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US sanctions: A case of friendly fire

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In an article published on the Washington-based website The Hill, Richard Sawaya, vice president of the US National Foreign Trade Council, writes about the serious damage that the anti-Russian sanctions are causing to America’s business interests. Richard Sawaya is also convinced that the irresponsible use of sanctions actually undermines the United States’ leading role in the realm of “international finance.”

The US business community and experts have been talking about the disastrous impact of the US-imposed unilateral sanctions on the United States itself since at least the 1990s, when these sanctions were already reducing the US’ share of a number of important export markets and resulting in up to $1 billion dollars’ worth of wage losses for US company employees.

Donald Trump came to power under the slogan of maintaining America’s dominant position in the world, which he views as an arena of tooth-and-claw competition between states. Trump believes that countries that are not ready to accept Washington’s conditions, especially those pursuing an independent policy, are “legitimate” targets for sanctions. Dozens of countries, including a number of leading nations, some of each happen to be America’s nominal allies, are already suffering the consequences of these sanctions. According to many European political analysts, the US sanctions are aimed at changing the balance of power in the global economy. The fact of the matter is, however, that this policy has increasingly been leading to quite opposite results.

For example, in many cases these sanctions prove detrimental to America’s foreign policy interests. Indeed, the restrictions that Washington has imposed on the oil industry of Iran or Venezuela do not necessarily harm these countries’ leaderships. Meanwhile, according to Western media reports, Washington’s actions are ramping up oil prices, thus filling the state coffers and stimulating the oil industry of America’s other rival – Russia. Moreover, external pressure is actually encouraging the rapprochement between Moscow and Beijing, which is “absolutely against America’s interests,” which is something Trump has repeatedly been reminded of since the publication of his National Security Strategy in December 2017.

Besides, America’s European allies are getting increasingly wary of the aggressive financial and economic sanctions being “generously” ladled out by Washington. A report, released in February 2020 as part of the preparations for this year’s international security conference in Munich notes that “according to critics, the United States is using security problems as “a smokescreen for its own economic interests.” As a result, the US policy threatens to disintegrate “the West as a community bound by liberal-democratic values.”

“We are witnessing the decay of ‘the West’ as a relatively cohesive geopolitical configuration,” the report said. “The world is becoming less Western. But more importantly, the West itself is becoming less Western, and the world as a whole is becoming less Western, too.”

It is against this backcloth that more and more European politicians are beginning to realize that developing positive, good-neighborly relations with Russia is in the best interest of “all the peoples of the continent.”

Finally, Washington’s policy of sanctions and financial and economic pressure has encouraged the formation of a financial system independent of the United States, with Russia, China, India, Iran and Turkey showing a great deal of interest in such a system. The EU too is now looking for ways to counteract Washington’s financial domination and circumvent its sanctions. Proposals are being made to create an independent financial settlement system – the European Monetary Fund (similar to the IMF), as well as a financial instrument “completely independent” from the United States.

Certain progress on this track has already been made. According to The Economist, China is working hard to create its own international payment system based on the yuan. Other Western experts believe that the US withdrawal from the Iranian nuclear deal has already contributed to the growth of trade in oil futures denominated in the Chinese currency, which was recently launched at the Shanghai Stock Exchange. Finally, even though none of the existing economic associations still has a financial system comparable to the US’, viable mechanisms are already being created to conduct effective trade operations with companies and countries victimized by Washington’s sanctions. Notably, it was America’s European allies – including France, Germany and the UK, who initiated the creation of INSTEX – a special purpose vehicle to help EU companies do business with Iran. Belgium, Denmark, Finland, the Netherlands, Norway and Sweden joined it by the end of 2019, but this system has not become fully operational yet.

Meanwhile, US businesses are already feeling the pinch of Washington’s extraterritorial sanctions. The US clampdown on a number of Chinese high-tech corporations, above all Huawei, caused by Washington politicians’ failure to understand the specifics of the global technology market threatens to undermine Google’s dominant position in the global mobile platforms market. Google, for its part, is bending over backwards trying to convince Washington officials of the extremely negative consequences of a possible loss of the Chinese market that could eventually encourage Beijing to develop its own platforms and operating systems for mobile devices and network infrastructure. Experts warn that if “an alternative to Android appears … many countries, for their own safety, will embark on a policy of supporting a competing platform.”

In February of this year, it became known that the Chinese IT giants Xiaomi, Huawei, OPPO and Vivo, which account for more than 40 percent of all mobile phones delivered to the world market in 2019, were contemplating the launch of the Global Developer Service Alliance (GDSA). The platform, initially planned to launch in nine countries, including India, Russia and Indonesia, can eventually become a powerful alternative to software stores for smartphones and tablets operated by the US corporations Google and Apple. Google could be hit the hardest with commentators saying that the Chinese project is capable of seriously undermining Google’s positions, primarily in emerging markets, such as India and Africa. Google could also find itself on the losing end in markets with a combined potential audience of 4 billion users in China, India and the African region.

Internationally, Washington’s undisguised attempts to check the growth of and even destroy China’s high-tech companies have already convinced many countries worldwide of the need to have independent IT developers. As a result, they could restrict or ban altogether services and products provided by US companies on their territory. At least, this could impact such an important sector as public procurement. Many countries may also prioritize measures to encourage the creation and development of national information products, services and software. Ultimately, there is a growing threat to the positions of the leading Silicon Valley companies in the global market, not least due to the actions taken by shortsighted and arrogant politicians in Washington. All this could eventually set in motion a process of disintegration of the global IT market and the creation of blocs and coalitions of countries focused on domestic manufacturers of equipment and developers of software and technological standards all their own.

One textbook example of this were the events of 2018, when the United States imposed sanctions on the Russian aluminum producer Rusal. The impact of this move against one of the world’s leading aluminum exporters was felt not only on global markets, but it also sent aluminum prices in the US itself tens of percent up, resulting in serious losses for major US aircraft manufacturers and machine builders. As a result, the US Treasury Department backed off and started lifting sanctions from the Russian company. Also in 2018, a number of large-scale joint projects with significant participation of leading Western oil companies were suspended in Russia. US firms were hit the hardest with ExxonMobil suffering significant losses after being forced to cancel contracts with Rosneft in the Kara Sea.

In December last year, the US Senate Foreign Relations Committee approved the Defending American Security from Kremlin Aggression Act, known by the acronym DASKA. Meanwhile, according to Richard Sawaya, “DASKA’s energy provisions would take collateral damage to new heights.” For example, the bill requires US companies to withdraw from any energy project should a Russian entity hold even a minority stake there. According to Sawaya, “there are nearly 150 estimated energy projects in more than 50 countries that would be affected. These projects employ thousands of people and play an important role in the energy supply chain in global hydrocarbon markets. Any disruption to the operations abroad would have a domino effect and damage many small- to medium-sized US businesses.”

Another provision would “prohibit US companies from engaging in transactions of Russian sovereign debt denominated in rubles, which would effectively stymie any US company operations in Russia.” As a result, nearly 3,000 US companies that operate in joint ventures with Russian firms could be forced to exit or shutter operations to the benefit of their non-US (primarily Chinese) competitors. “More broadly, in the global economy with its complex network of multi-country supply chains, ever increasing US sanctions cause US companies to be regarded as unreliable partners.”

Thus, Washington’s belief that large-scale sanctions will strengthen the US’ position in the world has proved to be all wrong as its desire to “punish” opponents is, directly and indirectly, backfiring on the entire sectors of the US economy. At the same time, America’s opponents are increasingly demonstrating their ability to not only guard against US sanction pressure, but also to inflict significant and lasting damage on the financial, economic and technological positions of the United States itself. Meanwhile, Washington keeps undermining its global sway by further alienating many of its key allies. All this is creating powerful prerequisites for the consolidation against the United States of all states that value their sovereignty – that is, most of the countries of the world. 

From our partner International Affairs

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Americas

Who won the interaction with the “free press” at the Geneva Summit?

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Before the much anticipated Geneva Summit, it became clear that President Biden would not be holding a joint press conference with President Putin because Biden wanted to go speak to the “free press” after the meeting. This was Biden’s way to show Putin, to rub it into Putin’s face that in Russia the media is not free.

Then the day of the meeting came and it turned out that Biden had a list of pre-approved reporters “as usual” whose names only he had to call. And Biden told everyone to the dismay of not only Republicans but pretty much anyone, including the free press.

Then Biden had a hard time answering questions even from that list. When CNN’s Kaitlan Collins asked him a regular question along the lines of “why do you think this would work?”, Biden lost it and suggested that Collins did not belong in the journalistic profession.

Collin’s question was a softball question, in fact. It was not even a tough question according to international standards. It was a critical question from an American mainstream media point of view, assuming Biden as the good guy who just can’t do enough to stop the bad guy Putin.

It was not even a tough question and Biden still couldn’t handle it by mustering something diplomatic and intelligent that makes him look like he was in control. Biden is no Obama. We knew that already but he should be able to at least respond to a regular question with a regular answer.

If you think American mainstream media were mistreated at the Geneva Summit, you should have seen how the rest of the international and local media were treated at another venue, at the request of the American government. I already described what happened at the point where the Biden and Putin convoys were going to pass. You should have seen how we were treated, at the request of the US authorities, and how the Swiss authorities really played by the US’s drum. Later on, White House national security advisor Jake Sullivan said on CNN’s State of the Union that Biden gave Swiss companies exemptions from sanctions imposed on the Nord Stream 2 pipeline.

Biden refused a joint press conference with Putin because he wanted to rub the “free press” in Putin’s face. Well, Biden surely showed him. It was the other way around, in fact. Biden didn’t take questions from the other side. Putin took highly critical questions from American journalists and he did it like it was business as usual. Putin didn’t have a list of blocked or preapproved journalists from the other side, or people he dismissed on the spot. Russian journalists were in fact denied access to the venue, in front of Parc la Grange.

Supporters of Black Lives Matter like me naturally didn’t like the substance of Putin’s answers. President Putin attacked Black Lives Matter, even though ever since the Soviet times the treatment of black people has always been a highlight of Russian criticism of American society and values. It seems like President Putin doesn’t want a big, sweeping movement that would reform everything, so that the issues can persist and so that Putin can keep hammering on the same point over and over again. If one is truly concerned about rights and well-being, one has to be in support of the social justice movement trying to address the problems.

In fact, Putin’s approach to black people’s rights is a lot like the FBI’s view of the radical, violent far left: the FBI do not wish to address the violent elements which probably represent 5% of the whole movement, just so that the FBI can keep the issues alive and discredit the whole movement. One saw that the Capitol riots groups really calmed down as soon as the FBI stepped in but FBI director Chris Wray is not interested in doing the same with the violent radical left, precisely so that the issues can persist and the FBI can keep pointing to violent “Black identity” extremists. It is the FBI’ style to keep little nests of fire here and there, so that they can exploit or redirect them in their own preferred direction from time to time. Let’s not forget that the leader of the Proud Boys was actually an FBI informant for a long time, probably taking instructions from the FBI.

At the Geneva Summit, Putin also stated that he saw nothing criminal in the Capitol riots on 6 January that undermined democratic principles and institutions. That was an example of someone trying to use and support existing forces within American society in order to undermine it.

But the substance of Putin’s answers had nothing to do with the process of interacting with the “free press”. Putin took questions from everyone, Biden didn’t. Putin didn’t screen out or dismiss journalists from the other side, Biden did. Putin didn’t lash out on anyone suggesting that they should not be in that job. Biden did and he did it even to his own pre-approved list of media that he was supposed to like.

In terms of process, Putin passed the test and Biden couldn’t handle interacting with the free press even in very restricted, sanitized conditions. Despite what you think of each leader and their policies, it has to be said that Putin handled interacting with the media as business as usual, and Biden struggled in his interaction with the media. Even when Biden was reading from a teleprompter, even with a preapproved list of journalists and even when he was not in the same room as Putin, Biden still made mistakes and couldn’t handle it. Even when everything was chewed for him, Biden still couldn’t do it.

In fact, Biden looked more like an overwhelmed Kardashian abroad who had to have his hand held at any moment and less like the leader of the free world. First lady Jill Biden in fact did hold Biden’s hand on occasion and rushed him out of places like a child when the President seemed to wonder off in the wrong direction, such as at the G7 Summit in Cornwall. And that guy has the nuclear codes?

There have been concerns with Biden’s cognitive abilities. President Biden confused President Putin with President Trump, while reading from a teleprompter. What was remarkable is that Putin stated that he found Biden to be actually knowledgeable and prepared on the issues, and that Biden is actually not in a mental and cognitive decline contrary to mainstream understanding. While on the face of it, the statement sounded 100% positive and in defense of Biden, this was a very aggressive, veiled jab of the sort “many are saying that but I don’t think that”. Putin raised the doubt, gave Biden an evaluation and proved to be a total player.

In total, the bottom line of who won the interaction with the “free press” at the Geneva Summit was clear: Russia 1, the US 0.

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Joe Biden’s European vacations

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Official White House Photo by Adam Schultz

Joseph Biden, better known as Joe Biden, is an American politician from the Democratic Party who won last year’s presidential elections amid scandals and accusations of fraud. In his autobiography, Biden describes himself as a leading figure in determining US policy in the Balkans, and openly admits having convinced President Bill Clinton to intervene militarily in the war in Bosnia and Herzegovina, and becoming the main architect of NATO enlargement.

Here are just a few facts from his past that can shed light on the possible  line of actions that could be taken by America’s current President.

Biden is certainly no stranger to Balkan issues. In 1999, he played an important role in the administration of President Bill Clinton, when NATO bombed Yugoslavia without a UN resolution, an act of aggression that resulted in Kosovo being proclaimed an independent state and which is now home to the largest US military base in Europe – Camp Bondsteel.  In 1999, the current US president was one of the most outspoken supporters of the bombing of Yugoslavia, which is something he took pride in.

“I propose to bomb Belgrade. I propose to send American pilots and blow up all the bridges over the Drina River,” said Biden, then a US Senator.

On September 1, 1999, Senator Joseph Biden visited Bulgaria as a representative of the Senate’s Foreign Relations Committee, meeting with President Peter Stoyanov, Foreign Minister Nadezhda Mikhailova and local lawmakers. Biden has become a key figure in Bulgaria’s integration into the North Atlantic Alliance.

Today, after several years of lull, tensions in Ukraine are shooting up again.  At the close of 2013, a series of riots were provoked there eventually leading up to the 2014 coup and the subsequent conflict in the country’s eastern regions. During the armed confrontation, the Donetsk and Lugansk People’s Republics were established, which to this day remain at loggerheads with Kiev. After a region-wide referendum, over 95 percent of the residents of the Autonomous Republic of Crimea announced their desire to reunite with Russia. The role of Washington in the violent overthrow of power in Ukraine was clearly visible. US officials openly supported the Maidan, and Senator John McCain met with future government officials. Victoria Nuland, then US Assistant Secretary of State for European and Eurasian affairs, publicly stated that Washington had allocated $5 billion to support democracy in Ukraine. She personally distributed food to “peaceful demonstrators”, many of whom later ended up on the Maidan with weapons in their hands. Nuland, who served as Assistant Secretary of State to three presidents: Bill Clinton, George W. Bush, and Barack Obama, retired in 2017. Today, Biden is bringing her back into politics, nominating her to the post of Assistant Secretary of State for Political Affairs – the third most important in the State Department.

Biden visited Ukraine five times during and after the Maidan. The United States, along with Germany, Poland and France, forced the country’s then-President Viktor Yanukovych to make concessions to protesters, which quickly led to the government’s collapse. Immediately after the resignation of Yanukovych in February 2014, President Barack Obama appointed Biden as his official representative in Ukraine. A little later, Biden’s son, Hunter, was appointed to the board of directors of Ukraine’s Burisma gas company.

After the coup, the Americans took deep roots in Ukraine with their representatives appearing both in economic structures and in the government and special services. Years later, details of their work became available to the media. Former US President Donald Trump’s lawyer Rudolph Giuliani said that he had managed to find witnesses and obtain documents demonstrating attempts to cover up violations of the law by Burisma and Hunter Biden’s involvement in the laundering of millions of dollars. Giuliani unveiled a scheme how $16 million, including $3 million “earned” by Biden Jr., had been withdrawn through a network of companies, a number of which were located in Cyprus. Other investigations initiated by the media have also revealed large flows of “dirty” money that was flowing from Ukraine through Latvia to Cyprus and other offshore companies such as Rosemont Seneca, founded by Hunter Biden and Devon Archer.

In April 2019, journalist John Solomon published a post in the American edition of Dakhil about how Joe Biden was helping his son in his business dealings after leaving the post of vice president and bragging to foreign policy experts that, as vice president, he had forced the dismissal of Ukraine’s chief prosecutor. Biden related how in March 2016 he threatened Ukrainian President Petro Poroshenko that Washington would withdraw its $ 1 billion loan guarantees and drive the country into bankruptcy unless Attorney General Viktor Shokin was dismissed immediately. And dismissed Shokin was, accused of not being active enough in fighting corruption. However, when talking about his victory, Biden misses an important point. Prior to his dismissal, the attorney general had launched a large-scale audit of the Burisma mining company where Hunter Biden was working. According to the US banking system, between spring 2014 and autumn 2015, Hunter’s company Rosemont Seneca regularly received transfers from Burisma to the tune of about $166,000.

This whole story gives us an idea of what kind of a person Joe Biden really is  and the question is how he will behave in the future.

Even before Biden’s inauguration as president, media representatives and analysts predicted an aggravation of the military situation, an escalation of the conflict in Ukraine and an increase in US activity in the Balkans. In the spring of 2021, these predictions were confirmed, and the military rhetoric of the US administration began heat up. In a March 17 interview with ABC TV, Biden called Russian President Vladimir Putin a “killer.” Even during the Cold War, world leaders did not allow themselves such disrespect for one another. Similar statements from American politicians are often made against foreign leaders whom they want to overthrow or physically eliminate. A number of analysts believe that the absence of an apology from Washington indicates that such a statement was not accidental, but well thought out and comes as a new step in the information war against Russia.

The further development of events in the international arena appears more and more is scary each day. In the media and in public statements by a number of politicians the topic of possible military action is almost becoming “business as usual.” Therefore, the new American president’s personality and his inner circle is extremely important for understanding the future and assessing global risks around the world.

From our partner International Affairs

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The Private And Public Joe Biden: Belief And Policy

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Official White House Photo by Cameron Smith

Joe Biden supports abortion rights politically, a position conflicting with doctrine in the Catholic church.  Despite the pope issuing a warning to act with care, the US Conference of Catholic Bishops (USCCB) is now ready to prepare a teaching document that could potentially bar Biden from receiving Holy Communion at mass.  A central sacrament during mass, Catholics believe that eating the consecrated wafer dipped in wine, representing the body and blood of Jesus Christ, unites them with their savior fortifying them to face evil temptations.

The USCCB vote to prepare the document was an overwhelming 168-55, and a committee of US bishops has been assigned the task.  Responding to questions, President Biden called it a private matter.  The document is expected to be ready in time for debate at the November bi-annual conference of US Catholic Bishops.

If that is one headache for Biden, another is in the offing.  Perhaps as a consequence of US policy towards Iran, the election of a hard-liner in Iran’s presidential election seems almost certain.  Judge Ebrahim Raisi, who is also Iran’s top judge, is on his way to victory on the basis of the votes counted so far.

The 60-year old cleric spent most of his life as a prosecutor until he was appointed Iran’s top judge in 2019.  He is fiercely loyal to his fellow clerics, particularly to Ayatollah Khamenei, Iran’s supreme leader who has the final say in all matters.  All the same, the president does the administration and has significant input in both domestic and foreign policy.  Suffice to say, Raisi lost in a landslide to Hassan Rouhani, who sought accommodation with the West, in the previous election four years ago.

Having played hardball with Iran, the US is repeating itself with a Russia anxious for better relations.  Following the G7 meeting in Cornwall a week ago, President Biden flew to Geneva meeting President Putin at the Villa La Grange for a closely-watched summit.

Relations between the two countries have been tense following a series of events including the Russian annexation of Crimea.  The latter was transferred to Ukraine for administrative convenience when a connecting bridge was being constructed so that both ends of it would fall under the same authority.  The people of Crimea have no other connection with Ukrainians other than they were both part of the Soviet Union. 

Climate change, arms control, cyber security and American interest in jailed dissenters in Russia including Alexei Navalny .  Reading the riot act to Mr. Putin does little to further stability in relations.  Peace is not a problem among like-minded countries with a commonality of interests, it is a challenge when the parties are rivals, nuclear armed, and capable of blowing up the world.  Mr. Biden may be proud of his performance but is he able to accept the challenge, for if not where does it leave the rest of us …

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