Australian firms are in a sweet spot between the bickering United States and China, where they can sell more and buy more cheaply because of weaker competition in both markets. Essentially, the mutual tariffs are a double blessing for Australia.
The latest escalation of the ongoing tariff war promises to impact on international trade exchanges to the tune of A$130 billion per year across a broad range of economic sectors, including metals, drugs, motor vehicles, electronic components, industrial machinery and foods.
Australia is one of the best placed countries in the world to reap the gains of the likely trade diversions. For example, Australian beef producers will be much more competitive in exporting to China as their American competitors have to grapple with the 25% tariff on their beef. On the other side, as China raises tariffs on soybeans, Australia could buy this product more cheaply from US farmers keen to find new distribution channels.
Australia’s main competitors for this double market grab are just a handful of highly developed economies with sizeable commercial ties with both the US and China. These include Canada, the EU, Japan and South Korea.
But in comparison with these trading competitors, Australia has a natural advantage due to the ease of access to maritime routes right across the Asia Pacific region.
While Europe is also in between the American and Asian continents, its overland trading routes are far less developed than the maritime ones and are also clogged by hostile countries such as Russia, Turkey, Iran, Pakistan and India.
Canada is also at a disadvantage to Australia because of its more embedded economy and supply chains with the US. The challenging renegotiation of the North America Free Trade Agreement with the US and Mexico could also stunt Canada’s range of trading action.
Similarly across the Pacific, Japan and South Korea share Canada’s tricky position as they are too close to their powerful neighbour, in this case China. Not to mention that South Korea is also under intense geopolitical pressure from President Trump to renegotiate its advantageous bilateral free trade agreement with the US.
Australia is sitting pretty
Australia doesn’t pose a direct strategic threat to either China or the US, as its economy and military power is not too big. And it’s not so small that it can be easily trumped. Also, its location is not too close, yet not too far from any of the major contenders for primacy in the Asia Pacific region.
Australia has skin in the game but not to an indispensable degree. More important still, Australia has solid and mutually beneficial bilateral free trade agreements with both China and the US, which gives more predictability to the country’s trade and investment flows.
In fact, as the Australian Trade minister, Steve Ciobo remarked, Australia is relatively safe from any retaliatory action from the Trump administration thanks to a negative trade balance with the US.
On top of that, in terms of foreign direct investment Australia has ample room and need to diversify its over-reliance on US money. Official data show the US tops the list of foreign investment in Australia with 27% of total value by country, which is a level 10 times bigger than Chinese investments. On the other hand, Australian capital mostly flows out to the US (28% of total value) and not very much to China (only 4%).
It’s handy for Australia that the US Trade Representative has flagged new restrictions on Chinese investment in the US to
contain “China’s stated intention of seizing economic leadership in advanced technology as set forth in its industrial plans, such as Made in China 2025”. This means more investment spillovers are likely to flow between China and Australia with more favourable terms than ever.
Deeper investment ties with China will make an increasing negative trade balance with Australia more acceptable to China over the long term. Also this dynamic places Australia’s economy in pole position to take advantage of the improving quality of Chinese financial markets. This is evident in the ongoing rebalance of the Chinese economy, as it moves towards more reliance on growing consumer demand and away from inefficient, debt-fuelled investment.
Overall we are in the presence of a paradox. What in ordinary times used to be Australia’s vulnerabilities may instead prove its strategic strength in the context of a trade tug-of-war between the US and China.
As long as the trade war does not escalate to a full-blown military conflict, on the face of it Australia can still afford to sit on the commercial fence. With this pragmatic economic approach, cynics may well define Australia as a vulture country.
But to be realistic, the US-China trade war gives Australia the unprecedented chance to expand its economic footprint in the geopolitical agendas of both global superpowers. At such uncertain times, even more than pure economic profit, this strategic improvement will be the sweetest fruit for the lucky country.
United States President Donald Trump is not the first to complain about intellectual property (IP) theft by Chinese companies but ironically it was US companies’ use of China’s resources that led to the development of its powerhouse of patents.
In the late 1980s and throughout the 1990s, western firms like Apple and Intel made large profits by investing in China to take advantage of the cheap labour, often at terrific human cost. As China’s economy grew, and the population became wealthier, western firms were then able to profit by selling their products back to the wealthier children of the same labour force which made them.
The Chinese government saw this happening, and wanted western firms benefiting from the Chinese market to give something back. It established a system of approving foreign investments on the condition the businesses involved agreed to partner with local firms and transfer knowledge and skills to the local Chinese market.
In December 2001 when China joined the WTO it entered into the Agreement on Trade-Related Intellectual Property Rights to bring its IP laws up to a minimum international level. At the same time, the government was keen to transition from being a manufacturing-based economy to an innovation-based economy. This large step forward (as opposed to great leap) would be fuelled by expanding China’s domestically owned intellectual property.
One of China’s more controversial growth tactics has been to focus on fostering IP innovation within China. For example, the government preferences procurement of high-technology products whose IP is owned or registered in China.
This has been called a strategic attempt to commercialise non-Chinese ideas in China, and as a trade barrier potentially contravening China’s WTO commitments, including those under the Trade-Related Intellectual Property Rights agreement.
Since the late 1990s, China has been steadily improving the quality of its IP protection and the standard of its IP law enforcement. Many of its preferential policies favouring Chinese IP development have been wound back so as not to discriminate against foreign IP; or at least not so obviously. Other amendments have strengthened IP protection and enforcement, as well as increasing penalties for IP infringements.
China’s most recent, 13th five-year plan, approved by the National People’s Congress in early 2016, envisions China as a world leader in science, hi-tech and intelligent machines:
We will…expedite implementation of national science and technology programs… make breakthroughs in core technologies in fields including next generation information and communications, new energy, new materials, aeronautics, biomedicine and smart manufacturing…
Perhaps the best example of China’s goal of becoming a global leader in artificial intelligence (AI) is in the area of facial recognition technology. These systems, which automatically identify an individual from a database of digital images, are now a part of everyday life in China in areas such as public security, financial services, transport and retail services.
This technology is also just one aspect of a broader system being rolled out by the Chinese authorities. It aims to monitor and influence the whole of Chinese society (individuals and organisations) through social credit ratings.
China knows that an essential part of achieving its aim of “science and intelligent technology leadership” is putting in place high quality legal protection for intellectual property. However, as recent reports from the United States have found, there remain many deficiencies in China’s protection of trademarks, copyrights, and patents.
IP enforcement in the case of piracy and other breaches is often inadequate. Either there is no prosecution of breaches, no positive finding that a breach has occurred or the penalty applied is too light to have any deterrence value.
However, for firms that do take the trouble to properly register their IP in China, protection does exist and enforcement is improving and will continue to improve.
Even though Australia follows the United States in much of its policy, Australian exporters and consumers will be hoping we don’t get caught in the crossfire as the US and China impose sanctions on each other.
US President Donald Trump has the power to impose trade sanctions on China for its disregard of US intellectual property (IP) rights: patents, trademarks and copyright.
These sanctions could make Chinese exports more expensive or prevent access to the US market. China has already indicated it will play tit for tat, imposing its own sanctions.
Trade disputes are often as much about rhetoric as about reality. China will remind the world that the US began as a pirate nation, harvesting European technological innovation and cultural production (such as work by Byron, Shelley, Dickens and Trollope) on the basis that it was a developing nation and because it could.
Away from the headlines China will likely take the US to the World Trade Organisation (WTO), a global mechanism for resolution of trade disputes. The US has announced it will take China to the WTO over patent violations.
The US will presumably ramp up claims with the WTO against other trading partners (such as India, Indonesia, Thailand and members of the European Union) that appear on its watch list for allegedly pirating US knowhow.
What this means for Australia
Academics such as Matthew Rimmer have astutely highlighted disadvantages for Australian consumers as citizens of an IP colony. This is where we import more than we export in content and pay a premium for work from overseas.
For example, we pay more than our US counterparts for software and hardware that most people take for granted. Our IP regime – in principle and practice – construes many violations of IP rights as piracy.
Our regime is aligned with that of the US. That reflects our traditional defence policy and the significance of US investment. What is good for US companies Microsoft, Pfizer and Disney is deemed to be good for Australia.
But joining in this cascade of retaliation will jeopardise economic growth, foster political unrest in developing economies and penalise consumers. The salient feature of economic growth over the past four decades has been globalisation – trade and investment across borders – rather that fundamental productivity gains through information technology.
Integration with the global economy (alongside the hollowing-out of local manufacturing and the TAFE system) mean that we cannot turn back the clock to the days of Alfred Deakin. Deakin’s grand compromise – the Australian Settlement – promised to protect small farmers, local manufacturers and workers behind walls that restricted migration and imports.
The headline-grabbling sanctions from Trump might also not necessarily be supported. Some business leaders recognise the importance of trade across the global economy and are perplexed by the current policy that seems to be driven by Trump’s late-night tweeting rather than anything coherent.
Where does that leave China?
China’s response has so far been cool. Moderation in the public arena highlights the idiosyncratic nature of Trump’s statements. It also reflects a deeper reality.
China wants to sell high-technology products to Australia, the US and other nations. One is example is 5G telecommunication networks from Huawei.
It wants the advantages that come from exploitation of the global IP regime, with its innovators and entrepreneurs building portfolios of patents and buying leading Western brands. It is likely to emulate what we saw with Japan: from “pirate” to IP citizen, complying with laws, within a few decades.
Beijing is slowly strengthening the enforcement of IP rules in key regions such as China’s Pearl River Delta. In part that’s an effort to reduce the backlash in its export markets and it’s also a recognition that growth may be a matter of fostering innovation rather than copying or cheap labour.
Australia sources many manufactured items from China, with that production often dependent on US, Japanese and EU IP. Our own economy depends on exports of commodities; universities are dependent on overseas (particularly Chinese) students. So we don’t want to see an increase in international tensions and don’t want a slowing of the global economy because of a cascade of tit-for-tat sanctions.
Australia ranks 12th in the Open Budget Index, and scores 74, much higher than the global average of 42 and the OECD average of 68. But Australia’s budget could still be more transparent if it included more on the budget’s impact on welfare and tax and by gender.
The Open Budget Index is published every two years and ranks countries using a transparency score, which is based on a survey for each country about publishing of budget documents, budget oversight and public participation.
This year, there were 115 countries in the index and Australia was included for the first time. Australia ranks behind our neighbours New Zealand and also behind the United States, United Kingdom and France. The top three countries in the index are New Zealand (with a score of 89), South Africa (89) and Sweden (87).
Each country’s survey for the index is prepared independently by an in-country civil society organisation or academic researcher. Applying standardised questions and based on evidence, researchers at the Tax and Transfer Policy Institute conducted the Australian survey. The assessments are also reviewed anonymously..
The survey assessed Australian federal budget process for the 2015-2016 year and the first half of the 2016-2017 year. Australia’s government performs well in publishing most budget documents at different points in the budget process.
Where the Australian budget falls down is in engaging the public in the budget process. The index evaluates public participation with 18 indicators. Australia’s weakest score is in budget participation (41 out of 100). This indicates limited opportunities for the public to engage in the budget process.
Yet, given participation opportunities are much scarcer in most other countries in the world, Australia is in fact one of the top performers on this measure. Almost all countries have only scant opportunities for public participation (score 40 and below), except New Zealand, the United Kingdom, Australia and the Philippines.
Where Australia scores really well is in its budget oversight by the Australian National Audit Office (a score of 100). But Australia presents a mixed picture on the checks and balances in overseeing the budget. The parliament provides adequate oversight at the executive and audit stage (that gets a score of 67); but limited oversight at the formulation and approval stage for the budget (with a score of 48). Overall, Australia gets a score of 70 out of 100, lagging considerably behind Norway (91) and Germany (89).
The main barrier to improving this is the lack of pre-budget debate by the parliament. Budget Paper No. 1 is given to members of parliament less than two months before the start of the budget year, and in-year budget implementation is not examined by a parliamentary committee.
Room for improvement
It’s crucial that budget processes are fair, open, democratic and accountable. Australia performs well generally on budget transparency – as we should expect as citizens in a robust parliamentary democracy. But there is some room for improvement.
For example, Australia’s budget contains much less information than in the past about distributional effects of budget policy on taxes and welfare. The government is no longer providing “cameo” tables, which show the projected impact in the real disposal incomes of different hypothetical families, as it did in the previous budgets prior to 2014-15.
The Australian budget also does not contain any analysis of the budget by gender. This is in contrast to the 1980s, during that time Australia was the pioneer in introducing gender budget analysis.
These gaps show us why it’s important for us to keep an eye on transparency. We should not be complacent. We need more public reporting, analysis and opportunities for public participation in the budget process.
Chinese President Xi Jinping wants to transform China’s military into the world’s most powerful force by 2050. And he could be on track to do it.
On the opening day of its National People’s Congress in Beijing yesterday, China reported a defence budget of ¥1.11 trillion ($A225 billion) for 2018. That represents an 8.1% increase in its defence budget, compared to a 7% increase last year.
China’s military has modernised rapidly in recent years. Since January alone it has demonstrated new capabilities in stealth fighter jets, drones, naval ships and advanced missiles.
Chinese scientists are also working to develop revolutionary technologies that would change the way wars are fought – and the way we live.
While China still lags the US in overall technological capability, it has narrowed the gap substantially. In the coming decades, it is poised to challenge US technological supremacy in key fields such as artificial intelligence, supercomputing and quantum information science.
What explains China’s rise as a technological power?
According to one security analysis, between 2006 and 2013 the Chinese military stole confidential data from more than 140 organisations around the world. The problem was so serious that in May 2014, the US Department of Justice indicted five Chinese military hackers for cyber-espionage activities against US companies.
Second, China has been able to mobilise resources for priority technology sectors and research and development (R&D) projects in a way that many democracies are simply unable to do because of the limits of government power or popular mandate. Large state subsidies, government R&D funding, tailored regulations, market barriers and lax individual rights (such as privacy) protection have given Chinese domestic companies an edge over their foreign competitors.
Here are a few examples of how China is making rapid progress in high-tech fields with military applications.
Hypersonic technology could one day allow us to travel from Beijing to New York in about two hours, rather than the 13 hours it currently takes. China is developing a hypersonic glide vehicle known as DF-ZF to make its nuclear and non-nuclear missiles extremely fast, manoeuvrable and capable of defeating existing missile defence systems.
To support this effort, China is building the world’s most advanced hypersonic wind tunnel for testing the extreme conditions of supersonic flight. While an operational hypersonic missile is still years away, once developed it would be a formidable weapon. It could also have a destabilising effect on strategic relations between China and other powers by compressing the time window for decision-making in a conflict or crisis situation.
Another area of China’s focus is quantum technology, which uses subatomic mechanics to process and transmit information in a fraction of the time required by existing technology.
China is making rapid headway in quantum communication, computing and cryptography. In August 2016, China launched the world’s first quantum satellite. This enabled Chinese researchers to conduct cutting-edge experiments in quantum entanglement and teleportation. To win the quantum race, China announced last year that it will build the world’s largest quantum research facility at a cost of ¥76 billion ($A15.4 billion).
Quantum technology would enable the Chinese military to set up virtually unbreakable communication networks. It would also provide it with overwhelming computing power for information operations, such as the decryption of secret communications by adversaries.
China is also in the advanced stages of developing an electromagnetic railgun. This supergun uses electromagnetic energy to shoot powerful projectiles over vast distances at incredible speed. These projectiles are aerodynamic and their power comes from the kinetic damage generated by the intense speed at which they travel.
Recent photos circulated on Chinese social media show what is suspected to be an experimental electromagnetic railgun mounted on the bow of the Chinese navy ship. This indicates that China may soon be the first in world to test such a weapon at sea, where it could revolutionise naval combat. In contrast, the US Navy is winding down its railgun research program because of resource constraints and shifting priorities.
The above examples are only a few among dozens of high-tech fields in which China is making rapid progress. Others include biotechnology, robotics, supercomputing, nanotechnology, advanced materials, space technology, and artificial intelligence. In fact, the Chinese government has identified 17 engineering and science megaprojects that are key to China’s economic and military strength. These include advanced satellites, large nuclear reactors, large aircraft and high-end electronic chips.
China’s continued rise as a technological giant will have profound implications for its military power as Beijing leverages civilian technology for its military. This effort is so important that President Xi considers it a top priority. To underscore this, Xi created a powerful commission under his direct leadership to provide high-level guidance and oversight.
Much hinges on how Beijing chooses to use its new-found military and technological might. Indeed, China’s extensive geopolitical ambitions and increasingly assertive foreign policy are ominous signs that foreshadow the challenges ahead.
Once again, unfortunate civilians are trapped in the “hell on earth” that the Syrian civil war has become. This time it is the turn of the 400,000 residents of Eastern Ghouta, ten kilometres east of the capital Damascus. Latest reports put civilian casualties at 520 and thousands wounded under the heavy assault launched by President Bashar al-Assad’s ground forces supported by Russian air strikes.
It seems conditions in Syria are getting worse, and there is no end to the conflict.
The end to any violent conflict comes when either the warring sides realise the devastation they cause and make peace; outside intervention sways the warring parties to end the conflict; or there are clear winners delivering a crushing defeat to their enemies.
None of the warring factions seem to care about the devastation of the seven-year civil war. Almost the entire country is rubble – more than 400,000 people have died, there are 5 million Syrian refugees and more than 6 million displaced. Unfortunately, the peace option seems highly unlikely.
There had been international intervention through peace initiatives since 2013, when the then US secretary of state, John Kerry, lamented that Syria “heads closer to an abyss, if not over the abyss and into chaos”. It was a chemical attack in Eastern Ghouta that prompted the United Nations to pass a resolution in 2013 demanding the destruction of chemical stockpiles and giving impetus to peace talks in Geneva. All efforts to make progress on these talks were continually stalled. The parties failed to meet even as late as 2017, painfully expediting Kerry’s apocalyptic prediction.
The Geneva talks were paralleled by a Russian-led peace initiative in Kazakhstan and later in Sochi. These talks could not have been expected to succeed, given that Russia’s unconditional and active support of the Assad regime hampered any attempt at brokering a peace deal.
Apart from the vested interests and insincerity, the biggest stumbling block has been disagreement over who to include in the peace process. The US does not want Assad or Iran involved; Turkey does not want the Kurdish People’s Defence Unit (YPG); and Russia does not want any of the jihadist rebel groups.
The sheer number of rebel groups is another issue. In the relatively small area of Eastern Ghouta alone, there are three rebel groups, which often bicker with one another.
Since the conflict began in 2011, nearly 200 separate rebel groups have sporadically emerged. Although most of these later merged into larger entities, there are still too many groups. Their inclusion in any peace process has been problematic, because it is unclear who actually represents the Syrian opposition, not to mention the groups’ refusal to sit at the same table.
Then there is the thorny issue of ideological and religious differences. Shiite Syrians and a segment of secular Sunni Muslims support the Assad regime, whereas the largest chunk of the rebel groups are Salafi jihadists. The exceptions are the Kurdish YPG and the largely weakened Free Syrian Army.
All along, Assad’s regime has been claiming it is fighting IS, Al-Qaeda and other Salafi jihadist groups to keep Syria a modern secular state. Putin is pushing Assad to wipe out these groups, spurred by the deep fear they could mobilise radical Muslim groups within Russia’s borders.
The US and Europe are in the cognitive dissonance of wanting neither Assad nor jihadist groups to gain control in Syria. They don’t want Assad, but they like his argument of protecting a modern secular Syria. The unspoken preference is for Assad over any Jihadi rebel group.
So, the lack of an effective peace intervention and the impossibility of parties sitting down to negotiate leaves only the option of fighting it out until clear victors emerge.
This leaves the Assad regime with a free run to assert itself as the only feasible and legitimate government in Syria, a possibility that may indeed eventuate.
This is the strategic line the Assad regime has drawn thick on the ground. It explains why Assad forces have ignored the UN’s 30-day ceasefire resolution. Putin’s disregard for the resolution, by reducing it to a farcical five-hour window, shows that neither Assad nor Putin wants the rebels to regroup and gain strength. They want a quick and absolute victory, even if it is a bloodbath.
Just as it is almost certain that the rebels of Eastern Ghouta will fall, it is equally certain Assad forces will next intensify the siege of Idlib, a northeastern city held by the Salafi jihadist rebel group Tahrir al-Sham (HTS). This pattern will continue until all rebel groups are wiped out.
It is unlikely there will be any fighting between Assad forces and the Kurdish YPG, as that would mean an open confrontation between Russia and the US. After the US supported the YPG, it successfully ended Islamic State’s presence in eastern Syria. The US has made it clear it is there to stay, establishing a 30,000-strong border security force as a deterrent against IS regrouping, but more importantly to stop Assad attacking Kurdish regions once he clears the ground of rebel groups in his territory.
The wild card in Syria is Turkey’s unpredictable president, Recep Tayyip Erdogan. He aims to establish Turkey in northeastern Syria as a third major player along with Russia and the US, by fighting alongside elements of the Free Syrian Army to capture the Kurdish-controlled district of Afrin.
Whether Russia and the US will allow Erdogan to realise his objectives remains to be seen. He may find he is out of his league when things get tough on the ground, forcing him out of Syria.
The Syrian conflict will end only if the Russian-supported Assad regime wipes out all Salafi jihadist rebel groups and regains control of western Syria and its most important cities. This may be before the end of 2018. In the meantime, the international community should be prepared to lament more civilian casualties.
Mehmet Ozalp, Associate Professor in Islamic Studies, Director of The Centre for Islamic Studies and Civilisation and Executive Member of Public and Contextual Theology, Charles Sturt University
One of the coldest northern winters for many years proved a piece of good fortune for the Winter Olympics in South Korea, but it may be the last happy moment on the Korean Peninsula for a long time. A war there is a distinct possibility. Some form of military action to disrupt North Korean nuclear weapon developments is even more likely.
Diplomacy may have run its course. We are at the most dangerous moment since the Korean War armistice in 1953. A war today could have unimaginable consequences: a catastrophic death toll, missile strikes beyond the peninsula, the first nuclear bombs to be used in conflict since Hiroshima and Nagasaki.
The risk has long been real – and in 2018, with Donald Trump in the White House, it is alarmingly high. Events unfolding on the Korean Peninsula and in Washington are pointing in a direction that is difficult, but essential, to contemplate.
A fear of mass civilian casualties and the perception that North Korea has a low bar on pre-emption have haunted US administrations. At least ten major North Korean atrocities and provocations since 1967 have been essentially passed over. The response has been sporadic attempts at diplomacy, backed by ever-tightening sanctions.
The Obama administration, faced with a paucity of good options and a hope that at some point the North Koreans would bend, articulated the Allied tactic as “strategic patience”. The Trump administration has said those days are over.
What has changed to bring us to this point? The first shift is the emergence of Kim Jong-un as supreme leader following his father’s death in 2011. Clearly the most insecure of the dynastic line, Kim’s regime has been marked by regular and brutal purges of his retinue and deepening oppression of his people.
North Korea’s nuclear capabilities are entwined with Kim Jong-un’s legitimacy. Recognition of North Korea’s status as a nuclear power is non-negotiable. Last year there were 23 tests of missile capability, culminating in the launch of the Hwasong-15 intercontinental ballistic missile (ICBM). At that point, Kim declared his program “complete”.
Kim’s 2018 New Year statement attracted attention for its outreach to South Korea, an obvious attempt to drive a wedge between the United States and its ally. This produced a flurry of diplomacy to include the North in the Winter Olympics.
For some, this raised hopes. But most observers had the sense that we had been here before, and none should be fooled. More significant was Kim’s indication that North Korea will focus on “mass-producing nuclear warheads and ballistic missiles for operational deployment”.
The second major change in the Korean situation is the election of US President Donald Trump. Trump’s approach to national security has deviated more from his campaign promises than any other set of policies.
He has dismissed allies, including South Korea, even suggesting that nation might want to provide its own nuclear umbrella. He sensed his voter base was tired of American commitments and wars, yet now finds himself on the verge of a war that would dwarf any in recent times.
Trump’s grasp of most matters in international politics and military affairs is rudimentary. His interventions, by tweet or otherwise, provoke instant mockery among the informed community. But he is the man in charge, and so his views bear close analysis. They reveal his method of processing the information and intelligence he is receiving. In response to a New Year nuclear boast from Kim, Trump tweeted:
Most commentary mocked this schoolyard exchange, but it was significant. Trump is seriously contemplating a war to disarm North Korea of its weapons.
Man in the middle
It would be folly to assume that Trump’s views are not widely held within his administration. His national security advisor, H.R. McMaster, who has described North Korea as “the greatest immediate threat to the United States”, is a leading proponent of military action.
This has posed some unique challenges for the secretary of defence, Jim Mattis, who understands the scale of a likely conflagration. Mattis has repeatedly warned that a conflict with North Korea would be “catastrophic”, while also providing assurances of the ultimate outcome – total US victory and the end of Pyongyang’s nuclear program – so as to maintain deterrence.
Mattis works in tandem with the secretary of state, Rex Tillerson, to achieve a diplomatic solution through a tighter sanctions regime. But Mattis matters to Trump; Tillerson doesn’t. Trump was angry about Tillerson’s suggestion that the US was prepared to begin talks with North Korea without preconditions.
We consider this to be a very reckless regime. We don’t think we need a band-aid and we don’t think we need to smile and take a picture. We think we need to have them stop nuclear weapons and they need to stop it now.
Trump’s principal source of advice is the Pentagon, which for years has worked on military options to pre-empt North Korea. The Pentagon’s primary duty is to work out how things can be done, a different task from saying whether they should be. Those who carry the diplomatic argument are sidelined.
This leaves Mattis in the weighty position of having to find both a solution and the enabling argument.
Mattis says the US has some potential military options that would not result in the devastation of Seoul, though he has not provided any details. How would it be done?
An apparent “preferred option” is the use of joint CIA and special forces teams – like those used in Afghanistan in 2001 – to seize the nuclear sites.
However, a covert operation of this kind would probably not be a standalone activity – extensive use of bombers and cruise missiles is likely. The possibility of a broader war through an accident or misinterpretation is substantial.
What would be the North Korean reaction to a limited punitive event? If Kim is as “rational” as is commonly claimed, a cruise missile strike to pre-empt a test would hardly trigger a massive response. Most likely, it would be a hit at a soft South Korean target or military base, or a cyberattack.
But neither a limited operation nor a wholesale assault on North Korea’s nuclear capabilities could be attempted without having in place the mechanisms for an all-out war. Defending Seoul would require the rapid degrading of the mortar, rocket, missile and artillery capabilities ranged against it.
Given the erosion of North Korea’s conventional capabilities, that might be doable. The problem would lie in what Kim might do in a situation where his regime’s survival was in question. Has he secreted nuclear weapons that could unleash devastation on South Korea and Japan? Half-a-dozen weapons would be economy-destroying; a dozen would be civilisation-destroying.
This brings us back to the question of why Trump would try. For him, the game is simple: North Korea shall not have an ICBM.
For the experts and advisers advocating a pre-emptive strike, it goes to the nature of Kim’s regime. North Korea is a nuclear power like no other, and its intentions are an open question. Does North Korea desire a nuclear capability simply for deterrence and regime survival, or does it have a more aggressive ambition to use that capability to try to reunify the peninsula?
It is difficult to imagine that a pre-emptive US strike can do anything other than risk the devastation of South Korea and Japan, with dreadful human and environmental consequences. Small wonder former Trump strategist Steve Bannon said, before leaving the White House: “There’s no military solution, forget it.”
There is a closing, not closed, window for diplomacy. Any attack would need to be preceded by a comprehensive diplomatic strategy involving China. The US might want to test the waters with China and North Korea on solutions involving a major stand-down rather than entire elimination of North Korea’s nuclear capability.
We probably have not yet seen the full weight China is capable of bringing to bear on North Korea. It would have to be a great deal to bring Kim to heel, and it is difficult to envisage such an outcome that would not undermine his sense of his regime’s legitimacy.
It is not yet midnight, but as the crisis deepens, the diplomatic and military options get more and more complex. In averting catastrophe, having a bigger nuclear button will not guarantee success. That is obvious to most informed observers.
But is it obvious to Trump? The answer is unknowable. What is certain is that his own sense of legitimacy is bound up in North Korea having no ICBMs. Richard Haass, president of the Council on Foreign Relations, puts the prospect of war at 50/50.
The prediction is chilling. This is going to be a hard year.
That judgment remains valid, but last week a sliver of light appeared. Motivated at least in part by concern over the march toward confrontation we describe, both during and after the Olympics South Korean President Moon Jae-in has sought to buy time for diplomacy.
High-level negotiators from the South, following meetings with the North, reported a possibility their counterparts might be prepared to put their nuclear capability on the table in return for security guarantees.
Some analysts suggest the latter means the removal of US forces and guarantees to the South they might think about it, essentially a delaying tactic. Moon wants to test this at a meeting with his counterpart. Trump himself said this might be a start. Certainly in terms of management of allied relationships, the US would want to see what it means, though public statements by the North suggests it is pressing on with the nuclear plan.
Past experience would indicate this is nothing more than an effort at confusion. Still, we don’t know how the other side of the hill interprets Trump’s obvious preparedness for war. The US will certainly need to do some thinking about a matter that has attracted only sporadic attention to date – what does a diplomatic end game look like?
One senses the US clock is still ticking to midnight, and this is not an endless process without credible developments. A hard year ahead remains the case.