Category Archives: Trade

Dangerous Liaison: Corporate Agriculture and the Reductionist Mindset

Food and agriculture across the world is in crisis. Food is becoming denutrified and unhealthy and diets less diverse. There is a loss of biodiversity, which threatens food security, soils are being degraded, water sources polluted and depleted and smallholder farmers, so vital to global food production, are being squeezed off their land and out of farming.

A minority of the global population has access to so much food that it can afford to waste much of it, while food insecurity has become a fact of life for hundreds of millions. This crisis stems from food and agriculture being wedded to power structures that serve the interests of the powerful global agribusiness corporations.

Over the last 60 years, agriculture has become increasingly industrialised, globalised and tied to an international system of trade based on export-oriented mono-cropping, commodity production for the international market, indebtedness to international financial institutions (IMF/World Bank).

This has resulted in food surplus and food deficit areas, of which the latter have become dependent on (US) agricultural imports and strings-attached aid. Food deficits in the Global South mirror food surpluses in the North, based on a ‘stuffed and starved’ strategy.

Whether through IMF-World Bank structural adjustment programmes related to debt repayment as occurred in Africa (as a continent Africa has been transformed from a net exporter to a net importer of food), bilateral trade agreements like NAFTA and its impact on Mexico or, more generally, deregulated global trade rules, the outcome has been similar: the devastation of traditional, indigenous agriculture.

Integral to all of this has been the imposition of the ‘Green Revolution’. Farmers were encouraged to purchase hybrid seeds from corporations that were dependent on chemical fertilisers and pesticides to boost yields. They required loans to purchase these corporate inputs and governments borrowed to finance irrigation and dam building projects for what was a water-intensive model.

While the Green Revolution was sold to governments and farmers on the basis it would increase productivity and earnings and would be more efficient, we now have nations and farmers incorporated into a system of international capitalism based on dependency, deregulated and manipulated commodity markets, unfair subsidies and inherent food insecurity.

As part of a wider ‘development’ plan for the Global South, millions of farmers have been forced out of agriculture to become cheap factory labour (for outsourced units from the West) or, as is increasingly the case, unemployed or underemployed slum dwellers.

In India, under the banner of a bogus notion of ‘development’, farmers are being whipped into subservience on behalf of global capital: they find themselves steadily squeezed out of farming due to falling incomes, the impact of cheap imports and policies deliberately designed to run down smallholder agriculture for the benefit of global agribusiness corporations.

Aside from the geopolitical shift in favour of the Western nations resulting from the programmed destruction of traditional agriculture across the world, the Green Revolution has adversely impacted the nature of food, soil, human health and the environment.

Sold on the premise of increased yields, improved food security and better farm incomes, the benefits of the Green Revolution have been overstated. And the often stated ‘humanitarian’ intent and outcome (‘millions of lives saved’) has had more to do with PR and cold commercial interest.

However, even when the Green Revolution did increase yields (or similarly, if claims about GMO agriculture – the second coming of the Green Revolution – improving output is to be accepted at face value), Canadian environmentalist Jodi Koberinski says pertinent questions need to be asked: what has been the cost of any increased yield of commodities in terms of local food security and local caloric production, nutrition per acre, water tables, soil structure and new pests and disease pressures?

We may also ask what the effects on rural communities and economies have been; on birds, insects and biodiversity in general; on the climate as a result of new technologies, inputs or changes to farming practices; and what has been the effects of shifting towards globalised production chains, not least in terms of transportation and fossil fuel consumption.

Moreover, if the Green Revolution found farmers in the Global South increasingly at the mercy of a US-centric system of trade and agriculture, at home they were also having to fit in with development policies that pushed for urbanisation and had to cater to the needs of a distant and expanding urban population whose food requirements were different to local rural-based communities. In addition to a focus on export-oriented farming, crops were also being grown for the urban market, regardless of farmers’ needs or the dietary requirements of local rural markets.

Destroying indigenous systems

In an open letter written in 2006 to policy makers in India, farmer and campaigner Bhaskar Save offered answers to some of these questions. He argued that the actual reason for pushing the Green Revolution was the much narrower goal of increasing marketable surplus of a few relatively less perishable cereals to fuel the urban-industrial expansion favoured by the government and a few industries at the expense of a more diverse and nutrient-sufficient agriculture, which rural folk – who make up the bulk of India’s population – had long benefited from.

Before, Indian farmers had been largely self-sufficient and even produced surpluses, though generally smaller quantities of many more items. These, particularly perishables, were tougher to supply urban markets. And so, the nation’s farmers were steered to grow chemically cultivated monocultures of a few cash-crops like wheat, rice, or sugar, rather than their traditional polycultures that needed no purchased inputs.

Tall, indigenous varieties of grain provided more biomass, shaded the soil from the sun and protected against its erosion under heavy monsoon rains, but these were replaced with dwarf varieties, which led to more vigorous growth of weeds and were able to compete successfully with the new stunted crops for sunlight.

As a result, the farmer had to spend more labour and money in weeding, or spraying herbicides. Furthermore, straw growth with the dwarf grain crops fell and much less organic matter was locally available to recycle the fertility of the soil, leading to an artificial need for externally procured inputs. Inevitably, the farmers resorted to use more chemicals and soil degradation and erosion set in.

The exotic varieties, grown with chemical fertilisers, were more susceptible to ‘pests and diseases’, leading to yet more chemicals being poured. But the attacked insect species developed resistance and reproduced prolifically. Their predators – spiders, frogs, etc. – that fed on these insects and controlled their populations were exterminated. So were many beneficial species like the earthworms and bees.

Save noted that India, next to South America, receives the highest rainfall in the world. Where thick vegetation covers the ground, the soil is alive and porous and at least half of the rain is soaked and stored in the soil and sub-soil strata.

A good amount then percolates deeper to recharge aquifers or groundwater tables. The living soil and its underlying aquifers thus serve as gigantic, ready-made reservoirs. Half a century ago, most parts of India had enough fresh water all year round, long after the rains had stopped and gone. But clear the forests, and the capacity of the earth to soak the rain, drops drastically. Streams and wells run dry.

While the recharge of groundwater has greatly reduced, its extraction has been mounting. India is presently mining over 20 times more groundwater each day than it did in 1950. But most of India’s people – living on hand-drawn or hand-pumped water in villages and practising only rain-fed farming – continue to use the same amount of ground water per person, as they did generations ago.

More than 80% of India’s water consumption is for irrigation, with the largest share hogged by chemically cultivated cash crops. For example, one acre of chemically grown sugarcane requires as much water as would suffice 25 acres of jowar, bajra or maize. The sugar factories too consume huge quantities.

From cultivation to processing, each kilo of refined sugar needs two to three tonnes of water. Save argued this could be used to grow, by the traditional, organic way, about 150 to 200 kg of nutritious jowar or bajra (native millets).

If Bhaskar Save helped open people’s eyes to what has happened on the farm, to farmers and to ecology in India, a 2015 report by GRAIN provides an overview of how US agribusiness has hijacked an entire nation’s food and agriculture under the banner of ‘free trade’ to the detriment of the environment, health and farmers.

In 2012, Mexico’s National Institute for Public Health released the results of a national survey of food security and nutrition. Between 1988 and 2012, the proportion of overweight women between the ages of 20 and 49 increased from 25% to 35% and the number of obese women in this age group increased from 9% to 37%.

Some 29% of Mexican children between the ages of 5 and 11 were found to be overweight, as were 35% of youngsters between 11 and 19, while one in 10 school age children suffered from anemia. The Mexican Diabetes Federation says that more than 7% of the Mexican population has diabetes. Diabetes is now the third most common cause of death in Mexico, directly or indirectly.

The various free trade agreements that Mexico has signed over the past two decades have had a profound impact on the country’s food system and people’s health. After his mission to Mexico in 2012, the then Special Rapporteur on the Right to Food, Olivier De Schutter, concluded that the trade policies in place favour greater reliance on heavily processed and refined foods with a long shelf life rather than on the consumption of fresh and more perishable foods, particularly fruit and vegetables.

He added that the overweight and obesity emergency that Mexico is facing could have been avoided, or largely mitigated, if the health concerns linked to shifting diets had been integrated into the design of those policies.

The North America Free Trade Agreement led to the direct investment in food processing and a change in the retail structure (notably the advent of supermarkets and convenience stores) as well as the emergence of global agribusiness and transnational food companies in Mexico.

The country has witnessed an explosive growth of chain supermarkets, discounters and convenience stores. Local small-scale vendors have been replaced by corporate retailers that offer the processed food companies greater opportunities for sales and profits. Oxxo (owned by Coca-cola subsidiary Femsa) tripled its stores to 3,500 between 1999 and 2004. It was scheduled to open its 14,000th store sometime during 2015.

In Mexico, the loss of food sovereignty has induced catastrophic changes in the nation’s diet and has had dire consequences for agricultural workers who lost their jobs and for the nation in general. Those who have benefited include US food and agribusiness interests, drug cartels and US banks and arms manufacturers.

More of the same: a bogus ‘solution’

Transnational agribusiness has lobbied for, directed and profited from the very policies that have caused much of the above. And what we now see is these corporations (and their supporters) espousing cynical and fake concern for the plight of the poor and hungry.

GMO patented seeds represent the final stranglehold of transnational agribusiness over the control of agriculture and food. The misrepresentation of the plight of the indigenous edible oils sector in India encapsulates the duplicity at work surrounding the GM project.

After trade rules and cheap imports conspired to destroy farmers and the jobs of people involved in local food processing activities for the benefit of global agribusiness, including commodity trading and food processor companies ADM and Cargill, there is now a campaign to force GM into India on the basis that Indian agriculture is unproductive and thus the country has to rely on imports. This conveniently ignores the fact that prior to neoliberal trade rules in the mid-1990s, India was almost self-sufficient in edible oils.

In collusion with the Gates Foundation, corporate interests are also seeking to secure full spectrum dominance throughout much of Africa as well. Western seed, fertiliser and pesticide manufacturers and dealers and food processing companies are in the process of securing changes to legislation and are building up logistics and infrastructure to allow them to recast food and farming in their own images.

Today, governments continue to collude with big agribusiness corporations. These companies are being allowed to shape government policy by being granted a strategic role in trade negotiations and are increasingly framing the policy/knowledge agenda by funding and determining the nature of research carried out in public universities and institutes.

As Bhaskar Save wrote about India:

This country has more than 150 agricultural universities. But every year, each churns out several hundred ‘educated’ unemployables, trained only in misguiding farmers and spreading ecological degradation. In all the six years a student spends for an M.Sc. in agriculture, the only goal is short-term – and narrowly perceived – ‘productivity’. For this, the farmer is urged to do and buy a hundred things. But not a thought is spared to what a farmer must never do so that the land remains unharmed for future generations and other creatures. It is time our people and government wake up to the realisation that this industry-driven way of farming – promoted by our institutions – is inherently criminal and suicidal!

Save is referring to the 300,000-plus farmer suicides that have taken place in India over the past two decades due to economic distress resulting from debt, a shift to (GM)cash crops and economic ‘liberalisation’ (see this report about a peer-reviewed study, which directly links suicides to GM cotton).

The current global system of chemical-industrial agriculture, World Trade Organisation rules and bilateral trade agreements that agritech companies helped draw up are a major cause of food insecurity and environmental destruction. The system is not set up to ‘feed the world’ despite the proclamations of its supporters.

However, this model has become central to the dominant notion of ‘development’ in the Global South: unnecessary urbanisation, the commercialisation and emptying out of the countryside at the behest of the World Bank, the displacement of existing systems of food and agricultural production with one dominated by Monsanto-Bayer, Cargill and the like and a one-dimensional pursuit of GDP growth as a measure of ‘progress’ with little concern for the costs and implications – mirroring the narrow, reductionist ‘output-yield’ paradigm of industrial agriculture itself.

Agroecology offers a genuine solution

Across the world, we are seeing farmers and communities pushing back and resisting the corporate takeover of seeds, soils, land, water and food. And we are also witnessing inspiring stories about the successes of agroecology.

Reflecting what Bhaskar Save achieved on his farm in Gujarat, agroecology combines sound ecological management, including minimising the use of toxic inputs, by using on-farm renewable resources and privileging natural solutions to manage pests and disease, with an approach that upholds and secures farmers’ livelihoods.

Agroecology is based on scientific research grounded in the natural sciences but marries this with farmer-generated knowledge and grassroots participation that challenges top-down approaches to research and policy making. However, it can also involve moving beyond the dynamics of the farm itself to become part of a wider agenda, which addresses the broader political and economic issues that impact farmers and agriculture (see this description of the various modes of thought that underpin agroecolgy).

Jodi Koberisnki’s nod to ‘systems thinking’ lends credence to agroecology, which recognises the potential of agriculture to properly address concerns about local food security and sovereignty as well as social, ecological and health issues. In this respect, agroecology is a refreshing point of departure from the reductionist approach to farming which emphasises securing maximum yield and corporate profit to the detriment of all else.

Wei Zhang – an economist focusing on ecosystem services, agriculture and the environment – says:

that ‘worldview’ is important to how you conceptualise issues and develop or choose tools to address those issues. Using systems thinking requires a shift in fundamental beliefs and assumptions that constitute our worldviews. These are the intellectual and moral foundations for the way we view and interpret reality, as well as our beliefs about the nature of knowledge and the processes of knowing. Systems thinking can help by changing the dominant mindset and by addressing resistance to more integrated approaches.

Agroecology requires that shift in fundamental beliefs.

A few years ago, the Oakland Institute released a report on 33 case studies which highlighted the success of agroecological agriculture across Africa in the face of climate change, hunger and poverty. The studies provide facts and figures on how agricultural transformation can yield immense economic, social, and food security benefits while ensuring climate justice and restoring soils and the environment.

The research highlights the multiple benefits of agroecology, including affordable and sustainable ways to boost agricultural yields while increasing farmers’ incomes, food security and crop resilience.

The report described how agroecology uses a wide variety of techniques and practices, including plant diversification, intercropping, the application of mulch, manure or compost for soil fertility, the natural management of pests and diseases, agroforestry and the construction of water management structures.

There are many other examples of successful agroecology and of farmers abandoning Green Revolution thought and practices to embrace it (see this report about El Salvador and this interview from South India).

In a recent interview appearing on the Farming Matters website, Million Belay sheds light on how agroecological agriculture is the best model of agriculture for Africa. Belay explains that one of the greatest agroecological initiatives started in 1995 in Tigray, Northern Ethiopia, and continues today. It began with four villages and after good results, it was scaled up to 83 villages and finally to the whole Tigray Region. It was recommended to the Ministry of Agriculture to be scaled up at the national level. The project has now expanded to six regions of Ethiopia.

The fact that it was supported with research by the Ethiopian University at Mekele has proved to be critical in convincing decision makers that these practices work and are better for both the farmers and the land.

Bellay describes another agroecological practice that spread widely across East Africa – ‘push-pull’. This method manages pests through selective intercropping with important fodder species and wild grass relatives, in which pests are simultaneously repelled – or pushed – from the system by one or more plants and are attracted to – or pulled – toward ‘decoy’ plants, thereby protecting the crop from infestation. Push-pull has proved to be very effective at biologically controlling pest populations in fields, reducing significantly the need for pesticides, increasing production, especially for maize, increasing income to farmers, increasing fodder for animals and, due to that, increasing milk production, and improving soil fertility.

By 2015, the number of farmers using this practice increased to 95,000. One of the bedrocks of success is the incorporation of cutting edge science through the collaboration of the International Center of Insect Physiology and Ecology (ICIPE) and the Rothamsted Research Station (UK) who have worked in East Africa for the last 15 years on an effective ecologically-based pest management solution for stem borers and striga.

But agroecology should not just be regarded as something for the Global South. Food First Executive Director Eric Holtz-Gimenez argues that it offers concrete, practical solutions to many of the world’s problems that move beyond (but which are linked to) agriculture. In doing so, it challenges – and offers alternatives to – prevailing moribund doctrinaire economics and the outright plunder of neoliberalism.

The scaling up of agroecology can tackle hunger, malnutrition, environmental degradation and climate change. By creating securely paid labour-intensive agricultural work, it can also address the interrelated links between labour offshoring by rich countries and the removal of rural populations elsewhere who end up in sweat shops to carry out the outsourced jobs.

Thick legitimacy

Various official reports have argued that to feed the hungry and secure food security in low income regions we need to support small farms and diverse, sustainable agroecological methods of farming and strengthen local food economies (see this report on the right to food and this (IAASTD) peer-reviewed report).

Olivier De Schutter says:

To feed 9 billion people in 2050, we urgently need to adopt the most efficient farming techniques available. Today’s scientific evidence demonstrates that agroecological methods outperform the use of chemical fertilizers in boosting food production where the hungry live, especially in unfavorable environments.

De Schutter indicates that small-scale farmers can double food production within 10 years in critical regions by using ecological methods. Based on an extensive review of scientific literature, the study he was involved in calls for a fundamental shift towards agroecology as a way to boost food production and improve the situation of the poorest. The report calls on states to implement a fundamental shift towards agroecology.

The success stories of agroecology indicate what can be achieved when development is placed firmly in the hands of farmers themselves. The expansion of agroecological practices can generate a rapid, fair and inclusive development that can be sustained for future generations. This model entails policies and activities that come from the bottom-up and which the state can then invest in and facilitate.

A decentralised system of food production with access to local markets supported by proper roads, storage and other infrastructure must take priority ahead of exploitative international markets dominated and designed to serve the needs of global capital.

It has long been established that small farms are per area more productive than large-scale industrial farms and create a more resilient, diverse food system. If policy makers were to prioritise this sector and promote agroecology to the extent Green Revolution practices and technology have been pushed, many of the problems surrounding poverty, unemployment and urban migration could be solved.

However, the biggest challenge for upscaling agroecology lies in the push by big business for commercial agriculture and attempts to marginalise agroecology. Unfortunately, global agribusiness concerns have secured the status of ‘thick legitimacy’ based on an intricate web of processes successfully spun in the scientific, policy and political arenas. This allows its model to persist and appear normal and necessary. This perceived legitimacy derives from the lobbying, financial clout and political power of agribusiness conglomerates which set out to capture or shape government departments, public institutions, the agricultural research paradigm, international trade and the cultural narrative concerning food and agriculture.

Critics of this system are immediately attacked for being anti-science, for forwarding unrealistic alternatives, for endangering the lives of billions who would starve to death and for being driven by ideology and emotion. Strategically placed industry mouthpieces like Jon Entine, Owen Paterson and Henry Miller perpetuate such messages in the media and influential industry-backed bodies like the Science Media Centre feed journalists with agribusiness spin.

When some people hurl such accusations, it might not just simply be spin: it may be the case that some actually believe critics are guilty of such things. If that is so, it is a result of their failure to think along the lines Zhang outlines: they are limited by their own reductionist logic and worldview.

The worrying thing is that too many policy makers may also be blinded by such a view because so many governments are working hand-in-glove with the industry to promote its technology over the heads of the public. A network of scientific bodies and regulatory agencies that supposedly serve the public interest have been subverted by the presence of key figures with industry links, while the powerful industry lobby hold sway over bureaucrats and politicians.

The World Bank is pushing a corporate-led industrial model of agriculture via its ‘enabling the business of agriculture’ strategy and corporations are given free rein to write policies. Monsanto played a key part in drafting the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights to create seed monopolies and the global food processing industry had a leading role in shaping the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (see this). From Codex, the Knowledge Initiative on Agriculture aimed at restructuring Indian agriculture to the currently on-hold US-EU trade deal (TTIP), the powerful agribusiness lobby has secured privileged access to policy makers to ensure its model of agriculture prevails.

The ultimate coup d’etat by the transnational agribusiness conglomerates is that government officials, scientists and journalists take as given that profit-driven Fortune 500 corporations have a legitimate claim to be custodians of natural assets. These corporations have convinced so many that they have the ultimate legitimacy to own and control what is essentially humanity’s common wealth. There is the premise that water, food, soil, land and agriculture should be handed over to powerful transnational corporations to milk for profit, under the pretence these entities are somehow serving the needs of humanity.

Corporations which promote industrial agriculture have embedded themselves deeply within the policy-making machinery on both national and international levels. From the overall narrative that industrial agriculture is necessary to feed the world to providing lavish research grants and the capture of important policy-making institutions, global agribusiness has secured a perceived thick legitimacy within policymakers’ mindsets and mainstream discourse.

It gets to the point whereby if you – as a key figure in a public body – believe that your institution and society’s main institutions and the influence of corporations on them are basically sound, then you are probably not going to challenge or question the overall status quo. Once you have indicated an allegiance to these institutions and corporate power, it is ‘irrational’ to oppose their policies, the very ones you are there to promote. And it becomes quite ‘natural’ to oppose any research findings, analyses or questions which question the system and by implication your role in it.

But how long can the ‘legitimacy’ of a system persist given that it merely produces bad food, creates food deficit regions globally,  destroys health, impoverishes small farms, leads to less diverse diets and less nutritious food, is less productive than small farms, creates water scarcity, destroys soil and fuels/benefits from World Bank/WTO policies that create dependency and debt.

The more that agroecology is seen to work, the more policy makers see the failings of the current system and the more they become open to holistic approaches to agriculture – as practitioners and supporters of agroecology create their own thick legitimacy –  the more willing officials might be to give space to a model that has great potential to help deal with some of the world’s most pressing problems. It has happened to a certain extent in Ethiopia, for example. That is hopeful.

Of course, global agribusiness nor the system of capitalism it helps to uphold and benefits from are not going to disappear overnight and politicians (even governments) who oppose or challenge private capital tend to be replaced or subverted.

Powerful agribusiness corporations can only operate as they do because of a framework designed to allow them to capture governments and regulatory bodies, to use the WTO and bilateral trade deals to lever global influence, to profit on the back of US militarism (Iraq) and destabilisations (Ukraine), to exert undue influence over science and politics and to rake in enormous profits.

The World Bank’s ongoing commitment to global agribusiness and a wholly corrupt and rigged model of globalisation is a further recipe for plunder. Whether it involves Monsanto, Cargill or the type of corporate power grab of African agriculture that Bill Gates is helping to spearhead, private capital will continue to ensure this happens while hiding behind platitudes about ‘free trade’ and ‘development’.

Brazil and Indonesia are subsidising private corporations to effectively destroy the environment through their practices.  Canada and the UK are working with the GMO biotech sector to facilitate its needs. And India is facilitating the destruction of its agrarian base according to World Bank directives for the benefit of the likes of Monsanto, Bayer and Cargill.

If myths about the necessity for perpetuating the stranglehold of capitalism go unchallenged and real alternatives are not supported by mass movements across continents, agroecology will remain on the periphery.

G7 vs. G6+1: The War of Words

Background

The war of words has intensified between the U-S and G-7 allies after President Donald Trump retracted his endorsement of the communiqué of the once-united group.

The German chancellor called Trump’s abrupt revocation of support for a joint communiqué sobering and depressing. Angela Merkel, however, said that’s not the end. France also accused Trump of destroying trust and acting inconsistently. Trump pulled the U-S out of the group’s summit statement after Canada’s Prime Minister Justin Trudeau announced the imposition of retaliatory tariffs on the U-S.  The White House said Canada risked making the U-S president look weak ahead of his summit with the North Korean leader. But, Canada’s Foreign Minister Chrystia Freeland later reiterated that her country will retaliate against U-S tariffs in a measured and reciprocal way.

*****

PressTV: What do you make of Mr. Trump’s decision to renege on the G7’s final statement?

Peter Koenig: Trump pulling out from the final G7 statement is just show; the usual Trump show. He signed it, then he pulled out. We have seen it with the Iran Nuclear Deal, with the North Korea meeting, on and off, with the tariffs first. About two months ago the tariffs were on for Europe, Mexico and Canada, as well as China. Then they were off for all of them, and now they are on again…

How serious can that be? Trump just wants to make sure that he calls the shots. And he does. As everybody gets nervous and talks about retaliation instead of practicing the “politics of silence” strategy.

In the case of Europe, the tariffs, or the equivalent of sanctions, as Mr. Putin recently so aptly put it, may well serve as a means of blackmailing Europe, for example, to disregard as Trump did, the Iran Nuclear Deal, “step out of it – and we will relieve you from the tariffs.”

In the case of Canada and Mexico, it’s to make sure Americans realize that he, Mr. Trump, wants to make America Great again and provide jobs for Americans. These tariffs alone will not create one single job. But they create an illusion and that, he thinks, will help Republicans in the up-coming Mid-term Elections.

In China tariffs are perhaps thought as punishment for President Xi’s advising President Kim Jong-Un ahead of the June 12 summit and probably and more likely to discredit the Yuan as a world reserve currency, since the Chinese currency is gradually replacing the dollar in the world’s reserve coffers. But Trump knows that these tariffs are meaningless for China, as China has a huge trade surplus with the US and an easy replacement market like all of Asia.

PressTV:  How could the silence strategy by the 6 G7 partners have any impact on Trump’s decision on tariffs?

Peter Koenig: Well, the G6 – they are already now considered the G6+1, since Trump at the very onset of the summit announced that he was considering pulling out of the G7- so, the remaining 6 partners could get together alone and decide quietly what counter measures they want to take, then announce it in a joint communiqué to the media.

It does not have to be retaliation with reciprocal tariffs.  It could, for example, be pulling out of NATO.  Would they dare? That would get the world’s attention. That might be a much smarter chess move than copying the draw of one peon with the draw of another one. Because we are actually talking here about a mega-geopolitical chess game.

What we are actually witnessing is a slow but rapidly increasing disintegration of the West.

Let’s not forget, the G7 is a self-appointed Group of the “so-called” world’s greatest powers. How can that be when the only “eastern power”, Russia, and for that much more powerful than, for example, Canada or Italy, has been excluded in 2014 from the then G8?

And when the world’s largest economic power – measured by the real economic indicator, namely, purchasing power parity – China has never been considered being part of the G-Group of the greatest?

It is obvious that this Group is not sustainable.

We have to see whatever Trump does, as the result of some invisible forces behind the scene that direct him. Trump is a convenient patsy for them, and he plays his role quite well. He confuses, creates chaos, and on top of it, he, so far single-handedly wants to re-integrate Russia in the G-7; i.e., the remaking of the G-8.

So far the G6’s are all against it. Oddly, because it’s precisely the European Union that is now seeking closer ties with Russia. Maybe because they want to have Russia all for themselves?

If that is Trump’s strategy to pull Europe and Russia together, and thereby create a chasm between Russia and China, then he may succeed. Because the final prize of this Trump-directed mega political chess game is China.

Trump, or his handlers, know very well that they cannot conquer China as a close ally of Russia. So, the separation is one of the chess moves towards check-mate. But probably both Presidents Putin and Xi are well aware of it.

In fact, the SCO just finished their summit in China’s Qingdao on 9 June, about at the same time as the G7 in Canada’s Charlevoix, Quebec Province, and it was once more very clear that this alliance of the 8 SCO members is getting stronger, and Iran is going to be part of it. Therefore, a separation of Russia from the Association is virtually impossible. We are talking about half the world’s population and an economic strength of about one third of the world’s GDP, way exceeding the one of the G7 in terms of purchasing power.

This, I think is the Big Picture we have to see in these glorious G7 summits.

The Next US President Will Save Europe From Russia’s Secret Plot

On the eve of his visit to Austria, President Vladimir Putin told the press: Russia has not the least intention of sowing dissent within the European Union. On the contrary, it is in Moscow’s interests that the EU, its biggest trading partner, remain as unified and thriving as possible.

Europeans have long been quite obsessed with the idea that Russia is bent on dividing and weakening Europe.  In the most prominent English-language media this is practically presumed to be as obviously true as their claims that Russia killed the blogger Arkady Babchenko, attempted to murder the spy Sergei Skripal, and shot down Malaysia Airlines Flight MH17.

As usual, after the Malaysian government admitted that the evidence of Russian involvement in the downing of flight MH17 was inconclusive, the anti-Russian propaganda campaigns were reduced to slim pickings. It was precisely for this reason that the more cutting-edge Western media were so happy to latch onto the murder of the blogger in Kiev. It was precisely for this reason that the very ones who had so desperately hyped that whole episode were so indignant when they realized that they had fallen victim to a bit of ruthless Ukrainian creative license.

German Chancellor Angela Merkel, Russian President Vladimir Putin and French President Emmanuel Macron at the G-20 leaders summit in Hamburg, Germany on July 8, 2017

But let’s get back to Russia’s secret plots against Europe. Interestingly, when you trace back the source of most of the warnings about the Russian plots to divide Europe, they seem to emanate from Great Britain. In other words, they are coming from a government that has decided to pull out of the EU but is now trying to direct its foreign policy.

Allegations of Russian plans to fragment Europe have been heard from both the head of Britain’s MI5 intelligence agency as well as from spokesmen from the European Council for Foreign Relations (ECFR). Judging by its name, one might be forgiven for assuming that was supposed to be a pan-European organization. But actually that’s just what’s written on the shingle they hang outside their door, because, in fact, this “think tank” is headquartered and funded in London.

It turns out that the most prominently schismatic states in Europe also hold wildly anti-Russian stances. Neither Great Britain, nor, shall we say, Poland could be suspected of a dearth of official Russophobia. Both of them, each in their own way, are trying to ruin the lives of those countries that form the core of the EU.  Both have closed their doors to refugees and both are bravely waging war against an “influx” of natural gas that theoretically has nothing to do with them. Poland, which gets 17 billion euros a year from the EU budget, has the audacity to be demanding reparations from Germany. Britain, which slammed its doors shut in order to avoid chipping in to fund the EU, is valiantly battling Brussels in order to hold on to its economic perks in Europe.

And in this context, the EU’s biggest common ally — the US — is becoming an increasingly big problem. Washington has unleashed an economic war, not only against Russia and Iran, but also against the countries of Europe. But in the propaganda being rolled out for the European audience, the picture of the world looks like this:

The European Union’s main enemies are Russia and China. It’s true that they do want to trade with Europe and are offering enticements to encourage this, but one mustn’t believe them. Because it is a known fact that they are conducting a hybrid war — invisibly and unprovably — against Europe. Russia is such a wily combatant that one can’t ever prove anything — but you have to believe that it’s true. The European Union’s biggest friend is still the US. And yes, it’s true that they are currently trying to run their friends out of town in order to make a quick buck. But it’s solely President Trump who is to blame for that. Just be patient: soon the next president will come and fix everything right up. And it’s also true that no one can say when that next president will be in office, or what his name will be, or what he will do. And, of course, everyone remembers the Obama administration’s ceaseless attempts to foist an entirely colonial “transatlantic partnership” on Europe. But once Trump’s gone everything will be different — you just have to believe.

And this “you just have to believe” has recently become the main leitmotif of all the anti-Russian propaganda. Since the preferred narrative about the spy, the blogger, and airliner haven’t panned out, the proof of Russia’s malice is increasingly being repackaged as a kind of spiritual evidence. As the Guardian put it so aptly — “We do not need Russia to poison people in a British city to recognise the expanding threat to common values posed by Vladimir Putin’s hostile, corrupt regime.”

BRUSSELS, BELGIUM – AUGUST 16: A statue holding the symbol of the Euro, the European common currency, stands in front of the European Parliament building on August 16 and 2011 in Brussels, Belgium. (Photo by Mark Renders/Getty Images)

But then how can one explain that in reality, the opposite is true, that Russia actually needs a unified, rich and strong European Union? This isn’t rocket science, people — you don’t need to invoke “values” and chant the mantra of “you just have to believe.”

Russia needs a rich EU, because a rich trading partner has more purchasing power, which gives Russia a positive trade balance with the EU.

Russia needs a unified EU, because a unified Europe that manages its own security issues from a centralized headquarters will present far fewer problems for Moscow than a string of feckless “friends of the US” along Russia’s western borders.

Russia needs a sovereign EU, because the anti-Russian trade sanctions serve no economic purpose for the EU whatsoever — and once Europe establishes sovereignty we will quite likely see those sanctions lifted.

And it is no coincidence that Austria was the first foreign country that Vladimir Putin visited after his inauguration.

Austria’s President Alexander Van der Bellen shakes hands with Russia’s President Vladimir Putin in his office in Vienna, Austria June 5, 2018. Reuters/Leonhard Foeger

That country is European, rich, and neutral (therefore not a member of NATO) and has been a staunch advocate for the rollback of Europe’s anti-Russian policy.

In other words, in Austria you can see a potential model for the kind of independent European Union that Russia would like to deal with in the twenty-first century.

And this is why the ones who are now so fervently preaching about “shared values” and “Western unity” when faced with the treachery of those natural-gas pipelines and that Eurasian trade route are actually demanding that Europe do itself a disservice by remaining deferential.

The Next US President Will Save Europe From Russia’s Secret Plot

On the eve of his visit to Austria, President Vladimir Putin told the press: Russia has not the least intention of sowing dissent within the European Union. On the contrary, it is in Moscow’s interests that the EU, its biggest trading partner, remain as unified and thriving as possible.

Europeans have long been quite obsessed with the idea that Russia is bent on dividing and weakening Europe.  In the most prominent English-language media this is practically presumed to be as obviously true as their claims that Russia killed the blogger Arkady Babchenko, attempted to murder the spy Sergei Skripal, and shot down Malaysia Airlines Flight MH17.

As usual, after the Malaysian government admitted that the evidence of Russian involvement in the downing of flight MH17 was inconclusive, the anti-Russian propaganda campaigns were reduced to slim pickings. It was precisely for this reason that the more cutting-edge Western media were so happy to latch onto the murder of the blogger in Kiev. It was precisely for this reason that the very ones who had so desperately hyped that whole episode were so indignant when they realized that they had fallen victim to a bit of ruthless Ukrainian creative license.

German Chancellor Angela Merkel, Russian President Vladimir Putin and French President Emmanuel Macron at the G-20 leaders summit in Hamburg, Germany on July 8, 2017

But let’s get back to Russia’s secret plots against Europe. Interestingly, when you trace back the source of most of the warnings about the Russian plots to divide Europe, they seem to emanate from Great Britain. In other words, they are coming from a government that has decided to pull out of the EU but is now trying to direct its foreign policy.

Allegations of Russian plans to fragment Europe have been heard from both the head of Britain’s MI5 intelligence agency as well as from spokesmen from the European Council for Foreign Relations (ECFR). Judging by its name, one might be forgiven for assuming that was supposed to be a pan-European organization. But actually that’s just what’s written on the shingle they hang outside their door, because, in fact, this “think tank” is headquartered and funded in London.

It turns out that the most prominently schismatic states in Europe also hold wildly anti-Russian stances. Neither Great Britain, nor, shall we say, Poland could be suspected of a dearth of official Russophobia. Both of them, each in their own way, are trying to ruin the lives of those countries that form the core of the EU.  Both have closed their doors to refugees and both are bravely waging war against an “influx” of natural gas that theoretically has nothing to do with them. Poland, which gets 17 billion euros a year from the EU budget, has the audacity to be demanding reparations from Germany. Britain, which slammed its doors shut in order to avoid chipping in to fund the EU, is valiantly battling Brussels in order to hold on to its economic perks in Europe.

And in this context, the EU’s biggest common ally — the US — is becoming an increasingly big problem. Washington has unleashed an economic war, not only against Russia and Iran, but also against the countries of Europe. But in the propaganda being rolled out for the European audience, the picture of the world looks like this:

The European Union’s main enemies are Russia and China. It’s true that they do want to trade with Europe and are offering enticements to encourage this, but one mustn’t believe them. Because it is a known fact that they are conducting a hybrid war — invisibly and unprovably — against Europe. Russia is such a wily combatant that one can’t ever prove anything — but you have to believe that it’s true. The European Union’s biggest friend is still the US. And yes, it’s true that they are currently trying to run their friends out of town in order to make a quick buck. But it’s solely President Trump who is to blame for that. Just be patient: soon the next president will come and fix everything right up. And it’s also true that no one can say when that next president will be in office, or what his name will be, or what he will do. And, of course, everyone remembers the Obama administration’s ceaseless attempts to foist an entirely colonial “transatlantic partnership” on Europe. But once Trump’s gone everything will be different — you just have to believe.

And this “you just have to believe” has recently become the main leitmotif of all the anti-Russian propaganda. Since the preferred narrative about the spy, the blogger, and airliner haven’t panned out, the proof of Russia’s malice is increasingly being repackaged as a kind of spiritual evidence. As the Guardian put it so aptly — “We do not need Russia to poison people in a British city to recognise the expanding threat to common values posed by Vladimir Putin’s hostile, corrupt regime.”

BRUSSELS, BELGIUM – AUGUST 16: A statue holding the symbol of the Euro, the European common currency, stands in front of the European Parliament building on August 16 and 2011 in Brussels, Belgium. (Photo by Mark Renders/Getty Images)

But then how can one explain that in reality, the opposite is true, that Russia actually needs a unified, rich and strong European Union? This isn’t rocket science, people — you don’t need to invoke “values” and chant the mantra of “you just have to believe.”

Russia needs a rich EU, because a rich trading partner has more purchasing power, which gives Russia a positive trade balance with the EU.

Russia needs a unified EU, because a unified Europe that manages its own security issues from a centralized headquarters will present far fewer problems for Moscow than a string of feckless “friends of the US” along Russia’s western borders.

Russia needs a sovereign EU, because the anti-Russian trade sanctions serve no economic purpose for the EU whatsoever — and once Europe establishes sovereignty we will quite likely see those sanctions lifted.

And it is no coincidence that Austria was the first foreign country that Vladimir Putin visited after his inauguration.

Austria’s President Alexander Van der Bellen shakes hands with Russia’s President Vladimir Putin in his office in Vienna, Austria June 5, 2018. Reuters/Leonhard Foeger

That country is European, rich, and neutral (therefore not a member of NATO) and has been a staunch advocate for the rollback of Europe’s anti-Russian policy.

In other words, in Austria you can see a potential model for the kind of independent European Union that Russia would like to deal with in the twenty-first century.

And this is why the ones who are now so fervently preaching about “shared values” and “Western unity” when faced with the treachery of those natural-gas pipelines and that Eurasian trade route are actually demanding that Europe do itself a disservice by remaining deferential.

US Trade War with the European Union

Background

The EU on Wednesday said a raft of retaliatory tariffs, including on whiskey and motorcycles, against painful metals duties imposed by the US would be ready as early as July.

The European Commission, which handles trade matters for the 28-country bloc, “expects to conclude the relevant procedure in coordination with member states before the end of June,” said European Commission Vice-President Maros Sefcovic at a news briefing.

This would allow “that the new duties start applying in July,” he added.

“It is a measured and proportionate response to the unilateral and illegal decision taken by the US to impose tariffs on the European steel and aluminum exports which we regret,” said the former Slovak prime minister.

From blue jeans to motorbikes and whiskey, the EU’s hit-list of products targeted for tariffs with the US reads like a catalogue of emblematic American exports.

The European Union originally drew up the list in March but pledged not to activate it unless US President Donald Trump followed through on his threat to impose 25 percent tariffs on steel imports and 10 percent on aluminum.

The Trump tariffs came into effect on June 1 and the EU now joins Mexico and Canada and other close allies that have announced their own wave of counter-duties against Washington.

The EU commission must now take their proposal to be signed off by the bloc’s member states amid divisions over what path to take against Trump’s unpredictable policies.

France and the Netherlands back a tough line against the US, while export powerhouse Germany has urged caution towards Trump’s “America First” policies.

*****

PressTV: How do you think this will affect the US? Wouldn’t it create more unemployment in America?

Peter Koenig: First, I think we have to distinguish between the various trade blocks and trade wars, like China, Russia, the NAFTA partner countries, Mexico and Canada – and the European Union – the EU. They are all different in as much as they have different motives.

Second, there is much more behind the so-called trade wars than trade. Much of this trade war is propaganda, big style, for public consumption and public debate, whereas in reality there are other negotiations going on behind closed doors.

And thirdly, there are mid-term elections coming up in the US this fall, and Trump must satisfy his home base, all the workers to whom he promised “Let’s Make America Great Again” – meaning bring back jobs, use US-made metals. So, Trump is also addressing those Americans who wait for jobs. As you know the unofficial but real figure of unemployment in the US is about 22% – and that does not even include the large segment of underemployed people, mostly youth.

I think we have to see the Big Picture here. And Trump, or rather those who give him orders, may not see all the risks that this complex multi-polar tariff war implies.

But for now, let’s stick to Europe.

It is very well possible that the EU will also impose import duties on US goods. But if it stays at that, it is very likely that this so-called trade war with the US is pushing Europe even faster than is already happening towards the East, the natural trading partners – Russia and China. As I said, it’s already happening.

But the Big Picture, in the case of Europe, I believe is IRAN. With tariffs on steel and aluminum – quite sizable tariffs, European producers of these metals, the second largest after China, would hurt. There may not be an immediate replacement market for America.

So, Trump may want to blackmail Europe into accepting his new sanctions on Iran. In other words, “either tariffs or you follow my dictate – abandon the Nuclear Deal and impose sanctions”.

Frankly, I doubt very much that this will work, since EU corporations have already signed billions worth of contracts with Iran. On the other hand, Germany in particular, is keen in renewing political as well as trade relations with Russia.

And the recent remark of the new US Ambassador to Germany, Richard Grenell, that he will support conservative right-wing movements in Germany and in Europe did certainly not go down well in Germany, with already a Parliamentary movement to expulse him, which certainly doesn’t help US-German relations.

As we speak, most likely this type of “blackmail” negotiations, “either tariffs or you go with us against Iran”, are going on with the EU behind closed doors. Of course, nobody knows the outcome.  Trump is like a straw in the wind, bending to whatever seems to suit him best at the moment.

Remember, a couple of months ago he already imposed tariffs on Europe, along with everybody else, on steel and aluminum, then he lifted them again – and now we are on again. It’s like with most everything he does. It’s probably his business negotiation strategy.

But, this would just confirm that this trade war is much more than meets the eye, more than a trade war – it’s about geopolitics – like “show me your card – which camp are you in?”

Trump and those who manage him may still be under the illusion of the last 70 years, that the whole world, especially Europeans, have to bend over backwards to please the US of A, because they saved Europe – and the world – from the Nazi evil.

Not only is it time to stop the vassalage and become autonomous again, but also, many European start understanding that whom they really have to thank for liberating them from the Nazis – is Russia.

US Trade War with China

Background

Washington, May 29 (Reuters): The United States said on Tuesday that it will continue pursuing action on trade with China, days after Washington and Beijing announced a tentative solution to their dispute and suggested that tensions had cooled.  By June 15, Washington will release a list of some $50 billion worth of Chinese goods that will be subject to a 25 percent tariff, the White House said in a statement. The United States will also continue to pursue litigation against China at the World Trade Organization.

In addition, by the end of June, the United States will announce investment restrictions and “enhanced export controls” for Chinese individuals and entities “related to the acquisition of industrially significant technology,” it said.  In mid-May, China agreed to increase purchases of U.S. agriculture and energy products, and last week, the U.S. Commerce Department told lawmakers it had reached a deal to put Chinese telecommunications firm ZTE Corp back in business.  While the announcements eased worries about the possibility of a trade war between world’s two largest economies, U.S.President Donald Trump also said last week that any deal between Washington and Beijing would need “a different structure,” fueling uncertainty over the talks.

Trump has threatened to impose tariffs on up to $150 billion of Chinese goods to combat what he has labeled unfair trade practices on the part of Beijing. Meanwhile, China has warned of equal retaliation, including duties on some of its most significant U.S. imports, like aircraft, soybeans and vehicles.

PressTV: What do you make of this so-called Trade War between the US and China?

Peter Koenig: It’s like almost everything by Trump – “on again, off again…”  Will these threats be materialized or just remain threats for propaganda, for public consumption?

The same with the long-sought head-to-head meeting between Trump and Kim Jong-Un on 12 June in Singapore. It was on, then off and now – maybe.

Iran, after 9 years of hard negotiations, the 5+1 Nuclear Deal was signed in July 2015. Trump comes in, of course, highly influenced by Netanyahu, the deal is off. But he doesn’t like that the other four will stick to it.

Same with China and the so-called Trade War. China certainly will not like tariff “punishment”. But, I’m sure if it happens, China has many avenues to circumvent dealing and trading with the US. But once that happens, China may be lost for good for the US market. And Trump knows it – hence, a little bit the on-and-off game. He wants to test the waters; see who reacts how.

PressTV: You say China has many avenues to circumvent the US sanctions or retaliate. What can China do?

Peter Koenig: China can, of course, also levy import duties on US goods. China doesn’t depend on US imports. China is self-sufficient and has, as it is, a huge trade surplus vis-à-vis the US.

China also controls the Asian market, having over-taken the US already a couple of years ago.

But what I really suspect is that Trump wants to discourage the world from using the Yuan as a reserve currency, since as such, it lowers not only the value of the US dollar, but it replaces the US dollar as the de facto reserve currency in the world.

Only 20 years ago, or so, the US dollar figured to 90% as reserve currency in treasuries around the globe. Today that percentage has shrunk to below 60%.

As you know, the Yuan has become an official IMF reserve currency about a year ago. That established worldwide trust in the Chinese currency, especially since the Yuan is backed by the Chinese economy plus by gold. Whereas the US dollar has no backing whatsoever; it’s pure and simple FIAT money.

Plus, the US is broke. Everybody knows it. The US has a current debt of about 110% of her GDP, more than the Greek debt was in 2008.

And if counting what the US General Accounting Office calls, “unmet obligations” or “uncovered liabilities”, the US debt is about 7 ½ times the US GDP.

Of course, such figures do not go unnoticed by the treasurers of the world.

So, Trump’s trade war with China, or the Propaganda for a Trade war, might as well be a Propaganda against the Yuan, diminishing its reputation, so as to deflect from every country’s golden opportunity to use the Yuan to replace the dollar as reserve currency.

Vassals and Victims

Nothing better illustrates the disaster of Britain leaving the EU than Donald Trump. Once we’re no longer able to enjoy the huge benefits of the European single market we will be compelled to try to arrange favourable independent trade deals with other countries, the largest of which will almost certainly be the USA. Having to rely on the US for our primary trading partner is the truly nightmare scenario of Brexit, and one example of why this is so was provided last week.

It was reported that the US will “use trade talks to force the NHS to pay more for drugs“. No matter that many medicines are already vastly overpriced, it’s still not enough for the giant drug companies who net billions of dollars profiteering from desperately sick people. They want to make even more because their greed knows no limit, and Mr Trump will “not be cheated by foreign countries” (1).

The US has a long and inglorious history of reneging on its promises and treaties. Ask Native Americans. More recently we’ve seen the US turn its back on its own Transpacific Partnership agreement, pull out of the Paris Climate Agreement, and effectively scrap the Iran Nuclear Deal, ignoring the fury of European counter-signatories. The US government has, of course, always totally ignored international law, as well as its own laws and federal constitution, whenever it felt like it. Henry Kissinger once infamously quipped, “The illegal we do immediately, the unconstitutional takes a little longer.”  It imposes vicious trade sanctions whenever it wants (more often than any other country), and last year this champion of free trade slapped a 200% trade tariff on Bombardier. This is the country we’ll be relying on after Brexit.

Of course, it’s easy, and true, to say that Donald Trump will not last forever, but Trump isn’t the main problem. The main problem is the whole US system of government, which appears to see the US as the only country in the world of any importance. The president is a distraction, designed to suggest that better days will come once the current one moves on. But the better days never come. Presidents come and go but the empire gets ever stronger, and more catastrophically dystopian.

Most of the people who voted for Brexit don’t understand this global reality. Most Brexit supporters have a worldview shaped almost entirely by deceitful tabloids and Hollywood propaganda movies. They think America is our friend. It isn’t. It has no friends, it only has vassals and victims, and neither of those is a very pleasant prospect for post-Brexit Britain.

The Europe That Can Say No?

EU president and Polish politician Donald Tusk says the U.S. acts with “capricious assertiveness.” With friends like this who needs enemies?” he asked the other day, adding, “If you need a helping hand you will find one at the end of your arm.”

EU vice-president Federica Mogherini met with European and Iranian representatives after the U.S. decision to leave the Iran nuclear agreement. She committed Europe to the following:

  • Maintaining and deepening economic relations with Iran;
  • The continued sale of Iran’s oil and gas condensate petroleum products and petrochemicals and related transfers;
  • Effective banking transactions with Iran;
  • Continued sea, land, air and rail transportation relations with Iran;
  • The further provision of export credit and development of special purpose vehicles in financial banking, insurance and trade areas, with the aim of facilitating economic and financial cooperation, including by offering practical support for trade and investment;
  • The further development and implementation of Memoranda of Understanding and contracts between European companies and Iranian counterparts;
  • Further investments in Iran;
  • The protection of European Union economic operators and ensuring legal certainty:
  • And last but not least, the further development of a transparent, rules-based business environment in Iran.

Meanwhile U.S. National Security Advisor John Bolton asks rhetorically on ABC: “Why would any business, why would the shareholders of any business, want to do business with the world’s central banker of international terrorism?” He threatens secondary sanctions on nations that, adhering to the agreement, expand trade with Iran.

Some including RT commentators predict Europe will buckle to U.S. pressure and cancel contracts. But maybe not this time. Maybe Europe will become the Europe That Can Say No.

“We are working on finding a practical solution … in a short delay of time,” Mogherini says. “We are talking about solutions to keep the deal alive. We have a quite clear list of issues to address. We are operating in a very difficult context … I cannot talk about legal or economic guarantees but I can talk about serious, determined, immediate work from the European side.”

Immediate work to diminish the damage done to world peace and stability by Trump’s withdrawal from the Iran nuclear agreement.

According to EU Commissioner Dimitris Avramopoulus, the EU is preparing legislation to block U.S. sanctions targeting Iran. Its members know that if Iran reaps no sanctions relief from the agreement it will also withdraw, charging betrayal. France’s Total S.A. and Germany’s Siemens have indicated they may back out of contracts with Iran due to fears of U.S. secondary sanctions. The U.S. strives to use access to its marketplace to shape others’ investment options, in this case options that can lead to war. No matter that this violates the sacred bourgeois principle of Free Trade.

There are all kinds of good reasons for Iran and the rest of the world to expand trade ties. (French cooks would like access to Iranian pistachios—the world’s best—and saffron.) And there’s no reason for other governments to embrace Bolton’s view that the Iranian government is the central banker of international terrorism. (Surely that is Saudi Arabia, the world’s leading supporter of Salafist Sunni Islamism, which supports the Syrian Liberation Front, the Army of Conquest, and Ahrar al-Sham. The Saudi monarchy, presiding over a society far more oppressive than Iranian or Syrian society—but spared media outrage—pursues its unholy alliance with Israel to bring down the regime in Tehran, preparing for the coming confrontation by invading Bahrain, isolating Qatar, pulverizing Yemen and bombing Syria at U.S. behest and kidnapped the Lebanese prime minister in order to influence Lebanese politics and diminish the role of Hizbollah.)

And there are all kinds of reasons for Europe to stand up to the U.S. and say, “Your sanctions are not our sanctions.” And maybe add: Your intentions for further regime change in the Middle East are not popular in Europe, which fears more waves of refugees. And also add: The sanctions you’ve demanded we impose on Russia following the February 2014 coup in Ukraine and consequent Russian reassertion of sovereignty over the Crimean Peninsula are hurting Europe and should be lifted.

There should be a multilateral world. It already exists, actually, but the U.S. ruling class, wedded as it is to “full-spectrum dominance” and notions of U.S. “exceptionalism” resists acknowledging it. Bolton’s remarks are telling.

“I think the Europeans will see that’s in their interest ultimately to go along with this,” he told CNN’s Jake Tapper over the weekend. Asked if the U.S. would apply sanctions to European firms, he said vaguely, “It’s possible. It depends on the conduct of other governments.” He notes legal devices available to the U.S. such as the denial of licenses. He threatens to pull out all the stops to impede the world’s effort to conciliate Iran. He wants to coordinate Saudi, Israeli, U.S. and MEK efforts to effect regime change in Tehran; as he told an MEK audience in July 2017, he expects this by 2019!

This is the U.S. National Security Advisor, serving an unusually unbalanced, ignorant U.S. president. (The British demanded his withdrawal from the Libya talks in 2004 because he was overbearing, indeed acting like a madman.) He is saying, confidently, Europe will go along “when they see it’s in their interest.” Maybe he and Trump miscalculate. The EU even without Britain rivals the U.S. in population and GDP. If it once needed to obey, it might not need to (or want to) now. The U.S. these days does not smell of freedom, democracy, liberal values, calm reason, tolerated dissent. It reeks of white nationalism, racist exclusion, institutional police violence and murder, and seemingly irrevocable tendency towards the concentration of wealth in the .01%. It is a fundamentally unfair, unjust, unadmirable society that tortures its youth by offering them low-paying jobs and endless student debt if they were lucky enough to go to college. It denies its people the normal standard of public health care and charges them twice the Canadian fees.

It is a basically a fucked-up country. That it, after its (ongoing) disasters in Yugoslavia, Afghanistan, Iraq, Syria, Libya, Yemen, Somalia, Lebanon and elsewhere, it has no moral leg to stand on in lecturing Europe to maintain sanctions on Iran. After siding 100% with Israel, on everything imaginable, it has lost any credibility as an honest broker in international relations.

The EU comprises various imperialist countries who, of course, exploit workers throughout the world, competing in the process with the U.S. They are not morally different from the U.S. But their governments increasingly chafe under U.S. hegemony, and this particular nut-case hegemon, Donald Trump.

Angela Merkel said last week that Europe can no longer count on the United States to protect it. “It is no longer such that the United States simply protects us,” she declared, “but Europe must take its destiny in its own hands. That’s the task of the future,” she said during a speech honoring French President Emmanuel Macron, who said European nations should not allow “other major powers, including allies” to “put themselves in a situation to decide our diplomacy [and] security for us.” Trump was all over this guy in his last visit but the bromance ends here. You do not order proud France to cease trade ties with Iran just because you’re looking for another war. Europeans are tired of that. Tired of being taken for granted as slavish allies when the U.S. decides to attack somebody. The Truman Doctrine is dead, the Cold War over, Europe despite Brexit increasingly united in its ability to collectively respond to U.S. pressure.

Let there be an intensification of inter-imperialist contradictions! Let Germany say, yes, brothers and sisters, let us manufacture Mercedez-Benz sedans in Tehran! Let us sell you Airbus passenger airliners! Let us buy your walnuts and pomegranates and carpets. And let us tell the Americans the “American century” is not gonna happen. Because it shouldn’t happen.

Let us think about soybeans

China has announced that in retaliation for the 25% tariffs imposed on Chinese steel, aluminum and other exports to the U.S. it will impose 25% tariffs on, among other things, U.S. soybean imports.

Let us think about soybeans.

The humble, high protein, vitamin-B rich legume is important for human health and the health of the world economy. This year soybeans will exceed corn as the most planted crop in the United States. The U.S. currently produces some one-third of the world’s total. But this is of course not the most traditional North American food. Most of it’s not intended for us.

Soybeans were first grown by Chinese farmers from about 7000 BCE. Their cultivation spread around east and southeast Asia by the first century CE, but they were only first planted in colonial America in the 1760s, as an exotic Chinese plant. They were not grown widely in the U.S. until the 1870s and then mostly used as animal feed. The U.S. was importing soybeans from China in the 1930s when the outbreak of war ended the trade, causing U.S. farmers to pick up the slack for the limited domestic market. Soy became a subsidized commodity in 1941, as it remains, meaning that soybean farmers receive government subsidies designed to supplement their income and influence prices.

That North America should ever have become the main supplier of soybeans to East Asia is food for thought. Soybeans have become so widely produced in this country not mainly to satisfy the mounting taste for tofu (which among non-Asian Americans dates only to the 1970s) but in order to supply the region where people first domesticated the bean.

Soybeans are of course a staple of East Asian cuisines. Just looking at the Japanese case: shoyu (soy sauce), miso paste, miso soup, tofu, Koya-dofu (a kind of spongy dried tofu), edamame (boiled beans in the pod), natto (sticky fermented soybean dish), soybean sprouts, dried natto in those little packages you get on Japanese airlines, all kinds of chips and crisps. It’s an absolutely indispensable Japanese foodstuff, second only to rice. It is also essential in Korean cuisine (e.g. dobu jorim, braised tofu) and Chinese cuisine (e.g. mapotofu) too. Soy oil is one of the mostly widely used cooking oils in the world and has industrial applications. Soy is used in the production of realistically meat-like veggie sausages. You can do anything with soybeans. Tofutti. Tofu ice cream.

Before the end of the Second World War Japan was dependent on occupied Manchuria and colonized Korea for its soybean supply. After the war the U.S. required that Japan reconfigure its trade ties towards itself and its bloc, away from China and Korea as the Cold War progressed. Tokyo became obliged by contract to purchase subsidized soybeans from the U.S.

Soy production had only taken off in the U.S. during the war; from this point production soared to meet the captive Japanese market. By 1960 soybean imports exceeded one million metric tons for the first time; this doubled by 1966, while Japanese soy production dipped to 9%.

Japan remains dependent on U.S. suppliers. But China has long since become the much larger consumer of U.S. soybeans. It buys $ 15 billion in soy products from the U.S. every year. Its tit-for-tat move could spell disaster for U.S. farmers, especially in Illinois, Iowa, Minnesota, Nebraska, Indiana and Missouri—erstwhile Trump country.

Soybean stocks are taking a dive.

China doesn’t need U.S. soybeans; it can buy them from many other countries. What better time than now to cement ties with India, one of the top five producers? Or Brazil, the second largest producer? China is already Brazil’s main trade partner; they are fellow BRICS members and very friendly. Or Canada?

The Chinese soybean market is one big lucrative market that U.S. farmers might be barred from if Trump has his way. But perhaps his announced measures against China initiating a trade war are as wobbly and hollow as his vow to get out of Syria soon. Maybe the threats will (as he now implies, if only to soothe the market) lead to negotiations, and everyone will back off, and the stock market will soar. Or there will indeed be a trade war, and we will see what that means. Could mean cheaper tofu at Whole Foods. That would be good for me.

Sit back on your sofa with a bowl of steaming miso, a comfort food comparable to your mom’s chicken soup, and watch global capitalism war upon itself, as it has to do by nature. Inherent contradictions and all.

The inherent contradiction of the soybean issue is that it can be used to express friendship (“Here, eat my beans”) or antagonism (“We don’t need your beans”). The synthesis would be an agreement to eat the beans after the U.S. backs off on steel.

Otherwise this thing could grow and grow like the beanstalk produced by the magic bean in old English tale Jack and the Beanstalk. In that you recall the giant falls to his death when the kid chops the stalk down. Not that that’s relevant to anything.

Why China will not Back Down from a Trade War

On Tuesday (4/3/2018) the US published a list of Chinese imports, set to be hit with a $50 billion tariff increase. This is the latest in an escalating trade skirmish between the US and China, that could escalate into a war. On Monday (4/2/2018) China implemented a $3 billion tariff hike on several US imports including fruits, pork and steel. This was in response to Trump’s tariffs on Chinese aluminum and steel one month ago. Back then, he was tweeting, “trade wars are good and easy to win,” but now it appears he is getting a dose of his own medicine.

Xi is unlikely to back down since, several facets of the Chinese economy bolster it against the vicissitudes of a possible trade war. First, China has built up its internal economy. China’s “township village enterprises” (TVEs) helped rural incomes rise by 300% between 1989 and 2005, fueling domestic demand. Moreover, China’s internal markets received an unprecedented boost in 2008, when the government launched its $586 billion stimulus plan in response to the financial crisis. China has also maintained record high levels of investment in infrastructure and built a world renown high speed rail system that has greatly reduced transport costs to the interior. Correspondingly, exports as a percentage of GNP have been falling steadily since 2006, and with them reliance on trade with the US.

Second, South-South economic ties have been strengthened by China’s one-belt one road project and Asian Infrastructure Development Bank. Just this January, China invested $2.28 billion in the one-belt countries, and $1 trillion is the target investment for the entire project. Increased south-south trade would substitute for lost trade with the States. Third, China holds $1.2 trillion in US debt, which will not only provide a stream stream of income in the event of a trade war, but will militate against Trump escalating it to the point of a trade war in the first place. And finally, China’s housing guarantee, land guarantee, and constitutional right to a job, imply that as bad as any trade war gets, people will have a roof over their head, and either a job, or a plot of land, from which they can draw sustenance. The same cannot be said for the United States.

There are also at least two facets of the Chinese political system that militate against Xi backing down to Trump’s proto-imperialist aggression. First, although Xi is a member of the ‘elitist’ faction of the CCP, which has among its base urban, coastal entrepreneurs who are likely to prefer taking a short-term loss than see an escalation to an all-out trade war; capital is subordinated to the CCP in the Chinese political system. Two of the three primary means of production (land and capital) are controlled by the state. Real estate developers must obtain use rights for land from local party officials, rather than local party officials needing to obtain campaign funds from real estate developers. The power that the CCP has over Chinese capitalists, while incomplete, is significant. In 2008, real estate developers were compelled to invest in 36 million subsidized housing units to counteract rising urban housing prices, which were largely the product of their speculative behavior.

Second, the CCP operates based on the principle of democratic centralism, which stipulates that the minority concede to the majority, once ample debate has been undertaken. This would imply that even if, entrepreneurs opposed a resolute stand against Trump, they would be compelled to accept the dictates of the majority, who presumably would act in their own interests and support strong resistance to Trump’s policies.

It is notable that the legacies of Chinese socialism, are today enabling Chinese state capitalism, to stand resolutely against Trump’s protectionist salvoes. For instance, the 2008 stimulus package that so greatly bolstered China’s internal markets, was made possible by state ownership of the banking sector, which allowed the government to not only inject an unprecedented amount of capital into the Chinese economy, but inject it in the interior regions of China, for the express purpose of building up the domestic market.

Similarly, state banks were instrumental in facilitating the technology transfer necessary for China’s high speed rail system. State lending to “national champions” allowed these champions to leverage their monopsony buying power to force US companies into transferring their technical know-how.

China’s investments in infrastructure were greatly facilitated by the relative abundance of semi-skilled labor (welders, machinists, engineers etc.), themselves a product of the broad based approach taken to education in the Maoist era.

Rural China’s TVEs would not have been possible without state ownership of land, which allowed the state to prevent de-collectivized farmland from being ‘grabbed’ by global agribusiness and turned into vast monocrops which would not have stimulated internal markets in the slightest. TVEs were also, at least in the beginning, state-owned enterprises.

Subordination of the entrepreneurial minority would not be possible without state ownership of two of the three means of production – land and capital, as mentioned above, and of course, China’s various social safety nets: housing guarantee, right to work, land guarantee etc. are a product of the “people’s war.”

China’s socialist legacy is the backbone of its current “sovereign project” – the only such project in existence today. This sovereign project rejects both the dominance of the triad (US, EU, Japan) and the dominance of the neoliberal model propagated by this triad. The power of this triad stems from their control of the five oligopolies of twenty first century capitalism: finance, technology, information, natural resources, and WMDs. The triad’s corporations are disproportionately represented on the top 10 lists of banks, tech companies, media companies, oil companies, and nuclear powers.

International organizations like the WTO have also been regularly biased in favor of the triad. For instance, Trump’s steel tariffs against China were in conflict with existing WTO rules. Trump justified breaking these rules by alleging that China had stolen intellectual property and obtained WTO authorization to implement intellectual property tariffs. The speed with which the WTO protected the intellectual property of 25 US billionaires, and its absolute resistance to protecting the livelihoods of 2.5 billion peasants in the global south who were decimated by the Doha round agreements, reflects the institutional bias of the WTO toward the interests of the triad.

China is making inroads on the five oligopolies of the triad. It is, moreover, presenting an alternative, nationally oriented, state-capitalist model of development, that is fundamentally in conflict with the logic of the dominant neoliberal paradigm. The emerging trade war, is yet another episode in the ongoing battle. China however, seems poised to mount a resolute stand against Trump’s proto-imperialist protectionism. On account of the strength of China’s internal market, the growth of south-south trade, China’s ownership of US debt, and China’s social safety nets, China’s economy looks ready to withstand the shock of a trade war. Its political system moreover, due to the subordination of capital, and the principle of democratic centralism, seems poised to nip elite co-optation in the bud. These bulwarks are in large part, the result of China’s socialist legacy.