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SEPARATING FACTS FROM FURY IN FALLOUT FROM AUKUS
Well that escalated quickly.
What was supposed to be a happy agreement to share cutting-edge tech among English-speaking democracies has sparked trans-Atlantic (and trans-Pacific) fury.
The lack of agreement among Western democracies on how to confront China — while not unduly pissing it off — is on full display.
Paris thinks the Biden administration is turning into Trump in sheep’s clothing: “unilateral, brutal, unpredictable” in the words of French Foreign Minister Jean-Yves Le Drian. Getting caught up in those headlines is not very productive: So here’s a guide to separating fact and fiction around the defense partnership, and what happens next.
FACT: Australia has chosen the U.S. over China. In practice, Canberra has always been on the U.S. side, but it’s now definitively dropped the idea that it doesn’t have to choose sides between the world’s superpowers (watch this hilarious video about Aussie twisting and turning). Still missing: a rationale around why Canberra is happy to export record amounts of iron ore ($39 billion last year) to China, some of which goes towards steel for Chinese weapons.
FACT: France is furious — and has blind spots. You’d also be angry, too, if you found out via a POLITICO article (as the Élysée Palace did) that you were gazumped on a $60 billion submarine deal. But Australia was already angry with France before it finally ditched the agreement: partly because the cost of the deal had skyrocketed since it was signed in 2016; partly because the subs were going to arrive only in 2035; and also because they were conventional subs rather than nuclear-powered — not as good as the ones offered by Washington, or even the ones the French use themselves. Australia just wants to be the seventh country with a nuclear-powered submarine: after the U.S., U.K., China, Russia, India and France.
FACT: Other democracies want in on the deal, or support it, including India (which loves the idea of other bad cops on China patrol), and Canada’s Conservatives: party leader Erin O’Toole says if he wins Canada’s tight election race on Monday he will push to join AUKUS. I guess that would make it a CAUKUS. France also feels burned because it has territory and 300,000 citizens next door to Australia: in New Caledonia.
FACT: France is looking for compensation. “The cake is canceled” notes my Paris Playbook colleague Elisa Braun (what is it with French power brokers and cake?), but Paris is already making plans to collect a fat check from Canberra. “We’re studying all avenues” said Defense Minister Florence Parly.
FICTION: There’s permanent damage with France, which is cutting off American social ties for now, including the dramatic cancellation of a military gala marking the 240th anniversary of the Battle of the Capes that was to happen today at the French embassy in Washington. The gala is off, sure, but what’s still on today is an event at the embassy with retired Supreme Court Justice Anthony Kennedy, a down-sized event is still going ahead on a French destroyer in Baltimore, and a third with a French submarine in Norfolk.
FICTION: Australia is now an undersea power. Sydney Morning Herald’s Peter Hartcher points out: “as of Thursday, Australia has no (signed) agreement with anyone to build any new submarines whatsoever. China has 66 submarines. It’s expected to have 10 more by 2030, six of those nuclear powered, according to the US Office of Naval Intelligence. By that time, Australia will have exactly as many subs as it has today, which is the same number it had a quarter-century earlier” (six diesel-powered subs commissioned in the 1980s).
FICTION: China’s claim that the deal undermines regional stability. Nonsense! Beijing is lashing out, saying the subs deal “gravely undermines regional peace and stability, aggravates the arms race and hurts the international non-proliferation efforts.” While this week’s events are not going to help get the U.S. and China back on speaking terms, there’s no reason to think Chinese nuclear subs help peace but Australian subs wouldn’t. Beijing is angry that, for once, it was out-maneuvered, while arguing that everyone should ignore the international treaty it broke on Hong Kong, and its routine aggression towards Taiwan.
RISK: Giving Australia nuclear tech may offer Iran and others excuses to deploy the same. More from Alex Ward in his National Security Daily newsletter.
On Our Radar
UNGA PREVIEW: Your full U.N. General Assembly preview is coming Monday. It’s going to be a weird week of small official delegations, limited 5th Avenue shopping sprees and a lot of fighting over climate and Covid.
To whet your appetite as leaders and foreign ministers prepare to jet into New York, here’s ultimate U.N. whisperer Richard Gowan with a new International Crisis Group briefing: "Ten Challenges for the U.N. in 2021-22."
See also: “Global Catastrophic Risks 2021: Navigating the Complex Intersections.”
Russia has decided it’s against New York’s vaccine requirement (which now apply to gyms, indoor dining and convention centers). Russia’s diplomats claim the rules are a violation of the U.N.’s human rights charter … paging Alexei Navalny!
Memo from Navalny: His team dishes on how Russian Foreign Minister Sergey Lavrov likes to travel with mistress in tow (including on oligarch yachts). No word yet on her vax status.
WORLD BANK — ANNUAL “DOING BUSINESS” REPORT CANCELED. SENIOR STAFF ACCUSED OF CAVING TO CHINA: There was a lot of online fuss Thursday over this report by law firm WilmerHale, which criticized the Bank’s senior leaders. The report demonstrates that the bank had a bizarre and somewhat arbitrary process for assessing business conditions in a given country, and includes claims that then-CEO Kristalina Georgieva visited an employee at home to collect (bury) not-to-be-published drafts that were critical of China.
Overall, we learn too little about how the original rankings were developed, which makes it hard to understand where the problems begin and end. While it seems prudent that the report was put to rest, the independent investigation doesn’t prove much beyond that China (and later Saudi Arabia) was trying to throw its weight around, and that you can collate and cut economic statistics any number of ways.
INTERVIEW — GABRIELIUS LANDSBERGIS, LITHUANIA FOREIGN MINISTER
Lithuania isn’t afraid to absorb economic shocks as a price for defending its sovereignty: It’s one of the few EU countries to hit its NATO defense spending targets, and it has put exports on the line to support Taiwan. Global Insider sat down with Gabrielius Landsbergis, the country’s 39-year-old foreign minister, ahead of his meeting this week with Secretary of State Antony Blinken.
Memo to D.C. — invest more on hybrid threats: Landsbergis never imagined civilian air safety officials could be used to wage a war against democracy (as when Belarus diverted an international flight to arrest dissidents), or that Middle Eastern migrants would be funneled into his country to make the local population afraid. (Iraqis arriving visa-free to Belarus were fleeced of up to $20,000 and bussed to the Lithuanian border under state sponsorship, after being told they were being taken to Germany, the minister said).
“We have to start thinking about some additional instruments within NATO, like having a capacity-building and a quick reaction force, to counter hybrid threats,” he urged. “A hybrid threat [is] using anything that normally you wouldn't think of as a weapon, as a weapon. When you have small children you basically take away everything, nothing sharp stays inside, to protect the child. This is how we think about the foreign policy when we're dealing with dictators now: Basically anything can be used against us.”
China bullying: Landsbergis is “100 percent convinced” China is using Lithuania in an attempt to set a precedent in Europe about how it will behave toward any country that engages with Taiwan: And for that reason, he refuses to back down on recognizing Taipei.
Putin: If Putin has any interest in folding Belarus into Russia, he’s harming his own interests by aligning himself with the Lukashenko regime, Landsbergis said.
Nordstream: “I personally don't think that there is a lot of possibility to do anything about Nordstream. But as a true trans-Atlanticist, I won't look back.”
GLOBAL INSIDER TODAY: Friday 11 a.m. ET. Global Insider regular Nahal Toosi joins Ivo Daalder, Steve Erlanger and Nirmal Ghosh to dive into the surprise announcement of a new defense partnership between Australia, the U.K. and U.S.; Secretary of State Blinken’s Congressional testimony on Afghanistan; and the latest on Germany's federal elections. Register here.
GLOBAL RISKS AND TRENDS
COVID — HOW TO MEET BIDEN’S GLOBAL VACCINATION GOAL: Vaccine experts are clear that the only thing holding the Biden administration back from reaching its self-declared global goal of 70 percent vaccinated by end-2022 is its own vaccine export ban.
Bruce Aylward, the top WHO official working on COVAX told my colleague Carmen Paun: “The world needs 2.4 billion additional doses to go into low-income countries to get us to 40 percent [of the population vaccinated] by the end of this year. Those doses exist and next week is all about making sure there's a clear path to ensuring they go to where they're needed.”
Strive Masiyiwa, the African Union special envoy for Covid-19, said the key is lifting exports: “An export ban lifted in the United States, in Japan, in China, in South Korea, India, that will give us vaccines immediately.”
PEACE — MEASURING THE RISK OF CONFLICT BETWEEN RUSSIA AND NATO: Global Zero, an anti-nuclear campaign group, has catalogued 871 military incidents between 2014 and 2019 involving U.S./NATO forces and the Russian military (report here). The primary confrontation site is the Baltic Sea region, and air incidents are the most common.
DEVELOPMENT — OUTSIDER INSIDERS IN BID TO FIX USAID: Alex Ward had the scoop on the U.S. Agency for International Development turning to “Unlock Aid” to help in its struggle to help millions across the world. Unlock Aid features a board of development professionals and a consortium of private companies in the space. Their goal is to help USAID change its business practices and regulations to make providing aid more effective and efficient.
TECH — FACEBOOK’S GLOBAL RESPONSIBILITY FAIL: Newly leaked documents in a Wall Street Journal report show that while most Facebook users live outside the U.S., only a tiny fraction of the resources spent keeping the platform safe from extreme violence and misinformation is spent outside the U.S. and on non-U.S. content.
Maybe don’t compare Facebook to a car crash if you’re trying to help: “We know that more people die than would otherwise because of car accidents. But by and large, cars create way more value in the world than they destroy. And I think social media is similar," said Instagram chief Adam Mosseri in this podcast from Recode.
HUMAN RIGHTS — BIDEN PULLS PUNCHES ON RIGHTS ABUSERS
SUSTAINABLE RECOVERY SPOTLIGHT
AMERICA’S ECONOMY IS MORE SUSTAINABLE THAN IN FEBRUARY 2020: Mike Allen has collected an important set of statistics illustrating how life is changing for America’s most vulnerable, economically. Household wealth for the bottom 50 percent rose by 30 percent from the end of 2019 (a faster rate of growth than the top 10 percent), and the average wage is $30.73 per hour compared to $28.51 in February 2020. Unemployment rates have fallen for all racial groups — but are still above 20 percent “for people looking for a full-time job that pays a living wage, but who can't find one.”
POST-COVID MIRAGE: Developing countries will be $12 trillion poorer by 2025 than they would have been without the pandemic, per new data from a U.N. development agency.
STAKEHOLDER CAPITALISM — C-SUITE VIEW: At this week’s International Economic Forum of the Americas, Global Insider sat down with Amy Weaver, President and CFO at Salesforce, to talk about stakeholder capitalism.
“I don't think that there's any question that employees want to be at a company that they believe reflects their values. And especially as we look at the past 18 months, we look at how there's really no line between a company and the community you're in. I think for a long time, it was, you know, companies were viewed as islands, you had your corporation and then you had the community,” and that’s no longer true, Weaver said.
I asked Weaver if her job as CFO requires her to be the cautious one as employees and other stakeholders demand higher investments and less emphasis on shareholder dividends.
“I don't see this as an area of putting the brakes on, it's really an area of figuring out ‘how do we do this?’” she said. “How do we come up with the metrics so that we can actually measure what we're doing?”
GLOBETROTTERS
NEW CARNEGIE PRESIDENT: Mariano-Florentino (Tino) Cuéllar, a justice on the California Supreme Court, will be the new president of Carnegie Endowment for International Peace. Cuéllar was born in Mexico and worked for the Obama White House.
STATE DEPT.’S $3 BILLION EMBASSY REPAIR BACKLOG: Perhaps it’s a good thing that the Senate has confirmed virtually no ambassadors — because many of them wouldn’t have houses in acceptable condition to move into, according to a new GAO audit.
Ambassadorial residences are rated as being the worst condition (on average) of the different types of State Department’s 8.293 buildings. The average Ambassador residence has a condition rating of 69 (70 or less is considered “unacceptable”), and 89 State-owned buildings get a rating of 10 or less out of 100! Overall, 400 “mission critical” buildings are in poor condition, and the biggest problems tend to be in South and Central Asian buildings. Only 51 percent are in “good” condition.
The problem has rapidly spiralled out-of-control: A $96 million repair backlog in 2019 grew to $3 billion in fiscal year 2020, without State asking Congress for extra money to deal with the issue.
It didn’t need to be this way. Plenty of political attention was thrust onto the condition of high-risk State Department assets following the September 2012 Benghazi attacks, leading to the Capital Security Construction Program delivering $2.2 billion of work in fiscal year 2015. What appears to have happened is that a focus on construction of new, higher security buildings has allowed smaller problems to fester in existing assets.
Case in point: the same day the GAO report was released, Richärd Kennedy Architects of Phoenix, Ariz., was announced as building a new U.S. embassy in Doha on a 12-acre campus (cost not declared).
NORTH AMERICA MIGHT ACTUALLY GET A RAIL FREIGHT LINK: The first rail linking Canada, the U.S. and Mexico looks likely after Canadian Pacific Railway secured a $27 billion deal to take over Kansas City Southern.
U.S.-BACKED UYGHUR EXHIBIT OPENS IN GENEVA: The Wall of the Disappeared
BRAIN FOOD
SHORT READS
The Meryl Streep of Math
Does ‘Conservatism’ actually mean anything anymore?
NEWSLETTERS
Visual Capitalist
Kleptocracy Initiative Substack and
Keystone Defense Initiative – a monthly newsletter curated by Rebeccah Heinrichs on strategic deterrence. h/t Julia Sibley
LONG READS
How France sees Mitch McConnell — "the tormentor of Joe Biden," in the business daily Les Echos h/t Anaïs Moutot
Beyond Covax, by Conor Savoy and Elena Méndez-Leal. The Importance of Public-Private Partnerships for Covid-19 Vaccine Delivery to Developing Countries
Upgrading U.S. public diplomacy: A new approach for the age of memes and disinformation — Atlantic Council, by Marta Churella, Wren Elhai, Amirah Ismail, Naima Green-Riley, Graham Lampa, Molly Moran, Jeff Ridenour, Dan Spokojny and Megan Tetrick
Thanks to editor Ben Pauker, Olivia Reingold and Matt Woelfel
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