China comes to the rescue of Iran

The Chinese and Iranian governments have announced that China will invest $400 billion to develop the Iranian oil and gas industry, a petroleum industry newsletter has reported.

The Iranian government has embraced the Chinese Belt and Road Initiative, also known as the New Silk Road, an ambitious plan to build infrastructure to unify the economy of the interior of Eurasia under Chinese leadership.

It will include $120 billion for new oil and gas pipeline, including a pipeline through Turkey in violation of U.S. sanctions.  All the equipment for the new projects will be provided by Chinese contractors.

China has the right to buy Iranian oil at a discount and pay for it in soft currencies it has accumulated in dealings with countries in Africa and Asia.  This amounts to an overall 30 percent discount from the world price.

China will employ 5,000 “security personnel” to guard its properties.  This means that any attack on Iran would involve risk of killing Chinese and inviting Chinese retaliation.

Presumably the Iranians, like the Russians, would prefer to sell to Europe, their natural market, for full price, but the U.S. government has blocked them from doing business in Europe in dollars.

The goal of U.S. foreign policy for 70 years has been to control the oil of the Middle East.  Now the oil of Iran is within the Chinese sphere of influence.

There is little intrinsic common ground between China, Iran and Russia.  The U.S. government has driven them together by waging economic warfare against all three.  In the process, it is antagonizing its allies in Europe by forcing them to act against their economic interests.

China’s foreign policy makes it economically stronger.  United States foreign policy is a drain on U.S. strength.  China is making friends.  The U.S. is making enemies.  This will end better for China than it will for the United States.

LINKS

China Defies Trump Big Time With $400 Billion Belt and Road Investment, 5,000 Security Personnel by Juan Cole for Informed Comment.  Hat tip to peteybee.

China and Iran flesh out strategic partnership by Simon Watkins for Petroleum Economist.

How Tehran Fits into Russia-China Strategy by Pepe Escobar for Asia Times.

U.S. claims jurisdiction over Chinese biz exec

Meng Wenzhou, chief financial officer of Huawei, a giant Chinese telecommunications company, was arrested while passing through Vancouver on charges related to U.S. economic sanctions against Iran.

Meng Wenzhou

She is the daughter of Ren Zhengfei, the company’s founder.

She reportedly is accused of concealing the fact that a company called Skycom, which does business with Iran, is a subsidiary of Huawei, and thereby causing Huawei clients to unknowingly violate U.S. sanctions against Iran.

In other words, a foreign business executive has been arrested on foreign soil for breaking U.S. domestic law.  This is a power grab that the U.S. would not tolerate if a foreign government did it to a U.S. executive.

It is a slap in the face at China as a time when Presidents Trump and Xi were trying to resolve trade disputes.  It could raise hostilities between China and the U.S. to a new level.

I can think of four possible explanations for the U.S. action, all of them bad—

1. President Trump arranged this deliberately as a way of putting pressure on President Xi.
2. President Trump knew about the charges, but didn’t think they would affect trade negotiations.
3. American officials proceeded without notifying President Trump because they didn’t understand the significance of their actions.
4. American officials proceeding without notifying President Trump because they saw Huawei as a security threat or wanted to undermine the Trump-Xi negotiations.

Huawei sells telecommunications equipment and networks.  It reportedly has more than 180,000 employees and does business in more than 100 countries.  It is reportedly the world’s second largest manufacturer of smartphones.

Many Western countries and companies in recent months have stopped doing business with Huawei and ZTE, another Chinese telecom company, because they fear their equipment could be used for cyber-espionage by the Chinese government.  I think that is a reasonable fear.  The arrest of Ms. Meng is not reasonable.

LINKS

The War on Huawei by Jeffrey Sachs for Project Syndicate.

How Huawei’s CFO ended up in a jail in Canada by Julia Horowitz for CNN Business.

What’s going on with Huawei? by BBC News.

Meng’s arrest could plunge US, China into high-tech Cold War by Gordon Watts for Asia Times.

Huawei’s amazing global rise shrouded in controversy by Gordon Watts for Asia Times.

How Meng Wanzhou’s Arrest Might Backfire by Tyler Cowen for Bloomberg Opinion.

The Iran nuclear deal looks torpedo-proof

Am I the only one who finds it just a little bit odd that the American officials loudly claiming Iran cannot be trusted to fulfill any deal are simultaneously pledging that they will not fulfill any deal?  Is it possible they have such little self-awareness?

via Hullabaloo.

President Obama and Secretary of State John Kerry deserve a lot of credit for the nuclear deal with Iran, as do President Hassan Rouhani of Iran and the other diplomats who worked on the negotiations.

I think it is the best deal that can be expected.   The Iranians have nuclear power plants, which they are not willing to give up.  Any nation with nuclear power has the capability to develop nuclear weapons.

What the Iranians have done is to give up equipment and uranium stockpiles that would have enabled them to develop weapons-grade uranium and plutonium overnight, and to submit to inspections by the International Atomic Energy Agency to ensure that they do not do so.

It is crazy for Republican Senators presidential candidates to threaten to torpedo the deal.

What made the economic sanctions effective against Iran in the first place is that they were supported by U.S. allies and the Security Council of the United Nations.  Under the agreement, the other negotiating parties, Britain, France, Germany, Russia and China and other countries will resume trade with Iran no matter what the U.S. government does.

The only ones who would be hurt if the U.S. government renounced the deal would be Americans who want to do business in Iran.

The problem of the spread of nuclear weapons is more than just Iran.  Almost all industrial nations—Japan, South Korea, Germany, Italy, Brazil, Argentina, South Africa and many more—have the capability to develop nuclear weapons.

Actually, it is a tribute to the world’s good sense that only nine nations are known to have nuclear weapons—the USA, Britain, France, Russia, China, India, Pakistan, Israel and North Korea.

The only way to stop the spread of nuclear weapons on a long-term basis is for the existing nuclear power to agree to disarm and to turn over control of nuclear materials to an international agency.  Every nuclear-capable nation, not just Iran, should be open to the IAEA.

LINKS

The Iran nuclear deal, translated into plain English, by Max Fisher for Vox news.

The Iran Nuclear Deal, by the Numbers by Graham Allison for The Atlantic.

A good deal: How both sides can sell the Iran agreement back home by Ali Vaez for Reuters.

What if the US & UN sanctioned Israel over its nukes the way they did Iran over enrichment? by Juan Cole for Informed Comment.

Europe’s alternative to Putin’s oil and gas

Map: Global Research

Dependence of key European nations on imports of Russian oil and gas puts the European Union in weak position in relation to Vladimir Putin.

One way to get out of that position of weakness is to end the sanctions against Iran, and import Iranian oil and gas.  In the longer run, Europe would benefit from a new gas pipeline from Iran to Europe.

The European Union has no conflict of interests with Iran.  It is following the lead of the United States.  As far as that goes, the United States has no conflict of interests with Iran.  We Americans are merely nursing old resentments and following the lead of Israel and Saudi Arabia.

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Breaking Europe’s Putin addiction by Amir Handjani for Al Jazeera.

Obama’s chance to earn his Nobel prize

Iran’s President Hassan Rouhani has offered President Obama a chance to end the 34-year U.S. cold war with Iran, turn the United States away from perpetual warfare and retroactively justify his Nobel Peace Prize.

President Barack Obama

He has an opportunity to do what President Richard Nixon did when he established diplomatic relations with Communist China, and what President Ronald Reagan did when he negotiated an end to the U.S.-Soviet cold war.   Even though the initiatives came from Zhou Enlai (Chou En-Lai) and Mikhail Gorbachev, there would be been no peacemaking but for Nixon and Reagan.

Barack Obama’s path to peace will be more difficult than either of theirs.  For one thing, he is a Democrat, and most Democratic leaders think they have to be belligerent to disprove Republican charges that they are weak.  For another, he has to overcome a military-industrial and foreign policy establishment that is committed to war, and lobbyists for Israel and Saudi Arabia, based respectively on their strong ethnic ties and strong financial ties to the United States.

The stumbling block is Iran’s nuclear enrichment program.  The Iranian government says it is using nuclear energy for peaceful purposes, including medical research, which it is legally entitled to do.  The Ayatollah Khamenei says that nuclear weapons are immoral and contrary to Islam; I don’t think a religious leader would say such a thing unless he meant it, because, unlike with politicians, people take the statements of clerics seriously, and he would be completely discredited if he was shown to be lying.

President Hassan Rouhani

Some analysts think that Iranian leaders don’t want nuclear weapons, but they want the capability to develop nuclear weapons at some time in the future if the situation warrants.  This desire seems reasonable to me.  Iran is surrounded by countries with nuclear weapons – the United States, Russia, China, India, Pakistan and Israel.  Naturally an responsible Iranian leader would want some deterrent against attack.

I think adherence to the Non-Proliferation Treaty would provide a basis for peace.  This asks countries that do not possess nuclear weapons to refrain from acquiring them, and promises them in return that they will receive help in developing nuclear power for peaceful purposes and that the countries with nuclear weapons will take steps to get rid of them.

US opposes Pakistan gas pipeline to Iran

The U.S. government has threatened sanctions against Pakistan if that nation completes a pipeline bringing natural gas from Iran.  The Iranian section has been completed, and the schedule calls for Pakistan’s section to be completed by the end of 2014.

Notice that Pakistan shares a border with China.  The pipeline could be extended to give China direct access to Iran’s natural gas.   China is already Iran’s largest oil and gas customer and an opponent of U.S.-led economic sanctions against Iran.

Iran’s newly-elected President Hassan Ruhani has offered to make peace with the United States.   The U.S. government has said this is contingent on Iran abandoning its nuclear research program, which are for the stated purpose of  deterring Iran from developing nuclear weapons.

I think the Obama administration should take Ruhani up on his offer, rather than doubling down on sanctions.  The only way the problem of nuclear weapons proliferation will ever be solved for good is a comprehensive nuclear disarmament program and strong international inspections system.  Any country whose government feels threatened by a nuclear power will want its own nuclear weapons as a deterrent.

President Obama’s deep game

President Obama’s admirers say that he plays a deep game, that he is always thinking three or four steps ahead of everybody else.   You shouldn’t take what he’s doing and saying at face value, they say; the logic of what he’s doing will be revealed after the fact.

Is President Obama playing a deep game on Iran?  If so, who is he playing it against?

Recently he gave an interview to Jeffrey Goldberg of The Atlantic Monthly.  Goldberg served as a young man in the Israeli Defense Forces and has good sources within the current government of Israel.   Here is part of what the President told him.

We are going to continue to apply pressure until Iran takes a different course. … … It means a political component … a diplomatic component …  and it includes a military component.  And I think people understand that.

I think that the Israeli government recognizes that, as president of the United States, I don’t bluff.   I also don’t, as a matter of sound policy, go around advertising exactly what our intentions are.  But I think both the Iranian and the Israeli governments recognize that when the United States says it is unacceptable for Iran to have a nuclear weapon, we mean what we say.

via The Atlantic.

A day later the President said the following in a speech to the American Israel Public Affairs Committee.

Iran’s leaders should understand that I do not have a policy of containment; I have a policy to prevent Iran from obtaining a nuclear weapon.  And as I have made clear time and again during the course of my presidency, I will not hesitate to use force when it is necessary to defend the United States and its interests.

via POLITICO.com.

Now if President Obama’s aim is to avoid war with Iran, and to use sanctions and diplomacy as a stalling tactic, this interview was a terrible blunder.  If sanctions and diplomacy fail to pressure the Iranian government into abandoning its nuclear program, which seems to me quite likely, then Obama by his words has put himself in the situation in which he either has to go to war or admit that, in fact, he really was bluffing.

But what if his aim is not peace, but war?  What if his aim is to co-opt liberals into going along with an attack on Iran?  He has redefined the issue so that it is no longer war against Iran vs. peace with Iran.   Now it is war against Iran right away vs. war with Iran when and if economic sanctions and covert action fail.

An attack on Iran would not be an isolated event.  Iran is a larger, more powerful and more united nation than Iraq or Afghanistan were.  This would be the start of an open-ended conflict which would not be limited to Iranian soil.

Of course I can’t know President Obama’s mind.  I can only know what he publicly says and does.  And right now his statements and his actions duplicate all the mistakes of the George W. Bush administration, but on a larger scale.

Click on Obama to Iran and Israel: ‘As President of the United States, I don’t bluff’ for the complete interview with Jeffrey Goldberg.

Click on Transcript of Obama’s AIPAC speech for the complete speech to the American Israel Public Affairs Committee.

Click on The 0% Solution: War as the President’s Private Preserve for analysis of the implications of President Obama’s statements by Tom Englehardt on his TomDispatch web log.

Click on Top Ten Dangers for Obama of Iran Sanctions on Behalf of Israel for moral and political objections to economic warfare against Iran by Prof. Juan Cole, professor of Middle Eastern history at the University of Michigan, on his Informed Comment web log.

Drifting toward war with Iran

In this interview, Vali Nasr, a professor of international politics at Tufts University and a former adviser to the U.S. special representative for Afghanistan and Pakistan, says the Obama administration has backed the Iranian government into a no-win situation—accept economic sanctions that will destroy the country economically, or risk a war with the United States and its allies that will destroy the country physically.

President Obama’s intentions toward Iran are, as usual, hard to interpret.  I have read commentators who say his earlier talk of dialogue with Iran a setup to show that the Iranians are unreasonable so that he could organize an anti-Iran coalition and justify anti-Iran sanctions, covert action and threats.  I have read commentators who say his anti-Iran sanctions and threats are a setup to neutralize war hawks in the United States and Israel.

Whatever his intentions, the threat to block Iran’s oil exports is a threat to destroy the Iranian economy.  The Iranian government must choose whether to surrender or fight.  The Obama administration would no doubt reply that all the Iranian government has to do to end the sanctions is to give up its nuclear program—that is, its ability to defend itself.  The Associated Press reported in my morning newspaper that Israeli hawks are openly pressing for an attack on Iran while the country is still unable to retaliate.

War to change the Iranian regime is a risky business.  We would risk loss of access to Persian Gulf oil and a worldwide economic crash.  We would risk military confrontation with China and other countries.  We would face the certainty that the surviving Iranians would be committed to revenge against the United States and Israel, and the likelihood of a new regime that actually would be completely fanatical and irrational.

Stepping back from this brink would be a risk to the President’s re-election.  Continuing in the present policy would be a risk to the country.  President Obama has said all options are on the table.  One of these ought to be diplomacy.

Click on The Iranian oil embargo blowback for insight from Pepe Escobar of Asia Times on the impact of an Iranian oil embargo on the economy of Europe and the rest of the world..

Hat tip for the video to Glenn Greenwald.

Risky business in the Persian Gulf

The Obama administration is drifting toward war with Iran.  Besides the obvious risk of a repeat of the U.S. invasion of Iraq, there are risks of another oil price shock and of confrontation with China.

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Iran is the world’s third-largest oil exporter, behind Saudi Arabia and Russia.  The United States government is trying to organize a world oil embargo against Iran.  Saudi Arabia’s rulers promise to increase their own oil production to make up for Iranian oil being taken off the world market.  Iran’s rulers threaten that if that happens, Iranian forces will close the Strait of Hormuz, through which 20 percent of the world’s oil exports go.

The United States gets most of its oil from domestic production and other Western Hemisphere sources, but the nations of Asia depend on Middle East oil.  The Chinese expect to more than double their consumption of oil within the next 10 years.  The Chinese government has tried to befriend Iran while getting along with the United States.  But if China’s oil supply is jeopardized, there could be a serious confrontation.  Since the United States and China are the world’s two largest oil importers, there could be a confrontation anyway, as oil becomes harder to find and more expensive to produce.

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Nima Khorrami Assi, a security analyst at the Transnational Crisis Project in London, wrote recently that, until now, China and also India have sought to acquire oil supplies through a policy of neutrality, nonintervention and cooperation with all governments.  But he said that the two countries are adopting different policies over the U.S.-Iran confrontation.

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India aligns with the United States, Japan and the Arab kingdoms in the Gulf Cooperation Council, which so many Indians work overseas and which are potential customers for India’s information technology products.  But China, in his view, is joining Russia as a protector of Iran, splitting the world’s major powers into two competing blocs.  I can’t say whether is true, or whether there is any truth in reports that China is supplying Iran with advanced military technology.  But these are things that could be true, or could be true in the future if they aren’t happening now.

A writer for Forbes asserted that if the Strait of Hormuz is closed, even temporarily, world oil prices could triple.  That’s the last thing the United States or the European Union nations need, as they struggle to pull out of the deepest recession since the 1930s.

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But it might not come to that.  Pepe Escobar, roving correspondent for Asia Times, noted that Pakistan has given the go-ahead to a new pipeline which will bring Iranian natural gas to the Indian subcontinent, bypassing any naval blockage..  He noted that Iran has excellent relations not only with China and Russia, but also Iraq, Afghanistan, Pakistan, not to mention Venezuela, Ecuador, Bolivia and other nations of the non-aligned movement.

The great danger, as he sees it, is escalation of the low-intensity war that the United States is waging against Iran into a major military conflict.  The United States is losing economic power, but it still has military power.  The temptation will be to try to leverage military power into economic power.

Click on China and India: Rival Middle East Strategies for Nima Khorrami Assi’s article for Al Jazeera English.

Click on The myth of an isolated Iran for Pepe Escobar’s article for the Asia Times of Hong Kong, reprinted by Salon.

Click on Iran’s Real Weapon of Mass Destruction Is Oil Prices for Daniel Fisher’s article in Forbes.

Click on Pakistan speeds pursuit of Iranian pipeline, defying U.S. for a report in McClatchy Newspapers.

UN says North Korea aids Iran missile buildup

A leaked United Nations report says that North Korea, aided and abetted by China, is helping Iran develop its missile and nuclear programs, in violation of UN sanctions.

This is bad news.  The greater the number of countries that have nuclear weapons, the more additional countries will want nuclear weapons, to defend themselves against the existing nuclear powers.  Nuclear proliferation will snowball.

At the same time, if I were President Mahmoud Ahmadinejad or Supreme Leader Ali Khamenei of Iran, I would be doing my best to acquire nuclear weapons and missiles.  North Korea has arguably the most oppressive regime on the planet, but the United States does not dare attack it because of its nuclear weapons and missiles.  If the Iraqi or Libyan governments had possessed nuclear weapons, the United States would not have attacked those countries.  So when the Iranian rulers read discussion in Israel and the United States about attacking Iran, they draw the natural lesson.

An attack on Iran, besides being a crime against humanity, would not be a “solution” to the problem of Iranian nuclear weapons – not unless the attackers were prepared to invade and occupy Iran indefinitely.  Otherwise the likely result is to instill the Iranian population with a desire for revenge so that, in the course of time, the attack would bring about what it was supposed to prevent.

The only long-range answer to the problem of nuclear weapons is for all the countries that possess weapons to turn control over to a neutral international authority, and for credible guarantees to be given nations such as Israel and North Korea who think the need nuclear weapons for protection against attack.  I don’t think it likely that this will be done any time soon, but, if the world is to be safe from nuclear war,  it will have to happen sometime.  Nuclear deterrence has worked so far, but there will come a time when it doesn’t work.