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GEAB 125

The monthly bulletin of LEAP (European Laboratory of Political Anticipation) - 15 May 2018
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Following the removal of the last of the bolts imposed by the previous world order[1], and in line with our anticipations, vast amounts of until now restrained transforming energy are now being released along paths that have long been marked out but were previously forbidden. The challenges raised by this transition are immense, but the major global players seem to be in a position to handle – and no longer endure – this huge reconfiguration. As a matter of fact, we are beginning to see more clearly who they are and what their strategies are. This is precisely what we aim to report in this GEAB issue.

China is unveiling its economic power (as the world’s largest importer of oil), its military power (with J-20 stealth fighter planes[2], air-to-air missiles[3]) and its monetary power (with the famous petro-gold-yuan[4]). It is establishing itself worldwide, particularly in the South China Sea[5], setting up its regional security architecture whilst Western eyes are fixed (quite rightly) on the Middle East: Everyone, as they say, has their own problems! …

Europe, on the other hand, continues its separation from the United States, with European leaders trying desperately to dig up their old European defence project. The US withdrawal from the Iranian nuclear agreement provides a perfect opportunity to assert that the US is no longer a strategic partner reliable enough for the destiny of Europe to be kept in their hands[6]

With respect to trade, Trump’s European steel and aluminium tariffs are likely to serve the same EU-US decoupling dynamic. But beware, they can also serve the cause of a transatlantic rear-guard, invoking the need to sign any free trade agreement with the United States to avoid those tariffs. It should not be forgotten that, just after its announcement of tariffs on steel and aluminium, the White House said that ‘agreements could be reached for permanent exemptions with Argentina, Australia and Brazil’ whereas in the cases of Europe, Canada[7] and Mexico, only a thirty-day extension of exemptions was available. If Trump did not want the TTIP, that does not necessarily mean he does not desire a free trade agreement with Europe… He just wants it on his own terms. Europe is free to accept it or not.

The African Union is gaining considerable strength, now managing to take important decisions, like, for instance, the unification of air transportation, the liberalisation of civil aviation, the 0.2% taxation on imports and the creation of a free trade area. The AU is also cooperating closely with China in the context of an industry transfer which the latter is working towards (with environmental protection issues still under negotiation)[8]. China, for reasons of efficiency, no doubt, is favourable to negotiating on an equal footing with the AU, rather than using a strong-to-weak strategy with the African states, thus helping to strengthen the Union.

The United States goes back home. With the arrival of the petro-yuan, the dollar’s territory is shrinking considerably, posing great challenges for the transfer of large amounts of money, an issue we address in this GEAB issue. NATO is refocusing on the Atlantic[9] and Trump is eager to bring his troops back from Syria[10] as well as from South Korea[11]. As for the US multinationals, a large number of tax incentives are being introduced to engineer their return to the US[12] territory…

The Middle East, a region we will study in detail further on in this issue, comes under regional control with the emergence of powerful players, primarily Saudi Arabia and Israel, who strive to set up more harmonious interactions. Their vision of the future is emerging with concrete projects and strategies… (Register here)

In this extensive repositioning, the focus on global dynamics is maintained; energy, money and connectivity infrastructure are being largely reconfigured so as to resize the tools of global economy and innervate this multipolar world.

This huge reorganisation cannot help but cause upset here and there. The risk of conflict is far from small. Nevertheless, we are making an optimistic bet based on the following analysis: At the beginning of the 21st century, the levels of connection and interdependence in the world are structured in such a way that there is reason to count on a ‘networking’ of this multipolarity rather than fear a contest for leadership. Like us, the ‘new autocrats’[13] who manage the transition do have internet!

———————————————————–

[1]  Two Koreas, Saudi Arabia, US military and monetary supremacy, supra-national shackles…
[2]  Source: South China Morning Post, 10/05/2018
[3]  Source: South China Morning Post, 08/05/2018
[4]  The GEAB announced this arrival to its readers in September 2017 anticipating the irresistible nature of these futures contracts, including for Saudi Arabia. Source: GEAB N°117, 15/09/2017
[5]  The current resolution of the situation in Korea, the last Cold War Bastion, is giving China a handle on this part of the world. Thus, it is advancing its pawns in the South China Sea at full speed without anybody paying any attention to possible recriminations of Vietnam or other border countries. Chinese military installations in the South China Sea are the elements of a pax sinica within the region replacing the pax americana. Source: JapanTimes, 11/05/2018
[6]  Source: StraitsTimes, 11/05/2018
[7]  Not sure, however, that Canada is positioned in a way to avoid having a US agreement imposed upon it.
[8]  Source: AllAfrica, 29/04/2018
[9]  Source: The Guardian, 05/05/2018
[10] Were it not for the Ghouta gassing affair, US troops would be retreating. Source: Washington Post, 04/04/2018
[11]  Source: New York Times, 03/05/2018
[12]  Source: UNCTAD, 05/02/2018
[13] As of now, all major geopolitical actors have strong leaders, with autocratic intentions, managing to significantly change the programming of their state machine; for example Russia, Turkey, United States, Saudi Arabia, France, England, China, India.

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