News in brief: Merger of trade and war / Economic recession / Possibility of US-Iran negotiations

US-Iran negotiations

During this time of flaring tensions between the US and Iran, Japan’s prime minister Shinzo Abe has been acting as medium of communication and mediator between the opposing parties. The US and the Islamic Republic of Iran have no embassies in each other countries. They’ve often relied on third parties to carry messages between them.

US president Donald Trump visited Japan and its leadership from 25 to 28 May. Iran figured as a major topic of discussion between the president and prime minister.

Importantly, Iran’s foreign minister, Mohammad Javad Zarif, made a three day visit to Japan before the US president’s. Zarif’s visit was from 15 – 17 May. The trip was only announced the very day of the minister’s arrival.

Zarif has been touring widely throughout the region, coordinating regional policy with the leadership of key countries. He has hastily visited Turkmenistan, Russia, India, Japan, China, Pakistan, and Iraq with purpose in mind.

Abe has said that he may visit Iran in the coming weeks. This is a matter of great consequence: it would be the first time a Japanese prime minister has ever visited the Islamic Republic of Iran, founded some four decades ago following the overthrow of the country’s monarchy.

Abe and Trump will meet again in the Japanese city of Osaka for the upcoming G20 Summit (28 – 29 June), where Iranian negotiations and missives can be included as part of the agenda.

Following discussions with his Japanese counterpart, Trump said that Iran “has a chance to be a great country, with the same leadership. We’re not looking for regime change, I want to make that clear. We’re looking for no nuclear weapons”.

Given that regime change and military confrontation have been stated as threats, the US president’s statement deserves careful consideration as the opening to possible negotiations between the two countries.

US, Japanese, and global economies on the rocks

The US president’s visit to Japan included discussions on trade. Trump said that he expects Japan to facilitate the import of US products to that country.

Japan’s economy has been struggling for some years. Yet, the state’s statistics authorities have recently assessed their economy as “worsening”, the lowest of five self-ascribed categories they could attribute to economic health. This is in keeping with wider signs that a global economic recession may be around the corner. The manufacturing sector’s Purchasing Managers’ Index (PMI) is commonly a reliable source for predicting a measure of economic activity. According to PMI measures, growth of the manufacturing sector has dropped to near zero in the key economies of Japan, Europe, and the US. Germany is especially hard hit.

International trade is slowing significantly, and investment spending by US companies has slowed dramatically. Trade frictions, between China and the US are likely a factor in the stalling economy but they cannot alone explain the long-term decline of stable economic activity. See a detailed article by economist Michael Roberts for more details on these issues.

The nexus of trade, manufacturing, security, diplomacy, and military activities

The introduction of Deborah Cowen’s book, The Deadly Life of Logistics: Mapping Violence in Global Trade, deserves to be quoted at length in order to understand the complex of activities that go into international relations. For example, the trade negotiations between the US and Japan, trade tensions between the US and China, Brexit and the global role of London as a financial capital, the consolidation of German economic dominance within the EU, the threat of military confrontation between Iran and the US, China’s Belt and Road Initiative, naval military exercises and coordination between allies in the Pacific and Indian Oceans, the building up of listening posts and military bases along vital sea routes, the migration of labouring people within and to the EU, the concentration of manufacturing in East Asia, etc. stand in relation to one another.

From Cowen’s book:

“Commodities today are manufactured across logistics space rather than in a singular place. This point is highlighted if we account for ‘inbound logistics’ – the production processes of component parts that make the manufacture of a commodity possible – and if we recognize transportation as an element of production rather than merely a service that follows production. The complexity would be enhanced dramatically if we took stock of all the ways that capital circulates through its different forms during this physical circulation of commodity to market. A more nuanced narrative would especially start to surface if we were to highlight the frequent disruptions that characterize supply chains and the violent and contested human relations that constitute the global logistics industry. To the everyday delays of bad weather, flat tires, failed engines, missed connections, traffic jams, and road closures, we would also need to add more deliberate interruptions. Just-in-time transport systems can be disrupted by the labor actions of transport workers at any one of the multiple links along the way. Workers, organized or not, may interfere with the packing and repacking of cargo at any of the transshipment sites. Ships are frequently hijacked by pirates in key zones on open waters, and truck and rail routes are sometimes blockaded – in response to both long histories of colonial occupation and current practices of imperial expansion. Even national borders, with the unpredictable delays of customs and security checks, challenge the fast flow of goods. The threat of disruption to the circulation of stuff has become such a profound concern to governments and corporations in recent years that it has prompted the creation of an entire architecture of security that aims to govern global spaces of flow. This new framework of security – supply chain security – relies on a range of new forms of transnational regulation, border management, data collection, surveillance, and labor discipline, as well as naval missions and aerial bombing. In fact, to meaningfully capture the social life of circulation, we would have to consider not only disruption to the system but the assembly of infrastructure and architecture achieved through land grabs, military actions, and dispossessions that are often the literal and figurative grounds for new logistics spaces.”

Military and economic pursuits can go hand in hand

Given the explanation provided to us by Deborah Cowen, we should keep a close eye on a broad spectrum of activities in pursuit of competitive advantage between corporations, governments, or state organisations.

That’s why a Chinese military planner can comment on the economy. “One Belt, One Road [aka the Belt and Road Initiative] is not simply to join the global economic system, which is a globalization under the U.S. dollar. As a rising super power, the ‘One Belt, One Road’ strategy is the beginning of China’s own globalization. It is a necessary globalization process that a super power must have during the phase of its rise”. This was said by Qiao Liang, major-general of the Chinese People’s Liberation Army in 2015 during a forum at a Chinese Communist Party Central Committee office.

Similarly, the hot pursuit of logistical hubs, air strips, ports, surveillance centres, and military bases along one of the world’s most important waterways is of great importance.

This May the UN General Assembly overwhelmingly voted to support the International Court of Justice’s ruling that a part of Mauritius is illegally occupied as a colonial territory. The UN resolution demands,

that the United Kingdom unconditionally withdraw its colonial administration from the area within six months.

By a recorded vote of 116 in favour, to 6 against (Australia, Hungary, Israel, Maldives, United Kingdom, United States), with 56 abstentions, the Assembly affirmed that doing so — in accordance with the advisory opinion — would enable Mauritius to complete the decolonization of its territory as soon as possible.

Notably, Diego Garcia is among the territories deemed under illegal occupation. Diego Garcia is sometimes identified as one of the US’ ‘unsinkable aircraft carriers’. The island hosts a major US military base astride the Indian Ocean maritime transport route that carries a staggering portion of the world’s trade in goods and services.

Worldwide maritime transport accounts for about 80% of global trade by volume, or 70% by value. The Indian Ocean is bounded by some of the world’s most vital choke points: such as the Malacca Strait, the Strait of Hormuz, and Bal el-Mandeb.

The Malacca Strait’s importance is highlighted by the fact that 16% of the world’s volume of crude oil and petroleum products pass through it. It’s not far behind the world’s top choke point for these goods, the Strait of Hormuz (18.5%), that vital seaborne route to the oil rich Persian Gulf countries (See my article on the neighbouring body of water, the South China Sea, for more info).

The congested and narrow passage of the Malacca Strait helps to explain today’s competition over control of the neighbouring South China Sea.

The importance of Hormuz is linked to geopolitical tensions and to energy resources in the Persian Gulf region, as well as with the Pakistani and Chinese development of the port of Gwadar.

Bab el-Mandeb is bordered by Yemen, Djibouti, and Somalia. Yemen is the site of a devastating war, Djibouti is a tiny country that houses multiple foreign military bases, and Somalia is riven with a multi-generational civil war furthered by foreign interference. Bab el-Mandeb leads to the Suez Canal, and from there to the Mediterranean Sea.

It’s not realistic that the UK or the US would willingly surrender the immensely strategic Diego Garcia. The UN General Assembly resolution is nonbinding, and what force could they bring to bear to enforce such a decision?

Notably, the Maldives is one of the few countries that voted against the resolution. In February 2018, I briefly wrote about political turmoil in that island country. China was facing off against the US and India on the other side, and different camps of the island’s political elite were taking sides in what became a soft coup.

The US and India got the upper hand in that particular struggle, as evidenced by the Maldives’ rejection of the unenforceable yet still significant resolution.

Former Indian diplomat, M.K. Bhadrakumar, has made some interesting observations about this situation:

“The big question is whether Male [governing capital of the Maldives] took Delhi into confidence before the vote on Wednesday. The strong likelihood is there, of course. The fact of the matter is that there is a US-Indian game plan with regard to Chinese naval presence in the Indian Ocean, and a division of labour is at once obvious. India’s special defence/security ties with Mauritius, Seychelles and Madagascar come into play. They provide underpinning for the US activities in Diego Garcia. The Maldives’ induction into this matrix is ‘work in progress’. Indeed, the regime change in Male last November is coming to fruition.”

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