Category Archives: Trade

Trump: The De-Globalizer?

Looks like Trump is running amok with his “trading policies”. Not only has he upset the European Union, which doesn’t deserve any better, frankly, for having been and still being submissive vassals against the will of by now 90% of Europeans; but he has also managed to get China into a fury. Well, for China it is really not that important, because China has plenty of other markets, including basically all of Asia and probably increasingly also Europe, as Europe increasingly feels the need for detaching from the US.

What is striking, though, is that even at the outset of the G20 Summit now ongoing in Buenos Aires, Argentina,Trump’s Ministers have made it clear that unless Europe cancels all subsidies – referring primarily to agricultural subsidies – and eliminates the newly imposed retaliatory import duties, new trade deals are not going to be discussed. Never mind that the US has the world’s highest farm subsidies.

From afar this looks like the most wicked and non-sensical trade war the US via Trump is waging against the rest of the world – à la “Make America Great Again”. Will it work? Maybe. One can never predict dynamics, especially not in a neoliberal western world that is used to live on linearism, which by definition is always wrong. Knowingly and deliberately the west and its financial key institutions, IMF, World Bank, FED, European Central Bank – trick the public at large into believing their statistics and predictions – which, if one goes back in history, have always been off, way off.

All life is dynamic. But to understand this it takes independent thinking which the west has long given up, unfortunately. So, in response to the latest Trump-promoted trade fiasco at the G20 in Argentina, the IMF is up in arms, saying this might lower world GDP by at least 0.5%. Even if true, so what?

In reality, there is a totally different scenario that nobody dares talk about. Namely, what renewed local production and monetary sovereignty can bring to the world economy; precisely what Mr. Trump says he wants to propagate for the US of A – local production for local markets and for trade with countries that respect mutual benefits. The latter is, of course, a question not easily achieved by any trade deal with the US. But the former is an enormous economic power keg. The stimulation of local economies through internal credit is the most commanding means to boost local employment and GDP.

Then there is the sanctions game. It’s getting ever more aggressive. New sanctions on Russia, new sanctions on Venezuela, and new heavy-heavy sanctions on Iran. And the European puppets still follow suit, although they are the ones that most suffer from US sanctions imposed on others, especially because out of ‘stupidity’ or fear, they cannot let go of the destructive empire, hobbling away on its last breath. Or is it perhaps, that those fake leaders of the Brussels construct are bought?  Yes, I mean bought with money or with favors? It’s not out of this world, since those of the European Commission who call the shots are not elected, thus, responsible to no one.

Take the case of Iran.  Trump and his peons, Bolton and Pompeo, have threatened every oil company around the globe with heavy sanctions if they keep buying hydrocarbons from Iran beyond November 2018. Particularly concerned are the European Petrol giants, like Total, ENI, Repsol and others. As a consequence, they have canceled their literally of billions of euros worth of contracts with Iran to protect themselves, and, of course, their shareholders. Just recently I talked to a high executive from Total. He said, we have no choice, as we cannot trust our people in Brussels to shield us from Washington’s sanctions. So, we have to look elsewhere to fulfill our contractual obligations vis-à-vis our clients. But, he added, we did not buy the American fracking stuff; we are negotiating with Russia. There you go.

The European market for Iran’s hydrocarbon is estimated at about 20% of Iran’s total production. An amount easily taken over by China and others which are too big (and too bold) to be sanctioned by the empire. Some may actually resell Iranian hydrocarbons through their backdoor to the otherwise sanctioned European oil corporations.

Iran has another strong weapon which they already made clear they will use, if the US attempts seriously to block anyone from buying Iranian oil and gas. Iran can block the Gulf of Hormuz, where daily about 30% of all hydrocarbon used by the world is being shipped, including about half to the United states. This might increase the price of petrol exponentially and ruining many countries’ economies. However, higher prices would also benefit Russia, China and Venezuela, precisely the countries that Washington wants to punish.

Would such a move by Iran provoke a direct US aggression?  One never knows with the war profiteers of the US. What’s for sure, such an intervention would not pass without a commensurate response from China and Russia.

On the other side of the scenario – imagine – countries mired in this global mess, made in the US of A, start looking for their own internal interests again, seeking their own sovereignty, independence from the globalist dependency. They are embarking on economic policies furthering self-sufficiency, self-reliance; first foodwise, then focusing on their scientific research to build their own cutting-edge technology industrial parks. A vivid example is Russia. Since sanctions were imposed, Russia has moved from a totally import-dependent country since the collapse of the Soviet Union, to a food and industry self-sufficient nation. According to Mr. Putin, the sanctions were the best thing that happened to Russia since the fall of the Soviet Union. Russia has been the world’s largest wheat exporter for the last two years.

Europeans have started quietly to reorient their business activities towards the east. Europeans may finally have noticed – not the elitist puppets from Brussels, but Big Business and the public at large – that the transatlantic partner cannot be trusted, nor their self-imposed EU central administration of Brussels. They are seeking their own ways, each one of these nations are seeking gradually to detach from the fangs of Washington, eventually detaching from the dollar dominion, because they notice businesswise the dollar-based economy is a losing proposition.

There is BREXIT, the most open move away from the ‘freedom limiting’ European dictate which is nothing else but a carbon copy of the economic dictate of the dollar. As practiced in the United States and everywhere the dollar is still the main international contract and reserve currency.

The Five Star Movement in Italy was created on similar premises – breaking out from Brussels, from the Euro-policy handcuffs. In a first attempt towards sidelining the Euro, they received a spanking from the euro-friendly Italian President, Sergio Mattarella, when he refused to accept the 5-Stars coalition partner’s, Lega Norte, proposed Eurosceptic Minister of Finance, Paolo Savona, who called Italy’s entry into the eurozone a “historic mistake”. This thrive by Italy to regain monetary sovereignty has by no means ended. To the contrary, it has taken strength and more determination. Germany moves in the same direction – quietly opening doors to Moscow and Beijing.

Unfortunately, these moves have little to do with a new more human and peace-loving consciousness, but rather with business interests. But perhaps conscious awareness – the reconnecting with the original spark of a humanity solidified in solidarity is a step-by-step process.

What if, considering the motion towards peoples’ new self-determination, Trump’s amok run, his jumping from chaos to more chaos, to the sanction game no end – punishing, or threatening friends and foes alike, will lead to a genuine de-globalization of the world?

If this were to happen then, we the 90% of the globe’s population, should be very grateful to Mr. Trump who has shown and created the path to enlightening – the enlightening of de-globalization.

Irish Seanad votes in Favour of Occupied Territories Bill

Frances Black

Yesterday the Irish Seanad voted in favour of the Occupied Territories Bill which will prohibit the importation of goods or services from illegal settlements in occupied territories, including Israel’s settlements in Palestine which violate the Geneva Conventions. The Bill was introduced by the well-known Irish singer Frances Black whose albums feature both Irish ballads and traditional music. She was elected to Seanad Éireann as an independent Senator on her first attempt in 2016.

The Ireland-Palestine Solidarity Campaign welcomed the Seanad vote (25 in favour, 20 against) in support of Senator Frances Black’s ‘Control of Economic Activities (Occupied Territories) Bill. According to the IPSC Chairperson, Ms. Fatin Al Tamimi (a Palestinian-Irish citizen):

We in the IPSC, and Palestinians around the world, warmly welcome this historic vote, the first its kind in any Western country. Once again, Ireland is making history and leading the way in its solidarity with the Palestinian people. We thank and salute all those Senators and parties who have pledged to support the Bill, and we will be asking the Irish people to ensure that these politicians support its passage at all stages of the lawmaking process.

Black has been campaigning for some time now for the rights of the Palestinian people. She states:

I have long been passionate about the struggle of the Palestinian people, which shows clearly how trade in settlement goods sustains injustice. In the occupied territories, people are forcibly kicked out of their homes, fertile farming land is seized, and the fruit and vegetables produced are then sold on Irish shelves to pay for it all. We condemn the settlements as illegal but support them economically. As international law is absolutely clear that the settlements are illegal, then the goods they produce are the proceeds of crime. We must face up to this – we cannot keep supporting breaches of international law and violations of human rights.

Frances Black discusses the Bill that would support banning goods from Israel’s settlements.

According to an explanatory note on the bill’s main provisions:

Under international criminal law, the transfer by a State of its civilian population into a territory it has militarily occupied is a ‘war crime’, as well as a ‘grave breach’ of international humanitarian law. Importantly, it is also a crime under Irish law, no matter where in the world it is committed. Ireland has a duty to ensure these laws are respected and to uphold the humanitarian principles outlined in them. To this end, the Control of Economic Activity (Occupied Territories) Bill 2018 seeks to prohibit trade with and economic support for illegal settlements in territories deemed occupied under international law. It would restrict the import and sale of goods produced in such settlements, Irish involvement in the provision of services in such settlements, and the extraction of resources from occupied territories without the consent of the legitimate authority of that territory. This economic support underpins the long-term continuation of illegal settlements, established in clear violation of international law. In tabling this bill we are stating that Ireland should not provide economic or political support for them, wherever they arise.

The Bill, inter alia, specifically covers the importation and sale of settlement goods:

6. Importation of settlement goods

(1) It shall be an offence for a person to import or attempt to import settlement goods.
(2) It shall be an offence for a person to assist another person to import or attempt to import settlement goods.
(3) For the purpose of the Customs Act 2015, the import of settlement goods is hereby prohibited.

7. Sale of settlement goods

(1) It shall be an offence for a person to sell or attempt to sell settlement goods.
(2) It shall be an offence for a person to assist another person to sell or attempt to sell settlement goods.

Many Irish politicians believe that the passing of the Occupied Territories Bill will send a strong message that the issue of illegal settlements is being taken seriously and needs to be addressed.

The Israeli Embassy in Ireland has been highly critical of the Bill and commented that:

The absurdity in the Seanad Éireann initiative is that it will harm the livelihoods of many Palestinians who work in the Israeli industrial zones affected by the boycott.

However, the Boycott, Divestment, Sanctions (BDS) is a Palestinian-led movement for freedom, justice and equality. BDS upholds the simple principle that Palestinians are entitled to the same rights as the rest of humanity. It was Palestinian Civil Society that called for Boycott, Divestment and Sanctions against Israel as a form of non-violent pressure on Israel until it complies with international law and universal principles of human rights in 2005.

​(Image credit Trocaire)

Earlier this month former Pink Floyd star Roger Waters urged people to support the Occupied Territories Bill 2018 at a concert in Dublin.

Ms. Fatin Al Tamimi also commented that:

These have been great months for Palestine in Ireland, a country which punches well above its weight when it comes to solidarity. At least seven local councils have voted to support the Palestinian-led global Boycott, Divestment and Sanctions (BDS) movement, including Dublin, the first EU capital to take this stand, and most recently Mid-Ulster Council and Fermanagh & Omagh District Council. She said that last month saw the launch of a campaign for an Irish boycott of Eurovision 2019 and noted that barely a week goes by without solidarity vigils or protests outside shops selling Israeli products in Ireland.

As the activist for Palestinian human rights, Professor Mazin Qumsiyeh says:

I find that ingenuity in resistance, the ability to persevere — what we call sumud — to be tremendously inspiring. Our people are able to continue their lives despite the incredible odds arrayed against them and not only to persist but also to find some measure of success. As the graffiti on the wall says, ‘to live is to resist’.

Stomping in Britain: Donald Trump and May’s Brexit

What a rotten guest, but then again, that was to be expected.  Ahead of his visit to Britain, there was some indignation that US President Donald Trump should even be visiting in the first place.  Protesters were readying their assortment of paraphernalia in anticipation.  Walls of noise were promised.  Trump, on the other hand, was bullish after his NATO performance, which did a good deal to stir and unsettle partners and leaders.  On leaving Brussels, his singular account was that all partners had, in fact, agreed to a marked rise in defence spending.

Having settled into dinner with British Prime Minister Theresa May at Blenheim Palace, Oxfordshire, there was a whirring buzz that the president had been busy, having given an interview to that infamous rag of reaction The Sun newspaper.  It was spectacularly poor form, featuring a series of pot shots against his host on how she had handled Brexit negotiations so far.  Not that May’s handling has been brilliantly smooth. Characterised by Tory saboteurs, confusion and ill-expertise, the British tangle with the European Union has persisted with barnacle tenacity.

This did not inspire confidence from Trump, and the Chequers agreement that May had reached with cabinet members was deemed “very unfortunate”.  For the president, a Brexit softened and defanged to keep it bound up in some form in the EU could well spell an end to a separate, post-separation trade pact with the United States.  “If they do a deal like that, we would be dealing with the European Union instead of dealing with the UK, so it will probably kill the deal.”

The sting was greater for the fact that May was using the dinner to pitch her case for a separate trade arrangement.  “As we prepare to leave the European Union, we have an unprecedented opportunity to do more.”  Any free trade agreement between the countries, she asserted, would create “jobs and growth here is in the UK and right across the United States.” Bureaucracy would be defeated in the transatlantic venture.

Trump, as he tends to, was operating on a different frequency, claiming that he, brilliant chap that he is, had the formula for how May might best get a workable Brexit through. If only the prime minister had listened instead of chasing her own flight of fancy.

May was not the only British politician rostered for a tongue lashing. London Mayor Sadiq Khan, who reached some prominence criticising Trump’s election promise to temporarily suspend Muslim immigration to the United States, also came in for special mention.  “I think allowing millions and millions of people to come into Europe is very, very sad.”  Reflecting on the problems facing European cities as a result, he told The Sun that London had “a mayor who has done a terrible job in London.  He has done a terrible job.”  The mayor had blotted his copybook by doing “a very terrible job on terrorism” and, just for good measure, crime in general.

Not content at leaving it at that, Trump revealed that childish vulnerability typical in unstoppable, and encouraged egomaniacs. This had undoubtedly been spurred on by Khan’s refusal to ban the flying of a 20ft blimp depicting Trump as an indignant, orange infant, nappy and all.  “I think [Khan] has not been hospitable to a government that is very important.  Now he might not like the current President, but I represent the United States.”

Having said earlier in the week that the issue of whether May should continue as British prime minister was “up to the people”, Trump was less judicious in his liberating interview. In what could be construed as an act of direct meddling (foreign interference for the US imperium is genetic, programmed and inevitable), Trump had his own views about who would make a suitable replacement.  The blundering, now ex-foreign secretary Boris Johnson, a person with his own conditioning of Trumpism, would “make a great prime minister.”

For those incensed by Trump’s say in the matter, it is worth noting that his predecessor was no less terse in warning, not just the Cameron government, but the British people, that leaving the EU would banish Britain to the end of any trade agreement queue.  Britain was far better being part of a collective voice generated by the EU, rather than a single power going its own way.  At “some point down the line,” President Barack Obama explained at a press conference held at the Foreign Office on a visit in April 2016, “there might be a UK-US trade agreement, but it’s not going to happen any time soon because our focus is in negotiating with a big bloc, the European Union, to get a trade agreement done.”

Perhaps the most striking delusion that runs so deeply through the Brexit pathology is the idea the Britannia’s flag will again fly high, and that power shall, mysteriously, be reclaimed by a nation made anew.  Other powers will heed that; respect shall be observed.  What Presidents Obama and Trump have shown from different sides of the coin is that such hopes might be terribly misplaced.

Trump, Trade Wars, and the Class Struggle

All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and [humans are] at last compelled to face with sober senses [our] real conditions of life, and [our] relations with [our] kind.

— Karl Marx and Frederick Engels, The Communist Manifesto

An unfolding trade war pitting the United States simultaneously against China, the European Union, Canada, and Mexico has begun. The economic and political consequences – intended and unintended – are now unfolding.  How this trade war develops and “ends” is a political question that cannot be predicted concretely. But the framework to foresee what is coming down the road is coming into focus.

There is no letup in the continued erosion and breakdown of the post-World War II, post-“Cold War” eras characterized at their core by the predominance of US capital in the institutions of world capitalism and in world politics.

China

On June 15, 2018 the Donald Trump Administration announced it will be adding a 25% tariff-tax on some $50 billion worth of Chinese goods imported into the United States. On June 18 Trump then threatened another 10% tariff-tax on $200 billion worth of additional Chinese commodities, raised to $500 billion on July 5, affecting virtually every Chinese product throughout the US-China production-to-exchange chain.

The first-round of tariffs, $34 billion worth, took effect on July 6, applying to 818 commodities and products. The second round, $16 billion on an additional 284 items, await “reviews,” that is vetting by the major industrial and financial oligopolies whose profits may be more or less directly affected. They are lobbying Trump and his enforcers for exemptions, waivers, and dilutions individually and collectively.

Trump’s threats to escalate were presented as being contingent on any Chinese government and state counter-tariffs on US goods and services. These, of course, were bound to happen; there could be no other political choice for the Xi Jinping government. The Chinese Ministry of Commerce immediately announced counter-measures “of the same scale and the same strength.” The statement further announced as “invalid” the recently reported “progress” on a deal that would have led to an additional $70 billion in US imports to China, based on a negotiated reduction of Chinese tariffs and other legal barriers to selected US commodities and services, including energy, agricultural, and high-tech products. Agricultural commodities were an initial focus of Chinese counter-tariffs, since China is a major market for US agricultural products, especially soy beans.

Trump’s announcement was rolled out with provocative and jingoistic rationalizations. Uncle Sam as bumbling sucker, the victim of nefarious Chinese practices. They are stealing our technology. They carry out “state subsidies” of industries and dump surplus production stealing the jobs of American workers. And so on…as if the entire system of world capitalist production, finance, and exchange were not lubricated and dependent as a whole on such practices. Practices by which the most advanced capitalist states and industrialized economies – the United States, the former colonial powers of western Europe, and Japan – are the historic masters and mentors.

At a July 5 campaign rally in Montana which drew thousands, Trump thundered:

We are bringing back our wealth from foreign countries that have been ripping us off for years…For too long we watched and we waited and we saw as other countries stole our jobs, cheated our workers, and gutted our industry.

With his trademark national chauvinism and demagogy, Trump continued:

The United States of America was the piggy bank that everybody else was robbing. Our allies in many cases were worse than our enemies. We opened our country to their goods, but they put up massive barriers to keep our products and our goods the hell out of their country because they didn’t want that competition.

Trump is upending the decades-long, highly profitable arrangements between the US capitalist class, its various governments in Washington, and the Chinese state. US capital would invest in commodity production inside China for sales to the US and other developed capitalist markets. It has been an arrangement that has been crucial in the formation and accumulation of state and private capital in China by Chinese business owners and government officials.

While it is very difficult to calculate precisely balance-of-trade surpluses and deficits of nation-states within globalized production chains, as well as calculating so-called “services” onto the balance sheets, China’s trade “surplus” in finished goods with the United States has been in the low-to-mid 100s of billions of dollars range for many years. A good slice of which is recycled and parked in US Treasuries. This greatly cushions the impact for US debt markets, making it easier for US federal and private banking institutions to obscure, dilute, and hide dollar-denominated debt. It also helps the US Federal Reserve suppress higher interest rates, and keeps low or non-existent tax rates and outlays for billionaires, millionaires, and US-style oligarchs.

China today owns nearly $2 trillion in US Treasury securities, which makes it the largest US “foreign creditor” and the second largest owner of US bonds, after the Federal Reserve itself. No one can know for sure what the impact of the unfolding trade war will be on Chinese purchases of US Treasuries, insofar as the US-China balance of trade numbers and those of China’s purchases of US government debt have become the intertwined sine qua non of the entire economic and financial relationship. China’s vast holdings register both leverage and vulnerable dependency. China’s decades-long massive economic expansion and growth (high single-digit to low double-digit GDP rises every year since 1991!) has been strongly predicated on maintaining China’s access to US markets for the wholesale and retail sales of these commodities.

Over the decades US-China economic ties and exchange led to the massive expansion of Chinese factory manufacturing and industrial development, as well as huge profits for US capitalists and their Chinese state and private partners.

This process also contributed mightily to the large expansion of the Chinese industrial proletariat, including a super-exploited sector of migrant workers, and urban petty bourgeoisie, with the concurrent reduction in the size of China’s peasant population. All of this has led to the massive production and reproduction of surplus value in the country based on the application of labor power to produce commodities to be exchanged, that is, sold in the US and world markets.

This massive production and reproduction of real value, real social wealth, and real capital was certainly siphoned off disproportionately and corruptly by Chinese bureaucrats and capitalists. But it has also been massively invested in infrastructure and urban development projects, led by high-speed rail production and construction.

Two giant Chinese initiatives in the past period highlight these historical developments. First, the Chinese Belt and Road Initiative which promotes regional “connectivity” through infrastructure and other economic projects, and second, the China-initiated Asian Infrastructure Investment Bank (AIIB) which finances infrastructure and other economic projects in the Asian-Pacific region. AIIB is headquartered in Shanghai and has 86 members, including a number of US NATO “allies.”  Washington, from Barack Obama to Trump, has so far declined to be any part of it. Moreover, China has publicly issued its Made in China 2025 plan to be world leaders in future industrial applications in artificial intelligence, robotics, and chip manufacturing, which is viewed with hostility in Washington.

Looming Recession?

Washington – and this is a largely bipartisan cry – gets particularly worked up over so-called state aid and subsidies to Chinese industries and companies that are themselves state or quasi-state-owned or nominally private. China also attempts to get around efforts led by Washington to pressure companies to restrict Chinese access to some technologies by making such access a condition for sales and commercial exchanges in the vast Chinese markets themselves.

A June 29 column in the Financial Times (“Bond markets send signals of a looming recession”) by University of Chicago “Professor of Finance” Raghuram Rajan states:

[E]conomic metric estimates of the effects of one or two rounds of tariff rises are small. But the models do not capture the intertwined nature of global supply chains. Moreover, the effect on business sentiment, as well as the pall of uncertainty cast over investment will be considerable, A trade war will be costly.

Rajan points to the political difficulties for any governments and national leaderships today “to be seen [as] giving in to threats, making trade conflicts more likely.” He then continues with:

… a final reason for concern. China is cleaning up its financial system, an immensely complicated task given the debt that has built up. Growth has slowed, the cost of riskier loans has been rising, as have defaults. The Chinese authorities are working to spread losses across the system, but this needs to be managed carefully to avoid panic. If China is caught in a trade war while it is still restructuring its financial system, its difficulties could spread abroad.

If the dynamic of a large-scale US-China trade war is unleashed, then it will have critical economic and commercial – and therefore political — consequences for the trade and diplomatic regime that has been built up and stabilized over many decades between Beijing and Washington – and Wall Street and China.1

The EU, Canada, and Mexico

The tariffs on China set in motion by Trump and his Executive Branch team of Commerce Secretary Wilbur Ross, White House National Trade Council Director Peter Navarro, and Treasury Secretary Steven Mnuchin came on top of tariffs on steel and aluminum exports carried out against Canada, the European Union, and Mexico, announced with great hoopla, earlier in the June month. These ostensibly aim at boosting US domestic steel and aluminum production, but also led to immediate retaliatory measures of equal reach and value by all. So far, every dollar-value of US tariff-taxes have been met with an equal value in counter-tariffs. Can that be sustained?

On June 29, 2018 Canadian Foreign Minister Chrystia Freedland defiantly announced Canada’s response to the Trump tariffs on steel and aluminum. “We will not escalate — and we will not back down,” said Freeland. (Before her current gig as Foreign Minister for the Justin Trudeau government, Freedland was a leading editor of the Financial Times, the quintessential organ of British and world capital.)

She unveiled counter-tariffs on US goods entering Canada, including whiskey, toilet paper, washing machines, and motorboats. Altogether, Canada will tax $12.6 billion worth of American goods, which matched the value of the US tariffs on Canadian steel and aluminum.

“I cannot emphasize enough the regret with which we take these countermeasures,” Freedland added. She emphasized that the only way Canada might reverse them would be if the Trump White House rescinded first. There are always political dangers when many faces need saving at once.

Trump’s Executive Orders were invoked under the cover of “national security.” This provoked umbrage from Canadian, EU, and other US post-World War II era NATO “allies.” They pointed to the various imperialist wars they fought over the years hand-in-glove with Washington.

The current framework and regime for the regulation of tariffs and the resolution of trade disputes is the World Trade Organization (WTO). The US tariffs are already being contested in WTO bodies in a likely bruising battle. The WTO as an “objective” arbiter and judge, is clearly in danger of losing authority and fraying under great pressure. Trump’s back-to-back measures are bound to accelerate a breaking down of world capitalist trading norms and stability.

Allies and Competitors

The EU bloc, most of its individual nation-state components, and Canada are military allies of Washington — still by far the predominant military power with the most firepower and global reach on Earth – through the NATO alliance. But, at the same time, all are home bases for some of the fiercest competitors of US based multinationals and other capitalist firms in world markets. In a time of intensifying, cutthroat global competition, with financial volatility and turbulent waters ahead, the “competitors” side is being more sharply expressed and rising to the fore. The political fallout from policy choices and decisions on trade, tariffs, currency manipulations, debt and capital flows are, at the very least, posed more sharply in today’s world. Old trading blocs and ties come under pressure and weaken, rebooting political policies and alliances.

Consequences, Intended and Unintended

While Trump’s public utterances – “Trade wars are good and easy to win” – exude typical flippant political confidence on his part, these policies are highly contentious within the broader US capitalist class. Within these circles there is growing anxiety and dread that Washington will not be able to drive things through without serious political consequences in the world arena.

The shift that Trump looks to realize registers the political erosion internationally of the “neoliberal globalization” regime which greatly benefited many US-based giant corporations, banks, and businesses – and the mounds of capital behind their brands – as they set up shop in China, Mexico, and elsewhere with greatly increased profit rates. The major benefit of this inside the United States for US capitalists was the lowering of the value of labor and the evisceration of industrial jobs and industrial unions. The decisive factor involved is relatively cheaper (usually very much so) labor costs, which outweigh other disadvantages and extra costs for US-based capital in production outside the US, such as in transport costs, management training, and so on.

Of course, US capitalists couldn’t care less about the social devastation in working-class communities in the US.2

US Capital is Divided

Opposition to Trump’s measures is strongest among business groups and elected officials from both the Republican and Democratic parties who have been identified with the general “free trade” neoliberal policies worldwide that have dominated trade pacts and mainstream bourgeois economics for decades. These anti-working-class policies have increased in unpopularity since the so-called Great Recession and financial crisis of 2007-08 and are now widely discredited and hated in the US and around the world, especially among working people. But the opposition to them takes varied “populist” forms – left and right — that have done and can do little to effectively counter them or provide any program and perspective of mobilization and independent working-class political action and power. In the face of popular hostility and battered credibility, almost by inertia, the “neoliberal model” limps on.

What will be the impact on world economic developments of Trump’s tariffs? Does it give a push to the next – inevitable – financial jolts and economic downturn-recession? Will the EU, Canada, and Mexico have the political will and strength to counter them? Is there space for increasing domestic US assembly and manufacture of commodities, finished products, and capital goods (machinery, etc.) that have been “farmed out” for decades now that US labor value and costs has been driven down in recent decades? Can increased US domestic manufacturing (up 36,000 in June 2018 according to the US Bureau of Labor Statistics) sustain sales volume and profit rates?

Diminished US Political Power

There are wide layers in top US business, financial, and social circles who do worry that Trump is accelerating and deepening the deterioration in US political influence worldwide. They are anxious that Trump’s course, rather that restoring the post-World War II full-spectrum dominance of US capital – capsulized in his campaign slogan “Make America Great Again” – will do the opposite and actually accelerate US decline.

There is considerable substance to this anxiety. Under Trump there has been a striking US political isolation in world political forums on one major international political question after another: Washington’s withdrawal from the (fairly toothless, in any case) Paris climate change accords; Trump’s unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA) on Iran’s nuclear production and activity, an agreement which was ratified by China, France, Germany, Russia, the UK, and the EU as a body; Washington’s humiliating isolation every year in the UN over its criminal and hated blockade of revolutionary Cuba; and issues around Israel and Palestine that might ameliorate Palestinian conditions and advance a two-state solution.

Korea is Hardly a Trump Triumph

Trump’s escalating moves on US trade and exchange with China were announced when the ink was hardly dry on the document issued, amid great world attention and hoopla, after the June 12 Summit between Donald Trump and the Kim Jong-un government in the Democratic People’s Republic of Korea (DPRK).

While the Trump White House has been eager to spin the Summit results as a feather in its cap, his ability to do so was necessarily predicated on the US suspension of “war games” and other joint US-South Korean military maneuvers off the North Korean coasts. Maintaining Washington’s “right” and political will to do so became politically untenable following the Kim government’s ending of missile launches, atmospheric and underground tests, and even the verified destruction of one nuclear site while at the same time the two Korean governments deepened relations through friendly encounters amid popular enthusiasm. No one can seriously doubt that the Moon Jae-in government in South Korea favored and pushed for the US suspension of the “joint” war games.

It seems apparent that China and South Korea forcefully intervened behind the scenes to keep the US-DPRK talks on track. In reality, Trump and Secretary of State Mike Pompeo (with National Security Advisor John Bolton kept in the shadows) found themselves in an isolated diplomatic and political corner and risked a politically unwinnable confrontation with both China, South Korea and the United Nations large majority. This became even more dangerous politically for Washington on the heels of the US withdrawal from JCPOA treaty with Iran.

As this article was being finished, the US-DPRK negotiations had a negative public eruption after US Secretary of State Mike Pompeo met with top North Korean authorities in Pyongyang. The DPRK Foreign Ministry issued a detailed statement on July 7, calling the meetings “regretful” and Pompeo’s apparent sole focus on unilateral DPRK denuclearization “gangster-like.” The DPRK statement promoted, “in the spirit of” the Singapore Summit and its written statement signed by Trump and Kim, an interconnected focus on issues like a formal peace treaty replacing the “Armistice” ending military combat in 1953; improved US-DPRK bilateral relations; and building a “peace regime on the Korean Peninsula,” that is, building on the momentum of improving relations between the two Korean governments and states. Pompeo and Trump have both downplayed the DPRK statement, with Trump on July 9 spinning that China “may be exerting pressure on a deal because of our posture on Chinese Trade – Hope Not!”

Of course, as the DPRK statement said, “suspension of one action called exercises is a highly reversible step which can be resumed at any time or any moment as all of its military force remains intact in its previously held positions without scraping even a rifle.” Nevertheless, for the Trump Administration to revert to a “maximum pressure” policy while demanding North Korean capitulation and permanently subordinating all other political issues, starting with formal and actual bilateral and multilateral peace, is not politically tenable, starting with South Korea and China and, overwhelmingly, world public opinion.

Mexico

The July 1 landslide election in Mexico of left-wing “populist”Andres Manuel Lopez Abrador (AMLO) is also setting Washington’s nerves on edge. It is not Lopez Obrador’s political orientation and program, per se, that is setting off (mostly muted) alarms. While he is solidly progressive with anti-imperialist instincts flowing from Mexican and Latin American historical experience, AMLO has sent out clear signals that he is loath to directly promote anti-capitalist measures and policies. His campaign focused on the corruption of private capital and the Mexican capitalist state and the intertwined, massive violence and death associated with the illegal capitalist drug cartels.3

What is worrying for the US (and Mexican) ruling classes is the tremendous enthusiasm and mobilizations around AMLO’s campaign, which points to the rising expectations among Mexican working people and youth who want action and who are saying Enough is Enough! Rather than channel mass political combativity into harmless electoralism and parliamentary wrangling, it is more likely that any significant progressive measures promoted by the Lopez Obrador government and its clear majority in both houses of Mexico’s legislature, will spur on the class struggle. This is particularly worrisome for the guardians of US imperialism, given the remarkable history of gratuitous, patronizing insults and anti-Mexican demagogy employed by Donald Trump since the beginning of his campaign for US president. And his reactionary and brutal anti-migrant policies once in office.

In any case, a window into the arrogance of the US ruling rich came with a short editorial in the July 3 Wall Street Journal, titled “The Peso Federales.” Acknowledging Lopez Obrador’s “landslide” and “mandate,” the Journal’s editors warn of the pressure coming from a “different sort of election – the one that takes place daily in financial markets.” Pointing to a 1% drop in the Mexican peso (that “recovered” the next day) following the election, the editorial continued “the president-elect now has to worry what the markets think if he wants to improve the lives of Mexicans.”

One of the biggest concerns for the academic, journalist, and big-business monitors of world economic developments today, prior to the next sharp economic crisis and recession-depression, is that there has been a significant and growing outflow of capital from so-called “emerging” countries into the capital markets of the most advanced capitalist economies, especially the US. This is reversing a mild trend otherwise in recent years.

Sharp turns down for the Argentine peso is the starkest expression of this tendency. In June 2018 the IMF came up with a $50 billion “loan,” a bail out for austerity package, that has already provoked the biggest labor mobilizations in that country for over a decade.

The Class Struggle Will Ratchet Up

When you enter a period like the current one, within the transition from one era-epoch to another, old truisms become stale, alliances and allies can and do change, traditional state-to-state relations become strained and even boil over. No one can doubt that class struggle, social polarization, and political volatility is likely to be ratcheted up considerably in the context of the coming global economic downturn. This will happen everywhere and anywhere. In the United States itself we can expect more massive working class and popular eruptions – seemingly coming out of nowhere – like the wave of solid, disciplined, and victorious teacher’s strikes in the US states of West Virginia, Oklahoma, and Arizona in early 2018.

The unfolding trade wars unleashed by Donald Trump are now facts on the ground. To cite the great socialist pioneer Frederick Engels:

Those who unleash controlled forces, also unleash uncontrolled forces.

  1. The origins of the contemporary US-China relationship and the deeply intertwined  economic ties between both came during the final period of the Vietnam War. US President Richard Nixon and his Secretary of State Henry Kissinger carried out a secret diplomacy with the Mao Zedong-Zhou Enlai Chinese government in the early 1970s to establish mutually beneficial ties. The context was the sharp crisis and looming defeat of the US war effort in Vietnam and Indochina. Nixon and Kissinger were under tremendous pressure to end all US military operations and withdraw US troops from Vietnam and Southeast Asia. They were keen to preserve the “South” Vietnamese neo-colonial state and hoped to manipulate China (and China’s fierce political antagonist, the Soviet Union) to pressure the Vietnamese revolutionaries – who they both gave crucial military aid to — to make concessions to Nixon. This failed and Washington went down to final military defeat in 1975. Nevertheless a de facto political alliance and the foundations for the massive expansion of economic exchange between the United States and China was consolidated over four decades under both Republican and Democratic White Houses and Congresses.
  2. Before retiring in 2016, I was a Locomotive Engineer for Amtrak and member of the Brotherhood of Locomotive Engineers and the teamsters Union. I operated the high-speed Acela and other passenger trains between New York city and Washington, DC. For some 25 years, I would see, along the main line tracks from the locomotive cab, on the Northeast Corridor tracks, especially along the stretches between Wilmington, Delaware and Philadelphia towards Trenton, New Jersey, mile after mile of rotted out and abandoned industrial facilities, factories, plants, mills, metal shop, giant behemoths and myriad smaller ones in what were once, in the world War 2 era and subsequent decades, I imagined thriving working-class communities employing many tens and hundreds of thousands of workers. Today they really look like documentary films from the Battle of Stalingrad on the World War 2 Eastern Front. The authorities, decade after decade, never even bothered to tear them down. I would joke to younger workers in my cab qualifying on the physical characteristics of the territory – track speeds, interlocking rules, industrial sidings, and so on – when we would pass these areas, that the state should put a giant bubble over it all and open up “The Museum of American Industrial Glory.”
  3. The stunning failure of Mexico’s “war on drugs” has left hundreds of thousands dead and mutilated without making a dent in the production, consumption, or the profits of the cartels, and the corrupt wealth of officials up and down the supply chain. The production, marketing, and commercial exchange of cannabis, cocaine, methamphetamine, cocaine, opium, and heroin is a major component of the Mexican capitalist economy as a whole, counting for perhaps up to 10% of GDP, as well as propping up Mexican banking.

Three Cheers for Trump’s Peace Trifecta

In the short space of five days, June 8-12, President Trump took three steps that upended the old post WWII global order and moved us a few steps toward a more peaceful world.  Two of those steps are undeniable; the third is perhaps not so obvious.

The Singapore Summit

The Singapore Summit comes first, because it rocked the world.

In this bold and unprecedented meeting President Donald Trump and Chairman Kim Jong-un, of the Democratic Peoples’ Republic of Korea (DPRK), started down a path to Détente, aiming toward denuclearization of the Korean Peninsula, an intractable problem or so the pundits informed us.  But as Melania warned us with a bemused smile sometime back, “Donald always shakes things up.”

The historic meeting produced more than words; concrete steps were taken:  The DPRK went first, terminating the testing of nuclear warheads, IRBMs and ICBMs and even closing its nuclear test site – all done before the summit. Leading up to the summit, Trump cut back on the extent of annual joint South Korea-US military exercises.  These have been roiling the East Pacific since the 1970s, frightening the North Koreans since these “war games” could abruptly turn into a real invasion as in the Korean War.  At summit’s conclusion Trump went further and terminated those exercises planned for late summer, labeling them “provocative,” as the North Koreans have long described them, and “expensive,” cost always being a big item in the Trumpian mind.  These exercises are also costly for the DPRK since they come at a time of year when agricultural labor is needed and hundreds of thousands of men must be diverted from the fields to join the armed forces in case the war games turn into a real invasion.  This hurts the agricultural output of the DPRK, and one suspects it is designed to do so.

It is no exaggeration to say that the Singapore Summit is the biggest step toward peace on the Korean Peninsula since President Dwight Eisenhower lived up to his 1952 campaign promise to “go to Korea” and end Truman’s deeply unpopular war, which had claimed millions of Korean lives, 1 million Chinese lives and tens of thousands of American ones. Ike ended that genocidal war, which had slaughtered 20% of the population of North Korea primarily by bombing and the use of chemical weapons.  An armistice was negotiated quickly and so the killing stopped, but a formal treaty of peace proved politically impossible.  (Ike, the peacemaker, was criticized by the media for being inarticulate and stupid and for spending too much time on the golf course.  And he had a mistress.  Sound familiar?  But he brought peace.)

Quite rightly the world greeted the Kim-Trump breakthrough with jubilation – save for the US elite and its press, including the interventionist Democratic Party leadership all of which were quite glum or downright enragedThe admirable and effective President Moon of the Republic of Korea (ROK) who himself was a key figure in making the summit possible, gave Trump much credit, and the South Korean people gave Moon’s Party overwhelming victories in the municipal elections on the day after the summit, putting the very political existence of the hawkish leadership of the rival party in question.  There was great celebration in North Korea and even the Japanese PM Shinzo Abe hailed the agreement since it removed a perceived threat.  Needless to say, China and Russia who have long pushed for denuclearization of the peninsula were very pleased; the cessation of US war games in exchange for ending DPRK testing of nukes and rockets was just the sort of first step they had advocated for some time.  And the majority (71%) of the American people approved of the summit. The Monmouth poll taken just after the summit and before the media had time to spin its demented take on events reported:

Most Americans (71%) say that the recent meeting between Trump and Kim was a good idea, including 93% of Republicans, 74% of independents, and 49% of Democrats. Only 20% say it was a bad idea. This positive feeling is somewhat higher than in late April, when 63% said the prospect of having such a meeting was a good idea.

Would it not be correct to say that the Singapore Summit is a move toward a world of peace by Trump and Kim? If so, should not all peace-loving forces support and praise it as a way to protect it from attacks of domestic hawks and to encourage similar steps in foreign policy? Have we?

This is not an academic question. The opposition to this and the policies listed below is large and building as can be seen from the reaction of the press. When Jimmy Carter tried to reach an accommodation with the DPRK and remove US troops and 700 nuclear weapons from the ROK, he was ultimately stopped by the forces we would now call Deep State, as chronicled here.  And similar forces are already organizing to stop Trump. If the peace movement does not do all in its power to back these and the initiatives outlined below, then we will bear part of the blame if those initiatives fail. What side is the peace movement on here?  To this writer the answer is unclear and the clock is ticking.

Let Russia Join the G7, says Trump

Let’s turn to achievement number two over those five days in June.  It came leading up to the G7 meeting in Charlevoix, Quebec.  Trump announced beforehand that Russia should be invited back into the G7, a move opposed by all the other members but for Italy’s new government.  The U.S. press went berserk, of course, with many declaring as they do many times daily that Trump’s strings were being pulled by – who else? – Putin.

Putin himself responded to the disagreement at the G7, thus:

As for Russia’s return to ‘the seven,’ ‘the eight’ [G7, G8] – we have not left it. Our colleagues once refused to come to Russia due to well-known reasons. Please, we will be happy to see everyone in Moscow.

Putin made that statement at a press conference in Qingdao, China, at the conclusion of the meeting of the SCO, the Shanghai Cooperation Organization with its present 8 member states: China, Russia, India, Pakistan, Kazakhstan, Kyryzstan, Tajikistan and Uzbekistan – with Iran, currently an observer, backed by China to become a full member.  Putin went further in this press conference; and it was reported by RT.com as follows:

The SCO gathering concluded just shortly after the G7 summit, and Russia enjoys the format of the now-eight-member organization after India and Pakistan joined. Putin believes the SCO trumps the G7 in certain aspects. For example, the member states have already overtaken the G7 in purchasing-power parity, the Russian leader said, citing IMF data.

If we calculate… per capita, the seven countries are wealthier, but the size of the SCO economies [combined] GFP is larger. And the population is, of course, much bigger – half of the planet.

That is, the combined gross GDPs of the SCO 8 are larger than the combined economies of the G7 by the PPP-GDP metric used by the IMF and World Bank (and CIA) as can be seen here.  It is noteworthy that Russia’s GDP is about equal to Germany’s, and not the basket case that it is made out to be in the Western press.  In fact, the G7 has only 3 of the world’s 7 largest economies the same number as the SCO-8.  The G7 are really nothing more than the ex-colonial and now neo-colonial countries whose time may be running out with the rise of the economies of the once colonized nations of East and South Asia.

In calling for Russia’s readmission to the G7, Trump was turning his back on the old Cold War alliances and looking to the economic realities of the 21st Century exemplified by the SCO.  He was opting to create an atmosphere of dialogue which would include Russia.  As he later said, the G7 spends 25% of its time discussing Russia- so why not have Russia present and try to work out problems together.

Trump’s appeal to readmit Russia to the G7 is simply a repeat of his call to “get along with Russia” a promise made in the campaign of 2016.  Is this not a good idea?  Is the recognition of new realities not part of creating a peaceful world?

Would it not be correct to say that this move of Trump’s is a move toward a world of peace? If so, should not all peace loving forces support and praise it as a way to protect it from attacks of domestic hawks and to encourage similar steps in foreign policy?  Have we? Again this is not an academic question because the outcome depends in part on our support or lack thereof.

Mercantilism over imperialism and hegemony

The third move in Trump’s weekend trifecta is not so much an action of his in and of itself but the revelation of a mindset behind that action.  Trump has set in motion the imposition of tariffs on countries that he views as unfair in trade with the US.  My point is not to argue whether such tariffs are good or bad or even whether the US has been treated unfairly.  (One might think, however, that the need to impose them is the sign of a trading power in its infancy which needs to protect its key enterprises – or of one in decline which can no longer prevail by virtue of the quality of what it produces.  But that is not of significance for this discussion.)

What is unusual is that Trump did not limit his economic attacks to an official adversary like China.  No, he is also directing them at our “allies,” from NATO all the way to Japan on the other side of the world.  In so doing he shows that commerce is more important to him than alliances that facilitate military actions aimed at domination and hegemony.  It might fairly be said that Trump is putting mercantilism over imperialism – if by mercantilism we mean economic nationalism.  Most of those at the G7 meeting who were aghast at the tariffs are NATO allies.  This action taken without regard to “the alliance” reminds us of Trump’s assertion during the campaign of 2016 that “NATO is obsolete.”

Trump’s stance was criticized by Canada’s PM Trudeau on this very basis, saying:

Canadians did not take it lightly that the United States has moved forward with significant tariffs on our steel and aluminum industry…. For Canadians who…stood shoulder to shoulder with American soldiers in far-off lands and conflicts from the First World War onward…it’s kind of insulting. (Emphasis, jw).

Is fighting in the useless and criminal WWI something to be proud of?  Let’s pass over the many other murderess conflicts that have engaged the US and the G7 in the last 25 years, let alone the past 70 plus years.  Trudeau encompasses all this criminal behavior in the single word “onward.”  The alliances that have made this possible are indeed “obsolete,” in fact, retrograde and dangerous.  Trudeau is simply saying that the G7 have been willing allies in the imperial crimes of the US.  So they expect due economic consideration in return.  Trump is saying no more; now the business of America is business first and foremost.

This does not mean that economic nationalism is the answer to the world’s problems.  But Trump’s action does represent a move away from the “entangling alliances” that have been employed to further the hegemonistic policies of the US.

Would it not be correct to say that favoring competition in trade over cultivating alliances for military hegemony is a positive development? Should not all peace loving forces praise the move away from our “alliances,” away from NATO which has been the agent of so many criminal wars of the last quarter century?

The flies in the Trumpian Ointment

At this point in the conventional treatment of matters Trumpian, it is compulsory to launch into psychobabble about the man, with cries of indignation about his narcissism or vulgarity or some other imagined personality disorder.  This writer is not a mind reader, nor do I have much have faith in the “science” of psychology.  Such anti-Trump disclaimers are more often than not simply inoculation to protect the writer from the wrath of the legions of Trump-haters and Respectables.  Such disclaimers also represent a cheesy substitution of pop psych for political analysis.

In reality none of Trump’s actions outlined above should have been a surprise.  They are fully consistent with what he promised in 2016.  Likewise the war of words between Trump and Kim earlier in the year was simply a way to protect them both from charges of being weak on their adversary by their own hardliners.  Trump himself has admitted they were a charade, and there may have been more to the charade than he admitted.  Kim too had his hardliners although not so numerous or powerful as Trump’s.

That said, the beginnings of Trump foreign policy has not taken us from a quarter century drive toward US unipolar hegemony, which began with the Clintons, to a nirvana of peace in the space of 18 months.  Since the US Empire is the last of the 500 years of European Empires, successor to them all, it would be absurd to even expect such an outcome.  Likewise, it would be easy to google all the things that are wrong with US foreign policy and even growing worse – and there is a cottage industry devoted to just that.

But one of the current problems, US policy toward Iran, looms large and deserves special mention.  Because Iran has support from Russia and because it lies so close to Russia, conflict with Iran is likely to destroy Trump’s desire for Détente with Russia and could therefore drag the US into military conflict with a great nuclear power, even a World War.  Such a thing would be catastrophic for humanity – so it is a very big deal.  Fundamentally Trump’s position on Iran is dictated by Israel which maintains its stranglehold on US foreign policy in the Middle East and North Africa (MENA).  By necessity, given Israel’s power in US politics, and by his conviction as well, one suspects, Trump’s brain is Israeli occupied territory.  And the same malign influence contributes to the criminal US support of the Saudi atrocities in Yemen.  Perhaps discussions with Putin can help Trump on this matter.  But right now Israel poses one of the greatest obstacles to a new and enlightened foreign policy in a key area for all of humanity.

Finally let’s return again to the Singapore Summit.  Please, dear reader, immerse yourself in the jubilation it generated worldwide.  It jumps out of the screen right here Gangnam Style. Be sure the sound is on at the lower right of the screen– and join the dance for joy.

• This article first appeared on Antiwar.com

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.