How RCEP affects food and farmers
GRAIN | June 19, 2017
The Regional Comprehensive Economic Partnership (RCEP) is a mega-regional trade deal being negotiated among 16 countries across Asia-Pacific. If adopted, RCEP will cover half the world’s population, including 420 million small family farms that produce 80% of the region’s food. RCEP is expected to create powerful new rights and lucrative business opportunities for food and agriculture corporations under the guise of boosting trade and investment. Several RCEP countries are also part of the Trans-Pacific Partnership (TPP), another mega-regional agreement setting some of the most pro-big business terms seen in trade and investment deals so far. While the fate of the TPP is uncertain, these two agreements may have to co-exist and there is pressure to align them on numerous points. What will this mean for food and farmers in the region?
1. Land will be grabbed
Most RCEP countries do not allow foreigners to buy farmland. Instead, foreign investors can get leases, permits or concessions with varying types of restrictions. The stakes behind this issue are high because companies and investment funds have been aggressively buying up farmland as a new source of revenue in the last years. In the RCEP countries alone, 9.6 million hectares of farmland have been acquired by foreign companies since 2008. Ownership provides corporations far more control than use rights, but it also drives up land prices and speculation, pushing small farmers out.
Two chapters of RCEP could have a decisive impact on access to land. According to leaked drafts, the investment chapter proposes a rule that each government must give investors from other RCEP states the same treatment as domestic investors (‘national treatment’). That means they should have the same rights to purchase farmland as domestic investors, unless the government carves out a special exception for this. The draft chapter also contains proposed ‘standstill’ and ‘ratchet’ clauses which, if adopted, would mean that governments have to lock in their current levels of liberalisation, and if they liberalise more than they commit to in RCEP they cannot go back down to the level set by RCEP. The services chapter draft also proposes that foreign service suppliers not be treated less favourably than domestic companies (‘national treatment’). This includes the ability to own farmland for a service-related purpose. Again, countries may be able to squeeze in an exception for agricultural land, but any such exception would be subject to negotiation and have to be agreed to by all parties.
If governments do not make reservations on these provisions for farmland, RCEP could seriously aggravate land grabbing in the region and sabotage agrarian reform processes that are currently under way in some countries. Currently, farmers asserting their rights to land are being subjected to human rights abuses, criminalisation, incarceration and even assassination. For this reason, there are deep fears that if RCEP is adopted, it will intensify militarisation in rural communities.
2. Seeds will be privatised, GMOs may proliferate
Farmers regularly save seed from one harvest to plant a new crop. Big seed and agrochemical companies like Monsanto and Bayer want to end this practice and force farmers to buy seed each season, so they can boost sales. They do this by lobbying governments to extend intellectual property laws to cover plants and animals. The global seed industry is highly concentrated today with three companies representing more than 60% of global commercial sales. ChemChina is currently in the process of buying Syngenta, one of the world’s top three seed firms. This means that China has a new vested interest in seeing seed laws strengthened under RCEP.
Leaked drafts of RCEP’s intellectual property chapter show countries like Japan and South Korea pushing for all RCEP states to adopt “UPOV 1991”, a kind of patent system for seeds. Under UPOV 1991, farmers are generally not allowed to save seeds of protected varieties. Where limited exceptions are permitted, farmers must pay the seed companies royalties on farm-saved seed. Depending on the country and the crop, royalties can represent a markup of 10-40% over the price of regular commercial seeds, which are already more expensive than farmers’ seed. Civil society groups estimate that UPOV 1991 would raise the local price of seed by 200-600% in Thailand and by 400% in the Philippines.
It could get worse if RCEP moves closer to what was negotiated in the TPP, something which four RCEP states have already agreed to. TPP requires states to allow patents on inventions “derived from plants”, which means genetically modified organisms (GMOs). Right now, GMOs are illegal in all RCEP member countries except for Australia, India, Myanmar and Philippines, plus several provinces of China and Vietnam. And while it’s likely that RCEP will have a chapter aiming to harmonise food safety standards, we have not seen any drafts and do not know how it will regulate GMOs. All of these moves would lead not only to higher seed prices but a loss of biodiversity, greater corporate control and a possible lowering of standards for high risk products such as GMOs.
3. Small dairy and other farmers will go out of business
India is home to 100 million small farmers, most of whom keep livestock. Up until now they have been the backbone of India’s dairy sector, but that situation is now changing. Costs of production are going up while prices paid to farmers are going down, driving many small farmers into dire straits.
RCEP will make things much worse. Frustrated with New Zealand’s failure to conclude a bilateral trade deal with India, NZ dairy giant Fonterra — the world’s biggest dairy exporter — is now looking to RCEP as a way in to India’s massive dairy market. It has openly stated that RCEP would give the company important leverage to open up key markets that are currently protected such as India’s, where it would go head to head with India’s dairy cooperative Amul. As a result, many people fear that Indian dairy farmers will either have to work for Fonterra or go out of business. They will not be able to compete. Similar concerns face dairy farmers in Vietnam, where Fonterra has been investing heavily to increase its presence.
At the same time, some RCEP members like Japan and Australia not only subsidise their farmers tremendously, they also have food safety standards that are incompatible with the small-scale food production and processing systems that dominate in other RCEP countries. This may lead to the growth of mega food-park investments that target exports to such high value markets, as is already happening in India. These projects involve high tech farm-to-fork supply chains that exclude and may even displace small producers and household food processing businesses, which are the mainstay of rural and peri-urban communities across Asia.
4. Fertiliser and pesticide use will go up
Fertiliser and pesticide sales are expected to rise sharply in Asia-Pacific in the next few years, from $100 billion to $120 billion per year by 2021. Agrochemical use is heaviest in China and growing rapidly in India, while imports by the Mekong sub-region are also on the rise. China’s acquisition of Syngenta, the world’s top agrochemical company with more than 20% of the global pesticide market, puts the country in a particularly sensitive position within RCEP.
Beijing will want high levels of ‘market access’, being negotiated under the trade in goods chapter of RCEP, to capitalise on its new position. In January 2017, China already announced that it will scrap export tariffs on nitrogen and phosphorus fertiliser in order to boost its market share abroad. RCEP trade ministers have promised to deliver a deal that immediately cuts tariffs to zero on 65% of trade in goods, followed by a second phase to cut the rest. Farm chemicals are bound to be part of this, resulting in increased residues in food and water, more greenhouse gas emissions and further depletion of soil fertility.
Furthermore, if leaked intellectual property drafts are adopted, RCEP may increase the patenting of other inputs like veterinary medicines, farm machinery, microorganism-based products and agricultural chemicals, and extend their patent terms, making them more expensive.
5. Big retail will wipe out local markets
Over the past five years, Asia-Pacific accounted for more than half of the world’s new food retail sales. Japan is leading this trend, with 7-Eleven and Aeon at the top of food retail sales in the region. Aeon Agri Create, the agriculture production arm of Aeon, has been establishing farms in Japan and Southeast Asian countries like Vietnam. Aeon even aims to push ‘ICT farming’: the use of computers and communication technologies to manage farm operations. In India, the opening up of food retail, including e-commerce, to foreign direct investment (FDI) is almost complete, although many states are yet to adopt FDI in multibrand retail. RCEP would strengthen these trends further.
According to leaked drafts, RCEP’s services chapter may make it impossible for governments to limit the operation of supermarket chains that hail from other RCEP states (‘market access’). Furthermore, the trade agreement may make it illegal for a member government to require a service supplier like Alibaba or Aeon to have a ‘local presence’ in its country or to source food from local producers.
If precedents set by TPP are followed, ICT farming may be boosted under RCEP measures aimed at promoting regional supply chains and e-commerce. China’s Alibaba has just invested $1.25 billion in an online food delivery service, which will rely on more and more high tech facilities that are disconnected from seasons and from local markets. All of these developments pose a real threat to small traders and retailers in Asia.
What to do?
RCEP will usher in a wave of corporate concentration and take over of Asia’s food and agriculture sector. Corporate concentration, as experience in the other regions shows, brings less real choice and higher prices for consumers. In the food sector, it also brings important health and environmental costs from pesticides, excessive processing and chemicals, as well as downward pressure on wages and prices paid to farmers.
The answer is not to reform RCEP but to reject it because it relies on and pushes a corporate model of agriculture that no amount of tweaking will change. Instead, we need to implement policies and initiatives that enable people-led food and agricultural systems to flourish. Only then can trade policies be drawn up to serve these systems – not the other way around.
ACT NOW!
- Get more informed and organise discussions and debates about RCEP in your communities. One resource to check out is the collective open-publishing site http://bilaterals.org/rcep.
- Support the people’s call to stop RCEP and fight for a pro-people trading system that responds to people’s needs not to corporate elites. Contact groups in your country that also signed the call and join forces.
- Go to the RCEP meetings. Demand the public release of negotiating texts to better analyse and build awareness of how the agreement affects the livelihood of people in RCEP member countries. Voice your concerns, as groups have done over several rounds the past months in Perth, Jakarta, Kobe and Manila. The next rounds will be held in Hyderabad (July 2017) and Seoul (later this year).
- Join the region-wide people campaign on RCEP and trade justice, and participate in collective mobilisations like regional days of action
- Keep an eye on http://rceplegal.wordpress.com/, http://keionline.org/ and http://www.bilaterals.org/rcep-leaks for leaked texts and analysis of RCEP chapters.
GRAIN is a small international non-profit organisation that works to support small farmers and social movements in their struggles for community-controlled and biodiversity-based food systems.
China may finance Russia’s natural gas pipeline to Europe
RT | June 22, 2017
Gazprom’s Nord Stream 2 pipeline may get Chinese financing if European companies are forced out of the project by the latest round of US sanctions, business daily Vedomosti reports.
Russian officials have already contacted Chinese banks, sources have told the media.
“Nord Stream 2 has a good rate of return and low risks for creditors. Chinese banks may be interested,” explains Aleksey Grivach, deputy CEO at Russia’s National Energy Security Fund.
The extension will double the existing pipeline which delivers natural gas to Germany under the Baltic Sea and is estimated to cost €9.5 billion.
Initially, Engie, OMV, Royal Dutch Shell, Uniper, and Wintershall were to get a 50 percent stake minus one share in Nord Stream 2. However, red tape at the European Commission made Gazprom and its partners come up with another financing option. Under this plan, European companies will each provide an equal long-term loan to Gazprom, which will fully own the pipeline.
Financing of Nord Stream 2 may be affected by new US sanctions which target firms investing in Russian gas and oil projects. According to the new bill passed by the US Senate, and currently, before the House of Representatives, companies will be forbidden from making investments of over $1 million in the Russian energy sector.
On Wednesday, Russian President Vladimir Putin met the CEO of Royal Dutch Shell, Ben van Beurden. Among other things, they discussed Nord Stream 2. Van Beurden told Interfax the new project “will be realized for the benefit of all parties – both Europeans and the Russian Federation.”
A warrior prince rises in Arabia as the monarch of all he surveys
By M K Bhadrakumar | Indian Punchline | June 22, 2017
The royal decree of June 21 by Saudi Arabia’s King Salman appointing his son Mohammed bin Salman as the Crown Prince and next in line to the throne is a watershed event in Middle East politics. Such a development has been expected for some time, but when it actually happened, it still looks momentous and somewhat awesome.
For a start, 31-year old MbS, whom many tend to deride as the “warrior prince”, has earned a reputation for being rash in the use of force. The extremely brutal war in Yemen is his signature foreign-policy project. Saudi Arabia, famous for its caution and its glacial pace of decision-making, has changed remarkably since MbS trooped in alongside King Salman to the centre stage of the Saudi regime in January 2015.
Considering King Salman’s age and health condition, MbS is being positioned in advance so that there will be no succession struggle. MbS has been steadily tightening his grip on the key instruments of power through the past 2-year period – national security apparatus and intelligence, armed forces and oil industry – in a grim power struggle with the Crown Prince Mohammed bin Nayef, who has now lost the game and is retiring from the arena.
With the vast powers of patronage vested in MbS as the Crown Prince, make no mistake, the winner takes it all. In short, the Persian Gulf’s – nay, Middle East’s – power house is about to get a new ruler who is only 31 and he may lead Saudi Arabia for decades.
The timing of the shift in the power fulcrum cannot but be noted. It is exactly one month since US President Donald Trump visited Saudi Arabia. Trump’s visit revived the Saudi-American alliance, which was adrift during the second term of President Barack Obama. MbS has emerged as the Trump administration’s number one interlocutor in the Saudi regime, superseding Nayef who used to be the favorite of the Obama administration.
MbS has forged links at personal level with Trump’s son-in-law Jared Kushner. In a rare gesture, the Prince invited Kushner and wife Ivanka Trump to his residence for a private meal during father-in-law Trump’s visit to Riyadh. So, Saudi-US relations from now onward will be a cozy, exclusive, secretive family affair imbued with a “win-win” spirit – as it used to be in the halcyon days when the Bush family was holding power in the US.
Trump’s visit to Riyadh signalled that Saudi Arabia has regained its stature as the US’ number one partner in the Muslim Middle East. Trump has publicly endorsed the Saudi stance in their standoff with Qatar, which, incidentally, is widely attributed to MbS.
MbS is widely regarded as the mastermind of the tough policy policy to isolate Qatar to make it submissive and has personally identified with the virulently anti-Iran thrust in the Saudi regional strategies. Therefore, MbS’ ascendancy impacts Middle East politics along the following fault lines:
· The war in Yemen;
· The standoff with Qatar;
· The Saudi-Iranian tensions;
· The nascent Saudi-Israeli regional axis;
· Situation in Syria and Gaza and/or Lebanon; and,
· The crackdown in Bahrain.
It remains to be seen whether the unity of the Gulf Cooperation Council (GCC) can be preserved. MbS enjoys personal rapport with Sheikh Mohammed bin Zayed, the crown prince of Abu Dhabi in the United Arab Emirates. But other GCC states — Kuwait, Oman and Qatar — will have a profound sense of unease about the “warrior prince” and this may lead to some major realignments in the Persian Gulf.
On the one hand, MbS may advance a normalization of relations between Saudi Arabia and Israel. If that happens, Israel breaks out of isolation and the Arab-Israeli conflict can never be the same again. Again, it is conceivable that MbS may throw the Palestinians under the bus. On the other hand, Iran too may finally succeed in breaching the GCC cordon that Saudi Arabia had erected, which in turn, may somewhat blur the sectarian divide in the Muslim Middle East and bring about a convergence of interests with Qatar and Turkey as regards perceived Saudi hegemony.
MbS is a man in a hurry. He has radical ideas to transform Saudi society and its economy under the rubric of Vision 2030. He has brought in western-educated technocrats into the governmental apparatus, replacing the Old Guard. How the conservative religious establishment views these winds of change remains the big ‘unknown unknown’ — especially MbS’ management style such as his openness to out-of-the-box thinking, his uniquely public profile in a deeply conservative country, his risk-taking character and his willingness to break conventions.
There is indeed a lot of pent-up disaffection within Saudi Arabia, which makes the period of reform and transition very tricky. The example of Shah’s Iran readily comes to mind. In the ultimate analysis, therefore, the big question is Who is the real MbS?
Clearly, his conduct so far cannot be the yardstick to fathom his personality, since it was primarily a swift, decisive action plan to elbow out the incumbent Crown Prince and take his job. Now that MbS’ actual hold over the levers of power is going to be unchallenged, his priorities can also change. Indeed, there are intriguing sides to his personality – his personal role in forging Saudi Arabia’s working relationships with Moscow, his determination to reduce the economy’s dependence on oil, his appeal to the Saudi youth as the harbinger of “change” and so on. The bottom line is that social and political stability in the country is vital for the success of Vision 2030, in which MbS has staked his prestige, envisaging wide-ranging structural reforms, geo-economic restructuring and the infusion of massive investments.
King Salman’s recent visit to China underscored that MbS understands the potential linkage between his Vision 2030 and China’s Belt and Road Initiative. Of course, China is highly receptive to the idea, too. Deals worth $65 billion were signed in Beijing during King Salman’s visit. Similarly, MbS has been a frequent visitor to the Kremlin and enjoys some degree of personal rapport with President Vladimir Putin. The OPEC decision on cut in oil production has been a joint enterprise in which Putin had a “hands-on” role. Rosneft has signalled interest in acquiring shares in Aramco when its “privatisation” begins next year, and at the recent meet of the St. Petersburg International Economic Forum, the two countries agreed to set up a joint energy investment fund.
MbS, who is Saudi Defence Minister, has also intensified his country’s military cooperation with Russia and China. A notable project will be the Chinese drone factory to be set up in Saudi Arabia. Again, Russia is in talks currently for the sale of T-80 battle tanks to Saudi Arabia, among other weaponry.
Suffice to say, MbS is quite aware of the seamless possibilities that the multipolar world setting offers. It is useful to remember that MbS is a unique Saudi prince who never attended a western university. He is far from a greenhorn in the world of politics either, having begun as fulltime advisor to the council of ministers in 2007.
Indeed, his trademark is his assertiveness in foreign policies that stands in sharp contrast with the traditional Saudi style, and, which, therefore, looks aggressive. But then, it needs to be factored in that the war in Yemen and the strident anti-Iran outlook are immensely popular in the domestic opinion in terms of the surge of Saudi nationalism. The big question, therefore, will be how he deploys the surge of nationalism — amongst the youth, in particular — in his hugely ambitious plan to reform and modernise the country. Traditionally, Saudi rulers used to derive legitimacy from the approval of the Wahhabist religious establishment. (Read an Al Jazeera write-up on MbS’s profile here.)
Colombia’s FARC Delivers 60% of Weapons to UN Peace Mission
teleSUR | June 14, 2107
The Colombian FARC guerrilla delivered another 30 percent of their weapons Tuesday to the United Nation as part of the landmark peace agreement with the government ending over half a century of civil war.
“With this act, the FARC wants to show Colombia and the world that we leave behind the page of war and starting to write the page of peace … that our commitment is total and that we are going to give everything for the peace of the country,” Pablo Catatumbo, member of the FARC’s leadership, said during the event.
On June 7, the FARC delivered the first 30 percent of the weapons, kicking off its historic disarmament. On Tuesday, another 30 percent will be handed over, and the more than 7,000 members of the groups will deliver the total amount by June 20.
The event that took place in La Elvira, in the western department of Cauca, and had been expected to be attended by President Juan Manuel Santos, the former prime minister of Spain Felipe Gonzalez and former President of Uruguay Jose Mujica.
But the political figures could not participate at the last minute due to heavy rain and had to follow the event through a video conference. Santos from an air base in the city of Cali said: “Today, without a doubt, is a historic day. What we witnessed on television — we could not be there physically because weather did not allow us — is something that the country only a few years ago would never have believed was possible.”
The next step for the Revolutionary Armed Forces of Colombia will be the transition to civilian life and the creation of a political party to participate in the next elections.
The head of the Colombian FARC guerrilla Rodrigo Londoño, also known as Timoleon Jimenez or Timochenko, who is in Norway, said he urged the Colombian government to fight against paramilitary violence in the country.
“We are leaving our weapons behind to continue with politics that we have always maintained and our efforts to build a fairer and just Colombia, where people who think differently are not murdered for their ideas,” Timochenko said during a press conference in Oslo during a forum on conflict resolution.
The leader has said that the government has been slow in implementing the agreement and that there have been problems including security issues and infrastructure shortages for the 26 transition zones where the rebels have assembled before returning to civil life.
He stressed that the most critical issue, though, was that Santos administration has not admitted the ongoing problem of paramilitarism in the country or set out a course of action to tackle it. Timochenko called on the international community to pressure the government to eradicate it, as he says it has become “an obstacle for peace.”
Norway, together with Cuba, was a guarantor country in the four-year peace negotiations between the FARC and the Colombian government. Talks wrapped up in Havana last year once the historic peace accord was finalized. The peace deal brings an end to over 50 years of internal armed conflict that killed some 260,000 people and victimized millions more.
US senators agree new set of sanctions against Russia
RT | June 13, 2017
US senators have agreed on new sanctions against Russia because of alleged Russia’s ‘interference’ in the 2016 US election, as well as the situations in Crimea and in Syria. Russia is monitoring the situation closely, the Kremlin spokesman said.
The step would reportedly see new sanctions imposed on Russians who are allegedly “guilty of human rights abuses”, “supplying weapons to Syria’s government”, as well as cyber attackers, Associated Press and Reuters report.
The fresh sanctions would also see Russian mining, metals, shipping and railways affected, with the Senate also planning on putting into law some previous sanctions touching Russian energy projects and debt financing.
The latest measure will be attached as an amendment to a larger bill that would see new sanctions imposed on Iran.
The step is supported by both Republicans and Democrats, and the vote is set to take place on Thursday, RIA Novosti reported. If approved, the legislation will then be approved by the House of Representatives and, finally, be signed into law by President Donald Trump.
Should Trump reject the new sanctions, the measure’s backers say that there will be enough congressional support to override the veto, AP reported.
“By codifying existing sanctions and requiring Congressional review of any decision to weaken or lift them, we are ensuring that the United States continues to punish President [Vladimir] Putin for his reckless and destabilizing actions,” Senate Minority Leader Chuck Schumer wrote in a statement, as cited by Reuters.
“These additional sanctions will also send a powerful and bipartisan statement to Russia and any other country who might try to interfere in our elections that they will be punished,” Schumer added.
Kremlin spokesman Dmitry Peskov has said that Moscow views the proposed sanctions “negatively,” adding that the Russian leadership is “attentively monitoring” the situation.
Russia has repeatedly denied any interference in the US election.
Last week, the former FBI Director James Comey stated that there had been many stories about Russia which are “just dead wrong” but, nonetheless, reiterated the “high-confidence judgement” that Moscow had systematically interfered in the US elections last year.
Toshiba to pay $3.68bn for 2 nuclear plants after US subsidiary files for bankruptcy
RT | June 11, 2017
Embattled Japanese conglomerate Toshiba has agreed to pick up the $3.7 billion tab for its faltering nuclear engineering division, Westinghouse, which has been forced to file for Chapter 11 bankruptcy protection.
Toshiba signed on for the construction of two nuclear reactors at the Vogtle nuclear plant in Georgia in 2008 but the project has been plagued by cost overruns and delays for years.
“We are pleased with today’s positive developments with Toshiba and Westinghouse that allow momentum to continue at the site while we transition project management from Westinghouse to Southern Nuclear and Georgia Power,” said Georgia Power CEO Paul Bowers, the utility which is working with Westinghouse on the Vogtle nuclear plant expansion project, as cited by the AP.
The Japanese company will cap its liability for the construction of two of Westinghouse’s AP1000 reactors at the Vogtle nuclear plant in Georgia but the future of the development remains uncertain.
Government intervention may be required, however, as suggested by Tom Fanning, CEO of the Southern Company which is in talks to take over management of the project from Westinghouse.
“This is a national security issue,” he said on a recent a call to analysts, as cited by the Financial Times. “If the United States wants nuclear in its portfolio for the future, we’ve got to figure out a way to be successful here.”
In a statement Saturday, Toshiba confirmed the payments will be made from October 2017 through to January 2021. The company reported $8.6 billion loss for fiscal year ended March 2017.
Toshiba has factored the payment into its earnings reports. Auditors though, have refused to endorse the reports and are viewing the figures as projections and not true financial reports.
Toshiba is struggling to stay afloat financially and has been forced into selling its lucrative and highly prized computer chip and semiconductor business.
Toshiba President, Satoshi Tsunakawa, has acknowledged the flaws in the company’s strategy regarding Westinghouse, reports the AP, but nuclear power will remain part of Toshiba’s near-term business strategy which includes the decommissioning of the Fukushima Dai-ichi nuclear plant.
Qatar crisis sets in motion realignments
By M K Bhadrakumar | Indian Punchline | June 11, 2017
Four days have passed since the terrorist strikes in Tehran but Iran has not retaliated with any “surgical strike” against Saudi Arabia – and, typically, there isn’t going to be any. The political leadership pointed the accusing finger at Saudi Arabia, US and Israel. Supreme Leader Ali Khamenei said that the terror strikes “will only increase hatred for the governments of the United States and their stooges in the region like the Saudis.” However, Iran will not react in a hurry, given the crisis over the Saudi-Qatar standoff that is fraught with profound consequences for regional politics.
Interestingly, Iran signed another agreement on Saturday with Boeing, the American aircraft manufacturer, to buy 30 passenger planes in a $3 billion deal, with an option to buy another 30 aircraft at a later stage. This is on top of the $16.6 billion deal with Boeing negotiated in December. Tehran is piling pressure on the Trump administration because Boeing needed the approval of the US Treasury for the deal with Iran. Put simply, Tehran hopes to draw the US into an engagement process that incrementally deepens and broadens, which derails the Saudi-Israeli agenda to incite a US-Iran confrontation.
Iran is generating export business for American companies, which holds the potential to create jobs in their thousands in the US economy. This becomes a template, ironically enough, of President Trump’s ‘America First’ doctrine. It is a ‘win-win’ formula, because Iran’s economy also badly needs western investments and capital, especially the oil industry. Over and above, if American companies begin operating in the Iranian market, it will give impetus to European business and industry too.
Having said that, Iran’s regional policies remain on track, no matter the Trump administration’s pressure tactic and rhetoric. Iran scored a signal victory in the weekend with Syrian government forces supported by Iran-backed militia reaching the strategic border crossing with Iraq at Al-Tanf. (See my blog The scramble for control of Syrian-Iraqi border.) In immediate terms, the route for the US-backed fighters in the south to move into the strategically important Deir Ezzur province (which is also rich in oil deposits) now comes under the control of the Syrian government forces.
Meanwhile, Tehran is re-establishing high-level contacts with the leadership of Hamas. On Saturday, Hamas announced that a delegation led by its newly-elected leader Ismail Haniyeh (who recently replaced Khaled Meshaal) will be visiting Tehran. Iran’s ties with Hamas came under strain after Meshaal left Damascus (where he was living in exile for several years) to relocate himself in Doha, by way of displaying his solidarity with Qatar and Turkey in the Syrian conflict.
Hamas’ reunion with Tehran’s ‘axis of resistance’ is significant, since Hamas is an offshoot of the Muslim Brotherhood and Qatar has come under pressure from Saudi Arabia to snap its links with the Brothers. It meshes with Iran’s support for Qatar in its rift with Saudi Arabia as well as promotes Iran’s desire for partnership with Turkey. Turkish President Recep Erdogan continues to patronise Hamas, despite that being the principal discord in Turkish-Israeli relations.
On the other hand, Iran’s warming of ties with Hamas puts pressure on Saudi Arabia and Israel at a time when the mutual comfort level between Riyadh and Tel Aviv has been rising lately, with the Trump administration actively promoting the idea of an Arab-Israeli normalization.
Jared Kushner’s (Trump’s Orthodox Jew son-in-law and top advisor on foreign policy) thesis, which is the current US policy in the Middle East, is that a “from the outside-in” approach to Middle East peace – namely, signing of peace treaties between the Arab states and Israel to generate goodwill and new diplomatic relations, which in turn will help advance Palestine-Israel settlement – as against the traditional “inside-out” approach that gives primacy to peace between the Palestinians and Israelis as the necessary first step that will facilitate an end to the Arab-Israeli conflict.
Trump’s mission to Riyadh last month was at the behest of Israel, which has been pushing the narrative that the existential fear of Iran is bringing the Gulf Arab monarchies and Israel closer together. Of course, Israeli calculation is that peace treaties between the Gulf Arab regimes and Israel (on the pattern of Israel’s peace treaties with Egypt and Jordan) will ultimately render the Palestinian cause obsolete and completely ease the pressure on Israel to accommodate Palestinian aspirations and demand for a fully independent state.
Significantly, while reporting on Hamas leader Haniyeh’s forthcoming visit to Iran, the influential Tehran Times newspaper made the following observation:
- While the Syrian crisis has driven a wedge between Tehran and Turkey since 2011, the rift between Arab caliphates have led them into an ad-hoc alliance that some believe represents the best chance to mend fences.
- Turkey and Iran back Qatar and have links with the Muslim Brotherhood.
Suffice to say, Iran’s move to bring Hamas into the ‘axis of resistance’ threatens to undermine the game plan that Israel has been working on (via Kushner and Jason Greenblatt, fellow Orthodox Jew, associated with Trump’s organization.) All three countries – Qatar, Turkey and Iran – sense that the current US-Israeli-Saudi offensive against “terrorism” is actually the metaphor for an all-out assault on the Muslim Brotherhood, branding it as a “terrorist” organization, which in turn is ultimately aimed at driving Hamas into the political wilderness and thereby scattering the Palestinian resistance movement once for all.
To be sure, both Turkey and Iran have taken note that at the end of the day, the Muslim Middle East has shown reluctance to join Saudi Arabia’s ant-Qatar front — including Jordan, which is sitting on the fence, merely resorting to the cosmetic move of downgrading the diplomatic ties with Qatar, despite its need for Saudi goodwill. Of course, Turkey, Iraq, Lebanon, Jordan, Kuwait, Oman, Algeria, Morocco, Sudan and Tunisia have ostentatiously dissociated themselves from the Saudi strategy to isolate Qatar. Indeed, Turkey has forcefully rejected the Saudi embargo against Qatar — “We will not abandon our Qatari brothers,” said Erdogan at an Iftar meal in Istanbul on Friday, while addressing his party colleagues.
Iran signs final contract to buy 30 Boeing 737 planes
RT | June 10, 2017
Boeing has signed a final deal with Iran’s Aseman Airlines to supply 30 737 MAX jets to the carrier, IRNA news agency reports, citing the airline’s managing director. Following the first batch of the planes, the company will order additional 30 jets.
One year of negotiations between the US aerospace giant Iran’s third-largest carrier concluded on Saturday, when Aseman’s Managing Director Hossein A’laei and Boeing Sales representative in the Middle East and Russia James Larson signed the final contract on purchasing 30 of the 737 MAX jets.
While the carrier operates as a private company, Iran’s Minister of Cooperative, Labor and Social Welfare Ali Rabiei and Head of Civil Aviation Organization Ali Abedzadeh attended the signing ceremony.
According to the preliminary memorandum of understanding, which was signed between the two companies on March 19, the company will order 30 additional planes once the first batch is delivered.
The deal for 60 jets would be worth $3 billion, according to IRNA. Aseman would pay 5 percent of the sum and the remaining 95 percent will be financed by Boeing, the agency reported.
One 737 MAX costs around $100 million at current prices, but in the case of such large contracts, carriers usually enjoy a 50 percent discount.
The deliveries will start in 2022 and within two years, the carrier will receive all 30 planes of the first batch.
The new agreement supplements of the $16.6 billion deal Boeing signed with Iran under Barack Obama’s administration. Boeing has agreed to sell 80 aircraft to the country’s flag carrier IranAir under the deal.
Earlier this year, Iran signed a deal with Airbus to buy 118 passenger jets for an estimated €22.8 billion ($25 billion). The contract later would be cut to 112 planes, according to Iranian officials.


