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CWA # 152, 3 August 2019

The World this Week
New US Tariffs on China, Japan-South Korea Trade Tension, Burqa Ban in the Netherlands, INF Treaty's End and North Korean Missile Tests

  GP Team

Sukanya Bali, Harini Madhusudhan, Aparupa Bhattacherjee, Parkshith Pradeep and Seetha Lakshmi Dinesh Iyer

ISSSP, National Institute of Advanced Studies (NIAS

 

Trump imposes new tariffs on China

What happened?

The 13 months long US-China Trade war has taken a new turn, after the recent meeting between US Trade Representative Robert Lighthizer and Treasury Secretary Steve Mnuchin with Chinese officials, in Shanghai on Wednesday. The negotiation ended with little cooperation between the two countries. After the meet, Donald Trump's tweets have brought back both countries to a pre-G20 phase. Trump's tweet on 'putting an additional tariff of 10 percent on the remaining $300 billion of goods and products' coming from China has created an atmosphere of tension.

The White House said that the two sides had discussed topics including "forced technology transfer, intellectual property rights, services, non-tariff barriers and agriculture". The negotiations led China to commit an increase in the purchase of US agricultural products. Further, President Trump tweet claimed that China failed to keep the promise to curb the sale of Fentanyl, which had led to the death of more than 16000 US citizens.

What is the background?

Since July 2018, the two sides have imposed tariffs on more than $300 billion of goods. Both had agreed on a truce to end the trade war at G-20 summit in Japan 2019. Late in June, the US President had eased some restrictions against US companies selling hi-tech gear to Chinese telecom giant Huawei. With no substantial outcomes from the trade dialogue in Shanghai in July and with Donald Trump's tweet, the global markets took a hit. The trade war has shown a visible impact on both country's farmers, workers and consumers, and has put the country's economies at stake. The back and forth imposition of tariffs have shown a decrease in the growth rate of 6.2% in the Chinese economy, second quarter of 2019, which is the lowest since 1992.

What does it mean?

Trump's additional tariff from 01 September on China will increase the chance of further retaliatory tariffs from China in US-China trade war. The trade war has shown its repercussion on markets. The trade war between the two has disrupted the global supply chains and has affected commodity prices. This is not only hampering China but has brought in high inflation on goods and has changed the purchasing power of the US citizens. The deal between the two powerful economies of the world is turning as a 'threat' for the global growth rate. The trade war is likely to continue since both the countries have failed to make any substantial progress in the trade dialogue. Also, Trump's actions may be an attempt to bring China according to his terms before the 2020 presidential election.

 

Japan removes South Korea from Trusted Trade Partners list

What happened?

Japan announced that it would remove South Korea from its list of 'Trusted Trade Partners.' Stating that these measures are based on National Security Concerns and address Seoul's inadequate controls on export. Seoul was quick to respond to this, Ko Ming Jung, a government spokesperson, have said, "Our government will sternly respond to Japan's unfair decision." Not long ago, South Korea had warned that it may reconsider its decision over an intelligence-sharing accord with Japan if the situation were to get worse.

The "white list" includes 27 countries of which South Korea would be the first one to be removed, later this month, according to the announcement. The decision by Japan has come a month after Japan tightened rules on the export of materials crucial for South Korean tech manufacturers. Protests in front of the Japanese embassy in South Korea, called for a boycott of Japanese goods during a rally, while also demanding compensation and apology for the forced labour and wartime sex slaves.

What is the background?

The complicated history between the two countries is set to be a smaller version of the ongoing trade war between the US and China. The dispute began with the court ruling by a South Korean court on the comfort women and forced labour, ordering Japanese firms to pay compensation, thereby inflating the long-running tensions. These decisions were condemned by Japan who said that the dispute was settled in 1965 when diplomatic ties were normalised between the neighbouring countries.

South Korea has seized the assets of two companies' part of the case and Mitsubishi Heavy, one of the firms involved has refused to comply. Fast forward to a month ago, and Japan restricted access to products needed to make display panels and memory chips, which are critical industries for South Korea. The country's tech giants Samsung Electronics and SK Hynix exported around 60 percent of global memory components last year, according to IHS Markit, showing potential to rattle the electronics industry over potential threats to the global supply chain.

What does it mean?

Moon Jae-In on Friday tweeted saying, they would never be back to Japan "….We are expecting a lot of difficulties ahead of us, but it is not that we cannot overcome." Shows that there is no end to this dispute shortly. The immediate impact would be on the electronics industry, and as Japan's third-largest trading partner, buying about $54 billion worth of their goods, the impact would fall heavy on the industrial machines, chemicals and entertainment industries of the countries. A trade- war in the East, which has the largest technology-driven economies is just what the world did not need with 5G issue still around. On the political front, these actions by Japan could be an answer to the Chinese question on whose side does Japan stand, by taking the US route to trade conflicts.

 

The Netherlands ban Burqa

What happened?

This week, the Netherlands introduced a new law that bans burqas, niqabs, and other face coverings in public places. The law called Partial Ban on Face-Covering Clothing Act, prohibits the wearing of ski masks, full-face helmets, balaclavas, niqabs and burqas in public buildings that include schools and hospitals and on public transport. The law is yet to be enforced, but it states that people not following the law will be given an option to remove the offending item, or they will be fined €150 to €415. The law is restricted only to the public buildings and transport but does not apply on the streets.

Both the police and transport workers have stated that the law will not be imposed strictly on their behalf. The police mentioned that the enforcement was discomforting as it will hinder a veiled woman from reaching out to the police station to make any complaints or for redressal of any problem. Motivated by this, transport companies have also stated that they will not enforce their staffs on trains, metros, trams or buses to impose this rule.

This has created confusion regarding the seriousness of this law. Regardless, this law has been criticised vehemently to be partial and also seen as a result of Islamophobia. The Dutch government has denied Islamophobia to be the basis of this law. The government insists that this was a security measure and will also ensure proper communication.

What is the background?

A far-right lawmaker Geert Wilders pushed this law and his party, make the intention of the imposition of this law, questionable. Mr Wilders is known for his anti-Islam view. He has openly revered the passing of this law and twitted that the "next step" should be to ban headscarves also and highlighted that, "If you want to wear a burqa, then go live in Saudi Arabia or Iran." Mr Wilders is not alone, both his party and several other lawmakers have openly supported this law.

But the Netherlands is not first to impose such ban six other European countries are prohibiting face-covering clothing in public buildings. France, under the presidentship of Nicolas Sarkozy in 2011, was the first to state that full-face veils were "not welcome". Apart from France and the Netherlands, Austria, Denmark, Latvia, Belgium and Bulgaria are among those who have imposed a similar ban.

What does it mean?

First, this law could be a broader indicator of growing intolerance towards a pluralist society. This has also impacted the shift in Europe's policy towards migrant, which has often been unwelcoming. Alongside this, similar discussions are in place in other parts of European such as Germany, Switzerland, Estonia, Italy, Lithuania and Norway. Parts of Spain have introduced such bans locally. It seems legal imposition of this ban became crucial for these countries since 2010, quite around the same time when the migration wave shifted towards Europe. 

Second, the law could be hinting a shift in discourse towards Dutch nationalism under which anti-Islam remains a critical component.

Thirdly, the new law and drift in discourse could also imply the more significant shift from liberalism in Europe and other parts of the world. This is more evident through the rise of populist governments around the globe.

 

US Withdraws from the INF Treaty

What happened?

This week, the US withdrew from the Intermediate-Range Nuclear Forces(INF) Treaty. A Cold war era-arms agreement signed in 1987, between the US and Russia, which necessitated them to eliminate both conventional and nuclear land-based ballistic missiles, cruise missiles and missile launchers with a range of 500km to 5500km. The US cited the development of its warheads and Russian violation of the treaty as being the reason for its withdrawal. In October 2018, the US announced its decision to withdraw, which was followed by its suspension of obligations in February this year. The act of suspension provided a window for Russia to revisit the treaty, which seemed unlikely to happen.

What is the background?

This comes in the backdrop of US and NATO alleging Russia for their violation of the treaty. The US, in its 2014 Compliance report, pointed out to Russia's development of warheads, which could undermine the terms of the treaty. The state department in its reports has repeatedly alleged Russia of dishonouring the agreement. Russia has continued to deny these allegations amidst US's warning to withdraw.

Russia, despite pressure from NATO and the US, failed to destroy their 9M729 cruise missile system which, according to the US, is a breach. Both the US and Russia are barred from launching these missiles, but this limitation does not extend to air and sea-based missiles. The agreement aimed to eliminate an entire class of missiles and limiting any further development of the same. It also necessitated on-site assessments and inspections, furthering accountability and strict control to avoid negative offsets.

What does it mean?

This move could essentially elevate the American position on arms trade and boost employment in the US. But it also risks the possibility of aggravating trade tensions concerning arms and strategic weapons. China already has a significant number of medium-range missiles in its armoury, which is also exported to Asia. The US pulling out of the treaty could help the Americans export similar missiles to Asia furthering arms tensions. With the US emerging as a player in this class, it could potentially disrupt the movement of the arms trade on a global level.

On the other hand, the range bandwidth and proximity under this class are equally threatening to neighbouring nations and elsewhere. Following this, one should not fail to anticipate harsher possibilities of conflict in the middle east and war-prone areas surrounding Syria and Africa. Also, this could intensify Iranian ambitions and North Korea's military adventurism.

What is interesting is it provides Russia with an undue advantage, which is notably ahead in this technology provoking the US furthermore. This development is also a blow to the rules-based order in arms control. Observing the American steps to arms diplomacy, it could also pose a threat to the fate of New Start Treaty, yet another agreement the US has with Russia which aims to limit strategic nuclear arms by a third, which is due for renewal in 2021.

While nations across the world produce medium-range missiles, as analysts suggest, limits imposed on the US in doing so could also have led them towards withdrawing from the arms agreement. This could unfold into a larger picture in the race for arms expedition. On a concluding note, radical steps and knee jerk reactions by superpowers in matters of defence and critical arms technology can destabilise efforts to non-proliferation and arms control.

 

North Korea launches its third missile in a week 

What happened?

On 02 August 2019, North Korea fired a short-range ballistic missile, the third in eight days. While South Korea assessed the missiles to be different from the previous model which flew unusually fast, the missile is said to have travelled up to 220 km.

However, statements from the White House following the launch indicated that the US President Donald Trump wasn't wary about the recent spate of retaliation from North Korea. According to popular media, he called it a "very standard" response from the north and denied any links with the North Korean supremo.

What is the background?

According to South Korea, Pyongyang had previously fired two missiles that reportedly flew to a distance of 250km and reached a height of 30km near the East sea. The North had launched its first missile on 25 July 2019 after the US President Trump and North Korean leader Kim Jong-un met at the demilitarized zone in June where they had agreed to resume talks on denuclearisation. Despite pressing economic sanctions, Pyongyang had also launched a new submarine recently which is reportedly capable of carrying up to three ballistic missiles.

What does it mean?

The most apparent reason for North Korea's recent spate of missile launches is the Washington-Seoul military exercise scheduled later this month. The strong reaction comes as the North views this as a considerable threat and violation of norms signed under the joint statement by the US president and his North Korean counterpart during their meeting at Singapore the previous year. Pyongyang has further notified that the drills could affect the duo's future talks on denuclearisation. Evidently, this will affect Seoul's efforts to build strained ties with Pyongyang and further divide the Korean Peninsula.

Second, Trump's cold response to Pyongyang's actions would have been fuel to the latter's actions. The latest spate of launches could also be seen as Kim Jong un's strategy to create a sense of panic and urgency in the peninsula and eventually get the upper hand on the nuclear negotiations.

Alongside this, Japan and South Korea have deployed missile defence systems based on US military technology in the recent past. Little has this found fruit when North Korea's capabilities are steadily growing. The push could also be an effort to threaten the US by putting pressure on Japan and South Korea, its key allies in the region. Evidently, given Japan and South Korea's diplomatic tensions, North Korean actions are only straining the relation further and putting the US's efforts to bring the former together in vain.

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