and technological markets of the future. This implies Greater Eurasia proceeding in symbiosis with China’s New Silk Roads, or Belt and Road Initiative (BRI). And yet this advanced stage of the Russia-China strategic partnership does not mean Moscow will neglect its myriad close ties to Europe.

Russian Far East experts are very much aware of the “Eurocentrism of a considerable portion of Russian elites.” They know how almost the entire economic, demographic and ideological environment in Russia has been closely intertwined with Europe for three centuries. They recognize that Russia has borrowed Europe’s high culture and its system of military organization. But now, they argue, it’s time, as a great Eurasian power, to profit from “an original and self-sustained fusion of many civilizations”; Russia not just as a trade or connectivity point, but as a “civilizational bridge”.

Legacy of Genghis Khan 

What my conversations, especially with Lissovolik, Diesen and Karaganov, have revealed is something absolutely groundbreaking – and virtually ignored across the West; Russia is aiming to establish a new paradigm not only in geopolitics and geoeconomics, but also on a cultural and ideological level.

Conditions are certainly ripe for it. Northeast Asia is immersed in a power vacuum. The Trump administration’s priority – as well as the US National Security Strategy’s – is containment of China. Both Japan and South Korea, slowly but surely, are getting closer to Russia.

Culturally, retracing Russia’s past, Greater Eurasia analysts may puzzle misinformed Western eyes. ‘Towards the Great Ocean’, the Valdai report supervised by Karaganov, notes the influence of Byzantium, which “preserved classical culture and made it embrace the best of the Orient culture at a time when Europe was sinking into the Dark Ages.” Byzantium inspired Russia to adopt Orthodox Christianity.

It also stresses the role of the Mongols over Russia’s political system. “The political traditions of most Asian countries are based on the legacy of the Mongols. Arguably, both Russia and China are rooted in Genghis Khan’s empire,” it says.

If the current Russian political system may be deemed authoritarian – or, as claimed in Paris and Berlin, an exponent of “illiberalism” – top Russian academics argue that a market economy protected by lean, mean military power performs way more efficiently than crisis-ridden Western liberal democracy.

As China heads West in myriad forms, Greater Eurasia and the Belt and Road Initiative are bound to merge. Eurasia is crisscrossed by mighty mountain ranges such as the Pamirs and deserts like the Taklamakan and the Karakum. The best ground route runs via Russia or via Kazakhstan to Russia. In crucial soft power terms, Russian remains the lingua franca in Mongolia, Central Asia and the Caucasus.

And that leads us to the utmost importance of an upgraded Trans-Siberian railway – Eurasia’s current connectivity core. In parallel, the transportation systems of the Central Asian “stans” are closely integrated with the Russian network of roads; all that is bound to be enhanced in the near future by Chinese-built high-speed rail.

Iran and Turkey are conducting their own versions of a pivot to Asia. A free-trade agreement between Iran and the Eurasia Economic Union (EAEU) was approved in early December. Iran and India are also bound to strike a free-trade agreement. Iran is a big player in the International North-South Transport Corridor (INSTC), which is essential in driving closer economic integration between Russia and India.

The Caspian Sea, after a recent deal between its five littoral states, is re-emerging as a major trading post in Central Eurasia. Russia and Iran are involved in a joint project to build a gas pipeline to India.

Kazakhstan shows how Greater Eurasia and BRI are complementary; Astana is both a member of BRI and the EAEU. The same applies to gateway Vladivostok, Eurasia’s entry point for both South Korea and Japan, as well as Russia’s entry point to Northeast Asia.

Ultimately, Russia’s regional aim is to connect China’s northern provinces with Eurasia via the Trans-Siberian and the Chinese Eastern Railway – with Chita in China and Khabarovsk in Russia totally inter-connected.

And all across the spectrum, Moscow aims at maximizing return on the crown jewels of the Russian Far East; agriculture, water resources, minerals, lumber, oil and gas. Construction of liquefied natural gas (LNG) plants in Yamal vastly benefits China, Japan and South Korea.

Community spirit

Eurasianism, as initially conceptualized in the early 20th century by the geographer PN Savitsky, the geopolitician GV Vernadsky and the cultural historian VN Ilyn, among others, regarded Russian culture as a unique, complex combination of East and West, and the Russian people as belonging to “a fully original Eurasian community”.

That certainly still applies. But as Valdai Club analysts argue, the upgraded concept of Greater Eurasia “is not targeted against Europe or the West”; it aims to include at least a significant part of the EU.

The Chinese leadership describes BRI not only as connectivity corridors, but also as a “community”. Russians use a similar term applied to Greater Eurasia; sobornost (“community spirit”).

As Alexander Lukin of the Higher School of Economics and an expert on the SCO has constantly stressed, including in his book China and Russia: The New Rapprochement, this is all about the interconnection of Greater Eurasia, BRI, EAEU, SCO, INSTC, BRICS, BRICS Plus and ASEAN.

The cream of the crop of Russian intellectuals – at the Valdai Club and the Higher School of Economics – as well as top Chinese analysts, are in sync. Karaganov himself constantly reiterates that the concept of Greater Eurasia was arrived at, “jointly and officially”, by the Russia-China partnership; “a common space for economic, logistic and information cooperation, peace and security from Shanghai to Lisbon and New Delhi to Murmansk”.

The concept of Greater Eurasia is, of course, a work in progress. What my conversations in Moscow revealed is its extraordinary ambition; positioning Russia as a key geoeconomic and geopolitical crossroads linking the economic systems of North Eurasia, Central and Southwest Asia.

As Diesen notes, Russia and China have become inevitable allies because of their “shared objective of restructuring global value-chains and developing a multipolar world”. It’s no wonder Beijing’s drive to develop state-of-the-art national technological platforms is provoking so much anger in Washington. And in terms of the big picture, it makes perfect sense for BRI to be harmonized with Russia’s economic connectivity drive for Greater Eurasia.

That’s irreversible. The dogs of demonization, containment, sanctions and even war may bark all they want, but the Eurasia integration caravan keeps moving along.