A bridge too far.

Headline: A bridge too far. – 36th Parallel Assessments

Jiaozhou Bay/Qingdao-Haiwan Bridge, China. Photo: Feel the Planet (feel-planet.com).

The Labour-led government in New Zealand has settled on a new mantra when it comes to addressing the US-China rivalry. It claims that New Zealand is ideally situated to become a bridge between the two great powers and an honest broker when it comes to their interaction with the Southwest Pacific. This follows the long-held multi-party consensus that New Zealand’s foreign policy is independent and autonomous, and based on respect for international norms and multinational institutions.

The problem is that the new foreign policy line is a misleading illusion. It ignores historical precedent, the transitional nature of the current international context, the character and strategic objectives of the US and the PRC and the fact that New Zealand is neither independent or autonomous in its foreign affairs.

The historical precedent is that in times of conflict between great powers, small states find it hard to remain neutral and certainly do not serve as bridges between them. The dilemma is exemplified by the island of Melos during the Peloponnesian Wars, when Melos expressed neutrality between warring Athens and Sparta. Although Sparta accepted its position Athens did not and Melos was subjugated by the Athenians.

In stable world times small states may exercise disproportionate influence in global affairs because the geopolitical status quo is set and systemic changes are incremental and occur within the normative framework and around the margins of the system as given. When international systems are unstable and in transition, small states are relegated to the sidelines while great powers hash out the contours of the emerging world order—often via conflict. Such is the case now, which has seen the unipolar system dominated by the US that followed the bi-polar Cold War now being replaced by an emerging multi-polar system aggregating new and resurgent powers, some of which are hostile to the West.

In this transitional moment the US is in relative decline and has turned inward under a Trump administration that is polarizing at home and abroad. It is still a formidable economic and military power but it is showing signs of internal weakness and external exhaustion that have made it more reactive and defensive in its approach to global affairs. China is a rising great power with global ambition and long-term strategic plans, particularly when it comes to power projection in the Western Pacific Rim. It sees itself as the new regional power in Asia, replacing the US, and has extended its influence world-wide.That includes involvement in the domestic politics and economic matters of Pacific Island states, including Australia and New Zealand.

China’s rise and the US decline are most likely to first meet in the Western Pacific. When they do, the consequences will be far reaching. Already the US has started a trade war with the Chinese while reinforcing its armed presence in the region at a time when China cannot (as of yet) militarily challenge it. China has responded by deepening its dollar and debt diplomacy in Polynesia and Melanesia as part of the Belt and Road initiative, now paralleled by an increased naval and air presence extending from the South and East China Seas into the blue water shipping lanes of the Pacific.

There lies the rub. New Zealand is neither independent or autonomous when it confronts this emerging strategic landscape. Instead, it has dichotomized its foreign policy. On the security front, it is militarily tied to the US via the Wellington and Washington Declarations of 2010 and 2012. It is a founding member and integral component of the Anglophone 5 Eyes signal intelligence gathering network led by the US. It is deeply embedded in broader Western security networks, whose primary focus of concern, beyond terrorism, is the hostile activities of China and Russia against liberal democracies and their interests.

On trade, New Zealand has an addict-like dependency on agricultural commodity and primary good exports, particularly milk solids. Its largest trading partner and importer of those goods is China. Unlike Australia, which can leverage its export of strategic minerals that China needs for its continued economic growth and industrial ambitions under the China 2025 program, New Zealand’s exports are elastic, substitutable by those of competitors and inconsequential to China’s broader strategic planning. This makes New Zealand extremely vulnerable to Chinese economic retaliation for any perceived slight, something that the Chinese have been clear to point out when it comes to subjects such as the South China island-building dispute or Western concerns about the true nature of Chinese developmental aid to Pacific Island Forum countries.

As a general rule issue linkage is the best approach to trade and security: trading partners make for good security partners because their interests are complementary (security protects trade and trade brings with it the material prosperity upon which security is built). Absent that, separating and running trade and security relations in parallel is practicable because the former do not interfere with the latter and vice versa. But when trade and security relations are counterpoised, that is, when a country trades preferentially with one antagonist while maintaining security ties with another, then the makings of a foreign policy conundrum are made. This is exactly the situation New Zealand finds itself in, or what can be called a self-made “Melian dilemma.”

Under such circumstances it is delusional to think that New Zealand can serve as a bridge between the US and China, or as an honest broker when it comes to great power projection in the Southwest Pacific. Instead, it is diplomatically caught between a rock and a hard place even though in practice it leans more West than East.

The latter is an important point. Although a Pacific island nation, New Zealand is, by virtue of its colonial and post-colonial history, a citizen of the West. The blending of Maori and Pacifika culture gave special flavor to the Kiwi social mix but it never strayed from its Western orientation during its modern history. That, however, began to change with the separation of trade from security relations as of the 1980s (where New Zealand began to seek out non-Western trade partners after its loss of preferred trade status with UK markets), followed by increasingly large waves of non-European immigration during the next three decades. Kiwi culture has begun to change significantly in recent years and so with it its international orientation. Western perspectives now compete with Asian and Middle Eastern orientations in the cultural milieu, something that has crept into foreign policy debates and planning. The question is whether the new cultural mix will eventuate in a turn away from Western values and towards those of Eurasia.

The government’s spin may just be short term diplomatic nicety posing as a cover for its dichotomous foreign policy strategy. Given its soft-peddling of the extent of Chinese influence operations in the country, it appears reluctant to confront the PRC on any contentious issue because it wants to keep trade and diplomatic lines open. Likewise, its silence on Trump’s regressions on climate change, Trans-Pacific trade and support for international institutions may signal that the New Zealand government is waiting for his departure before publicly engaging the US on matters of difference. Both approaches may be prudent but are certainly not examples of bridging or brokering.

While New Zealand audiences may like it, China and the US are not fooled by the bridge and broker rhetoric. They know that should push come to shove New Zealand will have to make a choice. One involves losing trade revenues, the other involves losing security guarantees. One involves backing a traditional ally, the other breaking with tradition in order to align with a rising power. Neither choice will be pleasant and it behooves foreign policy planners to be doing cost/benefits analysis on each because the moment of decision may be closer than expected.

Analysis syndicated by 36th Parallel Assessments

MIL OSI – Source: Evening Report Arts and Media

Analytic Brief: Influence Operations, Targeted Interventions and Intelligence Gathering: A Primer.

MIL OSI – Source: Evening Report Arts and Media

Headline: Analytic Brief: Influence Operations, Targeted Interventions and Intelligence Gathering: A Primer.

Analysis syndicated by 36th Parallel Assessments – Headline: Analytic Brief: Influence Operations, Targeted Interventions and Intelligence Gathering: A Primer.

Source: http://logos.nationalinterest.in/2017/01/mind-map-russian-influence-campaign-us-2016-presidential-elections/

Revelations of Chinese influence operations in Australia and New Zealand, and the ongoing sequels to the Russian “interference” in the 2016 US election, have caused outcry and concern amongst policy-makers and public alike. Beyond the xenophobic aspects to fears of the spectre of a “Yellow Peril” emerging in the Antipodes (a fear that we do not share) aand the Cold War overtones to the response in the US to the Russia allegations, the way in which influence operations, targeted interventions and intelligence gathering differ–and how and when they overlap–is a subject worth considering. In this analytic brief 36th Parallel Assessments delinates what these three types of foreign outreach are and how they interact as legitimate and illegitimate tools of the trade.

Influence Operations.
Influence operations, also known as influence peddling, are normal and legitimate tools of states as well as non-state actors such as private firms, non- and international governmental organizations. They are focused on the old adage “how to win friends and influence people” in pursuit of organizational objectives, be these diplomatic, economic, military or cultural in nature. The purpose is to create a favorable impression of a state, firm or agency in the mind of a target entity, be it the general public or selected subsets of it, particularly key interlocutors (agencies as well as individuals) whose decisions impact on the fortunes of the influencing agent or organization.

Influence operations are the stock and trade of private sector lobbying and government outreach programs in foreign states. They include everything from wining and dining of potential business clients, partners or government decison-makers, providing transportation and accomodation to people of influence, staging cultural and artistic events, contributing to political parties and causes, organizing charities, creating education exchanges, donating goods and services, establishing media outlets and generally doing “favors” or good deeds in a target country, region or economic sector. The goal is to create a favorable impression of the influence peddler on the part of targeted entities and people in order to alter the narrative about the influencer in ways that are positive and profitable for it.

Influence operations are a well established part of foreign policy. Institutions like the Alliance Francaise, various US agencies and institutions like the Fulbright Commission, AID and Peace Corps, cultural promotion and friendship societies funded wholly or in part by foreign governments such as Confucious Institutes or Jewish Councils, business associations like the NZUS Council and American Chambers of Commerce–all of these organizations are in the business of promoting home country interests via various methods of exchange. The provision of developmental aid is another form of influence operation. A good example is China’s “checkbook diplomacy” in the South Pacific, where it provides no-or low-interest developmental loans to island states or gifts infrastructure projects to recipient countries as gestures of goodwill. The list of entities and countries that engage in influence peddling is not limited to powerful states or large business interests, and the cumulative impact of their operations is significant in shaping local perceptions of the international order.

Influence operations are most often overt in nature. However, there are instances when they may be used covertly to good effect. Russian use of social media to influence the tone of US campaign coverage (by among other things, placing political adverts and event invitations on platforms like Twitter and Facebook) is a classic instance of attempting to alter the narrative in order to influence the backdrop and lead-up to the elections. The use of so-called “disinformation campaigns,” in which false news stories are seeded throughout social and mainstream media outlets, is one prominent form of covert influencing (as well as giving birth to the phrase “fake news”).

The limits on influence operations are determined by local statutory and regulatory frameworks governing the domestic behavior of foreign agents. Some countries have relatively loose rules governing the activities of foreign influencers while others adopt more restrictive approaches to what can aand cannot be done by foreign agents on domestic soil. This includes what is acceptable when it comes to permissable monetary rewards, exchanges in kind or other forms of inducements provided by influence peddlers to others. In some South Pacific countries, decision-makers expect to be compensated for their time and interest in an influencer’s pitch regardless of the outcome. However, what is seen as koha or tribute in one context is seen as bribery in others, so influence operators must be keenly aware of where local mores draw the line at what is legal or illegal, legitimate or illegitimate when it comes to exchanges of favors.

Targeted Intervention.
Targeted intervention is a more contentious subject but in reality is just an extension of influence operations. Whereas influence operations focus on “softening up” targeted entities by altering general narratives about the influencer in ways that are more favorable to it, targeted intervention concentrates on securing specific outcomes within a targeted entity. This can be done by placing people in key decision-making positions, planting stories in compliant media or putting money into causes or individuals with the intent of securing a desired outcome in their fields of influence. Targeted interventions are conducted by businesses as well as political actors and state agencies.

Targeted interventions can be done overtly or covertly. Placing people in political parties with the intent of having them elected into office is one example of overt targeted intervention, unless the loyalities or political objectives of the person are disgusied or hidden. Donating to election campaigns is another overt form of intervention. Placing people in targeted businesses or public agencies, or engaging in third party financing of negative (or positive) advertising campaigns, are covert forms of intervention in specific fields of endeavour.

Targeted intervention becomes contentious when it is done by foreign actors, particularly states but to include businesses, in order to advance their agendas vis a vis a a sovereign entity. This has been a subject fo considerable concern in the South Pacific, where commerical interests in extractive industries have been accused of intervening covertly using both coercive as well as financial means to disrupt opposition to their activities and to secure favorable environmental, health and safety regulations from local government in spite of that opposition.

Here again, Russian involvement in the 2016 US elections is illustrative. Russian intelligence is alleged to have hacked into the email servers of the Democratic presidential candidate and Democratic National Committee. Selected emails from these accounts were bundled with fake emails purportedly from the same authors and delivered to the whistle-blowing organization Wikileaks, which promptly published them. These were then picked up by mainstream media outlets in the US and covered extensively in the weeks leading up to the November ballot. The furore over the content of the emails gave ammunition to the Republicans and put the Democratic candidate on the defensive. Although it is unclear to what extent the negative cobverage of the email “scandal” contributed to the Democrat’s defeat, with the margin of victory boiling down to 60,000 votes (out of 130 milliion cast) in two swing states, it is possible that the targted intervention by Russian hackers had a role to play in the outcome.

Even more directly, US intelligence has alleged that the Russians also attempted to tamper with elexctronic balloting in several states. These efforts were thwarted by US counter-intelligence measures and led to quiet threats of reprisals, but the larger point is that the attempted manipulation of  ballots by the Russians is a clear example of targeted intervention.

To be fair, the US has a long history of targeted interventions in foreign countries, up to an including electoral manipulation and material support for insurrections and coups d’etats. The point here is to stress that many forms of targeted intervention fall far short of these extreme measures and in fact often preclude such extremes from happening.

Intelligence gathering.
Intelligence gathering is the process of acquiring information on targeted entities without their knowledge or consent. This can occur overtly or covertly and is conducted by private agencies as well as governmental organizations and states. The purposes of intelligence gathering are to determine intent, motivation, patterns of behaviour, organizational charcteristics and capabilities, resource bases and Open source intelligence gathering such as that provided by 36th Parallel Assessments uses public records, secondary sources, personal interviews and scholarly analyses to provide indepth  appraisals of specific situations. Open source intelligence gathering is also conducted by state intelligence agencies, think tanks, research institutes, and a variety of international, governmental and non-governmental organications. For example, economic and political officers in embassies spend most of their time tasked with drawing up assessments of current events in their host countries.

Covert intelligence collection is the use of surreptitious means to gather sensitive information about target entities. The targets can be military, diplomatic, economic or social in nature (say, family dynamics within dynastic regimes). Covert intelligence takes three main forms: technical intelligence (TECHINT) gathering (e.g. thermal imagery, acoustic, radar and seismic monitoring; signals intelligence (SIGINT) gathering (e.g. phone wiretaps, computer hacking, fiberoptic cable “bugging,” telemetry intercepts, decryption programs); and human intelligence (HUMINT) gathering (where human agents are sent into the field to gain both startegic and tactical insight into the behaviour of targeted entities as well as provide context to them). HUMINT comes in two forms: official cover, where the intelligence agents is provided official protection (“cover”) via embassy or other governmental affiliation formalized in the issuance of a diplomatic passport (thereby granting some level of immunity from criminal prosecution): and non-official cover (NOC), where the intelligent agent operates outside of the protections of diplomatic representation by posing as something other than a government agent, for example, as an academic, business person, charity worker, etc).

Be it overt or covert in nature, intelligence gathering is often conducted in concert with or in support of influence operations and targeted interventions.  This is because intelligence gathering hekps identify the best courses of action in any given context, including points of strength and weakeness in targeted entities.

Conclusion.

Influence operations, targeted interventions and intelligence gathering are tools of statecraft as well as of business engagement with the socio-political and economic environments in which they are located. 36th Parallel Assessments provides clients with the means to detect, deter, ameliorate or conduct influence operations and targeted interventions as well as provide open source geopolitical and market intelligence services in a range of contexts.

From failure, opportunity beckons.

MIL OSI – Source: Evening Report Arts and Media

Headline: From failure, opportunity beckons.

Analysis syndicated by 36th Parallel Assessments – Headline: From failure, opportunity beckons.

The Trump administration’s decision to withdraw the Trans-Pacific Partnership Agreement, a multinational trade and investment accord involving eleven Pacific Rim countries other than the US, is seen as a blow to hopes for a freer flow of goods and services in the Asia-Pacific Region. In this analytic brief we look at the potential opportunities presented to the non-US TPPA signatories by the US abrogation.

When President Trump signed the executive order withdrawing the US signature from the Trans Pacific Partnership Agreement (TTPA), he signed the death warrant of that multinational trade deal in its present form. The US was the core member of the TPPA and held the dominant negotiating position within it, so the decade-in-the-making, laboriously undertaken and vexing complex compact that was agreed to by the other eleven signatories is now all but null and void.

There are options, however, for the TPPA that may allow it to survive and thrive in light of Trump’s unilateral abrogation.

First, the other eleven member states can put the agreement into hibernation, wait for the 2020 US presidential election and hope that a more trade-oriented president succeeds Trump.

Second, they can hope that the Republican congressional leadership will force Trump to reverse his decision sometime between now and 2020. That would only occur if Trump is weakened by some failure and the GOP sensed that it could re-assert its traditional pro-trade stance at his expense. The Democrats would welcome the move for opportunistic partisan reasons even if some of its leading figures such as Bernie Sanders also oppose the TPPA and applauded Trump’s decision to pull plug on it.

Third, the members could look to themselves and re-draw an agreement that is less US-centric. Many of the provisions insisted on by the US could be reconsidered and even dropped in exchange for increased preferences for the interests of previously junior TPPA partners.

Fourth, the remaining TPPA partners could look to fill the void left by the US with another large market economy. The one that springs immediately to mind is China. That is where things get interesting, and where opportunity may lie.

China is already party to the ASEAN-China Free Trade Agreement (ACFTA) that established a regional free trade area that is the largest in terms of population and third largest in term of trade volume and nominal GDP. Some of the ACFTA signatories are also parties to the TPPA (Brunei, Malaysia, Singapore, Vietnam). This agreement is considered to be a “true” free trade agreement in the Ricardian sense because it reduces tariffs across 7,881 product categories to zero percent, with the result being that tariffs on ASEAN goods sold to China fell to 0.1 percent and those of China sold in ASEAN to 0.1 percent in the year the agreement went into force (2010)

The non-US TPPA members could opt to negotiate an agreement with ACTFA as one course of action. That may be difficult given that the TPPA is not a “genuine” FTA as much as it is an investor guarantee agreement (IGA) in which market regulations are altered to attract foreign investors and these are protected from legal liability in the event of disputes with the host state. What is not included in the TPPA are across-the-board reductions to zero tariff, and in fact many domestic industries remain protected or subsidised throughout the TPPA membership as part of the horse trading undertaken during negotiations over its central tenets. But it may be possible to reconcile the two trade deals in an effort to create a new super trade bloc on neo-Ricardian grounds.

Another option might be to invite China to the table. It has the second largest market in the world and is continues to grow at a sustained and rapid pace in spite of the vicissitudes of the world economy over the last two decades. It is making the transition from export platform to a mixed domestic mass consumption/value-added export model, and it has previously expressed interest in joining the TPPA. The US blocked consideration of China’s membership because it saw the TPPA as the economic equivalent of the military “pivot to Asia” announced by the Obama administration, that is, as a hedge against Chinese economic, diplomatic and military influence in the Western Pacific Rim in what amounts to a new Containment Policy in the Asia-Pacific.

With the US gone, China has an opening and the remaining TPPA members have an opportunity. The TPPA will have to be renegotiated, but it is likely that the non-negotiable provisions insisted by the US will not be supported by the Chinese and can be dropped in the effort to entice their interest. In turn, China might have to accept something less than blanket reductions in uniform tariffs and agree to a tariff reduction regime that is more segmented and scaled in orientation and gradual and incremental in application (i.e. more product or industry specific and phased in over a longer period of time). That is clearly within the realm of possibility, as is Chinese agreement to other TPPA provisions stripped of their US-centric orientation.

China has already signalled its intentions in this regard. President Xi used this year’s Davos Forum to preach the virtues of free trade and global commerce, arguing against protectionism as an impediment to international understanding and exchange. China has proposed the creation of a Regional Comprehensive Economic Partnership (RCEP) along the lines mentioned above with regard to an ACTFA-TPPA merger but with the provision that the US be excluded. There are many details to be ironed out but the groundwork has been laid for that to happen.

What makes the turn to a China-included trade bloc a potentially win-win proposition for remaining TPPA signatories is that the key provisions demanded by the US–changes in market regulations and preferential market entry clauses for US business interests (including changes in patent and copyright protection) and imposition of limited liability clauses in the event US businesses are sued by local governments–were those that were most resisted by domestic audiences in several TPPA member countries. Removing them not only allows the agreement to be free of those constraints but also diffuses a source of domestic opposition in countries where such things matter.

One thing TPPA states should think carefully about, especially small states like New Zealand, is the invitation to negotiate bi-lateral trade deals with the US instead of the TPPA (something just announced by the Trump administration). The historical record shows that large asymmetries in market size favour the larger over the smaller partner in bilateral trade agreements. This is due to economies of scale, market dominance, and economic and geopolitical influence derived from market size advantages. The recent track record of bilateral deals between the US and smaller states reinforces this fact. Australia, South Korea, Chile, Colombia and the Central American nations plus Dominican Republic grouped in the CAFTA scheme all have bilateral FTAs with the US. In all instances the majority benefits accrued to US-based companies and industries and the benefits accrued in the partner states were limited to specific export markets (mostly in primary goods), with little flow-on, trickle down or developmental effects in the broader national economies.

So rather than “jump on a plane” to sign a bilateral deal with the US, as one wag put it, smaller states such as New Zealand need to think hard whether the bilateral alternative with the US is more long-term beneficial than a multilateral agreement, especially when it has shown that under a certain type of administration the US is willing to renege on its commitments even if they are multilateral rather than bilateral in nature. With the Trump administration also set to review and replace the tripartite North American Free Trade Agreement with Canada and Mexico (NAFTA), it is clear that honoring commitments and maintaining continuity in trade policy is not, even if just for the short term, on the US agenda.

When one widens the lens on what the Trump administration is doing in terms of its threats to withdraw from various bi-and multinational defense agreements unless the partner states “pay more” for US protection, it becomes clear that the US is not, at least for now, a reliable international partner.

The reason is that the new US attitude to trade is part of a larger phenomenon. The neo-isolationist protectionism embedded in the “America First” approach adopted by the Trump administration has ended, however temporarily, over 50 years of bipartisan consensus in the US political elite on the merits of international engagement. Be it in trade, foreign aid or collective defense, the US policy elite, both public and private, have embraced globalisation as a means of projecting US power, influence and values world-wide. That era has come to end for the time being, and so long as Trump is successful in pursing his “America First” strategy it will continue to be so.

That may or may not make America Great Again but it could well have a negative impact on those who seek mutual benefit by engaging with it. They will be asked to do more, pay more and offer more concessions in order to be granted US favour.

In the absence of an alternative, that is an unenviable position to be in.

If alternatives are available, then the current moment in US politics provides a window of opportunity to countries that have found themselves marginalised by Trump’s policy directives.

The re-orientation of TPPA is one such opportunity because, if for no other reason, a US return to the TPPA fold in the post-Trump era will see it with much less leverage than it had up until now. Add to that the possibility of increased benefits via a renegotiated deal with the remaining and possibly new partners, and the downside of the US withdrawal seems acceptable.

From a smaller nation perspective, that is a good thing.