Atlantic Council – Medill National Security Zone http://nationalsecurityzone.medill.northwestern.edu A resource for covering national security issues Tue, 15 Mar 2016 22:20:28 +0000 en-US hourly 1 Economic calculations vs. national security strategy in the East Asian oil market http://nationalsecurityzone.medill.northwestern.edu/blog/2015/06/11/economic-calculations-vs-national-security-strategy-in-the-east-asian-oil-market/ Thu, 11 Jun 2015 15:26:32 +0000 http://nationalsecurityzone.medill.northwestern.edu/site/?p=22463 Continue reading ]]> WASHINGTON- Less than a year ago, brent crude oil, the international benchmark, was around $115 per barrel. Today, it’s $65.32 a barrel.

And the oil industry continues to be volatile due to unconventional oil production, geopolitical conflicts and oil sanctions on Iran, according to an April 2015 report by OPEC, the Organization of the Petroleum Exporting Countries. The major actors in East Asia- Japan, China, South Korea and ASEAN, which are all heavily dependent importers of oil from the Middle East, should temporarily ease the historic friction these nations harbor, for the sake of their economies.

“Asian policy elites are putting up this one-way firewall to politicians separating economic calculations on the one hand and national security strategy on the other,” said Van Jackson, a visiting fellow at Center for a New American Security.

For example, the relationship between Japan and South Korea has been tumultuous. In World War II, the Japanese government colonized the Korean peninsula and exploited South Korean women as comfort women, which the Japanese government currently minimizes, according to the Council of Foreign Relations records. The tense relationship continues today.

Despite the lack of trust, intensifying competition and historical rivalries, their paradoxical warm economic relationship and frigid geopolitical tensions allows for burgeoning trade relations. The multidimensional issues relating to energy include both economic and security, and are extremely complex and multi-faced.

Experts convened at the Atlantic Council last month to discuss new strategies to establish a stable oil infrastructure, despite uncertain global energy markets and unstable relationships.

Edward Chow, a senior fellow at the Center for Strategic and International Studies, said East Asian countries avoid collaborating with neighboring states that also need oil, and instead pivot toward the Middle East to buttress their economies.

However, their dependence on imported oil became a concern when the oil market in the Middle East quivered from civil unrest.

Without their market, Asian countries would struggle in producing enough energy.

In order to address oil volatility, Jackson argued that these nations shouldn’t solely depend on the Middle Eastern oil market. Instead, they should yield historic tensions as bygones for the sake of economic prosperity.

Last year, China passed the United States as the largest net oil importer in the world, heavily importing from the Middle East, according to the U.S. Energy Information Administration. Japan is the third largest net importer of oil globally, behind the United States and China, and has limited domestic energy after its Fukushima plant incident.

“Japan and Korea have both made explicit their intention to diversify away from Middle East imports in favor of U.S. imports to the extent that they can,” Jackson said. “So the U.S. is the supplier of choice for both Japan and Korea, and they’ve put their money where their mouth is to some extent.”

However, Asia’s demand for oil is so high that optimistic projections of U.S. export capacity may not be capable of eliminating their dependence on Middle East oil, he said.

Experts agreed that there needed to be an interconnected regional energy infrastructure among Asian countries.

The reason this hasn’t occurred is because geopolitics and historical tensions trump market incentives and collective interests.

“My concern is that whatever optimism there is on the horizon,” arising in Japan and Korea energy security, “that optimism is taking place within a context of Asian nationalism, pervasive mistrust, and strategic and military competition,” Jackson said.

As oil prices have marginally rebounded this year, both countries’ energy strategy plans encourage their respective companies to increase energy exploration and development projects around the world, according to the EIA.

“Japan and Korea are more of a litmus test for what is possible for the entire region,” Jackson said. “If Japan and Korea can’t cooperate for a common energy problem that they have, I don’t know what hope there is for the region.”

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Kerry makes national-security pitch for trade deals http://nationalsecurityzone.medill.northwestern.edu/blog/2015/04/23/kerry-makes-national-security-pitch-for-trade-deals/ Thu, 23 Apr 2015 20:21:58 +0000 http://nationalsecurityzone.medill.northwestern.edu/site/?p=21573 Continue reading ]]> U.S. Secretary of State John Kerry (File Photo by Jennifer-Leigh Oprihory/MEDILL)

U.S. Secretary of State John Kerry (File Photo by Jennifer-Leigh Oprihory/MEDILL)

WASHINGTON — Secretary of State John Kerry placed the issue of U.S. trade agreements firmly in a national security context Thursday, saying two pending trade deals demonstrate how U.S. economic and national security interests are one and the same.

“In our era, the economic and security realms are absolutely integrated,” he told a room full of analysts and policymakers at an Atlantic Council event, making the case for the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership, two sweeping trade deals being negotiated by the U.S. Trade Representative.

The Trans-Pacific Partnership would set rules for the U.S. and 11 Asian countries, which notably exclude China, by far the biggest economic force in the region.

“The idea is to put pressure on China and write the rules before they have a chance to write them first,” said Garrett Workman, associate director of global business and economics and Atlantic Council.

But many economists and Washington insiders see the move to couch these economic issues in a national security context as a way to make them more palatable to the mounting domestic forces that oppose them.

“They need to make this a national security argument,” said Dan Ikenson, director of the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute, “because the economic argument is falling on deaf ears in the Congress and in the more traditionally resistant arms of the Democratic Party.”

Perhaps the most resistant is organized labor, which has long fought the TPP and similar trade agreements that have come before, such as the North American Free Trade Agreement, which was passed during the Clinton administration to open trade with Mexico and Canada.

“When these kinds of agreements fail to make their case on economic grounds,” said Thea Mei Lee, a deputy chief of staff at the AFL-CIO, the largest federation of unions in the U.S., “the leadership tends to invoke these sorts of amorphous national security issues.”

Labor isn’t the only point of friction for the TPP, which is in its final stages of negotiation internationally but still has to make it through Congress once the trading partners have settled on the terms. The American dairy industry, which is being pressured to accept more dairy imports from abroad, is trying to offset this breach into their market share by exporting their own product to other countries.

“If Canada opens its dairy market to some extent and if the U.S. gets a good package from Japan, then the U.S. could lower its barriers to New Zealand,” said Michael Smart, vice president of Rock Creek Global Advisors, a consulting firm that works on trade.

Negotiators have many such wrinkles to iron out in the coming weeks, and the Obama administration will likely have to account for many more when the TPP comes before Congress, which is likely to happen in September or October.

But some participants foresee a longer timeline for the agreement.

Moderating a panel before Kerry delivered his address, Frederick Kempe, the president and chief executive of the Atlantic Council, set the tone for the discussion by telling an anecdote.

“I asked a someone who worked on NAFTA what it takes to get one of these things done,” he said. “The reply was, ‘You have no idea what you’re getting into.’”


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