Tuesday, November 15, 2011

A thee-way waltz in Zioconned Honolulu Charades....

A thee-way waltz in Zioconned Honolulu Charades....
By M K Bhadrakumar

The broad outline of the Trans-Pacific Partnership trade agreement became the leitmotif of the weekend's Asia-Pacific Economic Cooperation (APEC) summit in Honolulu, Hawaii. But a long road lies ahead to know whether a platinum-quality agreement will be able to overcome the "noodle bowl" of overlapping free-trade agreements in Asia or end up merely adding another bowl of noodles within the current crop.

In immediate terms, though, Honolulu served one purpose: it gave clarity to the state of play in the complicated United States-China-Russia relations. At high-level meetings statesmen seldom begin with pleasantries the way US President Barack Obama did when he sat down on Saturday with his Russian counterpart, Dmitry Medvedev.

Obama said he had heard his friend "Dmitry" was spotted in a Hawaiian shirt "walking and enjoying the good weather" in his birthplace, Honolulu. Obama's spirits evidently lifted the moment his eyes fell on the comforting sight of "Dmitry". He was coming out of a tough meeting with Chinese President Hu Jintao, whom at his most informal he would address as "President Hu" after their nine meetings in the past three years. For Hu, too, "Barack" will remain "Mr President".

The current idiom of the US-Russia-China exchange is revealing. Even as the US-China relationship has come under the weather lately, things began to look up for the Russians. Moscow experienced disappointment during the George W Bush presidency, whereas Beijing looks back at those times with nostalgia. Moscow is pleased that Obama is someone with a "desire not only to listen but to hear others", as Russian Foreign Minister Sergey Lavrov described recently.

There is nothing particularly happening between the US and Russia at the moment to explain the Obama-Medvedev bonhomie. In fact, a terrible thing happened only most recently when Medvedev stepped aside and made way for Vladimir Putin in the race for the Kremlin in 2012. No matter how much Obama tried, and his Western allies dutifully encouraged, Medvedev wasn't convinced that Russia needed his leadership in the Kremlin for another six years.

Breathtaking display
The rhetoric that the 21st century is going to be America's "Pacific century" gave an unprecedented backdrop to the proceedings to Obama's nine-day tour of the Asia-Pacific, ominously hinting at a "Cold War style" US containment strategy toward China. But Honolulu instead presented a breathtaking display of US-China interdependency that doesn't easily lend itself to archaic Cold War strategies.

The US-Russia economic relationship is small change compared with Sino-American traffic. China can breathe life into the American economy and even possibly lift it from the pit, whereas the Russian economy is at best coping well for itself in these hard times. The US has no need of Russia's best offerings - oil and gas - whereas these are magical potions that could give a trillion-dollar ballast to the Russia-China relationship.

At Obama's APEC CEO Business Summit question and answer session, which was a highlight of the US president's agenda in Honolulu, no one cared to utter the word "Russia"; it was all "China, China, China". Corporate America has no death wish to kill the goose that lays the golden egg. Its demand is two-fold: China must give greater access to its market and should do more to give protection to US intellectual property rights.

The chief executive officers told Obama that what was needed was engagement. Reuters news agency took a poll among US business executives who were at the session with Obama and found that as many as 40% said their "single-biggest growth opportunity comes from the rise of spending power" in China.

However, Obama's meetings with Medvedev and Hu also had some common features. Neither meeting produced any concrete outcome. Obama told the media that Russia and China would help place pressure on Iran over its nuclear program and that Medvedev and Hu agreed with him on the problem. But the Russians and the Chinese have since conveyed an entirely different position.

No sooner had the Russian delegation taken off from Honolulu that Lavrov told the Russian press party that the latest International Atomic Energy Agency (IAEA) report on Iran "contains nothing new" and provided no further evidence that Tehran was developing nuclear weapons.

Lavrov caustically observed that the IAEA report seemed to "stir up passions in public opinion and prepare the ground for imposing some kind of unilateral sanctions" against Iran. He repeated Russia's opposition to any new sanctions in addition to those already imposed by the United Nations and the US.

Similarly, on Monday in Beijing, a Chinese Foreign Ministry spokesman echoed Lavrov's rejection of the sanctions route. He said, "Simply put, we believe pressuring, including blindly using economic sanctions, does not at all achieve the desired effect. From a long-term approach, we still want to resolve this problem through dialogue."

Again, Obama singled out Syria as one of the "world's trouble spots" that he discussed with Medvedev, but the latter merely nodded that Syria was discussed alongside the "situation in the Middle East" and Afghanistan.

However, the next day, a senior Russian military official maintained that Moscow would honor all its military contracts with Damascus and warned against a "repetition of the Libyan scenario" against Syria. Neither Obama nor Hu bothered to mention Syria in the recap of their meeting.

Whipping boys
The Obama-Hu meeting turned out to be a tough negotiation. Privately, Obama was more conciliatory than his rhetoric suggested. Hu told Obama that China would not be hustled on the yuan currency issue but "China will steadily advance the reform of the exchange rate mechanism with the goal of ensuring a market-based and managed floating exchange rate system that is tied to a basket of currencies".

But Obama recapped later: "Enough's enough. We're going to continue to be firm that China operate by the same rules as everyone else. We don't want them taking advantage of the United States."

Rhetoric aside, however, the message from Honolulu is once again that US-China ties constitute a very complicated relationship, but it is a long-term one that promises to be mutually beneficial and the negotiations at Honolulu leave enough to mull over for both sides.

The point is, an altogether new vector has surged lately in US-Russia-China equations. The Russians have given way to the Chinese as the favorite whipping boy of US politicians aspiring to public office.

United States politicians on the campaign trail tend to cross limits and say awful things and Obama will come under growing pressure from Mitt Romney, who might be his Republican opponent in the 2012 election, to match the latter's rhetoric on China.

And both Obama and Romney are having a hard time matching Rick Perry, a Republican contender: "I happen to think that the communist Chinese government will end up on the ash heap of history if they do not change their virtues."

The Russians must be relieved that after some six decades or so they are no longer an animated topic in US presidential elections. Nonetheless, they remain unemotional. As he left Washington for Honolulu, Obama announced that Russia was going to be accepted as a full member of the World Trade Organization (WTO) by mid-December.

Quite possibly, Washington expected a quid pro quo on Iran. But in the event that didn't happen. Medvedev graciously acknowledged Obama's "active and interested support" on WTO membership and even praised the Obama administration as the most supportive US administration Russia had ever dealt with, but he also brought in the "need to repeal the Jackson-Vanik amendment" as another residual issue of the Cold War era. It denies most favored nation status to certain countries with non-market economies that restrict emigration.

Lavrov recently rated the US-Russia reset as "constructive and pragmatic cooperation". In an interview last week, he flagged that missile defense remained a major sticking point - "the question is not moving. The flat refusal to discuss anything that might limit US plans in this area ... reinforces our conclusion that it won't be possible to come to an agreement. We will try to continue to negotiate."

Lavrov said even though the Obama administration was striving toward multilateralism, it was not above a unilateralist "desire to dominate in a common position" although the US no more had the resources or financial and political clout and was "in need of forming support groups ... [But] we will no longer tolerate an ambiguity that penetrated the resolution on Libya. Americans understand this."

However, Lavrov expected that "this very painful process" of a conclusive purge of the US's unipolar predicament "will take decades" to happen.

Lavrov's Chinese counterpart would probably go along with the assessment. The Honolulu meetings brought out that Russia and China have more in common than they thought. Indeed, the US invited neither into its initiative on the proposed Trans-Pacific Partnership trade agreement.