Was Trump’s attack on the lira Putin’s idea?

 

Trump Impeachment Odds Slashed to Shortest Ever After ...

What did Trump and Putin agree in their secret meeting in Helsinki in July? Trump’s attack on the Turkish economy has given Putin just the leverage he needs with Erdogan over Idlib.

Trump’s critics warn us that his belligerent policies towards Iran and Turkey are pushing them into Moscow’s arms, even as they seek evidence of ‘Russian collusion’ in all the wrong places. This collusion is not to be found in shady backroom campaign meetings; it is hiding in plain sight.

“He does things the right way” Trump said of Erdogan last month. It shouldn’t have been a surprise; the two men have much in common after all: nationalist tubthumping autocrats with a contempt for constitutional limits on presidential might, who see few problems which cannot be solved through the right combination of willpower and firepower. His comment specifically referred to Erdogan’s ability to ignore his own parliament, and was followed up with a mutually aggrandising fistbump. Yet the budding bromance was to be short-lived.

 

Days later, Trump entered his now infamous two-hour private meeting with Putin in Helsinki. According to their own account, one of the main items on the agenda was Syria, which for seven years has been the battleground for a proxy war between (among others) the two men’s respective countries. In this war, Turkey and the US were supposed to be on the same side; yet Trump, on Syria as so many issues, has been ambivalent as to US goals in the conflict. The original objective, of course, was to transform Syria – an independent regional power allied to both Iran and Hezbollah – into a failed state on the Iraqi/ Libyan/ Afghan model. Yet the Syrian state – with a level of popular support surprising to those western observers susceptible to their own propaganda – stubbornly refused to be destroyed. Russian intervention helped turn the tide in September 2015, and since then, one victory after another – most notably in Aleppo – has made it clear that not only will the Syrian government survive, but that it will very likely restore its authority nationwide. Most rebel-held cities have now been retaken by the Syrian Arab Army (SAA), whilst the Kurdish YPG – who have always, correctly, feared the US-backed sectarian insurgency far more than they have feared Assad – have entered into negotiations with the government, leading to a growing role for the SAA in YPG-held areas as well. The only major population centre still fully outside government control, then, is Idlib, home to almost 3 million, and largely under the control of Hay’et Tahrir Al Sham, the latest rebrand of Syria’s Al Qaeda franchise.

 

All the signs are that a government offensive on this last rebel stronghold is imminent, with government forces amassing at the western edge of the province near Jisr al Shughour. Yet one major obstacle remains. Turkey.

 

Turkish troops are now present on the ground in Idlib at around a dozen ‘observation posts’ set up under the terms of the ‘de-escalation zones’ agreed by Iran, Turkey and Russia at the Astana conference, making a direct assault on the governorate very difficult without risking a major escalation with Turkey – still, despite everything, a NATO member. Furthermore, Turkey wields extensive influence over many of the rebel groups present in Idlib. Back in May, Turkey formed a coalition of around a dozen anti-government militias there under the banner of the ‘National Liberation Front’. Earlier this month, they persuaded two HTS splinters – Nour al-Din al-Zenki, the US-UK-funded group infamous for their livestream beheading of an 11 year old, and Ahrar al-Sham, another Al-Qaeda in all but name and attitude to the west – to sign up. Through this force, Turkey now claims to control up to 100,000 fighters in Idlib, in addition to its own troops on the ground. In other words – Turkey has positioned itself to act as a major spoiler to any forthcoming Idlib operation.

 

Russia, then, seeks to pressure Turkey into agreeing to, if not a surrender of the province, then at least the removal of its troops, and a negotiated settlement with its NLF proxies – perhaps even a joint operation against HTS by the SAA, the NLF and Russia. This might be acceptable to Turkey – given a guarantee of influence in the aftermath – and Russia, but would be very hard to swallow for the Syrian government, who have no desire to share power with Al Qaeda lite. What Russia needs, then, in order to oversee an Idlib settlement on its own terms, is some kind of leverage over Turkey.

 

Enter Trump. Trump’s attack on the Turkish currency – already under pressure from the rising dollar due to its huge mountain of debt – precipitated an unprecedented decline in its value, only stemmed by a $15 billion loan from Qatar. But this is likely to only be a temporary solution. Cut out of US markets, and facing further sanctions over its purchases of Iranian oil, what Erdogan needs is a new, more dependable ally than his volatile erstwhile buddy in the White House.

 

Enter Putin. On August 10th, following the Trump tweet that triggered the lira’s plunge, Erdogan immediately spoke to Putin to discuss “trade and economic cooperation”. 3 days later, Erdogan explained that he had “made advancements in our ties with Russia in accordance to our benefits and interests”. This was followed up with a visit to Ankara by Foreign Minister Lavrov the next day and then, at the end of last week, Turkish Foreign Minister Mevlut Cavusoglu was received in Moscow by Putin himself. Russia had already reaffirmed its commitment to the delivery of its much-feared S-400 missile system by early next year, and made some vague promises to use the lira in its transactions with Turkey at some unspecified point in the future. But nothing new, nothing concrete. Russia was signalling that it was ready to come to Turkey’s aid; but at a price. That price may well be Turkish support for Russian proposals in Idlib, which Putin will be hoping to finalise in the forthcoming Syria summit between Turkey, Russia and Iran next week. Already, the statements coming out of Turkey following the various meetings which have taken place have indicated something of a shift in the Turkish position, with Cavusoglu admitting the presence of “terrorist groups” in Idlib, which need to “neutralised” – “to alleviate the concerns of our Russian counterparts”. At the same time, Putin can use the prospect of Turkish acquiescence to an operation in Idlib as leverage on the Syrian government to accept both its own proposals for recognition of Kurdish autonomy and Israeli demands on the Iranian presence in Syria. Such an outcome would allow both Netanyahu and Trump to claim a much-needed victory in their campaign to ‘rollback’ Iran, whilst simultaneously increasing Iranian and Syrian dependence on Russia. Trump’s attack on the lira, in other words, by throwing Turkey into Moscow’s arms, may have been the key to unlock the final stages of a Syria settlement under Russian tutelage. This is the real Trump-Russia collusion: not in backroom campaign meetings, but hiding in plain sight.

This article was originally published on Middle East Eye 

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Turkey and Qatar are being punished for refusing to do Washington’s bidding on Iran

 

Turkey and Iran reject 13 demands to Qatar | Vestnik Kavkaza

For years, Turkey and Qatar were at the vanguard of the western imperial project in the Middle East. Having had their fingers burnt in Syria, however, they are now refusing to facilitate Washington’s Iran plans – and paying the price.

Trump’s visit to Saudi Arabia in May last year – his first foreign trip as President – was significant for two main reasons: first, the $110 billion arms deal it produced, and secondly, the regional blockade of Qatar it heralded – widely seen as having been greenlighted by Trump during his visit. The impact of the blockade – implemented by Saudi Arabia, the UAE, Bahrain and Egypt – was, however, immediately mitigated by increased trade with Iran and Turkey in particular, limiting its overall impact.

 

This month’s attack on the Turkish economy, however, has had far more devastating results. Trump’s tweet on Friday August 10th – announcing a doubling of steel and aluminium tariffs on an economy already hit hard by his trade war – sent the Turkish currency into freefall. By the end of the day’s trading, it had lost 16% of its value, reaching a nadir of 7.2 to the dollar two days later; before his tweet, it had never fallen below 6 to the dollar. Trump’s move came on the back of Federal Reserve policies that were already threatening to provoke financial crises in over-indebted emerging markets such as Turkey. These are harsh punishments for countries long considered prime US allies in the region.

 

A NATO member since 1952 (following Turkish involvement in the Korean war on the side of the US), Turkey has hosted a major US airbase at Incirlik since 1954, essential to US operations in the region, and even housed the US nuclear missiles which triggered the Cuban missile crisis. Incirlik was crucial to the US-UK terror bombing of Iraq in 1991, and, although the Turkish parliament narrowly prevented its use for the 2003 redux, Turkey has been the launchpad for subsequent US strikes both in Iraq and in Afghanistan.

 

Qatar, meanwhile, is, to this day, run by the family – the al-Thanis – appointed as Britain’s proxies in the nineteenth century. Granted formal independence only in 1971, the country has remained deeply tied into western foreign policy since then. Both its ‘post-independence’ rulers were educated at the UK’s Sandhurst military academy, and it, like Turkey, hosts a major US base, whilst it’s ruling family, like those of the other Gulf monarchies, are dependent on western arms transfers to maintain their power. In 2011, Qatar played a major role in NATO’s Libya operation, providing airstrikes, military training, $400million of funding to insurgent groups, and even ground forces – not to mention the major propaganda role played by the Qatari-owned network Al Jazeera.

 

Then, in mid-2011, both countries threw themselves headlong into the war to overthrow the Syrian government. Turkish president Erdogan had previously enjoyed relatively warm relations with his Southern neighbour, but at some stage decided that the western-backed rebellion was going to win, and he wanted in on it. Turkey’s collaboration was crucial for the London-Washington Syria project, not only to give it a semblance of regional legitimacy, but more importantly because its 800km border with the country was to be the conduit for the tens of thousands of armed fighters on which the insurgency would depend.

 

Unwilling – and, following the decimation of their armies in Iraq and Afghanistan, probably unable – to provide the ground forces necessary to destroy the Syrian Arab Army themselves, the ‘regime-change regimes’ of the west relied on states like Qatar and Turkey to act as intermediaries – to facilitate weapons transfers, provide finance and smooth the passage of foreign fighters. Both states, heady with the prospects of the economic and geopolitical rewards that would follow Assad’s removal, and believing their own networks’ fantasies about an imminent collapse, were more than happy to act as accomplices. Over the years that followed, the resources they committed – and the devastation that resulted – were immense. In the case of Turkey, in particular, the spillover would prove disastrous.

 

Less than three years into the war, the International Crisis Group estimated that Turkey had spent $3billion on the war on Syria. Yet this figure, high as it is, represents a fraction of the true costs involved. A detailed report in Newsweek in 2015 noted the huge increase in military spending following the start of the Syria war, rising from $17 billion per year in 2010, to $22.6 billion in 2014, an increase of 25%. Furthermore, Turkey has been the first port of call for millions of Syrians fleeing the war. This alone had cost the country an estimated $8billion by 2015. Added to this, the report says, are the ‘collateral costs’ resulting from the deterioration of relations with Russia following Turkey’s downing of a Russian jet in 2015, which it estimated could be as high as $3.7 billion due to lost Russian tourism, investment and trade. Trade with Syria, of course, also slumped by “70 percent as a direct effect from the Syrian war,” from $1.8billion worth of exports in 2010 to $497 million two years later. In place of this legitimate trade – much of it in energy resources – however, came a flourishing new illicit trade. This new trade imposed “an additional cost to the Turkish economy: a growing, untaxed, hard-to-control black market economy. To combat its effect on government revenue, Turkey’s Energy Market Regulatory Agency declared an increase in inspections and control mechanisms in Turkey.” Ultimately, however, the government opted to facilitate, rather than attempt to control, this burgeoning black market, issuing in April 2015 “new border regulations that enabled Turkey to open its borders to uncontrolled cash inflow and remittances. According to the new law, travelers no longer had to declare transported currency or profit amounts at the customs booth.” This policy would, noted former governor of Turkey’s central bank Durmus Yilmaz, “attract black money to flow into Turkey.”

 

“In sum”, concluded the report, “as Turkey incrementally left its prior foreign policy agenda of “Zero Problems with Neighbors” and moved towards an Assad-centric policy, the costs imposed on its economy multiplied. This can be observed directly from the refugee costs, military spending, border security costs and the changing composition of trade volume and quality of liquidity flows in the economy.” Furthermore,The data suggest…that the more aggressive Turkey gets in its Syria policy in terms of military involvement, the more aggressively these costs rise.” Erdogan’s enthusiastic collaboration with the regime-changers in Washington and London had crippled his country’s economy – not to mention spawning a new era of sectarian militancy in the form of ISIS, which would launch multiple terror attacks within Turkey itself.

 

Being far removed from the conflict, the Syrian war’s impact on Qatar was not nearly as severe. Nevertheless, Qatar, too, pumped billions into the insurgency: noted the Financial Times in 2013, “The gas-rich state of Qatar has spent as much as $3bn over the past two years supporting the rebellion in Syria, far exceeding any other government”  It added that “Qatar has sent the most weapons deliveries to Syria, with more than 70 military cargo flights into neighbouring Turkey between April 2012 and March this year,” showing clearly the division of labour between Qatari finance and Turkish logistics.

 

Turkey and Qatar have thus put themselves right at the forefront of western efforts to overthrow the Syrian state. To date, however – other than an ever-growing pile of burnt Syrian corpses and a huge hole in their own finances – they have nothing to show for it.

 

In hindsight, the Turkish downing of a Russian jet in November 2015 can be seen as a last-ditch attempt to test the resolve, not of Russia, but of the west. Erdogan wanted to know whether or not the US was going to put their money where their mouth was and put some decisive muscle into the conflict. In the escalation that followed the attack, Turkey immediately put forward plans for a ‘no fly zone’ – euphemism for the sort of all-out aerial bombardment that befell Libya. But nothing came of it. That was the moment Turkey realised the west were not about to commit anything like the resources necessary to actually bring about victory. Assad was here to stay. Turkey would have to deal with that. And that meant dealing with Russia. The slow realignment of Turkish foreign policy had begun. And earlier this year, with tails no doubt firmly between their legs, even Qatar re-established relations with the Syrian government.

 

So when Trump came knocking for buyers for the west’s next brilliant idea – war on Iran, beginning with a brutal economic siege  – neither Turkey nor Qatar were exactly chomping at the bit to sign up. The suggestion was even less appealing than the disastrous Syria gambit, targeting an even more important trading partner, and with even less chance of influence over some mythical future government. Qatar shares a major gas field – South Pars – with Iran, and is dependent on Iran for accessing eastern energy markets, whilst Iran is the major source of Turkish energy imports. Following Syria, neither country has much nose left to cut off, even if they had wanted to spite their own face. Trump’s merciless attack on their economies is yet another sign of the increasing US inability to bend once-pliable clients to its will. For all his bluster, it is a clear admission of weakness and failure.

This piece was originally published on RT.com

Yemen’s media blackout

The shameful lack of coverage given to US-UK backed atrocities in Yemen is but one aspect of western media’s blackout of the truth about the conflict.
Image result for boys killed in saudi airstrike yemen bus

One of the survivors of the US-UK supported bombing of a school bus in Yemen, which killed over 40 children, mostly under 10

 

Even by the depraved standards of the US-UK-Saudi-UAE aggression against Yemen, yesterday’s bombing of a school bus was a new low. The bus had stopped at a market whilst taking the children back to school from a picnic when it was targeted, according to Save the Children. Health officials have informed the world that the strike killed 47 people with 77 more injured, but that that number was likely to rise. Most of those victims, tweeted the Red Cross, were less than ten years old. Following the attack, Frank McManus, Yemen country director for the International Red Cross, whose workers are treated the wounded, pleaded that: “Today should be the day the world wakes up to the atrocities going on in Yemen … a bus full of school children cannot be viewed as mere collateral damage. Even wars have rules, but rules without consequences mean nothing.”

It is hard to see how the world will wake up, however, when western media remains so committed to its refusal to give anything like adequate coverage to the ongoing aggression. You might have thought that the targeted bombing of a bus full of children parked in a market far from any military activity, by forces enjoying full military, diplomatic and strategic support from the UK, would make headlines. Yet this is not the case. Take the Guardian, for example, supposedly a bastion of liberal values and humanitarian concern. Their report on the incident went online shortly before 7pm last night. Yet this morning, it does not feature amongst their 13 headline stories, which include such gripping items as  “the chips are down in Belgium at heatwave hits supply of fries”. Click on the ‘world news’ section, and Yemen is not even amongst the 11 headlines there, bumped by earth-shattering stories such as “New Zealand – Jacinda Ardern says country will ban plastic bags”. Only if you specifically click on the Middle East section would you find the story – fourth of that section’s six headlines, just behind “Mauritian presidential hopeful arrested” and “Looted Iraqi antiquities return home”.

The Independent, now online only and perhaps, you might have thought, less subject to the pressure from advertisers that drives some of the self-censorship of its loss-leading print-edition cousins, is little different. Yemen was among neither its eight ‘top stories’ this morning, which included headlines such as “British campers flee as flash floods batter France”, nor the eight pieces in its ‘more stories’ section, which included items titled “summer not over yet, despite thunderstorms and heavy rain” and “Pochettino blames Brexit for Spurs’ failure to sign any new players”

Of course, in a sense, these outlets are entirely correct not to consider the story as news – for there is nothing really new about yesterday’s atrocity. Indeed, only last week, an airstrike on a market and hospital killed at least 60 people; such slaughter has become routine. Even the killing of children is standard practice: in fact, the 29 children killed in the bus bombing yesterday are but a fraction of the 130 children killed in Yemen every day by the famine and disease which the aggression has brought to the country.

Indeed, alongside the straightforward lack of coverage, the downplaying of the level of killing in Yemen constitutes a second, more subtle, form of media blackout. Somewhere along the line, someone decided that 10,000 was the death toll to be forever associated with the Yemen war, and this number has appeared in virtually every article on the subject for years. In truth, this figure is a massive underestimate, given that at least150,000 are believed to have died from starvation and preventable diseases last year alone, a direct consequence of the aggression on Yemen, the blockade of its ports, and the targeting of its civilian and agricultural infrastructure. Thus the ‘death toll’ endlessly repeated in the media – and shamefully, this often includes alternative media – is in truth but a tiny fraction of the true level of suffering being rained down on that country by the west and its proxies.

Another form of blackout is the presentation of the conflict as a civil war. There was a civil war in Yemen, the endgame of which was reached when the Ansar Allah movement captured the capital city and President Hadi fled the country. Since then, beginning in March 2015, what has been occurring is a foreign aggression against the country. In the words of Professor Isa Blumi, what is ”Strategically left out of the discussion” here “are those outside facilitators of empire whose war has created new opportunities to plunder Yemen’s resources. Rather than seeing the heavy hand of empire, the outsider is expected to believe the media and think tank experts that it is Yemenis’ own pathologies, their social and economic backwardness, that leave them susceptible to violence and thus ‘civil war’. The ‘they are at war with themselves’ trope continuously repeated in various media and academic circles ultimately obfuscates who are guilty, laying blame on eighty percent of a country’s population currently being starved to death”.

Even when foreign aggression is admitted, however, the agency for this is often misrepresented. Thus a fourth form of blackout consists of presenting the war as somehow an independent initiative of the Saudis, which the west are, at best, merely ‘backing’ or ‘going along with’ for the sake of arms sales or oil supplies. This is truly putting the cart before the horse. The truth is thatthis is a US-UK war, planned in the corridors of Whitehall and Washington, but executed by their faithful Gulf proxies. We know now, from emails leaked by Wikileakslast year, that even Crown Prince Salman himself wants out of the war. But he knows that his family’s grip on power is utterly dependent on western support. And the price of that support is that their foreign policy is not their own. The deal, stretching back to the days of the British empire, is that the west provide security to the al-Saud family – but in return, the al-Sauds relinquish their foreign policy to the west. And right now, the west’s order of the day is to destroy Yemen.

Make no mistake, the war on Yemen is a UK-US war, and to present it as anything else is a dangerous misrepresentation of reality which attempts to lay the blame solely at the door of their oriental fall guys. Of course, it plays very well in countries like Britain, still drenched in its colonial and orientalist mentality, to shift the blame for Yemen’s genocide onto crooked and mischievous Arabs. Groups like Stop the War, I am sorry to say, tend to play into this narrative, portraying the recent visit to Britain by Crown Prince Bin Salman, for example, in terms of an otherwise pristine Britain sullying itself by association with a bloody Arab ‘despot’. This is a complete inversion of reality; the truth, of course, is that the Saudis’ greatest crime is their collaboration with the genocidal ruling class in Britain and the USA.

But there is also another form of media blackout on Yemen, one which even the alternative media (and here I would have to include some of my own past writings on the conflict) often succumbs to. This is the presentation of Yemenis as simply passive victims, lacking all agency, the hapless recipients of bombing raids and starvation policies. In fact, Yemen’s struggle is not essentially a story of victimhood, but of resistance. When we lament three years of Yemen’s bombardment, we should not forget that we are also celebrating three years of truly extraordinary and heroic resistance. To have survived these punishing raids for this long should demonstrate beyond all doubt that the Ansar Allah movement, against whom this devastating war is being waged, is a genuinely popular and representative movement – for if it were not, it would have collapsed years ago. The constant media refrain of Houthis being merely Iranian proxies fighting the ‘legitimate government’ turns reality square on its head. Legitimacy does not come from being ordained by the priesthood of global capital, as Hadi was, but from the kind of popular support that alone allows a movement to face down a ten-country coalition supported by the most powerful militaries in the world.
And where does the Ansar Allah movement’s popularity come from? It comes from putting itself at the forefront of resistance to the western project of selling off Yemen, opening up Yemen’s resources to looting by western financial corporations, and turning over Yemen’s political system to Saudi stooges. Indeed, in so doing, Ansar Allah are merely the latest incarnation of a spirit of Yemeni resistance to western capitalism going back over 100 years. It is this spirit which the current bombardment is trying – in an act of the most brutal futility – to crush. It is this spirit that the media desperately want to black out. And it is this spirit that will ultimately see empire, and all its stooges and apologists, crumble into dust.  

A version of this article originally appeared on Middle East Eye 

Trump’s delusional Iran oil gambit is decades too late

Trump is using everything he’s got to wage economic war on Iran. His problem is that ‘everything he’s got’ is not nearly enough, as the virtual monopoly power once wielded by the US has long since evaporated.

Last week, a senior State Department official announced the US’ intention to cut Iranian oil exports “to zero” by November 4th this year, by threatening to impose sanctions on any company still trading beyond that date. Brian Hook, director of policy planning at the State Department, told reporters on July 2nd that “Our goal is to increase pressure on the Iranian regime by reducing to zero its revenue on crude oil sales”.

Hitherto, experts had predicted US sanctions would see a reduction of around 500,000 barrels per day (bpd) by the end of the year – barely one fifth of the country’s current export of 2.4 million bpd. Even the sanctions that preceded the 2015 nuclear deal – which, unlike today’s unilateral effort, were supported by a broad alliance of world powers, including Russia and China – only succeeded in removing half Iran’s oil (1.2m bdp) from the market.

Hook reassured the world that “We are confident there is sufficient global spare oil capacity”, claiming Saudi Arabia alone could produce an additional 2 million bpd. Saudi Arabia and Russia have already agreed to increase production by 1 million bpd reversing the production quotas imposed in the wake of the oil price slump in 2016.

This determination to destroy Iran by any means necessary has, of course, been the Trump administration’s signature foreign policy since day one, with almost every member of his team harbouring a long-held and well documented vendetta against the Islamic Republic. What is new with Trump, however, is not this determination as such – let’s not forget that Iran has been on the official Pentagon hitlist since at least 2001 – as the means used to pursue it. As I argued in 2014, the nuclear deal was not, on the part of the west, a genuine rapprochement so much as a long term programme of western infiltration, based on the ‘Libya model’, aimed at building a pro-imperialist fifth column within the Iranian state in order to prepare the ground for ‘regime change’ in the future. The Trump team, of course, has no patience for the long game, and want to simply cut to the chase. The reason for this obsession with destroying Iran – shared by all factions of the western ruling class, despite their differences over means – is obvious: Iran’s very existence as an independent state threatens imperial control of the region – which in turns underpins both US military power and the global role of the dollar. And as South-South cooperation continues to develop, this threat grows every day, whilst the means to diminish it are reduced by the same measure.

At the same time, the US military encirclement of China – begun in earnest as Obama’s ‘pivot to Asia’, but, like so much else, undergoing major escalation under Trump – is intimately linked to a policy of cutting off China from its suppliers. In this sense, a policy of ‘isolating’ of Iran is aimed at isolating China also, as China is the largest market for Iranian crude.

Trump’s policy, however, is likely to get few buyers. Pepe Escobar has explained the likely response to Trump’s plans from each of Iran’s top customers:India will buy Iranian oil with rupees. China also will be totally impervious to the Trump administration’s command. Sinopec, for instance, badly needs Iranian oil for new refineries in assorted Chinese provinces, and won’t stop buying. Turkey’s Economy Minister Nihat Zeybekci has been blunt: “The decisions taken by the United States on this issue are not binding for us.” He added that: “We recognize no other [country’s] interests other than our own.” Iran is Turkey’s number-one oil supplier, accounting for almost 50% of total imports. Russia won’t back down from its intention to invest $50 billion in Iran’s energy infrastructure.. And Iraq won’t abandon strategic energy cooperation with Iran. Supply chains rule; Baghdad sends oil from Kirkuk to a refinery in Kermanshah in Iran, and gets refined Iranian oil for southern Iraq.”

With European companies likely to be more nervous about insubordination to US diktat, this merely leaves more tantalising investments open to Russian and Chinese companies.  As Philip K. Verleger noted, “It’s a huge opportunity for China and Russia to cement relationships with Iran”.

At the same time, all this activity and uncertainty is bound to push oil prices higher, meaning that any reductions in export quantities may well be compensated by increased revenues.

Trump’s attempts to persuade the rest of the world to cut off its nose to spite its face, then, are likely to all on deaf ears. It is in this light that Trump’s igniting of a global trade war must be seen.

At midnight on July 5th, US tariffs on $34billion worth of Chinese imports went into effect, at a rate of 25%. Trump told reporters that tariffs on a further $16 billion worth were likely to follow in two weeks, fulfilling a pledge made in April to slap tariffs on 1300 products totalling $50 billion annually. These tariffs were designed to target the Chinese aerospace, tech and machinery industries, as well as medical equipment, medicine and educational material. The final total, however, he added, could eventually reach $550 billion – “a figure”, noted Industry Week, “that exceeds all of U.S. goods imports from China in 2017”. These China-specific tariffs follow tariffs on steel (25%) and aluminium (10%) imports imposed on the EU, Mexico and Canada four days earlier.

According to Fox Business, Canada stands to lose around $2billion per year as a result of these tariffs, with Brazil, Russia, China and South Korea each set to lose at least $500 million annually.

But this may be precisely the point: not only to ‘bring jobs back to the US’, but also to create new forms of leverage to be used against rivals and allies (and is there really a distinction between the two anyway these days?) alike. So far, of course, Trump has famously refused to offer waivers to his allies. But with Trump, nothing is forever – everything is leverage, to be played and bartered as seen fit. Could it be, then, that waivers may yet be offered to countries who manage to wean themselves off Iranian oil by the November deadline? And even if not, the very willingness to use trade as a weapon so openly and brazenly is a reminder that there may be further punishments on the way for those who do not toe the line on the strangulation of Iran. After all, as Louis Kuijs, chief economist at Oxford Economics, has pointed out, this ‘new era’ has only just begun: “Clearly the first salvos have been exchanged,” he said, “and in that sense, the trade war has started. There is no obvious end to this”.

Nevertheless, Trump’s bark may yet be well worse than his bite. For on thing, the counter-measures employed by the Chinese – a reciprocal 25% tariff on $50billion of US goods – will hit the US hard. One product subject to the new tariff, for example, is soybeans. China is the market for 25% of all soybeans grown in the US. Grant Kimberley, a soybean farmer with the Iowa Soybean Association, estimates that this tariff alone could lead to a 70% drop in exports.

But even, even apart from the Chinese counter-measures, the US-imposed tariffs themselves are likely to hurt the US as much as China. A report on NPR suggests thatfor now, the blows are threatening to land hardest on non-Chinese companies like New Jersey-based Snow Joe/Sun Joe”, which – like so many other US companies, relies on Chinese imports for crucial parts of its supply chain. And in the end, of course, all of these increased costs will be passed on to the US consumer, directly depressing their real wages.

For China, however, the impact is likely to be – in the words of Ethan Harris, head of economic research at Bank of America Merrill Lynch – “quite small”.  Industry Week noted that whilst “In the past, the U.S. used its economic clout to win trade skirmishes with developing countries… China, whose economy has grown tenfold since it joined the World Trade Organization in 2001, poses a much more formidable adversary.” James Boughton, a senior fellow at the Centre for International Governance Innovation in Waterloo, Ontario, told the site that  “The dynamic is different from anything we’ve seen. China has an ability to ride out this kind of pressure, to weather the storm, that a lot of countries didn’t have in the past.”

 

Indeed, Trump has already been forced into retreat in some areas, given the likely repercussions. Ian Bremmer, president of the Eurasia Group consultancy, told CBS that  “Trump backed off a couple weeks ago on implementing what would have been significant measures against them. You’re familiar with the Chinese telecom firm ZTE. They were going to be made bankrupt by White House regulations what were being put in place. Trump himself intervened with a tweet saying, we don’t want to lose all of those Chinese jobs… [Trump] knows that China can hit back really hard and they can hit back in a targeted way against red states, against American farmers. So I would be very surprised if we saw significant escalation as opposed to significant rhetoric before elections in the U.S. in November, which is what we’re really talking about here.” Other possible Chinese retaliatory measures include limits on exports of rare-earth metals, essential for technologies such as smartphones, and of course the zero-option of dumping its holdings of US treasuries (although this would not be without serious pain to itself of course).

So the idea that trade war will somehow pressure China (and others) to dump Iran seems ultimately fanciful. The process of ‘delinking’ has already gone too far. China is already Iran’s biggest trading partner, and – with Chinese tariffs on US oil looming – is more likely to increase Iranian imports to replace that no longer coming from the US rather than vice versa. Iran already sells its oil to China in yuan, rather than US dollars, meaning that the entire US-controlled financial system is completely circumvented for the countries’ bilateral trade, and therefore outside the control of US-imposed financial sanctions. Looking forward, Iran is set to play a crucial role in the development of China’s mega Belt and Road Initiative, with a high speed railway planned to provide sea access to landlocked central Asia. And with French oil giant Total’s planned investment in the massive South Pars oil field in jeopardy, the contract is likely to now go to a Chinese company.

Economics professor Danny Quah noted back in 2009 that the dependence of China on US markets tended to be greatly overestimated in the west. By 2006, only 20% of Chinese exports were to the USA, with a far higher proportion going elsewhere in East Asia. In 2013, the US was not even the largest single customer for Chinese goods (it came second to Hong Kong). By 2o15, only 18% of Chinese exports were to the US; with almost half (48.5%) going elsewhere in Asia, 19.9% to Europe, 4.2% to Latin America, and 4.1% to Africa. In other words, the global South accounted for more Chinese exports than US and Europe combined. And, as is becoming clearer by the day, US and Europe are not combined.

According to the CIA’s world factbook, Chinese exports in total represent just under 20% of GDP. If we do the maths, then – 20% of 20% – it turns out that just 4% of Chinese GDP comes from exports to the US. Significant, but hardly the economic gun to the head that Trump seems to believe.

The days when loss of market access to the US meant oblivion for countries like China are long gone. The future now lies in South-South cooperation precisely along the lines of the multibillion Belt and Road Initiative. The US government understand that, and their attempts to simultaneously sabotage both China and Iran are last-ditch attempts to prevent the inevitable – further delinking, and a global economy in which the US is becoming increasingly peripheral. But the truth is, this effort is already too late.

This article originally appeared on RT.com 

Trump’s attack on the lira – a new financial war on the Global South

Trump’s attack on the Turkish lira, combined with recent Federal Reserve moves to choke off dollar supply, are pushing the world towards a rerun of the 1997 currency crisis. This may well be the whole point.

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Last Friday, Donald Trump announced new sanctions on Turkey – comprising a doubling of the steel and aluminium tariffs he had introduced earlier this year. Turkey’s currency was already struggling, but these new sanctions “are the straw that broke the camel’s back”, commented Edward Park of the UK investment management firm Brooks Macdonald. The same day, the Turkish lira fell to more than 6 to the dollar, the first time it had ever done so, hitting a low point of 7.21 to the dollar on Sunday. Following Turkish caps on currency swaps, it slightly regained some of its lost value, and was trading at 6.12 by Wednesday, still way below the 4.75 to the dollar it was worth last week. Whilst the Turkish move has had some effect, this should not be overstated: simply banning the trading of lira above certain limits, which is effectively what Turkey has done, is hardly a sustainable means of revalorising the currency; andaccording to the FT, investors “are still ratcheting up bets against Turkey in other ways, such as through credit default swaps that pay out in the case of a debt default”. Turkish bank shares now stand at their lowest level since 2003.

Underlying the currency’s vulnerability are the country’s massive dollar debts. Turkish companies now owe almost $300 billion in foreign-denominated debt, a figure which stands at over half its GDP. The question is – how did this happen, and why has it suddenlynow become a problem?

During the era of Quantitative Easing, the US Federal Reserve flooded US financial institutions with $3.5trillion in new dollars, much of which poured into so-called ‘emerging markets’ such as Turkey. So long as the music kept playing, this was fine – near-zero interest rates, combined with a weak dollar, made these debts affordable. But since the Federal Reserve ended its programme of QE last year – and then started to reverse it, selling off the financial assets it had purchased (and thus effectively taking dollars out of the financial system) – the dollar’s value has started to rise again, making debt repayments less affordable. This appreciation of the dollar has been compounded by two successive interest rate rises by the Reserve; but it has also been compounded by Trump’s actions. Paradoxically, Trump’s trade wars have led to a further rise in the dollar, as investors have viewed it as a ‘safe haven’ compared to other currencies deemed less able to withstand the unpredictable turbulence he has unleashed. Even the yen and the Swiss franc, traditionally viewed as ‘good as gold’ have weakened against the dollar – as, indeed, has gold itself. As Aly-Khan Satchu, financial analyst at Rich Management, has put it the “US dollar has been weaponised – either deliberately or by design” (is there a difference?), adding that the “dollar is basically knee-capping countries”, warning that other countries will face the same treatment “if they continue to pursue the policies that Erdogan is seeking to pursue”.

Thus Turkey has been hit by a quadruple whammy by the US – interest rate hikes and the choking off of dollars from the Fed; tariffs and sanctions from Trump. The result is a loss in the lira’s value of almost 40% since the start of the year.

And the effects are already being felt far beyond Turkey’s borders; the South African rand fell to a two-year low on Monday, and the Indian rupee, Mexican peso and Indonesian rupiah have all been hard hit. This is unsurprising, as the ballooning of dollar-denominated debts – from $2trillion 15 years ago to $9trillion today, largely in the global South – combined with the reversal of QE was a crisis waiting to happen. All the conditions which prefigured the 1997 East Asian currency crisis are now effectively in place. All that’s needed is a push – which is exactly what Trump has just given.

This is textbook stuff – or should be, if economics textbooks bore any relation to reality (which they don’t). The last ten years are virtually an exact replay of the decade or so running up to the 1997 crisis. Whilst the 1985 ‘Plaza Accord’ dollar devaluation was not exactly Quantitative Easing, it had the same intent and results – a flood of cheap money and dollar debt, and therefore growing global dependence on the dollar and vulnerability to US monetary and economic policy. This vulnerability was then effectively ‘cashed in’ with the ‘reverse Plaza accord’ ten years later, which, as with the current reversal of QE, choked off credit and ramped up interest rates, making markets more jumpy and bankruptcies more likely. In the end, the trigger was the collapse of the baht – the currency of a country (Thailand) with a GDP half that of Turkey – which spiralled into a crisis that ultimately spread across all of Asia, sabotaging the continent’s development and allowing US corporations to buy up some of the most advanced industrial plant in the world for a fraction of its value.

It is not hard, then, to see why Trump and the Fed might well wish to trigger such a crisis today. The more the currencies of dollar-indebted countries slide, the more real goods and services they have to pay in tribute to the US to service the same paper-dollar debts – whilst those who cannot keep up will be gobbled up for pennies on the dollar. Yet beyond these purely economic gains lies also the geopolitical imperative – to maintain and extend US domination by scuppering its rivals. Trump is, after all, about nothing if not the conversion of all possible means of power into leverage to obliterate his opponents. Forcing one country after another to the brink of bankruptcy – and therefore to the IMF for a bailout – is a means of cashing in the dollar-dependency built up over the past decade into raw power. One can easily imagine the demands the US might make in return for its support in securing an IMF bailout – end oil imports from Iran, discontinue involvement with China’s Belt and Road Initiative… the potential is vast. Already direct threats are being made against Turkey about ‘what it needs to do’ to ‘reassure the markets’ – the Times on Tuesday, for example, demanding that “Erdogan should end his spat with the West if he wants to avert a deeper crisis…his course of action should be clear: he should raise interest rates [that is, promise a bigger cut of the Turkish economy to international currency speculators], heed competent economists, explicitly guarantee the independence of the central bank [that is, remove it from democratic oversight], and make up with President Trump” – as, after all, “US support will be needed if the IMF of World Bank is to step in”. Indeed, the targeting of Turkey may well be a response to Erdogan’s insubordination in relation to Iran: noted Robert Fisk this week, “Erdogan is helping Iran to dodge US sanctions which were imposed after Trump flagrantly tore up the 2015 nuclear agreement, and – in a decision demonstrating the cowardly response of the EU’s own oil conglomerates to Trump’s insanity – has announced that he will continue to import Iranian oil. Thus will Washington’s further threat of increased oil sanctions against Iran be blunted.” Trump may well hope – as I argued recently – that tariffs can serve as a weapon to bring recalcitrant states back in line with his Iran policy.

Indeed, it is here that the false dichotomy between the ‘globalists’ and the ‘economic nationalists’ in the Trump White House – and the country at large – is, once again, exposed. When it comes to pushing the global South into bankruptcy, their interests are perfectly aligned. However much Goldman Sachs’ press releases may cry wolf about Trump’s tariffs, the reality is that the trade war is the icing on the cake of the Fed’s own policy of squeezing the ‘emerging markets’. Indeed, Wall st depends on precisely the kind of financial instability which Trump’s trade wars have triggered. As Peter Gowan has noted, “the US economy depends…upon constantly reproduced international monetary and financial turbulence” – while Wall St in particular “depends upon chaotic instabilities in ‘emerging market’ financial systems.” But by draping these actions in the flag, and parading them alongside a chorus of pseudo-shock from the ‘globalists’, their true nature is obscured. The global South now stands on the precipice – with ‘establishment liberals’ and ‘nationalist insurgents’ alike lining up to give them a shove.

An earlier version of this article originally appeared on RT.com 

Is Russia facilitating Trump’s strangulation of Iran?

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Since the earliest days on the campaign trail, it has never been in doubt who Trump and his team have had in their sights. “Iran is the biggest destabilizing force in the Middle East and its policies are contrary to our interests,” Defence Secretary Mattis told his Senate confirmation hearing, having previously claimed the country posed a bigger security threat than either ISIS or Al Qaeda. Mike Pence called Iran the “leading state sponsor of terrorism” whilst new National Security Advisor John Bolton has for years called for Iran to be bombed. Trump himself, in his own little remix of Pence’s phrase, has called Iran “The Number One State of Sponsored Terror”, which presumably means something derogatory.

 

China, of course, was famously accused of “raping our country” by Trump in 2016, whilst White House aide Peter Navarro claimed the country was waging “economic aggression” against the US. Former National Security Advisor Steve Bannon announced this week that “we are at war with China”.

 

Iran and China, then, have been favoured rhetorical targets since day one – but this year that rhetoric has morphed into all-out economic warfare. This month alone, Trump has unleashed tariffs on $60 billion of Chinese goods, threatened to do so on $500billion more, and announced his intention to cut Iranian oil exports to zero by November. These weapons of financial destruction are openly aimed at crippling and sabotaging China and Iran in order to stymie their development and bring them to their knees. Yet at the same time as this is happening, the leader of Iran and China’s major geopolitical ally, Russian President Vladimir Putin, has continued to be courted and flattered by Trump. What is going on?

 

On the face of it, these hostile acts against two of Russia’s key allies have, as one might expect, been condemned by Putin’s government. Prior to Trump’s May announcement that he would intended to violate the Iranian nuclear deal by restoring sanctions, the Kremlin warned of “harmful consequences” should he do so. And following the recent Helsinki summit between the two leaders, Putin continued to back the deal (albeit on the grounds of limiting Iranian sovereignty rather than defending it) stating that “The Russian position remains unchanged regarding the Iranian nuclear program, and we believe that the JCPOA is an instrument that makes it possible to guarantee the non-proliferation of nuclear weapons in general and in the region in particular,” adding that the deal had turned Iran into one of the most heavily IAEA-monitored countries in the world. Russia similarly denounced the tariffs slapped on China earlier this month.

 

Yet, behind the rhetorical opposition, Russian actions are facilitating Trump’s aggression. Following 18 months of oil production cuts agreed by Russia and Saudi Arabia in 2016, which had successfully raised oil prices out of the slump into which they had fallen, Russia last month proposed an unexpected and immediate reversal of this policy. The low oil prices which had plagued oil markets before the 2016 cuts were agreed had caused huge problems for producer countries such as Russia, Iran and Venezuela, leading many to believe that the Saudis had been ordered by the US to flood the market in order to sabotage the economies of its geopolitical foes. The new production quotas, then, had given these countries some much-needed breathing space; yet, this June, Russia put forward a proposal to OPEC to increase production by 1.8million barrels per day (bpd) – and, unusually, proposed that these increases were to start kicking in within weeks. In the end, a pact to increase production by 1 million barrels per day – spearheaded by Russia and Saudi Arabia – was agreed by OPEC and non-OPEC countries in late June. The rise was opposed by Iran, Iraq, Venezuela and Algeria, with Iranian oil minister Bijan Zanganeh commenting ahead of the meeting that “OPEC is not the organization to receive instruction from President Trump … OPEC is not part of the Department of Energy of the United States”.

 

Within days of the adoption of the Russian-led production increase, the Trump administration announced its plans to “reduce Iranian oil exports to zero” by November 4th. Questioned on whether such a policy might cause disruption as countries scrambled to replace supplies, State Department policy director Brian Hooks remarked that “we are confident there is sufficient global spare oil capacity.” Russia’s push for increased production had, in effect, smoothed the path for the next round of Trump’s strangulation of Iran. It was precisely this deal which lay behind Trump’s brazen claim that world oil supplies would plug the gap created by the loss of Iranian crude; without the end to Russian-Saudi production limits, this would have been unthinkable. As things stand, however, all the pieces are in place for Trump to apply serious pressure on all importers of Iranian oil. Whilst the Russian-Saudi deal offers alternative sources of supply, the trade war now underway demonstrates Trump’s willingness to use tariffs against those who do not bend to his geopolitical will. Whilst Trump has openly threatened sanctions against those who do not heed his call to end their dealings with Iran, it is quite possible that those who do heed it will be rewarded with tariff exemptions. China, in particular – Iran’s biggest trading partner, and now threatened with tariffs on all $500bilion of their exports to the US – will be particularly under pressure.

 

On the surface, then, Russia’s actions appear self-defeating. The end to the, hugely successful, production quotas of the previous 18 months immediately triggered a drop in oil prices – Russia’s main export commodity – whilst facilitating the escalation of US economic warfare against key Russian ally Iran. Yet there are several reasons Russia may be supporting Trump’s moves.

 

Most obviously, Iran is a major competitor with Russia for oil export markets – especially in Europe. European hopes to reduce dependence on Russian energy supplies are likely to be seriously dashed if they can no longer turn to Iran as an alternative supplier. Quite simply, Russia will sell more oil without Iranian competition.

 

More than this, however, even Trump’s use of tariffs as leverage to push countries away from Iran could be to Russia’s benefit. If Trump does indeed make tariff-free access to the US market conditional on cutting investment and trade with Iran, China would face a major dilemma.

 

China has for some years been not only Iran’s major trading partner, but investment financier as well. In 2011, China  signed a  $20 billion  agreement  to  boost  bilateral  cooperation  in Iran’s industrial and mining sectors. Today, China is poised to take over development of the massive South Pars oil and gas field should the French company TOTAL pull out, as they are widely expected to do, whilst a $3billion deal was recently signed giving SINOPEC the right to expand the Abadan oil refinery in Khuzestan Province. Meanwhile, reports Fox News, “With the U.S. Treasury putting pressure on Western banks to not make any deals with Iran, the Chinese state-owned CITIC bank is extending lines of credit worth $10 billion for Iranian banks. This funding will finance water, energy and transport projects. To bypass U.S. sanctions, the lines of credit will use euros and yuan currencies”.

But most significant for Russia is the 2017 $1.5 billion deal made by the Chinese Export-Import Bank to finance a high-speed railway between Tehran and Mashhad. The railway is envisioned to become part of China’s ‘Belt and Road Initiative’ , creating a high-speed transit route between central Asia and Europe that will shave weeks off current travel times.

This May – in a clear act of defiance to the US – China opened a new train line between China’s Inner Mongolia Autonomous Region and Tehran, shortening travel time by 20 days compared to cargo ship. Once the full vision of  a Chinese built high-tech, high-speed rail network across central Asia is realised, however, the current ‘Northern route’ through Russia is likely to be rendered all but redundant.

 

Could it be, then, that Russia sees it as in its own interests to facilitate Trump’s quest to chase Chinese investment out of Iran in order to preserve its trade routes and access to European oil markets?

 

If so, it is likely to be disappointed. For Iran is central not only to the Belt and Road Initiative – China’s multi-trillion, multi-decade long ‘geoeconomic’ programme – but also to its defence strategy. As correctly observed in a recent piece published by The Diplomat, “Iran constitutes [China’s] true priority. China has nurtured bilateral relations with Tehran for decades, leveraging a common resentment toward Western dominance. This partnership has great geostrategic importance to both nations. Thanks to its oil and gas reserves, Iran could help Beijing withstand a U.S. attack on its SLOCs (Sea Lines of Communication).”

For China, much as it naturally seeks to avoid further punishment from the US, Iran is simply too important to be bargained away. Unfortunately not so, it seems, for Moscow.

Originally published in Middle East Eye, July 2018

The Rambouillet ruse: is Donald Trump setting up his Korea talks to fail?

President Trump has set the bar of success so high for his forthcoming meeting with Kim Jong-Un, it is difficult to see how it could possibly be met. As the New York Times noted last month, “To meet his own definition of success, Mr. Trump will have to persuade Mr. Kim to accept ‘complete, verifiable and irreversible denuclearization’ of North Korea — something that Mr. Kim has shown no willingness to accept in the past, and few believe he will accede to in the future.” Such denuclearisation would involve “the actual dismantlement of weapons, the removal of stockpiled uranium and plutonium bomb fuel from the country and a verification program that will be one of the most complex in history, given the vastness of North Korea’s mountains.” Furthermore, Trump has suggested that the North Koreans will gain nothing in return for this one-sided destruction of their defences, until the process in all-but-complete; as one Trump official told the Wall Street Journal, “When the president says that he will not make the mistakes of the past, that means the U.S. will not be making substantial concessions, such as lifting sanctions, until North Korea has substantially dismantled its nuclear programs”. In other words – give up your leverage first; then we’ll see. What Trump appears to seek is nothing less than a completely disarmed Korea that will pave the way for the “Libya solution” his people have openly suggested is the goal.

 

Obviously, North Korea will not go for that. The whole point of their nuclear programme has been to ensure that their country avoids the fate of Iraq or Libya; which is why the intelligence community is generally united in their view that it will never be given up.  According to Ryan Hass of the Brookings Institution, “virtually no North Korea analyst inside or outside of the US government expect Kim Jong-un to relinquish his nuclear weapons”, quoting former CIA analyst Jung Pak that Kim views nuclear weapons as both “vital to the security of his regime and his legitimacy as leader of North Korea”. Meanwhile, the New York Timescomments: “ask the people who have seen past peace initiatives whether they think this one will work out any differently, and they have serious doubts that Mr. Kim will give up his nuclear program for any price”, whilst forStratfor, the complete denuclearisation of North Korea is “a lofty goal that will be nearly impossible to ensure”.

 

So what is Trump doing? Surely he knows what he is proposing would be completely unacceptable to any North Korean leader, let alone Kim Jong-Un?

 

But maybe this is the point. What if Trump, far from wanting to reach a deal, is actually deliberately pushing a proposal which issupposed to be rejected? After all, so long as he ensures his demands are unacceptable, he can offer the moon in return: recognition, technology, aid, lifting of sanctions, hell – why not? – even the removal of US troops from South Korea. Having such an offer rejected would allow Trump much more readily to be able to paint North Korea as the aggressor – unwilling to compromise, insincere in its desire for peace, etc etc.

 

This is, after all, a time honoured tactic.

 

In February 1999, in the French town of Rambouillet, a series of meetings were convened between representatives of Kosovo’s multiethnic population and the United States with the ostensible aim of resolving the conflict between Kosovan separatists and the Yugoslav government. For its part, the Yugoslavs had proposed a ceasefire, peace talks, the return of displaced citizens, and the establishment of a devolved assembly for the province, with a wide degree of autonomy. This would clearly have gone a long way to addressing the conflict; but that very fact made it completely unacceptable to the US, desperate to justify their coming onslaught against Yugoslavia. Instead, they needed a ‘peace deal’ that would be rejected by the Yugoslavs, who could then be painted as the aggressors, paving the way for war. To this end, the ‘Rambouillet Peace Agreement’ was formulated. Produced by the US State Department, the 90 page document demanded complete de facto independence for Kosovo, whilst still allowing the province to influence the rest of Yugoslavia by continuing to send representatives to its federal institutions. Yet, just in case even this one-sided arrangement was accepted by the Yugoslavs, in chapter seven of the agreement, the US inserted a crucial clause: that NATO “personnel shall enjoy . . . with their vehicles, vessels, aircraft and equipment, free and unrestricted passage and unimpeded access throughout the Federal Republic of Yugoslavia, including associated airspace and territorial waters”, whilst at the same time be “immune from all legal process, whether civil, administrative or criminal, [and] under all circumstances and at all times, immune from [all laws] governing any criminal or disciplinary offences which may be committed by Nato personnel in the Federal Republic of Yugoslavia”. In other words, Yugoslavia would have to not only submit to a full-scale occupation by NATO, but also give the occupiers the absolute and unaccountable right to abuse the population at will. Such a demand could never have been accepted by any sovereign country. But that, of course, was the point: this was an agreement penned precisely to be rejected, in order to paint the Serbs as the unreasoning aggressors. It worked perfectly: the ‘agreement’ was duly rejected, and the planned blitzkrieg of Yugoslavia followed, with 78 days of unrelenting aerial bombardment.

 

The same ruse was repeated the following year by US President Bill Clinton. At Palestinian-Israeli peace talks at Camp David, he made a proposal for a ‘final settlement’ of the conflict which allowed Israel to keep 80% of their illegal settlements – 209 in total, housing almost 200,000 settlers – along with sovereignty over a patchwork of roads linking them together and thereby cutting the West Bank into unviable bantustans – with refugees permanently denied the right to return to their homes in Israel. As former US president Jimmy Carter commented, “There was no possibility that any Palestinian leader could accept such terms and survive – but official statements from Washington and Jerusalem were successful in placing the entire onus for failure on Yasir Arafat”. Indeed, through the distortions of western media, a narrative emerged that Israeli President Ehud Barak himself had made this so-called ‘generous offer’, the spurning of which demonstrated the Palestinians hatred for peace and unwillingness to settle for anything less than driving the Jews into the sea. In fact, the Israeli side themselves had never accepted Clinton’s proposal, and had issued twenty pages of concerns they had with it. On the last of the Clinton-chaired meetings – the one from which Barak’s supposed offer emerged, held in Taba in 2001 – Barak later said that “it was plain to me that there was no chance of reaching a settlement… Therefore I said there would be no negotiations and there would no delegation and there would be no official discussions and no documentation”. Nevertheless, the official narrative, to this day, recalls that the Palestinians rejected the Israelis’ ‘generous offer’ – and therefore only have themselves to blame for their continued slaughter.

 

The EU set up Yanukovych in the same way. In 2008, the EU and Ukraine agreed to negotiate what was supposed to be a trade agreement. Five years in the making, the EU Association Agreement was finally unveiled in 2013. But by then, the EU had included a clause on defence cooperation with the EU, effectively turning the country into a unofficial NATO member. Such a measure was guaranteed – and designed – to tear apart a country like Ukraine, a multiethnic polity with deep and historic ties to both Russia and Europe, whose unity rested on strict adherence to a policy of neutrality in terms of East-West rivalries. Furthermore, Yanokovych had an explicit democratic mandate for such neutrality, having been elected on precisely this basis. The Association agreement was duly rejected, as it was presumably intended to be – setting the stage for the western-backed ‘Maidan coup’ and civil war which followed and which continue to this day.

 

So western governments certainly have form in crafting proposals designed to be rejected, in order to justify escalation. And the US have every reason for doing so with North Korea today.

 

Trump’s North Korea policy throughout last year was one of warmongering rhetoric and the ratcheting up of tensions. Whilst this was to some extent successful in bullying China and others into agreeing to harsher sanctions, this ‘consensus’ began to fall apart as Trump’s team stepped up their war talk at the end of the year, with defence secretary Mattis warning of “storm clouds…gathering” and national security advisor McMaster claiming that the odds of war were “increasing every day”.

 

This ramping up of tension did not go down well in either Korea, and rapid moves to de-escalate were undertaken, with North Korean involvement in the winter Olympics a symbolic, but important, signifier of greater North-South cooperation to come. Then, in his New Year address, Kim Jong-Un began a diplomatic charm offensive with the South which gained rapid results. A summit was set up between the leaders of the two Koreas, which eventually took place in April when Kim Jong-Un became the first North Korean leader to cross the border into the South since the Korean war. The summit agreed to pursue denuclearisation of the peninsula and to secure a formal Peace Treaty – with an outline peace arrangement to be reached by the end of the year.

 

This emerging detente between the two Koreas has hugely undermined Trump’s warmongering. In an article entitledAs Two Koreas Talk Peace, Trump’s Bargaining Chips Slip Away”, Mark Landlerpointed out that the talk of peace is likely to weaken the two levers that Mr. Trump used to pressure Mr. Kim… A resumption of regular diplomatic exchanges between the two Koreas, analysts said, will inevitably erode the crippling economic sanctions against the North, while Mr. Trump will find it hard to threaten military action against a country that is extending an olive branch”. Landler went on to quote Jeffrey A. Bader, a former Asia advisor to Barack Obama, that, following the North-South rapprochement, “It becomes awfully hard for Trump to return to the locked-and-loaded, ‘fire and fury’ phase of the relationship”. Worse, “Inside the White House, some worry that Mr. Kim will use promises of peace to peel South Korea away from the United States and blunt efforts to force him to give up his nuclear weapons”.

 

Trump, therefore, urgently needs to snuff out this rapprochement if he is to return to the bellicosity that marked his Korea policy hitherto. As Landler wrote, “Mr Kim…made a bold bet on diplomacy” – and Trump needs to ensure that it fails. The best way of doing so is by putting himself at the head of it.

 

If Trump is indeed planning to use the Rambouillet ruse to reignite tensions against the North, it is important that he spin his designed-to-be-rejected offer as somehow incredibly generous. And in recent weeks there have indeed been moves in that direction.

 

First of all, Trump has appeared to accept that denuclearisation might not need happen in one fell swoop, telling reporters that whilst  “It would certainly be better if it were all in one…. I don’t think I want to totally commit myself.” Next, Trump went out of his way to guarantee Mr. Kim’s safety. “He will be safe. He will be happy. His country will be rich,” the president said. You can already imagine Trump’s words when his ‘generous offer’ gets rejected: “we offered him security. We offered him prosperity. We offered him phased elimination. And he rejected all of it”.

 

Fascinatingly, it turns out that Trump’s national security advisor John Bolton has actually already suggested precisely the Rambouillet ruse. According to the New York Times, “Two weeks before he was recruited as national security adviser, [Bolton] said a meeting between Mr. Trump and Mr. Kim was useful only because it would inevitably fail, and then the United States could move swiftly on to the next phase — presumably a military confrontation… ‘It could be a long and unproductive meeting, or it could be a short and unproductive meeting,’ he said on Fox News. …Even among officials who worry about war, there is sympathy for his view that “failing quickly” would be valuable.” Meanwhile,Stratfor’s analysis of the likely prospects for the forthcoming summit concluded that “it may also reinforce the idea that if the two leaders can’t negotiate a way out of the conflict, then perhaps a diplomatic solution isn’t possible and talk of a military solution to the United States’ North Korea problem could return…Without some change, we’ll probably find ourselves back on the path to containment, if not on a course toward military action to end the North korean nuclear and missile programme once and for all”.

 

Whether military action is realistically possible against North Korea, however, remains a serious question. Most analysts agree that the fallout from any retaliation – both against the 28,000 US soldiers stationed in South Korea, and against US allies in Seoul and Kyoto – would be unacceptably high. James Stavridis, former Nato supreme allied commander, is typical in hisview that there are “no military options which would result in fewer than several hundred thousand casualties and perhaps as many as 2m to 3m”.

 

So if war is not on the cards, to what end would Trump seek the rejection of his offer?

 

One answer has already been suggested – to scupper the emerging North-South co-operation that threatens to erode US influence on the peninsula. Summit failure would give Trump a perceived ‘moral right’ to bully the South into ending its outreach and returning to the US position of isolating the North.

 

But another reason could lie in Trump’s trade war with China, the opening shots of which have only just been fired. Any supposed North Korean intransigence could provide Trump with cover for initiating secondarysanctions against North Korea’s supposed ‘allies’. Congressional law already allows Trump to initiate secondary sanctions against anyone trading with the victim of primary sanctions, but with the current atmosphere of rapprochement, it is difficult for Trump to justify using these against China at present. A North Korean ‘walk-out’ would provide the perfect excuse for stepping up economic warfare against China under the guise of sanctioning Korea. Indeed, Trump has already been setting up China as a potential scapegoat for any failure to reach a deal, claiming that Kim’s position had hardened following his meeting with Chinese President Xi Jinping. “There was a different attitude by the North Korean folks after that meeting,” Trump told reporters recently, “I can’t say that I’m happy about it.”

 

The entire trajectory of Trump is, after all, not one of conciliation, but of escalation – on all fronts. Escalation against immigrants, against the working class, against Iran, against China, and even against his supposed chums in Moscow. There is absolutely no reason to think that North Korea is some kind of magical exception to this golden rule.

Setting up a deal guaranteed to be rejected, but which can be spun as incredibly generous, is, of course, no mean feat. This is especially true given that Kim has now repeatedly stated that he is willing to give up his nuclear weapons. Indeed, this possibility cannot be entirely ruled out: after all, North Korea’s conventional capacity alone – not to mention its mutual defence treaty with China – arguably provides as much deterrence as is necessary to prevent an invasion, as those casualty figures quoted above bear out. In this case, the devil will be in the detail – and more specifically in the timingsof the granting of concessions. Trump is likely, in my view, to offer what appear to be very generous concessions, but make them contingent on unacceptably obtrusive verification measures or unachievable levels of ‘proof’ before any of them kick in. Perhaps they will just copy and paste chapter seven of the Rambouillet Agreement in its entirety. A secret clause demanding NATO occupation of all of North Korea would probably do the trick.