TIME Japan

This Week’s Foreign Policy Must-Reads

From yakuza battles to Russian food policy

A roundup of the most intelligent takes on global affairs this week

The Coming Yakuza War—The Daily Beast

Japan’s organized crime groups, known collectively as the “yakuza,” … are different from the mafias we know about in the West. They are treated as if they were some sort of controlled substance, dangerous but accepted within certain parameters… The Yamaguchi-gumi isn’t only Japan’s largest organized crime group; it’s also a well-known Japanese corporation… They are Goldman Sachs with guns.

Only in Japan: The “gangster company man.”

Pablo Escobar Will Never Die – GQ

Alive, Pablo was a murderer and a philanthropist, a kidnapper and a congressman, a populist antihero who corrupted the institutions that tried to contain him and slaughtered thousands of compatriots who got in his way. Safely in the grave, he has spawned an entertainment-industrial complex—movies, books, soap operas, souvenirs—his legacy as impossible to repress as the frisky hippos he left behindThe commodification of Pablo is an awkward development for many Colombians, having struggled for a generation to overcome the collective trauma he visited on them.

Some say you don’t really die until the last time someone says your name. If so, Pablo Escobar will be with us for a long time to come.

The Lessons of Anwar al-Awlaki – New York Times Magazine

Some government agencies have tried to boil the process of radicalization down to a few clear-cut and inevitable stages, but in reality, the journey to extremism is a messy, human affair that defies such predictability. This was true of Awlaki’s acolytes; it was also true of the great radicalizer himself. Before Awlaki could talk anyone else into violent jihad, he had to talk himself into it. One giant step came as the unintended result of surveillance by the United States government.

Here’s a question: Does law enforcement tend to overestimate its ability to use surveillance to understand a person, his motivation, his capabilities, and his intent?

The Other France – New Yorker

France has all kinds of suburbs, but the word for them, banlieues, has become pejorative, meaning slums dominated by immigrants… [After the Charlie Hebdo massacre,] there was a widespread feeling, in France and elsewhere, that the killings were somehow related to the banlieues. But an exact connection is not easy to establish. Although these alienated communities are increasingly prone to anti-Semitism, the profiles of French jihadists don’t track closely with class; many have come from bourgeois families. The sense of exclusion in the banlieues is an acute problem that the republic has neglected for decades, but more jobs and better housing won’t put an end to French jihadism.

There is nothing more dangerous for the internal stability of France (and many other European countries) than the isolation of its minority enclaves, the violence that isolation can inspire, and the rise of political parties who win votes by exploiting the resulting fear and anger.

Why Russia is So Afraid of French Cheese—The Atlantic

Russia’s Federal Customs Service has drafted legislation classifying banned foreign foods as ‘strategically important.’ Until now, that label only applied to weapons, explosives, poisons, and radioactive materials. If it becomes law, the new classification will mean those caught importing banned fruits, vegetables, meat, and poultry can face up to seven years in prison. French cheese is apparently now just as dangerous to the security of the state as polonium, uranium, assault weapons, and dirty bombs.

Maybe NATO should load brie into warheads and rain “fromage fury” on Moscow.

TIME China

These 5 Facts Explain the Global Impact of China’s Impending Slowdown

china stock market
Jason Lee—Reuters An investor looks at an electronic board showing stock information at a brokerage house in Beijing on Aug. 27, 2015.

What happens in Beijing doesn't stay in Beijing

China’s up and down summer continues. Despite the blaring headlines warning of a dangerous economic slowdown—and starting recent drops in the stock market—the underlying fundamentals of China’s economy remain strong. That’s good news for Beijing, but not very comforting for countries that have bet their economic futures on China’s non-stop ascent. These five stats explain which countries have the most to lose from China’s inevitable slowdown.

1. Signs of China’s Weakness?

In the first three days of trading this week, the Shanghai Composite Index fell 16.61 percent. Monday’s mayhem dragged down stock exchanges across the globe, but world markets had stabilized by Tuesday. China’s freefall continued into Wednesday, when an interest rate cut finally stanched the bleeding. This hasn’t been a kind summer to the emerging market giant—from June 15 to August 27, the Shanghai Index fell about 40 percent.

Market turmoil always makes for great headlines. But the real story coming out of China is its continued economic deceleration. In 2007, China’s economy grew by 14.2 percent, according to the IMF. In 2010, it slowed to 10.4 percent. This year, China’s leadership is shooting for “about 7 percent.” The slowdown is necessary as Beijing transitions from an export-oriented economy to a more sustainable consumption-oriented one. Yet, the rising tide of anxiety outside China in recent weeks makes clear that some countries aren’t yet ready for what China’s president has called a “new normal.”

(Google Finance (a), Google Finance (b), International Monetary Fund, Wall Street Journal)

2. Lower Oil Prices

China’s downturn comes at an especially inconvenient moment for Saudi Arabia, Russia and Venezuela, countries that supply a healthy percentage of China’s imported oil. According to the latest figures from the Energy Information Administration (EIA), Saudi Arabia exports 14 percent of its oil to China; Russia sends 14 percent, and Venezuela 10 percent. Oil prices have plummeted from more than $100 a barrel this time last year to about $45 this week. Falling demand from China makes near-term recovery unlikely and could pull prices down even further.

With the lifting of sanctions on Iran, Saudi Arabia now faces a revitalized, oil-producing heavyweight regional rival; Russia must worry over the long-term impact of Western sanctions; and Venezuela’s Bolivarian revolution now lives oil-paycheck to oil-paycheck. For the past 20 years, these governments could count on Beijing’s unquenchable thirst for oil. That’s now in doubt.

(EIA (a), EIA (b), EIA (c), New York Times)

3. Not Just Oil

Oil is only the beginning of this story. Commodity prices generally have been sliding since 2011, and commodity-exporting countries have felt the pain. In fact, the value that producers of oil, gas, metals, minerals and other commodities have lost just in the past year comes to about $2 trillion, the size of India’s entire economy. Much of the slide is attributed to weakening global demand for basic resources and minerals, and China’s shift away from manufacturing doesn’t help. China still imports more than half the metals exported by Australia, Peru, and Indonesia and more than a third exported by Brazil and Chile. In fact, Australia (36 percent of its total exports to China), Chile (24 percent), Indonesia (13 percent), Brazil (19 percent) and South Africa (10 percent) were already exposed to China through their overall trade numbers. But it’s their deep dependence on commodities that puts them most at risk. 86 percent of Australia’s exports to China are commodities-based—for Chile it’s 92 percent, 71 percent for Indonesia, 45 percent for Brazil and 86 percent for South Africa. China’s slowdown does not bode well for any major commodity exporters, but this group is particularly vulnerable.

(Bloomberg, Resources Futures, Harvard University – Atlas of Economic Complexity: Australia (a), Chile (a), Indonesia (a), Brazil (a), South Africa (a); Australia (b), Chile (b), Indonesia (b), Brazil (b), South Africa (b))

4. Not Just Commodities

Some of these governments haven’t done enough to diversify their economies away from over-reliance for growth on commodities exports. But even well-diversified economies have something to lose from a Chinese slowdown. That’s because China, already the world’s second largest economy, has become crucial for global trade over the past two decades. In 2000, China accounted for just 3 percent of the global goods trade. By 2014, that number had jumped to 10 percent. China became the world’s lead trading nation in 2013. China by itself accounted for about 17 percent of the world’s overall GDP in 2014, but its demand for imports has already fallen 14.6 percent over the first seven months of 2015.

In other words, China’s down-trending growth will have an impact on virtually every country in the world.

(The Economist, Financial Times, Bloomberg, Huffington Post, The Guardian)

5. Weak Signals

What to look for next? We shouldn’t worry too much about the gyrations of China’s lead stock market. Foreigners own just 1.5 percent of shares in the Shanghai Index, and unlike more mature markets in the United States and Europe, China’s market tells us little about the fundamentals of China’s economy. Nor is the meltdown hurting the average Chinese consumer. Just 1 in 30 Chinese people own stocks today compared to the 1 in 7 Americans who are invested in American markets, many of them through 401(k) retirement accounts. But given how opaque the Chinese leadership is, observers grasp at anything they think hints at the true state of the Chinese economy. Don’t be fooled—the global economy is sending plenty of legitimate warning signals. Shanghai’s swinging stock market just isn’t one of them.

(CNN Money, The Telegraph)

TIME russia

This Week’s Foreign Policy Must-Reads

Putin, China and the war over corn

A roundup of the most intelligent takes on global affairs this week

Vladimir Putin’s Bonfire of the Delicacies – Foreign Policy

[The 1940’s Leningrad famine] is the most legendary of all the famines in the Russian history books, and its lore of hunger and cannibalism haunts most Russians, but especially Leningraders…So how could Putin and Medvedev—these two famous Leningraders—rid themselves of this inherited neurosis and sanction the calm destruction of food?

Russian defiance often takes self-destructive forms, but Putin’s popularity is holding steady, and the perception gap between urban and rural citizens continues to widen.

Corn Wars – The New Republic

The U.S. Department of Justice and the FBI now contend, in effect, that the theft of genetically modified corn technology is as credible a threat to national security as the spread to nation-states of the technology necessary to deliver and detonate nuclear warheads. Disturbingly, they may be right. …The world’s next superpower will be determined not just by which country has the most military might but also, and more importantly, by its mastery of the technology required to produce large quantities of food.

Even in a high-tech world, security of food and water is crucial.

How Google Could Rig the 2016 Elections – Politico EU

Google’s search algorithm can easily shift the voting preferences of undecided voters by 20 percent or more—up to 80 percent in some demographic groups—with virtually no one knowing they are being manipulated…This gives Google the power, right now, to flip upwards of 25 percent of the national elections worldwide. In the United States, half of our presidential elections have been won by margins under 7.6 percent, and the 2012 election was won by a margin of only 3.9 percent—well within Google’s control.

A less flashy, more interesting idea for remaking The Manchurian Candidate for a 21st century audience.

Is Donald Trump an American Putin? – Washington Post

He promises to restore his country’s greatness, without offering a specific plan. He uses crude, vulgar expressions that make him sound like an ordinary guy, even though he’s a billionaire. He’s a narcissist who craves media attention. And for all his obvious shortcomings, he’s very popular…Donald Trump is in some respects an American version of Putin. Like the Russian leader, he seeks to reverse his country’s losses and return its former glory. He promises a restoration of power and prestige without trifling about the details.

It’s an interesting comparison. People are naturally attracted to leaders who project extraordinary self-confidence and who don’t back down the way ordinary politicians would. It remains to be seen, however, whether the Trump phenomenon can continue when a broader segment of U.S. voters begins to really pay attention.

Jihad and Girl Power: How ISIS Lured 3 London Teenagers – New York Times

They were smart, popular girls from a world in which teenage rebellion is expressed through a radical religiosity that questions everything around them. In this world, the counterculture is conservative. Islam is punk rock. The head scarf is liberating. Beards are sexy. Ask young Muslim women in their neighborhood what kind of guys are popular at school these days and they start raving about “the brothers who pray.”… The Islamic State is making a determined play for these girls, tailoring its siren calls to their vulnerabilities, frustrations and dreams, and filling a void the West has so far failed to address.

Islam is punk rock? For how long? “Girl power” and jihadi culture won’t mix well over time. Yet another reminder that it will be easier to recruit people than to keep them.

TIME China

These 5 Facts Explain Why China Is Still on the Rise

Chinese President Xi Jinping waits to welcome French Prime Minister Manuel Valls at the Great Hall of the People on Jan. 30, 2015 in Beijing
red Dufour—Getty Images Chinese President Xi Jinping waits to welcome French Prime Minister Manuel Valls at the Great Hall of the People on Jan. 30, 2015 in Beijing

China has had a terrible past few weeks, but that won't stop it's growing dominance

Stock market plunges, currency devaluations and warehouse fireballs out of China have dominated headlines this summer. But make no mistake—this is the opening of the “China Decade,” the moment when the emerging giant’s international influence crosses a crucial threshold. These five facts explain why China’s rise is inevitable, even in the face of bad news—and why it won’t last forever.

1. Rough Summer

Economic indicators have been pointing to a Chinese slowdown for some time—exports had already dropped 8 percent last month compared to the same time last year—but matters have come to a head these last couple of months. Between June 12 and July 8, the Shanghai stock market plummeted 32 percent. On July 27, the stock market fell 8.5 percent, its greatest single-day drop. To put that in perspective, “Black Tuesday,” which kicked off the Great Depression in 1929, saw the Dow plunge 12 percent. Markets under the thumb of autocratic regimes were thought to be immune to such wild swings; turns out they’re not.

On August 11th, the Chinese government devalued the renminbi to kick-start their slowing economy. By the end of the week, the currency’s value had fallen by 4.4 percent, its biggest drop in 20 years.

(The New York Times (a), CNN Money, The New York Times (b), TIME)

2. China’s Rise

Yes, growth is slowing, but to levels enviable in any developed country. In the mean time, China’s march to no. 1 continues. In 2014, China’s total GDP overtook the US’s when measured by purchasing power parity. Using this metric, China accounted for 16.32 percent of world GDP in 2014, eclipsing the US’s 16.14 percent.

More impressive than the size of China’s economy is the speed with which it’s grown. Back in 2000, Chinese imports and exports accounted for 3 percent of all global goods traded. By 2014, that figure had jumped to more than 10 percent. In 2006, the U.S. was a larger trade partner than China for 127 countries. China was the larger partner for just 70. Today, those numbers have reversed: 124 countries trade more with China than with the United States.

(International Monetary Fund, Financial Times, Russia Today)

3. China’s Resilience

And despite recent turmoil, China’s economy has staying power. That’s in part because China’s leadership has spent decades building its foreign exchange reserves, which today are valued at $3.7 trillion. That’s by far the world’s biggest rainy day fund.

More important than its money buffer is China’s consolidated political leadership under Xi Jinping. China’s president has presided over an extensive anti-corruption campaign that has already seen 414,000 officials disciplined and another 200,000 indicted. In the process, Xi has probably rebuilt some of the party’s lost credibility with China’s people. He has definitely sidelined current and potential opponents of his reform program—and of his rule. And the lack of backlash illustrates just how strong his political control really is.

(Wall Street Journal, The Atlantic)

4. Spreading Wealth (and Influence)

Consolidated leadership also enables Beijing to pursue its comprehensive global strategy. China has spent the last two decades tactically investing around the world. Chinese investments in Africa jumped from $7 billion in 2008 to $26 billion in 2013, helping the continent build desperately-needed roads, rails and ports. In Latin America, China has already pledged to invest $250 billion over the coming decade, giving Beijing a solid foothold in the West. This extends China’s influence well beyond East Asia, helps China secure long-term supplies of the commodities it needs to continue to power its economy, creates jobs for Chinese workers, and helps China open new markets for its excess supplies of industrial products.

China also wants to use its money to reshape the world’s financial architecture. To that end, Beijing just launched the Asian Infrastructure Investment Bank to rival the Washington-based IMF and World Bank. Given that 57 countries have signed up as founding members, some of them US allies who chose to ignore US objections, it’s well on its way. With initiatives like the AIIB, China will continue funding infrastructure projects—and building goodwill—for years to come.

(Bloomberg, BBC, Wall Street Journal)

5. Problems Ahead

All that said, China’s longer-term challenges are becoming impossible to ignore. By 2050, it’s estimated that China’s work force will have shrunk by 17 percent. Blame demographics—back in 1980, the median age in China was 22.1 years; in 2013, 35.4, and by 2050 it will rise to 46.3. An aging labor force is like an aging sports star: both want more money, and both are nowhere near as productive as they once were.

Pollution continues to take its toll—less than 1 percent of China’s 500 cities meet WHO air quality standards. China’s environment ministry concedes that nearly 2/3 of underground water and 1/3 of surface water is “unfit for human contact.” A new study estimated that 4,000 Chinese die prematurely each day thanks to air pollution. As China’s masses join a growing middle class, the leadership will have to deal with stronger public demand for clean air and water. Beijing better deliver if it wants to keep the peace, and its regime, intact. And the public will have the means to make its demands known: There are already 650 million Chinese people online, and censorship, however sophisticated, can never fully control the flow of ideas and information in a social media market of that scale—witness the information leaking out on the Tianjin blast. China’s leaders know they must care about public opinion.

(Bloomberg, UN Economic and Social Affairs, Council on Foreign Relations, Russia Today, CNN)

China’s growing strength threatens the established world order, but its domestic vulnerabilities will have global repercussions, as well. It’s still too early to tell which of the two will be more destabilizing. Either way, the world will be shaped by Beijing’s successes and its failures. Welcome to the China Decade.

TIME russia

These 5 Facts Explain Russia’s Economic Decline

Russian President Vladimir Putin Delivers State Of The Nation Address To Parliament
Sasha Mordovets—Getty Images Russian President Vladimir Putin delivers his annual state of the nation address to the National Assembly in Grand Kremlin Palace on in Moscow on Dec. 4, 2014.

Corruption, cheap oil and unproductive workers all hold Russia back—though Russians don't seem to care

For the first time since 2009—low point of the global economic slowdown—Russia is in recession. Its economy will contract 3 percent this year, though Moscow’s $360 billion in cash reserves will cushion the immediate blow. Still, as President Vladimir Putin continues to try to assert Russian power on the international stage, it has become clear that he is now ruling a “submerging market.” Unless something changes, Russia is in for a slow and steady economic decline. These five sets of stats explain why.

(TIME, International Monetary Fund)

1. Lack of Diversification

It’s not simply the size of your economy, but its diversity and resilience that counts. For years, the Kremlin has supported and protected large state-owned companies at the expense of small and medium-sized enterprises (SMEs). But those smaller firms are the foundation of any strong and well-diversified economy. SMEs spur innovation and respond effectively to changing times, technologies, and consumer tastes. In the EU, SMEs contribute an average of 40 percent to their respective countries’ GDP; in Russia, SMEs contribute just 15 percent. Those are daunting figures for anyone looking to start a business in Russia.

Things aren’t getting better—between 2008 and 2012, Russia’s private sector lost 300,000 jobs while the state added 1.1 million workers to its payroll. Rather than diversifying, Moscow is doubling down on its state-centered approach to economic development.

(JYSkebank, The Economist)

2. At the Mercy of Oil Markets

The price of oil has now fallen below $45 a barrel—welcome to the new normal. OPEC continues to pump oil at historic rates as it tries to price out competitors, and Iran expects to bring over a million new barrels a day to world markets after the lifting of international sanctions. These are deeply troubling developments for Moscow, which relies on oil and gas sales for nearly 50 percent of its government revenues. In 1999, oil and gas accounted for less than half of Russia’s export proceeds; today they account for 68 percent. Moscow has grown so reliant on energy sales that for each dollar the price of oil drops, Russia loses about $2 billion in potential sales. For Russia to balance its budget, oil will need to surge back to $100 a barrel. That’s going to take a while.

(CNBC, CNN, Wall Street Journal , World Affairs, EIA, BBC, Financial Times)

3. At the Mercy of Sanctions

Moscow’s over-reliance on crude oil—which makes up 40 percent of Russia’s state budget—has also left the country particularly vulnerable to international sanctions. Given the age of many existing fields, Russia will increasingly depend on cutting-edge technology from Western firms to pump oil from difficult-to-reach shale and deep-water reserves. These sources could account for more than 15% of the world’s undiscovered oil reserves and 30% of the gas. Some argue that Russia can turn for help to China—but while China wants more Russian oil and gas, it doesn’t have the technology Russia needs to draw those resources from the ground. The IMF believes sanctions could eventually cost Russia 9 percent of its GDP.

(EIA, Forbes, Reuters)

4. Russia’s Other Problems

Russians aren’t nearly as productive as they could be. For each hour worked, the average Russian worker contributes $25.90 to Russia’s GDP. The average Greek worker adds $36.20 per hour of work. And Greece is not a country you want to trail in productivity. The average for U.S. workers? $67.40.

In addition, endemic corruption costs the Russian economy between $300 and $500 billion each year, or roughly the cost of three Greek bailout packages combined. This year, Freedom House gave the country a 6.75 on its corruption scale; 7 is “most corrupt.”

It’s no surprise then that well-educated Russians are leaving their country in droves. Between 2012 and 2013, more than 300,000 people left Russia in search of greener economic pastures, and experts believe that number has only risen since Moscow’s annexation of Crimea last year.

(Bloomberg, OECD, PBS, Telegraph, Wall Street Journal, Freedom House, Washington Post)

5. No Incentive to Change

Russia’s biggest problem may be denial. Typically, a stumbling economy brings about change in political leadership. Some countries, like Greece, take this to an extreme—Athens has seen five different governments in five years. But Russians have gone the other way—as their economy has slowed, Putin has grown more popular; he now holds an approval rating of 86 percent. More surprising is that while 73 percent of Russians are unhappy with their economy, 7 in 10 approve of the way Putin is handling it.

How is that possible? About 90 percent of all Russians get their news from Russian television channels directly controlled by the Kremlin. By framing sanctions and the invasion of Ukraine as “Russia vs. the West”, Putin has succeeded in stoking the country’s nationalism. Today, 63 percent of Russians have a very favorable view of their country, up from 29 percent in 2013 and 51 percent in 2014. It’s easier under those circumstances to blame bad economic circumstances on outsiders. Credit where credit’s due—Putin knows what his people want to hear. It’s just not clear if he knows how to fix his flailing economy.

(TIME, Pew Research Center, Washington Post, Pew Research Center)

TIME China

A Slowing China Still Picks Security Over Innovation

Bremmer is a foreign affairs columnist and editor-at-large at TIME.

For years, Chinese leaders have welcomed foreign firms to help pull the country’s economy and tech companies into the digital age. At the same time, they’ve tried to manage the flow of ideas and information into, out of and across the country, while protecting sensitive economic sectors. But recent evidence suggests that security hard-liners are now winning an internal political fight to establish greater state control of information and data. There are still senior officials who want to use wider exposure to market competition to empower innovation and enable entrepreneurship in areas including China’s tech sectors. But as economic growth has slowed over the past couple of years–a reality driven home by the government’s decision on Aug. 11 to devalue China’s currency–the state has become much more cautious.

First, a sweeping national-security law, announced on July 1, gives Beijing new powers to crush online dissent and restrict foreign access to economic sectors deemed essential for China’s economic and social stability. A week later, officials released the full text of a new draft cybersecurity law that will expand the government’s authority to control data, networks and information. When the law is passed (likely next year), foreign companies will be forced to store data on their Chinese customers inside China and contend with security audits and pressure to turn over source code.

The cybersecurity law will also have a chilling effect on privacy in China by building a single nationwide ID system that ties the online identity of citizens to their physical identity. Chinese officials insist that anonymity online allows terrorists and criminals to operate in the shadows–and that anonymity must be eliminated to protect Chinese citizens. Foreign companies will have to help manage these threats–even when they don’t agree with Beijing on what constitutes “terrorism” or a legitimate threat to national security. The cybersecurity law also provides a legal basis for the government to shut down the Internet in the event of serious social unrest.

China’s leaders know that censorship can’t work forever. But even if they can’t fully eliminate freedom of online speech, they can limit freedom of online assembly. That’s the more immediate domestic threat to the party’s political supremacy.

None of this should come as a surprise. A free and open Internet will never be compatible with authoritarian government and the state-managed variety of capitalism. But these latest changes provide another useful reminder that when risk rises, China’s leaders will always choose political stability over economic innovation.


This appears in the August 24, 2015 issue of TIME.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME trans-pacific partnership

These 5 Facts Explain the Obstacles to the Trans-Pacific Partnership

U.S.-MAUI-TPP-FAILURE
Yin Bogu—Xinhua Press/Corbis Ministers from 12 Pacific countries attend a press conference after the failure of negotiating the Trans-Pacific Partnership agreement in Maui, Hawaii on July 31, 2015.

The major trade deal should still pass, but there are significant sticking points left

The latest round of Trans-Pacific Partnership negotiations ended in Maui last week without an agreement. When all is said and done, the massive, 12-nation trade deal will link 40% of the world’s economy. The potential payoffs are expected to be huge for the countries at the table, but the geopolitics of such a complicated treaty are tricky. Still, while the deal will pass in the end, these five facts explain the last major hurdles to the most significant trade deal of the 21st century.

  1. Pharmaceutical Fight

According to the pharmaceutical companies, development of a new drug typically takes 10 to 15 years. Each success costs around $1.2 billion—including the price of the many failures along the way. A period of exclusivity in the form of patents are the reward for this investment. At issue in TPP negotiations is when cheaper generic forms of new drugs can come to market, or when that exclusivity ends. In the U.S., that timeframe is about 12 years, but most countries involved in negotiations want it to be shorter—eight years or less, though Australia is insisting on five. It makes sense that the U.S. wants the longest period of exclusivity; of the ten largest pharmaceutical companies in the world, six are based in the US. The other four? In Europe, which is not a party to this deal.

(PhRMA, New York Times, World Health Organization)

2. Got Milk?

Dairy accounts for more than 25 percent of New Zealand’s exports (and 7 percent of its overall economy), so the country is driving for greater market access for its dairy products, with help from Australia. It might come as a surprise that cows are so contentious, but Canada is having none of it. Their government is facing a tight election this fall, and dairy farmers hold disproportionate clout in Ottawa. How much clout? Enough that dairy imports in Canada currently face a 248.95 percent tariff. If you figure that each of the 12 countries involved in TPP negotiations have their own domestic politics to worry about—more on this below—you can start to understand why trade negotiations hit so many road blocks.

(Wall Street Journal, New York Times, World Trade Organization)

3. Car Controversy

Considerable media attention has been paid to the auto details of the deal. That’s because they prominently feature the U.S. and Japan, the two most significant members of the TPP trade bloc. Japan’s auto sector is the most closed-off of all industrialized countries, ranking 30 out of 30 across all OECD nations. It’s import penetration rate in 2012 was 5.9%, compared to an OECD average of 58% and a U.S. import penetration rate of 47.9%. Tokyo has made it quite difficult for foreign countries to sell in Japan by throwing up “nontariff barriers,” or indirect costs. Washington also has long-standing protections on its domestic auto industry. The U.S. currently has a 2.5 percent import tariff on passenger cars and parts and a 25 percent tax on light trucks. Automotives in general enjoy a high level of protection across industrialized countries, but this will start to change with the passage of TPP.

(American Auto Council, Institute for International Economics, U.S. Customs and Border Protection)

4. The Trouble with Textiles

Textiles, the poster child of globalization, have become ensnared in the deal. Only clothing that is wholly sourced and assembled within TPP countries will qualify for duty-free sales. This poses particular problems for Vietnam, currently the second-largest exporter of apparel and footwear to the U.S., with more than $13 billion in sales last year. In order to manufacture all those items, however, Vietnam had to buy $4.7 billion worth of fabric from China, about half of its total annual imports. By itself, Vietnam is only able to produce a fifth of the fabric that it needs to sell on world markets. Companies in countries like Vietnam have spent decades building up diversified and extensive supply chains. The TPP may well force some shifts. But the payoffs will be huge—American taxes on Vietnamese textile imports would fall from as high as 32 percent down to zero. In fact, of all the TPP countries, Vietnam is projected to be the biggest winner relative to the size of its economy, with an expected 10 percent boost if TPP goes into effect.

(Wall Street Journal, Forbes, Brookings Institution)

5. The Red Herring: Currency Manipulation

If you’ve been following the “fast-track” debates in the U.S. Congress over the past few months, you might think that currency manipulation was a key sticking point in the TPP negotiations. It isn’t, but it’s a big domestic headache for President Obama. U.S. politicians who oppose the deal attempted to tie it to the more general problem of global currency manipulation, when governments buy or sell foreign currency in an effort to artificially change the value of their currency. It’s easy to see why. The Peterson Institute estimates that the U.S. trade deficit has increased by $200 billion to $500 billion per year as a result of currency interventions. At the same time, the U.S. has lost between 1 million to 5 million jobs. Those are chilling figures.

But tougher currency manipulation regulations were never going to be a part of the TPP. Control over individual currencies and monetary policies are key issues of sovereignty, and countries are understandably wary of signing away that kind of control. Introducing stringent currency manipulation requirements would blow up the entire TPP on the spot. But it will make it tougher to get the deal passed. With anti-TPP Senators in the U.S. threatening to repeal Obama’s “fast-track” authority for TPP if the administration doesn’t address currency manipulation in the final agreement, Obama still has significant domestic battles ahead of him.

(Institute for International Economics)

***

Despite these thorny issues, the deal is a big economic and geopolitical win for all the countries involved. Expect the TPP to be completed by the end of 2015.

TIME Immigration

Why Good Border Fences Don’t Always Make Good Neighbors

Bremmer is a foreign affairs columnist and editor-at-large at TIME.

Rather than building walls, politicians need to address root causes

Donald Trump raised eyebrows recently when he demanded that the U.S. complete a wall with Mexico–and that Mexico pay for it. But give the Donald this: he tapped into a global trend. Several border-wall projects are under way worldwide, from India, which has a long-standing project to fence off much of Bangladesh, to the E.U., where anti-migrant sentiment runs high after incidents in Calais and the Mediterranean.

Saudi Arabia will soon have a 600-mile (965 km) wall on its border with Iraq, adding to the 1,100 miles (1,770 km) of barrier that already exists between the Saudis and Yemen. Turkey is spending hundreds of millions of dollars to erect a wall along its southern border with Syria in order to fend off would-be terrorists–only to find itself on the receiving end, as E.U. member Bulgaria puts up its own wall with Turkey. Hungarian Prime Minister Viktor Orban wants to complete a fence being built to curb illegal immigration from Serbia.

Walls are the archetypal quick fix. They reassure the public that there will be a sharp separation between “them” and “us.” In Israel, the construction of a fence in the West Bank has coincided with a dramatic reduction in suicide attacks, encouraging other countries to add concrete and barbed wire.

Yet Israel’s experience may be more exception than rule. Walls don’t deter migrants, who simply take longer, harsher routes. Walls are incredibly costly to build and maintain. They can disrupt trade and hurt a country’s reputation. Nor will walls solve terrorism. Tunisia is building a wall to separate itself from chaotic Libya, but it will not stop the more than 3,000 Tunisians who have reportedly traveled to fight in Syria from coming home.

Rather than building walls, politicians need to address root causes. In Europe, that means financing local development across the Mediterranean to reduce migrants’ incentive to leave their home countries. Those kinds of sober, long-term strategies won’t make Trump happy. But then, what will?


This appears in the August 17, 2015 issue of TIME.

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This Weekend’s Foreign Policy Must-Reads

A roundup of the most intelligent takes on global affairs this week

The Greek Warrior – New Yorker

Varoufakis, a mathematical economist with a modest academic reputation, had become a popular writer in Greece. When the snap election was called, he interrupted his professorship at the University of Texas, flew home to Greece, and launched a ten-day election campaign whose sole expense was the cost of gas for his motorcycle…Varoufakis was elected with a larger share of the vote than any other candidate, and he was named the finance minister.

Greece’s controversial former Finance Minister Yanis Varoufakis says he will miss his German counterpart Wolfgang Schäuble, whom he calls a “man of principle.” Does Schäuble feels the same for Varoufakis? Someone ask him. Please.

Pope Francis Against the World – The New Republic

The mistake made by the media all along has been to conclude that because Pope Francis can speak morally to a variety of issues we tend to think of as detached from moral reasoning (like economics, inequality, and property) that his authority is less limited than it really is. The truth is that Francis’s greatest ability outside the Church is his capacity to inspire, especially in those who don’t normally look to Catholic moral theology for their inspiration.

The general lack of international leadership and the number of current crises around the world offer an opening for a charismatic leader with the backing of a large flock. Yet, political leaders of both the left and right are confused about how (and whether) to engage him.

How to Smuggle $1,000 into North Korea – Politico EU

The smuggler will strap the items in a waterproof sack, swim across the river and bribe the guards on the North Korean border to let him pass into North Korea. These are guards that the smuggler has carefully built relationships with over time. Smuggling goods is highly punishable, and letting people pass through the North Korean border, rather than shooting them, could get the border guards killed instantly. But North Korea has become a country where money can solve any problem and can save lives.

And the cracks widen to let in a little more light. One day, North Korea will go from forgotten story to biggest story in the world in a matter of hours. And then one of the largest long-term humanitarian reclamation projects in history will have to begin.

“Death to America” and the Iran Deal – New Yorker

I talked to Iranians in Tehran from across the political spectrum about “Death to America!” I pointed out that, throughout the decades of tension, no American has been recorded going into a church and shouting “Death to Iran!” Some Iranians downplayed the revolutionary mantra’s importance; others insisted it still has strong symbolic merit. But all of them—particularly senior Iranian officials educated in the United States—seemed befuddled about why it would ever impact the fate of the nuclear deal.

When two countries refuse to talk to one another for 36 years, it takes time to find a common language. That process has only just begun, and there’s no guarantee that the two governments, or their citizens, will find much to say to one another anytime soon.

Why Greece’s Lenders Need to Suffer – New York Times Magazine

A world of bonds works only when the investors who buy the bonds are extremely nervous and wildly cautious…The bailout represented a transfer of wealth from the rest of the economy into the bond market — precisely the opposite of what is supposed to happen. Now, in the moral hand-wringing over Greece and its failure to pay, we see that bondholders expect to be bailed out constantly, even when they were obviously culpable in failing to manage their own risk.

Just as short-sided lenders helped inflate the housing bubble in the US, so Greece’s lenders helped fuel the destructive patterns of that country’s long-dysfunctional government. Another timely reminder that short-attention-span media simplifies too many stories when reality isn’t so clean.

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