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Deciphering EU’s new investment deal with China

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The perceived economic gains of the Comprehensive Agreement on Investments (CAI), which the 27-nation European Union recently struck with the People’s Republic of China, come at the cost of disregarding human rights, which the Western bloc is known for, amid clear and irreconcilable systemic differences.

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The closing days of 2020 saw the European Union and China striking a deal known as the Comprehensive Agreement on Investments (CAI), thereby concluding seven long years of negotiations, as per the year-end deadline. China is also the EU’s biggest trading partner after the United States, but a strategic and systemic rival too.

The European Commission, Brussels-based executive arm of the EU, primarily led the negotiations on behalf of the bloc. Germany, being the holder the EU Council Presidency and led by Chancellor Angela Merkel’s continued push, combined with Beijing’s last-minute concessions, proved instrumental in expediting the process of finalising the CAI before the end of 2020.

However, the deal will still have to wait for a formal ratification by both sides and an approval by the Strasbourg-based EU Parliament, a tougher task, before finally setting it on course to be effective in a couple of years’ time, if not by early 2022.

Better rules, level-playing field for European businesses

The EU, by this deal, aims to widen the access for European companies to lucrative Chinese markets, with billion-plus consumers, on a wide range of sectors, particularly in services such as healthcare, finance, cloud-computing and air travel, among others, that has always been restrictive to foreign players in the past.

The deal could bring in a level playing field in the conduct of European businesses in China wherein Chinese state-owned enterprises will no longer be given preferential treatment through subsidies, thereby promoting fair competition and ensuring transparency in technology transfers. Newer possibilities for the expansion European businesses in China will be opened.

The CAI also promise better rules, investment protection, and an investment dispute settlement mechanism within two years of signing, which will replace all the separate bilateral investment treaties currently signed between China and EU member states. The EU maintains that the main purpose of this new deal is to address the economic imbalance in its relations with China.

However, the most striking aspect of the CAI is that, for the first time, China commits to follow accepted standards on climate and labour aspects, even though in a vague form. And for the EU, the timing of this deal with China is significant as a way of signalling its reengagement with the world in the aftermath of a post-Brexit scenario.

At the same time, the CAI reaffirmed reciprocal access for Chinese companies into European markets, which they always had. So, the deal matters to Europe, more than it matters to China. So, the real question is the extent of compromises which European negotiators had to make to strike the deal with the Asian superpower.

The issue of forced labour in China

Many EU member countries and the US had been apprehensive about the human rights situation in the northern Xinjiang province of China where there have been evidences and investigations on the use of forced labour from the media and elsewhere, which has not been duly factored in while concluding the investment deal.

It has been alleged that in the past several years, the Chinese government has forced over a million Uighur minorities in Xinjiang to perform seasonal labour against their will and are often underpaid. But, the Chinese government has repeatedly denied such allegations.

Many European lawmakers believe that China is not interested in fully complying with international agreements after signing it and is not a responsible and trustable partner. The presence of mass detention camps in this province, as verified by satellite imagery and other documents, is also a human rights concern which the EU was not supposed to ignore, considering its historical commitments to human rights.

US concerns and strategic rivalry

The incoming Biden administration has also raised concerns about the CAI, stating that it would “welcome early consultations” with its European partners on shared concerns surrounding China’s unfair economic practices, hinting at the issue of forced labour and the deal’s lacking on the question of enforcement of human rights.

Being a security and strategic partner of the US and part of the North Atlantic Treaty Organisation (NATO), any such deal which EU and its member countries sign with its strategic rival, China, could effectively undermine American-led efforts to counter the strategic and geopolitical threat posed by Beijing’s aggressive and expansionist policies around the world.

It also flies in the face of an incoming Biden administration which is openly committed to mend relations with allies in Europe that had been worsened under Donald Trump. Many experts in the US have felt the EU should’ve waited for a few more weeks until the Biden administration takes charge to form a co-ordinated approach, as it related to their common systemic and strategic rival, China.

Moreover, the deal comes at a time when individual EU members such as Germany and the Netherlands have recently released their own outlook on the Indo-Pacific strategy, which is perceivably aimed at containing China’s rise and to ensure balance of power in the region. Meanwhile, France’s outlook is in existence for two years now.

Way ahead for implementation

The deal has now been reached at the technical level, paving way for a final ratification. But, getting the deal through the European Parliament, which attaches far more significance to human rights concerns than the Commission and the Council, is going to be a tough task, as many European legislators are increasingly sceptical of Chinese intentions and commitments to any deal.

The coming months are going to be crucial with regard to how the European legislators will debate and take forward the deal to the next level.

Bejoy Sebastian is an independent journalist based in India who regularly writes, tweets, and blogs on issues relating to international affairs and geopolitics, particularly of the Asia-Pacific region. He also has an added interest in documentary photography. Previously, his bylines have appeared in The Diplomat, The Kochi Post, and Delhi Post.

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European Union Trucks Banned From Entering Russia

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In a reciprocal step, an executive order banning European Union haulage trucks crossing borders into Russia’s territory aggravates economic situation for both Russia and the European Union. Besides the European Union, the ban also affects international cargo transport on Russian territory for transport companies from Ukraine, the United Kingdom of Great Britain and Northern Ireland and Norway.

The ban applies to two way transportation, transit, and transportation from or to a third country, and valid from October 10 until December 31, 2022. On the other side, from April 8, any Russian and Belarusian automobile transport enterprise has been banned from cargo transportation, including transit carriage, in the European Union.

Under the current conditions, EU trucks facing ban from Russia loose huge revenues while essential consumers and other foreign products are obviously cut from the distribution chains, and the situation is characterized by serious price hikes.

Late September, Russia’s President Vladimir Putin signed an an Executive Order On Some Aspects of International Road Transport of Goods as a reciprocal measure to the new round of  latest EU sanctions due to the Russia’s special military operations in the former Soviet republic of Ukraine.

It was signed in light of some foreign states’ unfriendly actions aimed at adopting restrictions against citizens of the Russian Federation and Russian legal entities, which contradicts international law, to protect the national interests of the Russian Federation and in accordance with Federal Law No. 127-FZ, dated June 4, 2018, On Measures (Countermeasures) in Response to Unfriendly Actions of the United States and Other Foreign States.

Under the Executive Order, the Government of the Russian Federation is authorised to adopt a ban on international road transport of goods across the territory of the Russian Federation for vehicles of international carriers registered in the states that have adopted restrictions against citizens of the Russian Federation and Russian legal entities in the area of international road transport of goods.

If the Government adopts such a ban, it should also stipulate its duration; include the list of states that have introduced restrictions against citizens of the Russian Federation and Russian legal entities in the area of international road transport of goods; the types of international road transport of goods covered by the ban; and the conditions of international road transport of goods compliance with which precludes the imposition of the ban.

The Russian permits, special permits and multilateral permits stipulated in Federal Law No. 127-FZ, dated July 24, 1998, On State Control over International Transport by Road and on Liability for Violating Procedures for Such Operations, shall be considered null and void if foreign carriers use them for international road transport of goods in violation of this ban.

Leading experts commented on the European Union trucks ban from entering Russia. “We’ve been waiting precisely for this decree for months now. We proposed not to completely ban the import of merchandise but to introduce restrictions on trucks entering Russia so that cargos are handed over at the border. European carriers will enter the border zone and hand over the cargos to our carriers,” President of the Gruzavtotrans Association Vladimir Matyagin told local Russia media Rossiyskaya Gazeta. According to him, this will help those Russian truckers who lost their jobs due to the sanctions to transport merchandise domestically.

Executive Director of BMJ Logistics Alexey Yakushev told the Kommersant newspaper that back in April when the EU banned Russian and Belarusian transport carriers from crossing their borders, European logistics operators began preparing for retaliatory measures, actively wrapping up their activity in Russia. 

“So this ban will most likely affect small and medium-sized companies in the EU’s transport sector who continue to deliver cargos to Russia,” he said, noting that domestic carriers would only win while those companies involved in imports from Europe would most likely shoulder additional expenses.

Market experts acknowledge there is currently economic crisis which is aggravated by the risks of transit causing some enterprises to either scale down or shut down operations, and further say retaliatory ban on trucking in Russia from those countries, including European Union, costs of cargo transportation from Russia to Europe and back has already skyrocketed four or even fivefold. According media reports, importers and exporters have already sustained extra costs of over $1.26 billion at the current exchange rate), while the annual figure about $6.18 billion.

As a direct result of Russia’s “special military operation” aims at “demilitarization and denazification” in the former Soviet republic of Ukraine since late February, Russia has come under a raft of sanctions imposed by the United States and Canada, European Union, Japan, Australia, New Zealand and a host of other countries. President Vladimir Putin has signed a decree on legal recognition of Donetsk, Lugansk, Zaporozhye and Kherson regions’ independence and finally joined the Russian Federation.

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For A New Foreign Policy in Italy

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The sad and notorious vicissitudes of the non-existence of an Italian foreign policy have hit rock bottom over the last three years, thus destroying even the minimum that we had managed to create after the disappearance of the serious and experienced political class born out of the Resistance Movement and lasting until the early 1990s.

The initial low profile of Italian foreign policy in the international scenario in the aftermath of the Second World War was certainly not due to phantom injustices of history or the inability or acumen of politicians or diplomats at home. For Italy, the reason was the necessary outcome of the Yalta alignments and the presence in our country of the strongest Communist Party in the West.

The values of patriotism, Nation and flag – where they proved to be fundamental for the political-economic reconstruction of the countries that had really fought and had been severely tried by the conflict (China, France, Germany, Japan, Great Britain, USSR, etc.) – were removed and erased in Italy by “a foreign nationalist party, inadmissible in the democracy of our countries”, as Gaetano Salvemini and Ernesto Rossi put it.

Even the liberal epic of the Risorgimento was lost: try asking the 30/40-year-old man in the street, let alone a younger one, about Cavour, Mazzini, King Victor Emmanuel II of Savoy, etc. He may know something about Garibaldi, thanks to TV programmes produced by the long wave of Bettino Craxi, a fan of the Italian general born in Nice.

The heritage of the country’s unity and Mussolini’s rhetoric reminded of the very concept of Nationhood and Fascism. It was therefore in the interest of the Kremlin and therefore of the Italian Communist Party – when the Bolshevik revolution in Italy was just a chimera to be administered to the voting masses – that its point of reference set political parameters that guaranteed the international commitments of the Sarmatian region. Over the years they came to brand words such as “Italianness”, “tricolour Italian flag”, “lost former unredeemed lands”, and the like, as right-wing synonyms for grief and tragedy.

The Soviets’ party of reference in Italy then decided that, in order to remain credible before voters and members who still wished in good faith for the mýthos of proletarian catharsis, we had to at least destroy the only non-military or economic-industrial expression of the bourgeoisie, i.e. the sense of homeland. At the same time, for the superpowers’ equilibria, the rest had to be left intact and unchanged.

From 1945 to the events of 1989-1991 – the fall of the Berlin Wall and the implosion and collapse of the other homeland, the Soviet one – Italy’s foreign policy, while praising and exalting the skilful and refined experience inherited from Lorenzo the Magnificent, from Westphalia, etc., had to move maimed and lop-sided, deprived of the national interest motivation that, on the contrary, other States placed and still place at the core of their actions.

For almost half a century, Italian politicians and diplomats were the protagonists of fundamental engagements and commitments around the world. It was not Italy – as the exclusive subject – that dictated policy lines as pars contrahendi, but there were specific schools of foreign policy, following the lines of De Gasperi, Nenni, Fanfani, Moro, Craxi, Andreotti, De Michelis, etc. The fear of arousing even the slightest top-down nationalism, albeit formal, was the blackmail to which governments were subjected on the sacrificial altar of the internal equilibria desired by the Italian Communist Party.

Over the last thirty years, the end of the bipolar system, based on weapons of mass destruction, the opening up of new international scenarios, and, in particular, the stance taken by the Italian President of the Republic, Carlo Azeglio Ciampi – with his heartfelt appeals for rediscovering Italy as a value and pride to be flaunted not only at the football stadiums when the national team was playing – have overturned the mannerist minimalism, in which – as Achille Albonetti has been arguing since April 2005 – Italy’s downgrading, which “is neither admitted nor discussed”, has been developing for some months “in the almost general indifference of institutions, politicians, journalists and experts, including historians and diplomats”.

However, just as it took almost half a century after the Resistance struggle to bury the past, we hope that it will take fewer years for Italy to resume the leading role it has uninterruptedly played since Unification until a few decades ago. Three are the most evident symptoms of Italy’s progressive downgrading.

Firstly, the three Summits between President of the Republic Jacques Chirac, German Chancellor Gerhard Schröder and British Prime Minister Tony Blair in June and September 2003, and later in February 2004, which led to some important agreements in the crucial defence sector.

Secondly, the negotiations with Iran, which began at the level of the Foreign Ministers of France, Germany and the United Kingdom in October 2003, on the sensitive nuclear issue.

Thirdly, Germany’s candidacy as a permanent member of the UN Security Council, supported by France and the UK.

What happened in those years between the great three European countries, which excluded Italy, was the beginning of its downgrading, which would be a severe mistake not to record.

It is worth recalling that Italy has always been present in the leading groups and among the great European powers, ever since its birth (1861). It has therefore been assured a position similar to the UK, French and German positions. Over the last 140 years, regardless of its internal regime and actual strength in relation to the others, Italy has played important and decisive roles: the Triple Alliance in 1882; the Algeciras Agreement in 1904; the Pact with the Allied Powers in 1915; the Treaty of Locarno in 1926; the Four-Power Pact in 1934; the Munich Mediation in 1938; the deployment of the Euro-Missiles in 1979-80, etc.. As seen above, as early as 1882, Italy made a pact with the Central, Austro-Hungarian and German Empires. However, it was contacted by the Triple Alliance and, from 1915, it secretly switched to supporting France, the United Kingdom and Russia.

In the Fascist period Italy had important, albeit harmful and damaging allies, i.e. the Nazi Germany and Japan. In the post-war period, it enthusiastically joined all the major European ventures: the Council of Europe and OECE in 1948; the ECSC in 1950. After the failure of the EDC and EPC in 1954, it promoted the European relaunch in Messina in 1955, which led to the signing of the Treaties of Rome in March 1957, i.e. the European Economic Community and Euratom.

Italy joined the European Monetary System in the late 1970s; the Single European Act in 1985; and the Treaties of Maastricht (1992), Amsterdam (1996) and Nice (2000). It is one of the countries that have joined the Euro. Since 1975 it has been a member of the G5, later to become G7 and G8, and G14. In the sensitive military sector, as early as 1957 Italy has been the architect – with France and Germany – of a project for a nuclear military capability. In 1969 it adhered to the Nuclear Non-Proliferation Treaty, with twelve conditional clauses, including the European clause, etc..

However, when a Foreign Minister performs his assignment – not knowing, and not even understanding what we have mentioned above (acronyms included) – it is natural that the downgrading process continues. It must also be said, however, that the responsibility does not lie with the Minister, but rather with those who placed him in this role of utmost responsibility.

The opportunity to try to make up for lost time and lost face at the Foreign Ministry could be the creation of the new government that – based on the recent outcome of the polls – could even lead the country to have a woman as Prime Minister. It would be an epoch-making turning point, as well as an opportunity missed by the Left, which from the Liberation to the present day, has expressed only Nilde Iotti, Speaker of the Chamber of Deputies from 1979 to 1992, as its highest female leader.

At this juncture, as some media claim that any right-wing government would be an expression of the nostalgic Right, I wish to point out that the alleged historical references of the future government’s protagonists were erased from history by the USA and the UK, while the current leaders of the winning coalition are perfectly in line with the wishes of the White House and the liberal-capitalist West.

In the meantime, let us take a look at the Foreign Ministers of previous centre-right governments and try – based on our experience as former observers of foreign policy and international relations – to provide some advice to the future Prime Minister.

There were four Foreign Ministers in the centre-right governments: Antonio Martino (Ω 2013), Renato Ruggiero (Ω 2013), Franco Frattini and Gianfranco Fini. The latter was also Deputy Prime Minister: a double responsibility that had previously been held only by Giuseppe Pella (1957-1958) and later by Massimo D’Alema (2006-2008), thus proving the skills and experience of the three aforementioned politicians. Gianfranco Fini was also Speaker of the Chamber of Deputies from 2008 to 2013.

When I organised the face-to-face meeting between Israeli Prime Minister Ariel Sharon and Italian Foreign Minister Gianfranco Fini (November 24, 2003), Sharon emphasised Italy’s balanced position, praising it as an important contribution to the advancement of the peace process. Furthermore, during his stay in Israel, Fini spoke of Italy’s faults regarding the “infamous racial laws wanted by Fascism”, for the implementation of which the decisive signature was not that of Mussolini, who proposed them, but of King Victor Emmanuel III of Savoy, who approved them.

It was Maria José of Savoy who, during one of my visits to Switzerland, made me aware of King Victor Emmanuel III’lack of decisiveness, as well as his spouse’s preponderant aspect of mater familiae.

A cowardly act that disgraced that King and his coat of arms indelibly before History. On the contrary, when the idea of marking the Jews with a Star of David was floated, King Christian X of Denmark (who ruled from 1912 to 1947), declared: “If that emblem is used, then we shall all wear it”. The government of that Nazi-occupied country did not implement racial laws.

It is good to remind ourselves of History, but it is also edifying to highlight the value of some Italian politicians who have taken on their responsibilities in the right fora (although they may have made some personal mistakes which, however, were unrelated to their political actions).

At a time of political void, it would be good to pick up the broken threads of a discourse of serious continuity of Italian diplomacy, which has recently undergone considerable stages of total embarrassment.

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How a U.S. Colony Works: The Case of Germany

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On 15 July 2022, Britain’s Reuters news agency headlined “70% of Germans back Ukraine despite high energy prices, survey shows”, and reported that “Some 70% of those polled backed Germany’s support for Ukraine, … found the survey conducted between July 12-14 by broadcaster ZDF.” ZDF is funded by the German Government — German taxpayers. 

Germany’s AfD Party is one of the two Parties in Germany that are less than enthusiastically backing Germany’s anti-Russia position, the other such Party being “Die Linke” or “The Left” Party, which is Germany’s only socialist democratic Party, despite West Germany’s “Social Democratic Party” calling itself “democratic socialist” while being neither. 

The AfD Party issued a press release, on 25 August 2022, “Stephan Brandner: Skandalöse „Politische Filter“ beeinflussen NDR-Berichterstattung” or “Stephan Brandner: Scandalous ‘political filters’ influence NDR reporting.” It reported that Mr. Brandner, who is an AfD Member of the German Parliament, said that

After the self-service affair about the now hated RBB director Schlesinger, reminiscent of feudal structures, an online magazine now reports that employees on North German radio complain about ‘political filters’ from their superiors. According to the report …, public service broadcasting executives act like ‘ministerial press officers’. … 

As an AfD politician I am not surprised. After all, ARD and ZDF only report on the AfD with a ‘political filter’ and, for example, no longer invite AfD politicians to talk shows. … Compulsory contributions [by taxpayers, to ‘public broadcasting’] should be abolished.

Mr. Brandner provided no evidence for any of his allegations. (That’s the way politics is in a dictatorship. How can the public vote intelligently if they are routinely accepting allegations that are being made without supplying documentation? That’s a dictatorship by lies and liars, and no democracy-capable public would accept it. In science, what is not documented to be true is assumed to be false — not assumed to be true. A democratic country operates on the basis of science, not on the basis of faith.)

However, this doesn’t mean that Mr. Brandner’s allegations there are necessarily false. One reason why they could very well be true is that there are six Parties in Germany, and the current governing coalition consists of the three that take the hardest line against Russia, and for America, and for the post-2014, U.S.coup, anti-Russian, Ukrainian Government. The ruling coalition, those three Parties, are called the “traffic-light coalition”, and include the rabidly neoconservative (or pro-U.S.-empire) anti-Russian Green Party, plus the U.S. Democratic Party-allied so-called “Social Democratic Party,” plus the rabidly libertarian or “neoliberal” (pro-free-market, anti-regulation, and generally U.S.-Republican-Party-allied) Free Democratic Party; and they EXCLUDE (or give the red light to, and prevent from participating in the Government) the three least-anti-Russian Parties, which are The Left Party (the authentic democratic socialists, or progressives, ideologically opposed to any imperialism), the AfD Party (nationalists), and the U.S.-Republican-Party-allied CDU/CSU Christian Democratic and Christian Social Union Party. 

Brandner raised an important question, without providing any evidence regarding its solution. But here are some relevant facts, regarding the extent to which Germany’s Government tolerates corruption (which includes corruptness of a Government and of its ‘news’-media):

On 14 December 2021, I did an analysis comparing the anti-corruption laws in three nations, and headlined “Political Corruption in U.S., Germany, and Russia”. I concluded that 

Although this is a very incomplete indicator of a country’s corruptness, it does present the U.S. in a very favorable light, and present Germany (11 out of 12 “No”s [meaning no law against corruption]) as being rather astoundingly corrupt. Russia is midway between those two, perhaps because after Yeltsin’s abominable rule, Putin cleaned up Russia’s Government, but a lot of that job still remains undone, even after 21 years.

Germany’s Government was more shaped by Truman than perhaps any in the world except America’s own Government. But, from the present indicator, America’s vassal nations would appear to be even more corrupt than the imperial center, the U.S., itself, is — at least insofar as their political campaign-finance laws (“what’s written in black and white” in the lawbooks) are concerned.

Here was the summary, specifically regarding Germany:

Following here will be answers that are solidly grounded in the written laws of each of these three countries (though not necessarily reflecting how those laws are enforced — or not), regarding the 12 most clearly important questions that were studied. I present those dozen questions in the order that seems to me to provide the clearest sequence in order for the reader to interpret them, not in the order that was employed by the source:

GERMANY

“8. Is there a ban on anonymous donations to candidates?” “There are no explicit provisions regarding donations to candidates.”

“2. Is there a ban on donations from foreign interests to candidates?” “There are no explicit provisions regarding donations to candidates.”

“18. Is there a limit on the amount a donor can contribute to a candidate?” “There are no explicit provisions regarding donations to candidates.”

“10. Is there a ban on donations from corporations with government contracts to candidates?” “There are no explicit provisions regarding donations to candidates.”

“4. Is there a ban on corporate donations to candidates?” “There are no explicit provisions regarding donations to candidates.”

“6. Is there a ban on donations from Trade Unions to candidates?” “There are no explicit provisions regarding donations to candidates.”

“5. Is there a ban on donations from Trade Unions to political parties?” “There are [is] no explicit … ban on donations from Trade Unions to political parties”

“3. Is there a ban on corporate donations to political parties?” “Ban on donation from corporate bodies, but accepted if it is a business enterprise, of whose shares more than 50 per cent of shares are owned by Germans …”

“9. Is there a ban on donations from corporations with government contracts to political parties?” “No.”

“14. Is there a limit on the amount a donor can contribute to a political party during a non-election specific period?” “No.”

“16. Is there a limit on the amount a donor can contribute to a political party during an election?” “No.”

“27. Are there provisions requiring donations to go through the banking system?” “No.”

Consequently, Brandner’s allegations might be expected to be true, simply because Germany, especially after the U.S. Government blew up the Russian gas pipelines to Germany and yet Germany’s Government continues to be a U.S. vassal-nation, despite that U.S. act of war against both Germany and Russia. This indicates Germany’s Government to be extremely corrupt, willing to ditch its own population in order to please its U.S. masters.

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