1.
The War on
Huawei
Project Syndicate Dec 11, 2018
The
Trump administration's conflict with China has little to do with US external
imbalances, closed Chinese markets, or even China’s alleged theft of
intellectual property. It has everything to do with containing China by
limiting its access to foreign markets, advanced technologies, global banking
services, and perhaps even US universities.
NEW
YORK – The arrest of Huawei CFO Meng Wanzhou is a dangerous move by US
President Donald Trump’s administration in its intensifying conflict with
China. If, as Mark Twain reputedly said, history often rhymes, our era
increasingly recalls the period preceding 1914. As with Europe’s great powers
back then, the United States, led by an administration intent on asserting
America’s dominance over China, is pushing the world toward disaster.
The
context of the arrest matters enormously. The US requested that Canada arrest
Meng in the Vancouver airport en route to Mexico from Hong
Kong, and then extradite her to the US. Such a move is almost a US declaration
of war on China’s business community. Nearly unprecedented, it puts American
businesspeople traveling abroad at much greater risk of such actions by other
countries.
The
US rarely arrests senior businesspeople, US or foreign, for alleged crimes
committed by their companies. Corporate managers are usually arrested for their
alleged personal crimes (such as embezzlement, bribery, or violence) rather
than their company’s alleged malfeasance. Yes, corporate managers should be
held to account for their company’s malfeasance, up to and including criminal
charges; but to start this practice with a leading Chinese businessperson,
rather than the dozens of culpable US CEOs and CFOs, is a stunning provocation
to the Chinese government, business community, and public.
Meng
is charged with violating US sanctions on Iran. Yet consider her arrest in the
context of the large number of companies, US and non-US, that have violated US
sanctions against Iran and other countries. In 2011, for example, JP Morgan
Chase paid $88.3
million in fines in 2011 for violating US sanctions against Cuba, Iran,
and Sudan. Yet Jamie Dimon wasn’t grabbed off a plane and whisked into custody.
And
JP Morgan Chase was hardly alone in violating US sanctions. Since 2010, the
following major financial institutions paid fines for
violating US sanctions: Banco do Brasil, Bank of America, Bank of Guam, Bank of
Moscow, Bank of Tokyo-Mitsubishi, Barclays, BNP Paribas, Clearstream Banking,
Commerzbank, Compass, Crédit Agricole, Deutsche Bank, HSBC, ING, Intesa
Sanpaolo, JP Morgan Chase, National Bank of Abu Dhabi, National Bank of
Pakistan, PayPal, RBS (ABN Amro), Société Générale, Toronto-Dominion Bank,
Trans-Pacific National Bank (now known as Beacon Business Bank), Standard
Chartered, and Wells Fargo.
None
of the CEOs or CFOs of these sanction-busting banks was arrested and taken into
custody for these violations. In all of these cases, the corporation – rather
than an individual manager – was held accountable. Nor were they held
accountable for the pervasive lawbreaking in the lead-up to or aftermath of the
2008 financial crisis, for which the banks paid a staggering $243 billion in
fines, according to a recent tally. In light of this
record, Meng’s arrest is a shocking break with practice. Yes, hold CEOs and
CFOs accountable, but start at home in order to avoid hypocrisy, self-interest
disguised as high principle, and the risk of inciting a new global conflict.
Quite
transparently, the US action against Meng is really part of the Trump
administration’s broader attempt to undermine China’s economy by imposing
tariffs, closing Western markets to Chinese high-technology exports, and
blocking Chinese purchases of US and European technology companies. One can
say, without exaggeration, that this is part of an economic war on China, and a
reckless one at that.
Huawei
is one of China’s most important technology companies, and therefore a prime
target in Trump administration’s effort to slow or stop China’s advance into
several high-technology sectors. America’s motivations in this economic war are
partly commercial – to protect and favor laggard US companies – and partly
geopolitical. They certainly have nothing to do with upholding the
international rule of law.
The
US is trying to targeting Huawei especially because of the company’s success in
marketing cutting-edge 5G technologies globally. The US claims the company
poses a specific security risk through hidden surveillance capabilities in its
hardware and software. Yet the US government has provided no evidence for this
claim.
2.
Theresa May's
Brexit strategy left brutally exposed by Brussels failure
Labour declares deal ‘dead in the water’, as hopes of further talks on
backstop disappear
The Guardian 14 Dec 2018
Theresa
May rowed with Jean-Claude Juncker at the Brussels summit. Photograph:
ec.europa.eu/PA
Theresa May has come home from Brussels empty-handed
and without hope of further negotiations over the Irish backstop, with the
failure to achieve any kind of breakthrough leaving her brutally exposed.
Plans
to work over Christmas on a legal guarantee over the temporary nature of the
backstop had run into a brick wall, EU officials said, despite May’s claim that
she would be holding further talks “in the coming days”.
Brussels
sources claimed May was just keeping up a pretence that the legal guarantee she
had promised rebellious Tory MPs during this week’s leadership challenge was
still on the cards.
Without
clear evidence that she has made progress, May faces mounting jeopardy in
Westminster, with Labour seriously considering tabling a vote of no confidence
before Christmas, if it believes the prime minister’s DUP partners might
support it.
Jeremy
Corbyn accused May on Friday of “dangerously running down the clock”.
“The
last 24 hours have confirmed that Theresa May’s Brexit deal is dead in the
water. The prime minister has utterly failed in her attempts to deliver any
meaningful changes to her botched deal,” he said.
One
shadow cabinet member said the moment at which Labour would table a
no-confidence vote was getting “much, much closer”, but said it would depend on
the stance of the DUP. “We are watching like hawks,” he added.
Some
of May’s allies also fear renegade Brexiters from the right wing of the Tory
party could throw their weight behind Labour in the hope that a no-confidence
vote would result in a more Brexit-friendly Conservative being installed in her
place.
The
work and pensions secretary, Amber Rudd, has called for MPs across the
political divide to build a Brexit consensus, warning Britain’s departure from
the EU is “in danger of getting stuck”. Writing in the Daily Mail, Rudd said it
is possible Theresa May will ultimately be unable to persuade enough of her own
MPs to back her deal, suggesting it is time to “abandon outrage and
accusations” and “try something different”.
Rudd
said a “practical, sensible and healing approach” was needed for MPs to
coalesce around a deal to avert the danger of Britain crashing out of the EU.
The
cabinet minister is the most senior Conservative so far to suggest support may
need to be won from outside the Tory-DUP alliance in order to get a deal over
the line in the Commons.
In
Brussels on Friday, EU leaders insisted they would not do any more to sweeten
the Brexit deal containing the backstop that 100 Tory MPs want her to ditch.
The
European council president, Donald Tusk, spoke of his respect for May but
he was unable to hide the fact that he could not give the prime minister what
she had come for.
“I
have no mandate to organise any further negotiations,” Tusk said. “We have to
exclude any kind of reopening our negotiations on the withdrawal agreement. But
of course we will stay here in Brussels, and I am always at Prime Minister
Theresa May’s disposal.”
The
prime minister’s Brexit aide Olly Robbins had been holding secret negotiations since Monday over a
two-stage plan to secure the legal guarantee that Downing Street believed could
turn MPs in its favour.
But
leaders ripped up a prepared script on Thursday night in which they would have
offered both warm words and the promise of further assurances in January.
The
prime minister had been seeking a “joint interpretative instrument” that would
put a duty on both sides to try to get out of the Irish backstop within 12
months of it coming into force.
Member
states led by France and Ireland lined up to reject further concessions,
warning that May’s deal appeared doomed to failure whatever was offered. They
instead reiterated that they did not want to trigger the backstop, and that if
it did come into force it would be a short-term arrangement.
Asked
three times whether the UK could get further concessions or legally binding
assurances that go beyond the current agreement, the German chancellor, Angela
Merkel, offered May no succour.
“The
27 member states have given assurances. They are contained in the conclusions
of yesterday evening,” she told reporters. “So that is our position, that is
what we have put on the table and now we expect Great Britain to respond.”
With
Downing Street’s plan in tatters, the EU’s leaders instead turned their fire on
the House of Commons for showing the prime minister a lack of respect, as they
sought to convince MPs to back the deal.
3.
Europe in
Disarray
Project Syndicate Dec
13, 2018
In what by historical standards constitutes an instant, the future of
democracy, prosperity, and peace in Europe has become uncertain. And with the
US under President Donald Trump treating its allies like enemies, the continent
must confront the growing threats it faces largely on its own.
NEW
YORK – It was not all that long ago – just a few years, as hard as that it is
to believe – that Europe appeared to be the part of the world most closely
resembling the end-of-history
idyll depicted by Francis Fukuyama at the end of the
Cold War. Democracy, prosperity, and peace all seemed firmly entrenched.
Not
anymore. Parts of Paris are literally burning. The United Kingdom is consumed
and divided by Brexit. Italy is led by an unwieldy left-right coalition that is
resisting EU budget rules. Germany is contending with a political realignment
and in the early phases of a transition to a new leader. Hungary and Poland
have embraced the illiberalism seen across much of the world. Spain is
confronting Catalan nationalism. And Russia is committing new acts of
aggression against Ukraine.
In
what by historical standards constitutes an instant, the future of democracy,
prosperity, and peace in Europe has become uncertain. Much of what had been
widely assumed to be settled is not. NATO’s rapid demobilization after the Cold
War looks premature and precipitous.
There
is no single explanation for these developments. What we are seeing in France is
populism of the left, the result of people having difficulty making ends meet
and rejecting new taxes, whatever the justification for them. This is different
from what has fueled the rise of the far right across Europe: cultural
defensiveness amid local and global challenges, above all immigration.
The
European Union, for its part, has gradually lost its hold on the public
imagination. It has been too remote, too bureaucratic, and too elite-driven for
too long. Meanwhile, renewed Russian aggression may simply reflect President
Vladimir Putin’s judgment that, having realized large political returns on his
previous military “investments” in Ukraine and Syria, he had little to fear or
lose from further actions.
Europe’s
political class deserves its share of responsibility for today’s growing
disarray. The EU introduced a common currency without a fiscal or banking
union, making it all but impossible to conduct a coherent economic policy. The
decision to put the UK’s continued EU membership to a popular vote, while
allowing a simple majority to decide the issue and failing to spell out the
terms of departure, was misguided.
Likewise,
opening Germany’s borders to a flood of refugees, however pure Chancellor
Angela Merkel’s motives, was sure to trigger a backlash. Most recently, French
President Emmanuel Macron did himself no favors by backing down to the “Yellow
Vest” protesters and offering compromises more likely to fuel additional
demonstrations and exacerbate his country’s budget predicament.
We
should not assume things will get better. It is only a matter of time before
France’s far-right National Rally (formerly the National Front) and political
parties across Europe figure out how to combine economic and cultural populism
and threaten the post-World War II political order. Italy’s hybrid populist
government is a version of just that.
The
UK will remain torn over its relationship (or lack thereof) with the EU no
matter what comes of Brexit; and it is entirely possible that a post-Brexit UK
might come under serious strain itself, given renewed calls for Irish unity and
Scottish independence. There is no formula for dividing power between Brussels
and capitals that would be acceptable to both the EU and national governments.
Meanwhile, it is far from certain that Putin is content or done with his
aggression against Ukraine or conceivably others.
Moreover,
in a world of increasing inequality, violence within and between countries, and
climate change, the pressures posed by immigration are more likely to worsen
than fade away. And economic dislocation is bound to intensify in a world of
global competition and new technologies that will eliminate millions of
existing jobs.
Why
this matters should be obvious. Europe still represents a quarter of the
world’s economy. It is the largest constellation of democratic countries. The
last century demonstrated more than once the cost of a breakdown of order on
the continent.
Alas,
just as there is no single cause that explains Europe’s increasing disarray,
there is no single solution either. To be precise, there is no solution of any
sort. There is, however, a set of policies that, if adopted, would help leaders
manage the challenges.