International Trade

Economics Globalization International Trade The International Economy

COVID-19: Globalism’s Achilles Heel

As COVID-19 spreads around the world, everyday life for hundreds of millions has been drastically altered. Full-scale quarantines have been imposed on countries hit hardest by the outbreak. Italy is under lockdown as its northern region faces sharp challenges in limiting new infections. In the United States, schools have closed, travel disrupted, and mass fear illustrated in the clearing of grocery store shelves.

Perhaps the most consequential disruption – aside from the direct human toll the virus has had – is the economic volatility felt across global markets. In America, ominous signs have pointed to a looming recession. Markets have hit bear territory, meaning securities prices have fallen more than 20% from recent highs. On Monday, March 16th, the Dow Jones Industrial Average saw its steepest single day drop in 33 years. Pessimism and panic have taken hold of economic sentiment. People under quarantine and social distancing measures are less inclined to go out and purchase goods or services. Broad layoffs throughout the job market have begun while the Trump administration seeks nearly $850 billion in stimulus to keep the United States economy afloat.

One of the greatest threats the pandemic has imposed on the global economy is its sheer impact on supply chains. 75% of companies in the U.S. have had their supply chains disrupted as a result of the virus.

Decades of globalization and interconnecting economies have developed a system in which finished products are not made in any single place. Their parts and manufacturing span oceans and continents. The manufacturing of a single Apple IPhone Touch ID button requires over 12,000 miles of movement to reach the place where the iPhone is assembled. All-in-all, “the iPhone has a transportation footprint at least as great as a 240,000-mile trip to the moon, and most or all of the way back.”

It is difficult to fathom the level of complexity that goes into the production of simple products many of us take for granted on a daily basis – at least until COVID-19 hit. Today the world is facing an inflection point surrounding globalization. It has uncovered both its limits and weaknesses.

The unprecedented movement of goods and people has cultivated the perfect environment for a virus which began in a seafood and livestock market in central China to wreak havoc on the world. In a mere three months it has spread to virtually every part of the globe and tanked markets.

It has also demonstrated to governments and its leaders advocating for a turn inwards that isolation is not always a feasible option. What happens in one place inevitably affects another. Companies which operate under a just-in-time (JIT) inventory system, a strategy that opts to maximize efficiency by limiting inventory, face existential threats to their supply of goods. Apple, which produces many of its products under this scheme, is now set to miss its forecast for the second quarter and is facing a sharp constraint in its ability to produce the IPhone.

The more tangible impact that the outbreak will have on globalization is difficult to determine as of now since the spread of COVID-19 has only begun. From a political level, Philippe Legrain of Foreign Policy Magazine has argued that the “outbreak has been a gift to nativist nationalists and protectionists, and it is likely to have a long-term impact on the free movement of people and goods.”

Political leaders espousing these ideas may end up with the ammunition and legitimacy they need to put the final nail in the coffin in their fight against globalization. The world could come out of this more divided and uncooperative than it was before.

This prospective reality is frightening because it is a response to a problem requiring the exact opposite. Forces outside of the control of politicians or their rhetoric are in fact integrating the world to greater degrees as time moves forward. Advancements in technology and infrastructure have enabled more people than ever to travel around the globe. Developing nations are increasingly integrating into the world as hubs of business and travel. Businesses and governments would find it infeasible to truly de-integrate based on the reality that modern globalization has enabled companies to produce products better, faster, and cheaper via the construction of highly efficient supply chains. Reversing this course of direction would be a daunting and nearly impossible task. Globalization is not just some policy choice, it is a consequence of advancements in human ingenuity. In reality, governments ought to be coming out of this realizing the need to invest more in domestic and global preventive measures/capacities. Cooperation and information sharing should become the centerpiece to fighting and preventing future outbreaks. The construction of a more robust global health regime bolstered by true initiative and sustained investment in domestic measures are key to tackling future pandemics.

Although people may feel inclined to see globalization as a threat to humanity in the face of COVID-19, the world continues to change in ways that make turning inwards and shutting the door virtually impossible. People must come to terms with the fact that civilization faces many challenges ahead that do not respect borders. If anything, our current predicament shows us all that many times the only way forward is by uniting and cooperating in the face of shared adversity. The reality is that pandemics transcend many of our common conceptions of national interest and multilateralism. Preventing and combating them requires an immense level of global cooperation and an outgrowth from the daily trivialities that plague interactions between political entities, both domestically and globally. They are one of the starkest delineations of a “global challenge.” Transnational threats to humanity must demonstrate to us all that, in the end, we are in it together.

March 17, 2020 1 comment

China International Trade United States

Miles Apart: The Larger Issues Hampering a U.S.-China Trade Deal

written by Zachary Durkee

Forging a trade deal with China has proved to be a frustrating, fluctuating saga for the Trump administration. It has taken nearly two years for China and the United States to reach a limited “phase one” trade deal, indicating the two remain at a distant divide regarding larger issues that are breeding conflict in the trade relationship.

Reaching a comprehensive trade deal will take far more than simply getting China to purchase more American products.

The recent deal signed between the two countries on January 15th is a first step but ultimately fails to alleviate the true issues plaguing trade with China. The deal leaves open questions regarding enforcement and covers less contentious issues such as Chinese agricultural purchases.The divide between the two is grounded in deep structural economic and political differences, China’s ambition to gain the upper-hand in coveted industries, and the competitive pressure exerted by China’s rise on the global stage.

Why is striking a deal proving to be so difficult?

It must be kept in mind that the Chinese Government is highly authoritarian and holds much of its power through its grip over economic modes of production. Where U.S. officials view Chinese State-Owned Enterprises (SOEs) as distorting cheaters of the global economy, the Chinese Government sees them as a vital means to consolidating power and maintaining regime legitimacy. To the Chinese Communist Party, SOEs provide crucial sources of employment and serve as a powerful arm of the state in its pursuit of national economic goals.

Simply arguing that China ought to become more market-driven is not an option for political leaders in Beijing. For any authoritarian country, maintaining a strong grip on power is of first priority. Liberalizing an economy in which resources are exceedingly centralized in the parameter of government influence can open the door for instability and unleash forces that can grow outside of the state’s control (Remember the Soviet Union?).

This balancing act between privatization and state-led direction of the economy is illustrated in how the Chinese economy has fared since the end of the Mao era. The government has made sure that its move to extract wealth and grow its economy from exposure to market forces has not ceded the state’s overwhelming monopoly over resources, influence, and power, or jeopardized the survival of the regime. Even today, China’s brand of state-pseudo capitalism has been quite resilient. The state has defied conventional wisdom, liberalizing parts of its economy and allowing the flourishment of some powerful private enterprises while simultaneously becoming more politically illiberal. Before China’s rise, U.S. policymakers and experts widely held the belief that if China liberalized its economy, political liberalization would follow due to increased demands posed by a newly emboldened middle-class. China has managed to successfully blend elements of capitalism with its authoritarian model to a degree that enables the Communist Party to remain relevant.

Maintaining massive subsidies, controlling broad access to capital, and propping up unproductive SOEs and is simply part of the nature of China’s political-economic nexus. Its challenge in maintaining this order is twofold. On one hand, the Chinese Communist Party (CCP) has seeked to extract party legitimacy through a strong economy that is exceedingly evolving to require higher levels of efficiency and innovation which ultimately requires unleashing individual creative capacity and enabling businesses to operate untamed and unshackled from encroaching government influence. On the other, the regime’s survival in its current state requires the government to hold the vast majority of the cards and influence large aspects of the economy. The former requires a sacrifice of the latter. People’s acceptance of the one party system has been driven in large part by economic prosperity and double-digit growth. Without this sustained prosperity, people’s acceptance of CCP domination may become strained, especially if reformist or liberal factions within the party seeked to exploit turbulent times. This challenge leads to the second area of trade contention: coveted industries and unfair trade practices.

The nature of China’s economic model forces it to adopt controversial trade practices to substitute its innovation deficit. A world-class economy requires world-class ideas and inventions to sustain its growth and separate itself from the rest of the pack. America’s economic strength and ability to create is directly linked to its political system: people are free to express themselves which leads to a proliferation of ideas, and, coupled with exposure to market forces, drives companies and individuals to maximize productivity. At the forefront of the trade war is America’s adamant demand that China curbs intellectual property (IP) theft and ends the regulatory pay-to-play bulwark designed to protect domestic companies and force American ones into joint-ventures with Chinese firms if they wish to have access to the market.

As high technology continues to increase in economic importance, China will be less inclined to halt this kind of trade conduct. Stability in U.S.-China trade is important, but so is pushing ahead in securing a dominant position in coveted high-tech industries. Picking off IP and leapfrogging across the backs of American firms has been a key factor in China’s ability to make such substantial progress in closing the technological gap between the two countries in such a short span of time. Huawei, a Chinese tech firm, was accused last year of conspiring to steal T-Mobile’s technology.

When all is taken into account, the broader competitive streak manifesting itself within both countries on a growing number of fronts is not helping the situation. Mr. Trump and Mr. Xi are both looking to walk away as winners in the trade war, with both seeing anything short of a definitive upper-hand in a deal as unacceptable. Behind all the structural realities guiding Beijing’s refusal to cave to American demands lies a powerful propagation of nationalism, pride, and fervor of prestige pushing back against compromise. There is a growing perception in China that America is simply looking to contain and constrain China’s growth. With all of these complexities in play, the prospects of achieving a comprehensive trade deal appear dim.

March 6, 2020 0 comment

China International Trade Security Security and Conflict The International Economy United States

The Dragon and the Eagle: Where the United States’ Chinese Foreign Policy is Failing

written by Corrado Chirico

The hostile relationship between the People’s Republic of China and the United States isn’t anything new. Profound fear of the adversary has always been a defining characteristic of China-US relations. Though there have been a few moments in the past decades where a possible harmonization of bilateral relations was in sight, particularly in the 80s during the era of Deng Xiaoping’s economic liberalization, the Chinese-American relationship has mostly been characterized by a cold and uncomprehending approach from both sides. This unsatisfying and often dangerous course is rooted in a deep misjudgement and lack of knowledge about the counterpart. But, if the U.S. is interested in improving relations with China in the future and wants to maintain an international balance of power, the American government should stop sharpening its weapons and work to de-escalate the ongoing economic confrontation with the Celestial Empire.

Recently, as President Trump has kept increasing the economic pressure on Beijing, many international observers and experts have started describing this new trade war between the superpowers as a new version of the Cold War. Indeed, the confrontation has become harsher and harsher but Washington doesn’t seem keen on loosening its grip anytime soon. Although the U.S. might be right that the Chinese approach to intellectual property is unfair and that off-shoring is having negative effects on American industry, the U.S. should maintain a certain caution in its policies towards China. Whether President Trump likes it or not, good relations with Beijing are critical for the U.S. because of specific security and political concerns. Additionally, as paradoxical as it may sound, if the U.S. wants to maintain its status as a global hegemon, they will need to cool tensions with China.That said, there are multiple instances where Washington could make a greater effort in order to prevent significant threats to international security.

The North Korean Dossier

Since he took office in January 2017, President Trump has made it clear that one of his foreign policy intentions is to bring the North Korean Leader, Kim Jong Un, to the negotiation table in order to prevent an escalation of the already fragile situation on the Korean peninsula. He has tried to do this by persuading the Chairman to put an end to the nuclear tests, which from a North Korean perspective serve the purpose of scaring off their southern neighbor and getting the regime into international spotlight. The first interactions between the two leaders were quite rough, at least according to their initial tactless tweet exchanges. The tweets immediately made headlines because of the insults and childish accusations issued from both sides; Some may recall the famous “red button policy” that characterized President Trump’s first approach to the North Korean dossier. Luckily enough, right when these tensions were reaching their peak, a reconciliation process between the leaders of North and South Korea began. After several guard posts within the Demilitarized Zone had been destroyed, Kim Jong-Un and South Korean President Moon Jae-In agreed to meet on several occasions. Soon after President Trump and Chairman Kim were the guests of honor at two bilateral summits, held respectively in Singapore and Hanoi, Vietnam, which brought very little progress in the denuclearization process on the Korean peninsula. Though Kim has softened his initial aggressiveness towards the US and reduced the number of missile launches, the summits were mainly useful to Trump as an instrument to strengthen his approval at home, as he was able to sell the (very disappointing) outcome of the two meetings as a major foreign policy achievement. This interpretation, according to which the summits and the now “friendlier” attitude of the North Korean leader were both the fruits of President Trump´s great abilities as a negotiator, was also shared by some American analysts and the media. But those who give Trump credit are neglecting an even more critical source of the success; None of the summits would have taken place without China’s approval.

With a yearly trade volume close to six billion dollars, Beijing represents North Korea’s most important trading partner and has always helped its neighbor and ideological cousin to bypass international sanctions. The origins of the ties between the two countries can be found in the early 1950s, when China decided to intervene in the Korean War (1950-1953) in support of Pyongyang. Since then Beijing has both politically and economically backed all the North Korean leaders, from Kim Il-Sung to the current leader of the Workers’ Party, Kim Jong- Un. However China has shown that it is not above putting pressure on its ally when it showed the potential of threatening the stability of the Korean Peninsula and the broader east Asian region. An example of this “carrot and stick” policy of the Chinese government was the Security Council Resolution 1718. This resolution, which the Chinese government voted in favor of, criticized the nuclear test carried out by North Korea in October 2006. Considering all the aspects mentioned above it is clear how China has kept playing a major role in the security architecture of the region and is still the only country able to both support and “control” Chairman Kim´s intentions. As a consequence, if Washington is interested in keeping Pyongyang on the denuclearization path and hopes to preserve Kim Jong-Un’s willingness to remain open to further dialogue occasions, it should respect China’s hegemonic position in the region and avoid an escalation of the trade war, since the deterioration of the diplomatic channel with North Korea would represent a much bigger risk to regional and international security than the current economic tensions. In summary, the Trump administration should keep the following in mind: no peace with Kim is possible without Xi.

The Risks of an “Asian Bloc”

The North Korean dossier is far from being the only reason why Washington should focus more on Beijing’s real ambitions and put an end to its determined confrontation with the Asian superpower. As reported by the National Bureau of Chinese Research, many experts have already recognized the potential threats of closer cooperation between Moscow and Beijing. That said, the American administration is still doing too little when it comes to resuscitating its almost non-existent relations with Russia and countering the intensification of economic and security ties between Moscow and China.

The history of Sino-Russian relations has always been a troubled one. Despite an initial, mainly ideological partnership, sealed by the Treaty on Friendship, Union and Mutual Assistance signed in 1950, economic and political cooperation, which Beijing was strongly hoping for, didn’t last long. Though in the early 1950s the Soviet Union started contributing to the weak economy of its Asian neighbor by taking part in several industrial projects on Chinese territory, only a few years later relations began to deteriorate gradually. The turning point has been identified by historians in the 20th Congress of the Soviet Communist party held in Moscow in 1956 under Nikita Krushev. In fact, in that occasion the party’s Secretary General announced that a plan of “de-Stalinization” of the whole Soviet territory was to be implemented soon. This decision by the Soviet leadership caused great disappointment in Beijing, where Chairman Mao and his associates accused Moscow of “revisionism” and feared that the communist partner would no longer be China’s closest ally, since it was apparently distancing itself from its founding ideology, the Marxist-Leninist doctrine. Only in 1982 did the ties between the two countries experience a revival.

Since then Beijing and Moscow have been gradually increasing their cooperation in many different sectors. In this light, the US should be worrying about the fact that this historical partnership is now being sustained by a strong personal relationship between Russian President Vladimir Putin and his Chinese counterpart, Xi Jinping. This gradually growing rapport between the two leaders is rooted in the extremely similar ways in which they lead their respective countries and their vision of both the liberal world order and (declining) western culture. In this regard an interview President Putin recently gave to the Financial Times is paradigmatic of this diffuse idea among autocrats that western liberalism has somehow become an “obsolete” form to organize societies. This particular approach to international affairs shared by Moscow and Beijing has been a cornerstone for much more comprehensive cooperation between the two countries, which could pose a serious threat to international security in the long term, if not countered in time. Indeed, over the past years China and Russia have been increasing their military cooperation exponentially. Notable examples for this new development are the joint military exercises, such as those held in September 2018, which were the biggest of their kind since 1981, the new joint Chinese-Russian air patrol and Beijing’s dependence on Russia’s advanced military technology. At the same time agreements between the Russian and Chinese governments have been made in regard to deeper economic cooperation, especially in the energy sphere as announced at the bilateral energy business forum in St. Petersburg earlier this year. The most prominent amongst the already existing projects in this sector are the Shanghai Cooperation Organization as well as the Eastern Siberia – Pacific Ocean pipeline. Furthermore Russia is playing a crucial role, especially in relation to Central Asia, in the broader framework of the Belt and Road Initiative, which is already bringing massive infrastructural investments to large parts of Russian territory.

The elements mentioned above, which characterize the current state of relations between Moscow and Beijing, show how both countries are strongly interested in building an alternative political and social model to the western one and are ready to use their nuclear arsenal as leverage. In this light, in order to avoid escalation of violence and military confrontation between the “Asian bloc” and the U.S., possibly followed by its NATO allies, a solution could be to introduce a new sort of INF treaty, which would include China in addition to the U.S. and Russia. With this kind of initiative the chance of preserving a multipolar and secure world might be higher than with a new unregulated race to arms. Based on this, the American Administration should put more effort into promoting talks and negotiations both with Moscow and Beijing. Otherwise, without a basic consensus about international security between the major world powers, the United States will be worrying about much more serious problems in the future than just China’s intellectual property theft.

December 4, 2019 0 comment

Europe Featured Immigration International Trade Populism The International Economy

State of the European Union

written by Grayson Peters

Two years after the British people narrowly voted for a “Brexit” referendum to withdraw the United Kingdom from the European Union, the EU is more threatened than ever. Trade and customs negotiations between the British government and the European Union are at a standstill, nationalist parties blame the EU’s open border policy for enabling the passage of Syrian and and African refugees into Europe, and support for pan-European internationalism appears to be in decline. Political pressure from emboldened Eurosceptics like former London Mayor Boris Johnson and ardent Europeanists like French President Emmanuel Macron complicates the already fraught negotiations between the EU and UK. How these negotiations unfold may well determine whether or not the European system endures or succumbs to nationalist revolts in its member states.

At 11 PM on March 29, 2019, the United Kingdom is scheduled to exit the European Union. In the event of a “No-Deal” Brexit – that is, an exit without any trade or customs agreements with the European Union – the UK will be left without a legal framework for trade or border controls with the EU. In the short term, the result would be absolute pandemonium.

At present, EU-UK negotiations are deadlocked. Despite UK Prime Minister Theresa May’s insistence that a deal on border controls and other contentious issues such as aviation rules and fishing rights is still possible, disagreements persist without a resolution in sight. More critically, however, is the potential for a hard border between Northern Ireland and the Republic of Ireland.

The Good Friday Agreement of 1998, which concluded the Troubles – decades of sectarian violence between Irish supporters of the United Kingdom and those desiring an independent Irish state – established a ceasefire between Irish Republican guerillas and the United Kingdom. The division between British-governed Northern Ireland and its southern neighbor, the Republic of Ireland remained. As a compromise, citizens of Northern Ireland were given the option of being both Irish and British citizens, and the border between the two Irish states was softened to allow greater freedom of movement.

In 2016, Northern Ireland, still a part of the United Kingdom, overwhelmingly opposed the Brexit referendum and voted to remain in the European Union, but was outvoted by the rest of the UK. If the UK is unable to reach an agreement with the EU that includes free movement of citizens (akin to the existing Schengen Area), a political crisis may result. A hard border between a non-EU Northern Ireland and the Republic of Ireland, still an EU member state, could undo the fragile peace and inflame Irish nationalist and unionist passions.

While talks between the British government and the European Union stall, internal political pressure from hard-line Brexiteers like Boris Johnson, who demand a more complete withdrawal than even Prime Minister May is proposing, threatens the likelihood of a deal. Johnson and other proponents of total disengagement from European institutions are fomenting an internal revolt within the UK’s Conservative Party, claiming that Prime Minister May’s “Chequers Plan” preserves unacceptably close ties with the EU and fails to “take back control” from European customs and trade regulatory agencies. Johnson resigned his cabinet post in July in protest of the Chequers Plan, sending May’s government into a tailspin and renewing concerns about the feasibility of a Brexit deal. Any agreement reached between May’s government and the EU will likely be seen as too moderate by Johnson and other strict Brexiteers, but the EU is unlikely to accept a “Hard Brexit” akin to what Johnson proposes.

To further complicate matters, French President Emmanuel Macron has taken a noticeably tougher stance on the UK’s withdrawal from the EU, labeling Brexit proponents “liars” and rejecting May’s insistence that the EU accept the Chequers Plan as a framework for ongoing negotiations. For Macron, this hard-line stance on Brexit negotiations is not motivated by any pragmatic concern for the fine print of an eventual UK-EU deal, but by an overarching desire to preserve the integrity of the European system.

The European Union is extremely vulnerable, more so than at any previous time since it was founded by the Maastricht Treaty in 1993. The Greek bailout, in which the EU (mostly Germany and France) were obliged to extend credit to a fiscally-irresponsible and oft-corrupt Greek government, concluded on August 20th of this year, but financial instability in neighboring Italy, whose populist government under the Five Star Movement is violating EU fiscal rules as it increases welfare spending, has experts worried that another sovereign debt crisis is on the horizon. Nationalist movements are ascendant across Europe; along with the Five Star Movement, Germany’s AfD, France’s National Rally (formerly National Front), and others have capitalized on their constituencies’ opposition to the liberal democratic order, internationalism, and immigration embodied by the European Union.

Macron’s stance on Brexit should be read as an intentional show of force to impress upon other nations the costs of exiting the European Union. If the UK were allowed to exit the EU with favorable terms, this would likely embolden other Eurosceptics like France’s own National Rally. If other European nations believed that they could free-ride and keep the benefits of EU membership, such as the tariff-free common market, while avoiding the dues, restrictions, and open-border policy, they would likely follow in the UK’s example. Macron is thus determined to make the UK’s exit from the European Union difficult either to dissuade continental Eurosceptics in the event of a “Hard Brexit” or to encourage the UK to reverse course in face of the likely costs.

Even though France continues to insist that a Brexit deal is achievable, the French government has begun drawing up contingency plans, pointing to a real fear that no deal will be finalized before the March 2019 deadline. The French Parliament published a draft bill, which can be quickly passed in the event of a “No-Deal” Brexit, to address issues including work permits and residency visas for British nationals. According to French minister of European Affairs Nathalie Loiseau, the Eurostar train which connects England and France underneath the English channel might be barred from entering French soil, and British planes could be denied access to French airspace if no Brexit deal is finalized.

This would be a dramatic departure from the current state of affairs, which is essentially a state of open borders between the UK and continental Europe. At present, the journey from France to England is a 35 minute train ride under the English Channel, so brief that so-called “Eurocommuters” can live in one country but work in the other. Next year, that same train may be turned away by armed police at the French border.

The potential economic costs of Brexit are severe for both the United Kingdom and European Union nations like France. The Center for European Progress estimates that, even though the UK has not yet officially left the European Union, wary European investors and reduced cross-channel trade have already made a dent in the British economy, to the tune of “€26 billion [$29.49 billion] per annum – or €500 million [$567 million] a week.” The Center’s study projected that as a result of the passage of the 2016 Brexit referendum, the British economy is 2.5% smaller than it otherwise would have been. When the UK actually exits the EU, the economic repercussions will be even more severe, especially in the event of a “Hard” or “No-Deal” Brexit which results in significant barriers to trade and investment. The International Monetary Fund projects that a “No-Deal” Brexit would cost the EU around $250 billion, or about 1.5% of the EU’s GDP.

It is a very real possibility that, in the event of a “No-Deal” withdrawal from the European Union, the United Kingdom will become immediately isolated from the European continent and excluded from the European body politic for the first time in twenty years. If that comes to pass, continental nationalist parties will no doubt be emboldened, and the European experiment of free trade, free movement, and free people may find itself in mortal danger. At a time when illiberal sentiments such as hyper-nationalism, xenophobia, and distrust of globalism appear to be in vogue, the survival or disintegration of the European Union will likely determine whether or not the liberal international order can endure.

What does all this mean for confused American spectators? Since the end of the Second World War, the U.S has greatly benefited from this liberal order, built on rules-based international organizations, free trade agreements, and, ideally, respect for human rights. In large part, this is because the United States was the de-facto leader of the postwar West, hence the moniker “Leader of the Free World,” and has therefore traditionally held great sway over the United Nations, World Trade Organization, and similar institutions.

Nationalist movements which threaten the European Union are in many ways identical to the post-2016 American Right which calls for immigration restrictions, trade protectionism, and a withdrawal of American support for international institutions like NATO. With the U.S. itching to abdicate these responsibilities, if the European Union falls, so too may the international system upon which American hegemony has rested for the last 70 years.

November 5, 2018 0 comment

Environmental Change Featured Global Health Globalization History Human Rights International Trade Society and Culture The International Economy

Bayer Acquires Monsanto: Controversy & Implications for Global Agriculture

written by Sareen Ishanyan

Following two years of negotiations and approval seeking from various governmental bodies, the acquisition of the American agricultural biotechnology company known as Monsanto by the German pharmaceutical and life sciences giant Bayer was approved in spring 2018. Less than half a year later in August, Dewayne Johnson of the Bay Area was awarded $289 million in a civil suit which charged Monsanto’s infamous Round-Up Ready herbicide–also known as glyphosate–with causing Mr. Johnson’s diagnosis of non-Hodgkin’s lymphoma.

For years, Monsanto has been decried by environmentalists and farmers alike for its pesticides, herbicides, genetically modified seeds, and seed policies. Additionally, with Bayer’s acquisition of Monsanto, there are concerns for monopolization of the global seed market, as Bayer itself is a highly important player in the field of agriculture. This article seeks to understand the implications of a potential monopolization of the global agriculture system. First, however, this article will provide a background with a brief overview of the various controversies associated with Monsanto.

Criticism of Monsanto has spanned decades. During the Vietnam War, Monsanto was the largest American manufacturer of Agent Orange, an herbicide and tool of warfare used by the American military. Research in this area suggests that exposure to Agent Orange is associated with negative health effects. Vietnamese people and American veterans who were exposed to Agent Orange have been found to have higher cancer incidence rates than those who were not exposed. Meanwhile, the spraying of Agent Orange in Vietnam resulted in serious environmental problems, namely deforestation and reduction in the diversity of animal species.

Additionally, the seeds produced and patented by Monsanto have been a major source of controversy. One common charge involves cross-pollination lawsuits. For example, if a farm has planted the seeds of a patented GMO and, by way of cross-pollination, these seeds reach a neighboring farm and produce plants, it is often believed that Monsanto will sue, and has sued, the latter farm simply because of wind patterns affecting the movement of pollen. However, in reality, as one NPR article notes, there have been no such suits. But in 2013, the United States Supreme Court heard a seed saving case involving Monsanto. Based on patent law, the Court ruled in favor of Monsanto, which had sued a farmer from Indiana for saving seeds. Saving seeds refers to the practice whereby after harvest, seeds are saved and planted during the next year. Monsanto requires farmers who purchase their seeds to sign contracts in which they pledge not to save the patented Monsanto seeds they purchase in a given year. Still, this issue and the surrounding debate remain controversial as many question the practice of granting companies patents of living things. Arguably, patenting seeds is especially problematic as seeds are, both literally and symbolically, one of the most important living things on the Earth. Further, in India, over ninety percent of the cotton seed is controlled by Monsanto. In fact, some have even argued that increased suicide rates among Indian cotton-farmers is associated with Monsanto’s practices and patents of seeds. The evidence regarding a causal relationship is not conclusive, and many argue that a causal relationship does not exist; still, it is striking that Monsanto owns over ninety percent of the Indian cotton seed.

Additionally, the biotechnology of Monsanto has serious implications for agriculture and the environment. Round-Up Ready, also known as the chemical glyphosate, is the most popular herbicide used in agriculture. Glyphosate is a powerful chemical that is able to eliminate the growth of unwanted plants such as weeds. Yet glyphosate is also capable of killing valuable plants too. It is for this reason that Monsanto created genetically engineered crops that are resistant to glyphosate. The first of the company’s genetically engineered crop was the soybean in 1996. However, the use of glyphosate has the potential of developing so-called superweeds, which are resistant to glyphosate. Also, the development of such superweeds may induce the increased use of herbicides and pesticides by farmers attempting to contain such weeds. It is for these reasons that some protest Monsanto on environmental grounds.

Another issue is that there are concerns about the impact of glyphosate on human health. In 2015, the World Health Organization’s International Agency for Research concluded that glyphosate is a possible carcinogen. And, as discussed, a recent court ruling in San Francisco ruled in favor of Mr. Johnson, who claimed that Monsanto’s Round-Up Ready herbicide caused him to develop cancer. Monsanto, now considered a ‘unit’ of Bayer, faces thousands of other similar lawsuits, with many dying individuals in Northern California being given expedited trials. Still, Bayer is arguing that Mr. Johnson and the court ignored certain pieces of scientific evidence which claim that their is no link between cancer and glyphosate, and are seeking a mistrial.

However, it ought to be noted that the link between glyphosate and cancer is one that is under debate. For example, the National Institutes of Health and the Environmental Protection Agency have concluded that glyphosate is likely not carcinogenic. Monsanto has also been accused both of attempts to suppress scientific research reports which offer a negative assessment of Monsanto pesticides, and also instances of ‘ghostwriting’ scientific research findings which hold that glyphosate is safe for human health. For example, The New York Times notes of one 2015 article posted on the Forbes website that is believed to be ghostwritten by Monsanto but is credited to an academic named Henry I. Miller. Still, however, a study published in Scientific Reports found a link between glyphosate and fatty liver disease. Along with the recent court ruling, the possibly carcinogenic nature of glyphosate has been particularly salient in the last several weeks following a report that found traces of glyphosate in cereal such as Cheerios. The environmental research and advocacy group that published this report, Environmental Working Group, claim that such traces of glyphosate can says could “increase cancer risk for children.” However, as stated, findings about the nature of glyphosate remain inconclusive.

Amid the debate on the health and safety of glyphosate, there has been much talk in the European Union on the question of whether or not glyphosate should be a banned chemical. Many contend that glyphosate should be banned across all EU member states. While states such as Belgium voted against re-licensing glyphosate in the European Union in 2017, the vote ultimately ended in Monsanto’s favor with glyphosate’s license being extended for an additional five years. It will be interesting to see whether the acquisition of Monsanto by Bayer, a German company, will have any effect on the use of glyphosate in the EU.

Further, Bayer’s acquisition of Monsanto suggests that alterations in the agricultural arena await. First, it should be noted that there has been a recent trend of consolidation in the agriculture industry. For example, before the Bayer-Monsanto merger, the companies Dow and DuPont merged, as did Syngenta and ChemChina. As Mark Connelly, an agriculture analyst notes, Bayer’s acquisition of Monsanto indicates that “$1 out of every $3” that farmers spend on seeds, pesticides, and herbicides will go to Bayer. In other words, a third of the world’s agriculture supply is now controlled by one company–Bayer. This consolidation has farmers across the globe concerned. For many, the increased trend of monopolization means increased prices. This is supported by data and research from the Farmers Business Network. In research that focused on the price of corn seeds and chemicals, this group found that greater market share was associated with higher market prices for products. As mentioned, Bayer now controls a third of the market share. Dow-Dupont and Syngenta-ChemChina are not far behind.

Monsanto has historically been associated with a variety of controversial products and practices. Despite all this, it is undeniable that the science and innovation of Monsanto has been remarkable. For instance, in the 1990s, the ringspot virus threatened to destroy the papaya industry in Hawaii. However, Monsanto, which had a patent on transgenic technology, allowed for this technology to be used to create the Rainbow Papaya, a genetically modified papaya that is resistant to the ringspot virus. This saved the Hawaiian papaya industry. However, there is the the fact that Monsanto manufactured Agent Orange, a biochemical weapon with possible long-term health effects, that was used in Vietnam. But Monsanto was not the only company contracted by the American government to produce this war chemical. There is also the fact that Monsanto’s patents over biological entities, such as seeds, has also received considerable attention. However, sensational claims of Monsanto suing small farmers because of wind patterns and pollen drift appear unsubstantiated. Also, the health and safety of Round-Up Ready is a current and hotly-debated topic. Thus, while Monsanto has been a topic of debate for decades, it is not clear whether Monsanto has done more harm than good, especially with regard to the agriculture industry, human health, and the environment.
Finally, while the acquisition of Monsanto by Bayer means that, legally, the name Monsanto refers to a company of the past, doubtless, the issues associated with (what was) Monsanto will continue to persist. Further, this recent acquisition marks a highly significant moment for the global agricultural sector. It is especially important to see how all of this will unfold in the coming years.

September 24, 2018 0 comment

Donald Trump Environmental Change Europe Featured Geopolitics International Trade Interview Military North Korea Nuclear Deterrence Security and Conflict The International Economy United States

Adam Schiff: Bernard Brodie Lecture and Interview

written by Andrea Zachrich

Congressman Adam Schiff came to UCLA to give the Bernard Brodie Lecture on the Conditions of Peace on May 31st of this year. Before the lecture, members of The Generation were fortunate enough to sit down with Congressman Schiff and ask him questions about the House Intelligence Committee- of which he is currently the Ranking Member- his responsibility to his constituents and the American people, democratic institutions and the rule of law, and the reputation of the United States internationally. He echoed and elaborated on many of these topics during his lecture and audience questions, which we were also able to attend following the interview. While there has been a summer that has past since the time of interview, many of his comments remain relevant as we’ve watched President Trump’s antics unfold over the past few months.

Congressman Schiff has a great sense of humor. He began the lecture by telling an anecdote about when President Trump called him “sleazy”. Schiff said that he felt the need to explain to his son what had happened in case the other children at school talked about it. He told his son that “the President called your dad sleazy”, and his son, wholly unconcerned, replied, “Can I call you sleazy?” Congressman Schiff used humor frequently throughout his lecture to highlight the absurdity of some of the administration’s recent actions, such as President Trump calling Vladimir Putin to congratulate him on his win. He even went so far as to mimic how that phone conversation might have gone, which had the entire audience laughing.

In the interview with us, however, Congressman Schiff’s tone was markedly more serious. We began by asking him about the partisanship on his committee in the House of Representatives, which is the House Select Intelligence Committee. The committee has been charged with conducting an investigation into Russian interference in the 2016 presidential election and possible connections between President Trump and members of his team and Russia. Despite the traditionally bipartisan nature of the Intelligence Committee, Schiff noted that one particular instance- what he called the “midnight run“– which divided the committee along partisan lines. The “run” occurred in March of 2017 when Republican Chairman Devin Nunes went to an undisclosed location to reportedly receive classified materials unmasking a conspiracy that claimed that the Obama administration had done surveillance on members of President Trump’s transition team. Nunes then went to the White House to present this evidence. However in a matter of days it as revealed that the supposedly undisclosed location was the White House. Schiff states, “But we learned within a matter of days that in fact the secret location he had gone too had been the White House and the materials he had received were from the White House that he was presenting to the White House.That kind of blew up the investigation because it became clear that the mission for the chairman was to protect the President at all costs rather than doing an objective investigation. The incident troubled Schiff for illustrating Nunes’ blatant disregard for the committee’s constitutional duty and for demonstrating the vastly different goals of its members.

We then asked Schiff what would change on his committee if Democrats win a majority in the House in the upcoming midterm elections and he becomes chairman. His first priority, he said, would be a return to “comity” on the committee, and blames the current chairman Nunes’ divisive actions for the current level of partisanship. When asked a similar question during the lecture, Schiff responded that he would like his committee to “get back in the oversight business”. Based on some recent special election results, Schiff may get his wish for his committee from the midterm elections. In a recent special election in Ohio, the vote came down to closer than 1 percent in a district that has had Republican representation in Congress for 35 years, the past incumbent consistently cruised to victory by 10 percentage points, and where Trump beat Hillary Clinton by a whooping 11 percent. These election results, while not representative of the entire nation, have led many to predict that Democrats may shortly regain the majority in Congress, making Congressman Schiff the leader of the House Intelligence Committee.

On a different note, one idea that Schiff kept highlighting throughout both the interview and his lecture was the breakdown of democratic institutions and the rule of law, and how this is affecting the U.S.’s reputation and negotiating power abroad. Schiff even went so far as to say “I think that the health of our democracy is very much at risk”. He mentioned numerous examples that ranged from President Trump’s tendency to ban reporters from news outlets he doesn’t like such as the New York Times and BBC from press briefings, to discussing the possibility of him pardoning himself for any possible crimes he may be charged with in the future. Additionally, the president’s constant Twitter tirades about the “fake news” press and special counsel Robert Mueller’s Investigation have led many of his supporters to distrust both the press and the Justice Department. The United States was downgraded from a full to a flawed democracy by the “Economist Intelligence Unit” the year Trump came into office, and has remained in the flawed category for its 2018 ranking, currently ranked 21 out of 167 countries for its democracy score. It seems as though Schiff may well be justified in worrying about the state of our democracy.

On a similar note, Schiff also noted his concerns with the way the rest of the world currently views the US, stating “our America first and everyone else be damned has really left us isolated and the rest of the world deeply concerned”. As evidence, he cited examples of this poor perception of America from our allies such as a Politico article titled “Leader of the Free World meets Donald Trump” referring to Angela Merkel, and Trump’s decision to pull out of the Iran nuclear deal. Since this interview, President Trump has continued to take actions that worry world leaders and isolate the U.S. on the world stage, such as placing tariffs on Chinese and European goods against the advice of most of the world’s economists and Trump’s troubling actions during and after June’s G7 meeting such as arriving late for the first meeting of the conference and acting outraged at Prime Minister Trudeau’s easily predictable retaliatory actions to Trump’s steel and aluminum tariffs. Congressman Schiff stated in the interview that “It’s hard to imagine a time when the United States has been held in lower regard around the world than right now”, but after Trump’s antics this summer, we may be even lower in the opinion of the world than we were in May when the interview was conducted.

This interview was conducted shortly before the first North Korea negotiations had occured. Congressman Schiff was glad to hear that the negotiations were back on after being canceled for a spell, but was concerned with this administration’s approach to North Korea, calling it “erratic and at times dangerous”. He warned that North Korea’s nuclear program was not going to be an easy problem to solve stating, “If it were not a hard problem, it would have been solved by any number of presidents in the past”. This statement has proven to be true since the interview. While President Trump and Kim Jong-Un did sit down for negotiations in June, the joint statement that came out of this was widely criticized as vague. President Trump conceded an important bargaining chip by agreeing to give up military exercises in South Korea while gaining no time table for denuclearization from the North Korean leader. Additionally, on August 24th President Trump called off talks between North Korean leaders and his Secretary of State, Mike Pompeo, citing concerns that not enough progress has been made in regards to the country’s denuclearization. Congressman Schiff’s warning has proven true; it seems that the problem of North Korean denuclearization has shown itself to be trickier than President Trump first believed it to be.

In a time where dishonorable behavior has come to be expected from the current administration, the political backbone displayed by Congressman Adam Schiff was refreshing. He asked his audience “What’s the point of being there [in Congress] if you’re not going to do what the country needs you to do when they need you to do it?” At one point during the lecture, he received an spontaneous round of applause from the audience after declaring he believes politicians should “do the right thing and still find a way to get reelected”.

It was a pleasure speaking with the Congressman and listening to his lecture, and it will be interesting to witness any potential changes within his Committee following the November midterm elections.

schiff 8

September 10, 2018 0 comment

Asia Featured International Trade The International Economy

Trump’s Isolationist America

written by Zach Emanuel

Swept into office almost a year ago now, Donald Trump was elected in part because of his foreign policy promise to restore American dominance and leadership to the world. A key component of this proposal was his assurance that the U.S would no longer be manipulated by China, and would bring the budding world power down to size. Rally attendees shrieked in support at then- candidate Trump’s commitment to no longer “allow China to rape our country.” He promised that once elected, it would be the United States that “would start winning again” on the world stage.

And yet an illustration of China’s leader Xi Jinping graced the cover of the October 14, 2017 issue of The Economist with the caption “the world’s most powerful man.” The description was derived in part from Xi’s speech that week at China’s Communist Party Congress in which he called on China to the lead the world on issues political, economic, military, and environmental. Additionally, the Congress’s decision to enshrine Xi into the country’s constitution, the first Chinese leader gain this privilege since Mao Zedong, further demonstrates his dominance. The Economist’s description of Xi is one that over the past 60 years has been used almost exclusively to describe America’s chief executive. Moreover it is the opposite of what Trump ensured would follow under his tenure.

So what went wrong? Since taking office last January, President Trump’s actions on the world stage have featured an isolationist bent. He has pulled out of the Trans-Pacific Partnership, slashed funding for international aid and investment, and left the landmark Paris Climate Agreement. These moves have consistently undermined his promise to restore America as the dominant player in international affairs and on the contrary have left a power vacuum which Xi and China- both stronger now than ever before- are ready to fill.

On his third day in office, President Trump signed an executive order pulling the U.S out of the Trans-Pacific Partnership (TPP) free trade agreement after asserting that it was bad American manufacturing. Trump claimed the deal would have continued the process of outsourcing to Asia and Latin America while reducing wages at home. The twelve-country pact- the largest in history- was signed with the goal of promoting economic growth, job creation, and innovation. While one can argue over the economic merits of the agreement, there is no question that the original deal would have put both economic and geopolitical pressure on China by projecting a message of American dominance in both East and South Asia. As Barry Naughton, an expert on Chinese international affairs at the University of California, San Diego says, the TPP has the potential to ensure that the “rules for the global economy will be written under predominant U.S. influence” and this makes China “extremely uncomfortable.” Moreover, by increasing trade with China’s neighbors such as Vietnam, Malaysia, and Singapore, the TPP would have drawn those nations “economically closer” to- and made them more dependent on- the U.S, hence reducing what Naughton calls “Chinese economic preponderance.” This maneuver would have given America more leverage and power in its dealings within the Asian Theater, effectively containing Chinese influence. Such action was therefore antithetical to Trump’s campaign promise to stop China’s growth as an international player and restore America’s “winning” tradition.

In addition to pulling out of the TPP, President Trump’s 2018 budget proposal slashed aid and investment to developing countries by 29%. As the largest development donor in the world, cuts to American aid will adversely affect the economies and stability not only of just neighboring Latin American states but developing countries in East Africa, the Middle East, and Southeast Asia as well. Likewise, cuts to foreign investment further signal an American retreat on the world stage and threaten Trump’s pledge to maintain the U.S’s role as the one indispensable nation. Even if aid fails to benefit the U.S economically, as the President claims, the cultivation of strategic partnerships that aid and investment can foster across the world are of the utmost importance to America if it wishes to maintain international authority. It should come as no surprise that states receiving American aid have an incentive to stay on good terms with the U.S. by voting alongside it at the UN and other international bodies or adopting American-oriented foreign policies. By cutting aid however, Trump is encouraging these allies to seek out other foreign powers- specifically China- for which to tailor their policies towards. For instance, after lashing out at Pakistan on Twitter earlier this month for not doing enough to crackdown on terrorism in its midst, the State Department announced a suspension of aid to the long-time strategic ally in the War in Afghanistan. Already China is pouncing on the opportunity to draw the nuclear-power closer into its orbit by praising Pakistani anti-terror efforts, reiterating Chinese commitment to Pakistan’s safety and security, and reminding the nation’s leaders of China’s pledge to invest $57 billion into rebuilding the country’s infrastructure over the next several years.

Furthermore, if developing nations, as a result of cuts to American foreign aid, feel they can no longer depend on the U.S. as a reliable partner in their quest for growth, they will seek out other economic benefactors that are. In the midst of President Trump’s cuts to such activities, over the next decade China intends to invest well over a trillion dollars in critical transportation and energy infrastructure across the developing world via its One Belt, One Road (OBOR) initiative. OBOR projects include the New Eurasian Land Bridge, a railway that seeks to link China to Central Europe, as well as the construction of a number of ports in Sri Lanka, Pakistan, Djibouti, and numerous others throughout Southeast Asia and Oceania. However as Christopher Balding, an economics professor at Peking University tells it, the project’s purpose is not so much to bring economic benefits to recipients of Chinese aid but “more like a diplomatic effort for [Beijing] to win friends and influence people.” Yet again, by cutting foreign aid and investment, Trump is playing into the hands of Xi and the Chinese to the detriment of American interests.

Finally, Trump’s decision to pull the United States out of the landmark Paris Climate Agreement is also incompatible with his assurances to rein Chinese influence. With climate change being the issue that leaders see as the biggest threat to our world today, the Paris agreement was a prime opportunity for the U.S. to demonstrate its commitment to, and leadership in, solving a global problem. By pulling the U.S out of the agreement, Trump is proving America’s unwillingness and inability to keep its promises as well as a reluctance to lead. By reneging on our commitments to the international community, an opportunity is again left for the Chinese and Xi, who just before Trump’s inauguration called on all signatories to the agreement to “stick to it instead of walking away…as [it] is a responsibility we must assume for future generations.” President Trump’s decision to pull out of the deal cast a pall over the prospect of American leadership on the most important of global issues.

If the President truly wanted to live up to his foreign policy promise to restore American authority in international affairs and stop China’s rise as a global superpower, he would strengthen the U.S.’s economic and diplomatic ties with East Asia by remaining in the TPP, demonstrate American commitment to its allies as well as the growth of the developing world by bolstering foreign aid and investment, and remain an active member of the Paris Climate Agreement as a way to prove America’s ability to lead on the defining issue of the 21st century. By backing away from these commitments however, Trump’s actions have consistently undermined his assurances as he leads the U.S further away from the international dominance he seeks to restore, and instead leaves a void for a nation he calls our “enemy” to fill.

January 18, 2018 0 comment

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Africa Featured Globalization International Trade

China’s Strategic African Exploitation

written by Tala Ahmadi

The minibus violently jostled left and right as we hit a road under construction. Awoken from my nap, I looked out the window half asleep. I figured I must still be dreaming as we passed Chinese signs, Chinese workers and Chinese machinery– wasn’t I in the West African country of Ghana? While accustomed to encountering diversity in Africa’s globalized metropolises, I was surprised to find a Chinese presence at a construction project en route to a small village in rural Ghana. As I traveled to more African countries, the image of Chinese investments against the continent’s cities and landscapes was a frequent recurrence.

Since the beginning of the 21st century, China has aggressively positioned itself in Africa through a host of economic activities ranging from infrastructure projects, construction, mining, social services, restaurants, retail and more. In what President Xi Jinping has deemed a “win-win” relationship, China extracts natural resources from the continent to fuel its economic development in exchange for cheap manufactured goods, roads, schools, hospitals, railways and more. A testament to its foreign policy commitment of “Go Global,” China surpassed the United States (US) as Africa’s largest trading partner in 2009.

China’s appetite to forge international partnerships comes at a time when rising populism has forced many Western countries to look inward, with President Donald Trump notably proposing to cut foreign aid by one-third. The economic powerhouse is also ramping up its activities in Latin America in light of a diminishing US presence, doling out more development finance than the World Bank, Inter-American Development Bank and the Andean Development Corporation combined. China has also set its eye on the Middle East, releasing its first Arab Policy Paper which describes how the country hopes to increase trade with the region mostly in exchange for oil.

By pouring $2.25 billion into Africa annually, China has positioned itself as a viable, and often more attractive, alternative to traditional Western aid and development organizations. Chinese money is accompanied by a policy of no interference, meaning few strings are attached for the recipient country besides access to natural resources or a local market. Unlike Western money that often comes with conditionalities like enforcing good governance, human rights or environmental protection, Chinese aid is doled out efficiently and projects are often completed on schedule or earlier. Their non-interference policy also means that the Chinese are willing to indulge African despots that many Western development organizations dare not. One such dictator includes Robert Mugabe, Zimbabwe’s dictator that is purportedly using Chinese funds to increase surveillance capacities rather than assisting the 72% of Zimbabweans who live in poverty (national poverty line).

China has been criticized by many Western countries and media outlets as a neo-colonial force that disregards local labor regulations, funds dictatorial leaders, destroys local markets and invests in construction projects that lack quality and lifetime in the name of profit. While these accusations are valid, China is providing desperately needed infrastructure to a continent that still struggles to achieve fundamental levels of development even after the $30 billion in aid Africa has received since the 1970s. Western development agencies are known for their bureaucratic and top down approach to development that often imposes, unsuccessfully for the most part, western cultural norms and institutions on a continent that frequently does not share the same values. The Chinese have been able to successfully execute projects that Africans can make use of like roads, schools and hospitals.

China’s African foreign policy strategy is deeper than the superficial goal of economic exploitation or neo-colonialism. In light of shifting global paradigms, where the US seems more and more like a decaying empire, China is seeking to build strategic partnerships across the continent that result in international signs of support like at the United Nations. In fact, one of China’s first projects in Africa was the construction of the Tazara railway in the 1970s, connecting Tanzania to Zambia. In exchange for the railway, China required support at the UN to be reinstated in the Security Council. AidData reveals that for every 10% increase in voting support at the UN, China increases aid by 86%. Another bargaining chip for access to Chinese money is often international recognition of China over Taiwan, which most recently occurred with the small, African island country of Sao Tome and Principe.

Another indication that China seeks strategic alliances rather than a form of pure exploitation is China’s establishment of the tri-annual Forum on China-Africa Cooperation (FOCAC) in 2000. During the most recent FOCAC in 2015, where 50 African leaders attended compared to four in the first forum, President Xi promised $60 billion investment in Africa. In 2013, President Xi also revealed his One Belt, One Road initiative, an ambitious vision with a $1.6 trillion price tag, linking Asia, Africa and the Middle East’s trade routes to create a stronger Eastern trade bloc. Perhaps a flex of its geopolitical muscle and a wink to the West, China started building its first African military base in Djibouti— only about ten miles from the US’ largest African military base.

China is presenting itself as a champion of the East and an alternative option for financing the development of emerging economies. While characteristics of China’s foreign policy are accurately likened to economic exploitation, it appears China’s deeper goal in Africa is to forge lasting partnerships in exchange for political loyalty. This may also be influenced by the fact that the longevity of the Sino-African “win, win” relationship is contingent on the Chinese economy’s success. With Chinese economic growth consistently slowing and commodity prices fluctuating, a purely economic agenda may not be sustainable. China presents itself to African nations as an example of an alternative model for climbing out of poverty, an easier and more efficient financing partner and a global leader rivaling the Western hegemonic power structure. A testament to their attempt at cultivating an international image of partnership and leadership, the Chinese Ambassador to Ghana recently commented on the One Belt, One Road initiative, “The belt and road initiative comes from China, yet it belongs to the world.”

August 6, 2017 0 comment