Opinion - EURASIA NEWS

Iran wants to join Eurasian Economic Union

Will Russia allow it?

There are some good reasons for Moscow’s lukewarm response to the possibility of Tehran’s admission to the EAEU. What are factors for and against Iran joining Eurasian Economic Union from Russian point of view?

By NIKOLA MIKOVIC

The Russia-dominated Eurasian Economic Union might soon be acquiring a new member: Iran. Boxed in because of its rivalry with other states in the Middle East, and laboring under US-imposed sanctions, Tehran believes it needs to strengthen ties with such neighbors as might be willing to accept it.

Iran appears to think that membership in the EAEU is a done deal. That is despite officials of the bloc denying they had received any formal request. When Mohammad Baqer Qalibaf, Speaker of the Iranian parliament, visited Moscow on February 10, he declared Iran would “permanently join the EAEU in two weeks.” Apart from the fact that the date has passed, such optimism is extremely premature.

The response from Mikhail Myasnikovich, chairman of the board of the Eurasian Economic Commission, was telling. The Eurasian union wants Iran to have “a special view on cooperation with Eurasia,” he said. It hardly sounds like a warm welcome. Other EAEU officials have stressed that Iran must formally apply for membership. A veiled warning, perhaps, that Iran cannot expect to bypass procedures.

On the face of it, there are reasons for Tehran and Moscow to support Iran’s inclusion into the bloc. The economic area is an integrated market of 180 million people with a combined GDP of more than US$5 trillion. It encourages the free movement of goods and services and can formulate common policy in key areas such as energy, agriculture, transport, customs, and foreign trade and investment.

Iran already has had a free-trade agreement with the Eurasian union since 2018. In 2020, trade turnover between Iran and the EAEU increased by 2%, exceeding $2 billion.

Mutual benefits

Food products and agricultural raw materials accounted for most of that trade in both directions. 80% of the goods that the EAEU supplied to Iran and 68% of what Iran sent to the EAEU.

Joining the EAEU would improve Iran’s economic and political position globally and help to offset, at least partly, the cost of US sanctions.

On the Russian side, Moscow wants another pathway to the markets of the Middle East. That is why the Kremlin strongly supports the construction of the Nakhchivan corridor. It is a land route connecting not only Azerbaijan to its Nakhchivan exclave between Turkey and Armenia, but also Russia and Turkey and – crucially – Russia and Iran.

A future rail link between Russia and Iran, passing though Azerbaijan and Armenia, will undoubtedly enhance economic ties between the two countries as well as Iran’s trading relations with other Eurasian union member states.

However, how receptive Arab Middle East states would be to Russian goods transiting through Iran is another question altogether. This might be a reason for Moscow’s distinctly lukewarm response to the possibility of Tehran’s admission to the bloc.

In fact, there are several large questions hanging over inducting a new member into the bloc. Bloc consists of Armenia, Belarus, Kazakhstan and Kyrgyzstan, in addition to Russia. Uzbekistan, Moldova and Cuba have observer status.

Impact on Russian relationship with Israel and Arab States

It is not improbable that closer economic ties would lead to stronger military ones. The UN Security Council embargo on conventional arms shipments to Iran expired in October. It is no secret that Iran is interested in purchasing Russia’s S-400 anti-aircraft system. As well as Su-30 fighter jets. But such a deal would almost certainly ramp up tensions between Moscow and Washington and raise alarm bells in Gulf Arab states.

Then there is Russia’s relationship with Iran’s arch-enemy, Israel. The Russians have not prevented Israel from striking at Iranian targets in Syria, despite operating S-400 units in the area. Russia was the mediator in a prisoner exchange between its ally, Syria, and Israel that took place this month and there are rumors of further ongoing negotiations on humanitarian issues and even on wider geopolitical matters.

Speculation aside, what is known is that Israeli Prime Minister Benjamin Netanyahu and Russian President Vladimir Putin discussed continued coordination between their two countries in light of developments in regional security. Was Iran also on the agenda?

Moscow, after all, must maintain its own delicate balancing act and guard its geopolitical interests. The normalization of ties between Israel and the United Arab Emirates and other Arab states has changed interest-dynamics in the region, tilting the balance further toward the Arab Gulf region’s anti-Iran alliance. How does Russia profit from the new Middle East?

Some other countries are already in the queue to join

Finally, there is the fact that there are others ahead of Iran in the queue to join the Eurasian union. Syria is one of them; 40 other countries also have stated their wish to develop trade and economic cooperation with the bloc.

As well as declaring that Iran would soon join the EAEU, Qalibaf said he had brought “a very important message” from Supreme Leader Ali Khamenei. It may well be that Moscow is composing its own, equally important message to send back to Tehran.

NIKOLA MIKOVIC

Nikola Mikovic is a political analyst in Serbia. His work focuses mostly on the foreign policies of Russia, Belarus and Ukraine, with special attention on energy and “pipeline politics.”

More by Nikola Mikovic

Working with China is more beneficial than fighting it

By Ken Moak

It appears the political and security elites in the United States are preparing for an OK Corral-type showdown with China. On December 1, the US Justice Department asked (some would argue pressured) Canada to arrest Meng Wanzhou, the chief financial officer of Chinese telecommunications giant Huawei, on a provisional warrant. It went on to charge two Chinese government employees with stealing information from firms and governments in 12 countries.

The big question is: Why now and what does the US hope to gain from these provocations?

China’s economic, technological and military rise

A brief look at China’s accomplishments in the economic, technological and military realms might shed light on the question.

The size of China’s economy is estimated at US$13.7 trillion in nominal exchange rate measurement and it met the targeted growth rate of 6.5% in 2018, according to China’s National Bureau of Statistics (CNBS). China’s growth rate is far greater than that of the US, estimated at around 3% by the US National of Statistics. If the trend continues, the Chinese economy could well topple that of the US, becoming the biggest economy in both measures.

The remarkable annual average growth rate of nearly 9% has allowed the country to spend lavishly on research and development and higher education, estimated at over US$260 billion and US$175 billion, respectively, in 2017 by the CNBS. A big chunk of higher education spending was on science, technology, engineering and mathematics (STEM).

As a result, China produces over 6 million STEM graduates each year and a similar number worked in research. These millions of STEMs are the country’s best and brightest scientific and engineering minds.

This might be a more compelling explanation of why the country is fast closing the innovation gap with and even surpassing the US in some areas – 5G, AI, driverless cars, high-speed railway, etc – than China stealing American secrets.

Huawei is at the forefront of 5G technology and the biggest (and some would suggest the best) telecommunications equipment manufacturer in the world. According to the company’s press release, almost 170 countries are using its equipment. Huawei is also the world’s second-largest smartphone producer, surpassing Apple but behind South Korea’s Samsung.

Other than the US, Australia and New Zealand, no country has accused Huawei of being a “spy” for the Chinese government. Indeed, France and Germany welcome the company’s investment.

It is probably the fear that Huawei might displace Apple that the US barred the company’s products from entering its market and asked Canada to arrest its chief financial officer. According to Jeffery Sachs, a Columbia University professor and Washington Post columnist, Meng Wanzhou’s arrest might have been politically motivated, contrary to what both the US and Canada have claimed. This allegation was supported by Trump himself when said he would intervene if China would not give him the “deal” he wants.

While China is not interested in getting into an arms race with America, it is spending heavily on developing new weapons systems to ensure it has a credible deterrent. The latest is the JL3, a submarine missile that can carry 10 nuclear bombs with a range of over 7,500 kilometers. Together with its DF21, DF26, DF31 and DF41, China has achieved that credible deterrent capability.

America’s ruling elite upset and frustrated

The US political, security and intelligence communities are upset with China because it is able to challenge American supremacy but cannot do anything about it short of a nuclear attack.

It was not supposed to be that way. The US did not expect China to transform itself from an impoverished and backward country into a superpower within four decades. Based on Soviet economic performance, the West and Japan, in fact, laughed at Deng Xiaoping’s “Socialism with Chinese Characteristics,” dubbed “state-capitalism.” Indeed, they cheered for India.

However, the West, the US in particular, and Japan are shocked because China has done so well. According to the World Bank, China’s economy was just a little over US$250 billion in 1978, the year Deng opened the country up and established economic reforms, turning away from dogmatic central planning to a market economy with Chinese characteristics.

Since then, China’s economy has grown enormously, reaching nearly US$13.7 trillion in 2018. Along the way, the government managed to lift between 750 and 800 million people out of poverty, build the largest and most sophisticated high-speed train system in the world, and establish a formidable space program, just to name a few accomplishments.

In a span of 40 years, China has managed to become a near-peer power of the US, economically, technologically and militarily, and therein lies the frustration: having China as an equal is unthinkable but stopping her is unimaginably costly.

Is Beijing as “evil” as the US says?

It could be argued that the “communist” government might be more responsible and caring than any in the West, including the US. According to the World Bank and other supranational institutions, the Chinese government has lifted 800 million people out of poverty and elevated over 400 million to middle-class status within 40 years. In doing so, it has erased considerable human misery and lived up to its stated aim of “serving the people.”

Putting economic development at the forefront has not only benefited China, but also the world. Since the 2008 financial crisis caused by the US, China has contributed to a third of global economic growth by buying huge quantities of resources and other goods and services around the world. Indeed, the Australian China hawk Tony Abbott even admitted that it was China that made his country the “lucky continent.”

Because of huge industrial and infrastructural investment from China, many countries in Africa, Latin America and Asia are beginning to develop more rapidly.

What did the “holier than thou” US do to improve the lives of its poor and middle class?

A final comment

Demonizing China with “fake news” would only make the world a more dangerous and miserable place. US provocations in the South China Sea in the name of “freedom of navigation operations” could lead to a military clash, risking American, Chinese and other people’s lives.

As the UK’s last colonial governor of Hong Kong, Chris Patten, painfully discovered, China is too big to be bullied. The US and its allies should do the right thing for their countries: work with China to make this world a better place.

There is nothing to be gained from conflict. Spending more money on defense translates to less money for improving people’s lives.

Ken Moak Ken Moak taught economic theory, public policy and globalization at university level for 33 years. He co-authored a book titled China’s Economic Rise and Its Global Impact in 2015. HIs second book, Developed Nations and the Economic Impact of Globalization, was just published by Palgrave McMillan Springer.

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/

Eurasia torn between war and peace

Iran’s top trading partner is China, while Tehran and Moscow have been improving ties as the three countries move closer to cementing a solid alliance

By Pepe Escobar

Two summits – the cross-border handshake that shook the world between Kim and Moon in Panmunjom and Xi and Modi’s cordial walk by the lake in Wuhan – may have provided the impression Eurasia integration is entering a smoother path.

Not really. It’s all back to confrontation: predictably the actual, working Iran nuclear deal, known by the ungainly acronym JCPOA, is at the heart of it.

And faithful to the slowly evolving Eurasia integration road-map, Russia and China are at the forefront of supporting Iran.

China is Iran’s top trading partner – especially because of its energy imports. Iran for its part is a major food importer. Russia aims to cover this front.

Chinese companies are developing massive oil fields in Yadavaran and North Azadegan. China National Petroleum Corporation (CNPC) took a significant 30% stake in a project to develop South Pars – the largest natural gas field in the world. A $3 billion deal is upgrading Iran’s oil refineries, including a contract between Sinopec and the National Iranian Oil Company (NIOC) to expand the decades-old Abadan oil refinery.

In a notorious trip to Iran right after the signing of the JCPOA in 2015, President Xi Jinping backed up an ambitious plan to increase bilateral trade by over tenfold to US$600 billion in the next decade.

For Beijing, Iran is an absolutely key hub of the New Silk Roads, or the Belt and Road Initiative (BRI). A key BRI project is the $2.5 billion, 926 kilometer high-speed railway from Tehran to Mashhad; for that China came up with a $1.6 billion loan – the first foreign-backed project in Iran after the signing of the JCPOA.

There’s wild chatter in Brussels concerning the impossibility of European banks financing deals in Iran – due to the ferocious, wildly oscillating Washington sanctions obsession. That opened the way for China’s CITIC to come up with up to $15 billion in credit lines.

The Export-Import Bank of China so far has financed 26 projects in Iran – everything from highway building and mining to steel producing – totaling roughly $8.5 billion in loans. China Export and Credit Insurance Corp – Sinosure – signed a memorandum of understanding to help Chinese companies invest in Iranian projects.

China’s National Machinery Industry Corp signed an $845 million contract to build a 410km railway in western Iran connecting Tehran, Hamedan and Sanandaj. And insistent rumors persist that China in the long run may even replace cash-strapped India in developing the strategic port of Chabahar on the Arabian Sea – the proposed starting point of India’s mini-Silk Road to Afghanistan, bypassing Pakistan.

So amid the business blitz, Beijing is not exactly thrilled with the US Department of Justice setting its sights on Huawei, essentially because of hefty sales of value-for-money smart phones in the Iranian market.

Have Sukhoi will travel

Russia mirrors, and more than matches, the Chinese business offensive in Iran.

With snail pace progress when it comes to buying American or European passenger jets, Aseman Airlines decided to buy 20 Sukhoi SuperJet 100s while Iran Air Tours – a subsidiary of Iran Air – has also ordered another 20. The deals, worth more than $2 billion, were clinched at the 2018 Eurasia Airshow at Antalya International Airport in Turkey last week, supervised by Russia’s deputy minister of industry and trade Oleg Bocharov.

Both Iran and Russia are fighting US sanctions. Despite historical frictions, Iran and Russia are getting closer and closer. Tehran provides crucial strategic depth to Moscow’s Southwest Asia presence. And Moscow unequivocally supports the JCPOA. Moscow-Tehran is heading the same way of the strategic partnership in all but name between Moscow and Beijing.

According to Russian energy minister Alexander Novak, the 2014 Moscow-Tehran oil-for-goods deal, bypassing the US dollar, is finally in effect, with Russia initially buying 100,000 barrels of Iranian crude a day.

Russia and Iran are closely coordinating their energy policy. They have signed six agreements to collaborate on strategic energy deals worth up to $30 billion. According to President Putin’s aide Yuri Ushakov, Russian investment in developing Iran’s oil and gas fields could reach more than $50 billion.

Iran will become a formal member of the Russia-led Eurasia Economic Union (EAEU) before the end of the year. And with solid Russian backing, Iran will be accepted as a full member of the Shanghai Cooperation Organization (SCO) by 2019.

Iran is guilty because we say so

Now compare it with the Trump administration’s Iran policy.

Barely certified as the new US Secretary of State, Mike Pompeo’s first foreign trip – to Saudi Arabia and Israel – amounts in practice to briefing both allies on the imminent Trump withdrawal of the JCPOA on May 12. Subsequently, this will imply a heavy new batch of US sanctions.

Riyadh – via Beltway darling Crown Prince Mohammad bin Salman, (MBS) – will be all in on the anti-Iran front. In parallel, the Trump administration may demand it, but MBS won’t relinquish the failed blockade of Qatar or the humanitarian disaster that is the war on Yemen.

What’s certain is there won’t be a concerted Gulf Cooperation Council (GCC) front against Iran. Qatar, Oman and Kuwait see it as counterproductive. That leaves only Saudi Arabia and the Emirates plus irrelevant, barely disguised Saudi vassal Bahrain.

On the European front, French president Emmanuel Macron has stepped up as a sort of unofficial King of Europe, leveraging himself to Trump as the likely enforcer of restrictions on Iran’s ballistic missile program, as well as dictating Iran to stay out of Syria, Iraq and Yemen.

Macron has made a direct – and patently absurd – connection between Tehran abandoning its nuclear enrichment program, including the destruction of uranium stockpiles enriched to less that 20%, and being the guilty party helping Baghdad and Damascus to defeat Daesh and other Salafi-jihadi outfits.

No wonder Tehran – as well as Moscow and Beijing – is connecting recent, massive US weapons deals with Riyadh as well as MBS’s hefty investments in the West to the Washington-Paris attempt to renegotiate the JCPOA.

Putin’s spokesman Dmitry Peskov has been adamant; the JCPOA was the product of a strenuous seven-country negotiation over many years: “The question is, will it be possible to repeat such successful work in the current situation?”

Certainly not

Thus the suspicion widely floated in Moscow, Beijing and even Brussels that the JCPOA irks Trump because it’s essentially a multilateral, no “America First” deal directly involving the Obama administration.

The Obama administration’s pivot to Asia – which depended on settling the Iranian nuclear dossier – ended up setting off a formidable, unintended chain of geopolitical events.

Neocon factions in Washington would never admit to normalized Iranian relations with the West; and yet Iran not only is doing business with Europe but got closer to its Eurasian partners.

Artificially inflating the North Korea crisis to try to trap Beijing has led to the Kim-Moon summit defusing the “bomb the DPRK” crowd.

Not to mention that the DPRK, ahead of the Kim-Trump summit, is carefully monitoring what happens to the JCPOA.

The bottom line is that the Russia-China partnership won’t allow for a JCPOA renegotiation, for a number of serious reasons.

On the ballistic missile front, Moscow’s priority will be to sell S-300 and S-400 missile systems to Tehran, sanctions-free.

Russia-China might eventually agree with the JCPOA 10-year sunset provisions to be extended, although they won’t force Tehran to accept it.

On the Syrian front, Damascus is regarded as an indispensable ally of both Moscow and Beijing. China will invest in the reconstruction of Syria and its revamping as a key Southwest Asia node of the BRI. “Assad must go” is a non-starter; Russia-China see Damascus as essential in the fight against Salafi-jihadis of all stripes who may be tempted to return and wreak havoc in Chechnya and Xinjiang.

A week ago, at an SCO ministerial meeting, Russia-China issued a joint communiqué supporting the JCPOA. The Trump administration is picking yet another fight against the very pillars of Eurasia integration.

Why Europe is afraid of the New Silk Roads

Many EU countries are concerned about one-way traffic along the new trade routes Beijing is trying to set up to Europe

By Pepe Escobar

It came out as a sort of minor scandal – considering the ’24/7 post-truth news cycle.’ Of the 28 EU ambassadors in Beijing, 27, with the exception of Hungary’s, signed an internal report criticizing the New Silk Roads as a non-transparent threat to free trade, allegedly favoring unfair competition by Chinese conglomerates.

The report was first leaked to respected German business newspaper Handelsblatt. EU diplomats in Brussels confirmed its existence to Asia Times. Then the Chinese Foreign Ministry calmed the turbulence, saying that Brussels had explained what this was all about.

In fact, it’s all about nuances. Anyone familiar with how dysfunctional Eurocrat Brussels is knows there’s no EU common policy towards China – or Russia for that matter.

The internal report does mention how China, via the New Silk Roads, or Belt and Road Initiative (BRI), is “pursuing domestic political goals like the reduction of surplus capacity, the creation of new export markets and safeguarding access to raw materials.”

That’s a self-evident Chinese rationale inbuilt in BRI from the start – and Beijing never denied it. After all, the concept itself was first floated inside the Ministry of Commerce, way before the official announcements by President Xi Jinping in Astana and Jakarta in 2013.

Perceptions of the BRI vary across myriad latitudes. Central and Eastern Europe are mostly enthusiastic – as BRI is synonymous with badly needed infrastructure projects. So are Greece and Italy, as Asia Times reported. Northern ports such as Hamburg and Rotterdam are actually configured as BRI terminals. Spain is very much interested in the days when the Yiwu to Madrid cargo train will move to high-speed rail.

Essentially, it all boils down to companies from specific EU nations deciding their degree of integration with what Raymond Yeung, ANZ’s chief economist for greater China, describes as “the biggest economic experiment in modern history.”

Watch those Chinese engineers

The case of France is emblematic. President Emmanuel Macron – now on a massive geopolitical PR offensive to crown himself the unofficial King of Europe – actually praised the BRI when he visited China earlier this year.

But nuance, once again, applies: “After all, the ancient Silk Roads were never only Chinese,” Macron said in Xian at the Daming Palace, the residence of the Ancient Silk Road stalwart Tang dynasty for more than two centuries. “These roads”, added Macron, “cannot be those of a new hegemony, which would transform those that they cross into vassals.”

So Macron was already prepositioning himself to steer EU-China relations away and beyond the number one EU grievance; how the Chinese play the foreign trade/investment game.

Macron has been very vocal in prodding the European Commission bureaucracy to toughen anti-dumping rules against Chinese steel imports and forcing EU-wide screening of takeovers in strategic sectors, especially from China.

In parallel, virtually every EU nation – not only France – wants more access to the Chinese market. As much as Macron has touted an optimistic mantra – “Europe is back” – in terms of EU competitiveness, that barely masks the primordial European fear; the fact that it’s China that may be getting too competitive.

The BRI, for Beijing, is all about geopolitical but most of all geo-economic projection – including the promotion of new global standards and norms that may not be exactly those practiced by the EU. And that brings us to the heart of the matter, not enounced by the leaked internal report; the intersection between BRI and Made in China: 2025.

Beijing is aiming to become a global high-tech leader in less than seven years. Made in China: 2025 identified 10 sectors – including AI, robotics, aerospace, green cars and shipping and shipbuilding – as priorities.

China-Germany bilateral trade, at 187 billion euros last year, is way bigger than China-France and China-UK, at 70 billion euros each. And yes, Berlin is worried. Made in China: 2025 represents a significant “threat” to top quality German companies producing high-end manufacturing goods.

Those days may be over when China bought astonishing amounts of German machinery – plus the inevitable BMWs and Audis. The new normal points to an army of Chinese companies moving up the value-added chain at breakneck speed.

As Bauer CEO Thomas Bauer told Reuters: “(Rivalry with China) will not be a contest against copiers. It will be one against innovative engineers.”

Navigating the blue economy

The report Blue China; Navigating the Maritime Silk Road to Europe usefully expands the scope of the debate, pointing to how the development of the Maritime Silk Road may be even more crucial than overland connectivity corridors.

The report acknowledges how the Maritime Silk Road already affects the EU in terms of maritime trade and shipbuilding, and asks some questions about the increasing global presence of the PLA Navy. It recommends that the EU “should emulate China’s blue economy as an engine of growth and wealth, and encourage innovation to respond to well-funded Chinese industrial and R&D policies.”

The “blue economy” features heavily in Made in China: 2025 – especially in terms of innovation in port infrastructure and shipping. The rationale, from Beijing’s point of view, is always about maritime trade cost cutting – but that, of course, will always depend on whether oil prices will keep going up, as OPEC and Russia are keen.

As it stands, the EU bureaucracy has to be fearful, sensing the possibility of being squeezed between high-tech China and Trump’s America First. And that does not even factor in the inevitable geo-strategic clash between the BRI and the “free and open Indo-Pacific” to be managed, in theory, by the US, Japan, India and Australia; more of a glamorized South China Sea patrol than a vast project of Eurasian economic integration.

There will be an EU-China summit in July and then a German-China summit later in the year. Non-transparent sparks are bound to fly.

China will not fall into the ‘Thucydides Trap’ with India

President Xi Jinping projects China as a ‘benevolent power’ but at the Raisina Dialogue in Delhi the ‘Quad’ nations lined up against him

By Pepe Escobar

The West’s notions of history and geography between Europe and Asia, are drenched in myriad cultural implications and can be traced back to ‘The Romance of Alexander’.

This is a collection of essays mixing truth, epic drama and mythology, composed between the death of Alexander The Great in 323 B.C., and the fourth century A.D, and attributed either to Callisthenes, Aristotle’s nephew or to Alexander’s tutor.

During a 10-year period, Alexander forged an empire encompassing Asia Minor and what the West later defined as the Middle East, annexing the current lands of Turkey, Syria, Israel and Palestine, Egypt, Lebanon, Jordan, Iraq, Iran, a slice of Pakistan and northwest India.

For more than two millennia, Alexander best embodied in the West the clash of these two lofty paradigms: East and West. Alexander’s conquests also helped India to enter the Western frame of mind in terms of geography and civilization.

We eventually learned that India was actually close to the Arab world – overland via Iran, and in naval terms via its direct connection to the Persian Gulf.

The exchange of goods, traditions and culture was always inbuilt in the Big Picture. Overland or seaborne, the ancient Silk Road – before arriving in China – went through India. Rome was already trading with India before learning about the Middle Kingdom, and vice-versa as the Chinese barely knew the Mediterranean existed.

Closer to the West

So, India was always closer to the Western mind than China.

In parallel, when Vasco da Gama reached southwest India in 1498, those ports for more than a millennium had been trading with China, Southeast Asia, the Arab world and the Mediterranean.

The historical case can be made that India’s royals, after trading for so long with Arab, Jewish and Chinese merchants, were fooled by the “peaceful” intention of the first European incursions, which eventually led to British domination of the subcontinent.

This background should be taken into account when we look at what happened during the latest international Raisina Dialogue in New Delhi. This was sponsored by the Indian Ministry of External Affairs and the Observer Research Foundation (ORF), an Indian think tank.

The theme of the Raisina Dialogue was “Managing Disruptive Transitions.” And the number one “disruptive transition” was identified as no less than China’s New Silk Road, otherwise known as the Belt and Road Initiative.

More than 200 million Indians are Muslims, which makes it the third largest Muslim nation in the world after Indonesia and Pakistan. So, it is no wonder that Premier Narendra Modi’s right-wing pro-Hindu BJP acts as the self-proclaimed defender of a multi-millennium civilization.

But when we dig deeper we find that modern Hindu nationalism – instead of worrying about the destiny of the Mahabharata – was actually born in the 1920s, infused with the theories of Mazzini, d’Annunzio and even one Benito Mussolini. Still, that was all about fear of the Hindu identity being swamped by Islam and Christendom.

Now, it is all about fear of China.

Belt and Road versus ‘Quad’

NATO was in full voice at the Raisina Dialogue in New Delhi via Admiral Harry Harris, commander of US Pacific Command and named recently as US Ambassador to Australia. According to Harris, “the reality is that China is a disruptive transitional force in the Indo-Pacific, they are the owner of the trust deficit in the region.”

Significantly, the navy chiefs from the Quad nations – US, India, Japan, Australia – all agree on it. So does retired General David Petraeus, the former CIA director and mastermind of the surges in Iraq and Afghanistan.

Neocon ideologue Zalmay Khalilzad, a former US Ambassador to Iraq and Afghanistan, also attended, and duly agreed that by trying to connect all of Eurasia via the Belt and Road, China would “change the international order.”

The Raisina Dialogue fully illustrated the scope of Washington’s terminological pivot from “Asia-Pacific” to “Indo-Pacific”, while detailing the prescription inbuilt in the new Pentagon Defense Strategy.

China – along with Russia – are “revisionist powers” bent on undermining the “international, rules-based order”, especially China with its “predatory economics” which will be fully developed through the Belt and Road program.

So, it was up to Quad to implement a new China containment strategy.

Geopolitically, in Beijing, China-India relations are regarded very seriously, second only in importance to China’s relations with the US. Lately, China-Russia relations have been in the ascendant – mutually exhorted as a “strategic partnership”.

China-Japan relations, meanwhile, may qualify as a distant fourth although vast swathes of the Chinese public appear to consider it the second biggest threat to President Xi Jinping’s “Chinese Dream”.

Yet once Beijing consolidates its influence over key maritime trade routes across East Asia, Japan will cease to be a problem. The real problem is if India ever decides to try to cut or at least interfere with China’s Belt and Road Initiative naval routes – and complex supply lines – across the Indian Ocean.

The key geopolitical question of the 21^st century is how the ascension of China will “disrupt” American hegemony and arguably enable a Chinese – actually Eurasian – century.

China and India would have all it takes to be complementary. Both are members of BRICS, the group also comprising Brazil, Russia and South Africa. They are also part of the Shanghai Cooperation Organization (SCO), as well as top nations in the G-20. And yet New Delhi persists on treating Beijing not as a partner but as a threat.

Fear of the rising power

Xi Jinping, for his part, seems to take the Thucydides Trap seriously: when a rising power causes fear in an established power which escalates toward war. Xi has referred to it many times in his speeches.

So, closing the historical circle that started with Alexander, we now have an informed reader from the Middle Kingdom showing respect toward the most eminent historian of Ancient Greece

Xi is, in fact, warning the US, and by proxy, India, not to fall into the mistake that generated the Peloponnesian War, where every player lost.

The fear instilled in Sparta by the ascent of Athens rendered the war inevitable (replace Sparta by Washington/Delhi and Athens by Beijing). Athens was defeated as well as its model of democracy. In fact, the whole of Greece was defeated, its decline acting as a prelude for being conquered by Philip of Macedonia.

Inspired by the maritime expeditions of Admiral Zheng He, Xi’s point is that China is a benevolent power, with the New Silk Road – a massive trade route and a potential multiplier of wealth – developed as the archetypal globalization 2.0 “win-win”.

But, don’t count on India and the Quad to play along.

Source: http://www.atimes.com/article/china-will-not-fall-thucydides-trap-india/?utm_source=The+Daily+Report&utm_campaign=ec0ab36231-EMAIL_CAMPAIGN_2018_02_12&utm_medium=email&utm_term=0_1f8bca137f-ec0ab36231-21552319

Quasi-State: Kosovo is Europe’s Blind Zone – Economist

German economist, Martin Heipertz, spent several years in Kosovo as deputy head of the industrial and financial sector of the International Civilian Office, which later evolved into an EU mission in the region (EULEX).

After his time in Kosovo, Heipertz wrote a book called “Macchiato diplomacy — Kosovo — the blind zone of Europe”, he spoke about it to Sputnik Serbia.

Sputnik: Why coffee?

Martin Heipertz: Coffee has always been a symbol of friendly chatter and rest. Sipping coffee, they say something about everything. And we never spoke about serious political issues while drinking coffe. In Henry Kissinger’s epic book, “Diplomacy”, he develops the concept of strategic policy, and my book is a reverse story, which shows that all diplomacy in this case was reduced to talking over a cup of coffee.

Sputnik: What does it mean — the blind zone of Europe?

Martin Heipertz: I think as a motorist. You don’t see what’s happening in the blind zone. This applies to Kosovo — that’s how in Western and Central Europe the issue of Kosovo is perceived. The matter is sometimes raised before society, and then again forgotten, and no one talks about it. And it’s necessary to talk about Kosovo constantly, it shouldn’t be in the blind zone.

Sputnik: Does this mean that Kosovo as a state is a failed project?

Martin Heipertz: Kosovo is an inefficient project that shows us an example of how a quasi-state looks.

putnik: So Europe made a mistake recognizing the independence of Kosovo?

Martin Heipertz: Everyone should answer this question based on their own interests. If we think that it was possible to find a better solution, then we are mistaken.

Sputnik: There wasn’t one?

Martin Heipertz: When I arrived in Kosovo, the decision (on recognition of independence) had already been made, so I do not know if there was an alternative. But if someone asked me, I would say that the best solution for Kosovo would be the Tyrol model, an autonomy. Kosovo’s autonomy within Serbia. But I don’t know if it would have been realistic and if it wasn’t too late to make such a decision.

Sputnik: Can something from what you’ve mentioned still be realized now?

Martin Heipertz: I think time has already passed and no other decision on Kosovo can be made now.

Sputnik: In your book you often mention corruption as the main problem in Kosovo. You worked in the international administration system, how large is the system’s responsibility for the problem remaining unsolved?

Martin Heipertz: The Bible says that we tend to see the speck in our brother’s eye but fail to notice the beam in our own eye. Corruption is a problem in many states, it’s not only the problem of Kosovo. We at EULEX wanted to create a legal state, and this turned out to be a very high goal, so we failed to reach it. Our result was very bad. I don’t criticize the fact that corruption rules in Kosovo, but us, because we couldn’t do anything about it.

Sputnik: You’ve said that the United States played a critical role is the Kosovo issue. Why did Europe agree to it?

Martin Heipertz: I’m often pretty provocative talking about European impotence. I think Europe can’t show itself as a force, because it does not have an inner unity. We need a political union, a political union within the EU in order to implement coordinated foreign policy. That we can also impliment by military means in some cases.

Sputnik: In other words, does the EU need its own army?

Martin Heipertz: Yes. We lack political unity and therefore lack a common foreign policy and a unified army.

Sputnik: But what about NATO?

Martin Heipertz: NATO is a collective security system, not an instrument of active foreign policy. That’s why we are divided and weak, and we give, so to speak, the battlefield to America, Russia, Turkey, Saudi Arabia. We have a strong economy, but there’s no common foreign policy.

Sputnik: Should recognition of Kosovo’s independence be a condition for Serbia’s accession to the EU?

Martin Heipertz: I don’t want to compare the situation, but West Germany couldn’t pursue a foreign policy towards Russia and the East, until it reconciled and became accustomed to the idea of losing the eastern territories. Serbia will be able to normalize political relations with the EU if it gets used to the idea of losing Kosovo.

Sputnik: What do you think of the Spanish non-paper document on Kosovo’s European integration?

Martin Heipertz: I wouldn’t recommend equating the attitude of Spain and the EU towards Kosovo.