China will step up pressure on Taiwan on all sides

Subject China-Taiwan relations. Significance Burkina Faso on May 24 withdrew diplomatic recognition of Taiwan, the latest result of a raft of measures Beijing has taken this year to isolate Taiwan from the international community and convince Taiwan’s current independence-leaning government that there are significant potential costs for failing to find a modus vivendi with Beijing. The coercive measures included military intimidation, diplomatic pressure and a sharp escalation in pressure on international companies to hew to China’s preferences when referring to Taiwan. Impacts Burkina Faso is likely to establish diplomatic relations with China and receive economic rewards. Chinese coercion will prompt gestures of support for Taiwan in the US Congress, where anti-China sentiment runs high. Foreign airlines and other firms will adopt approaches that go some way to pleasing Beijing, some of them pre-emptively.

Significance Puerto Rico is facing a severe fiscal crunch; its general obligation bonds are rated junk status and the government has said that a 2.9 billion dollar bond issuance -- at risk because of the congressional vote -- is required to prevent a shutdown in the next three months. Impacts There is little-to-no prospect of Puerto Rican statehood while Republicans control the US Congress. Puerto Rico would gain five representatives and two senators, likely to vote Democratic. However, this may encourage some Republicans to back federal intervention on debt, to ward off calls for statehood.


Subject Trends in approaches to coups in Africa. Significance Following the introduction of multi-party politics in the 1990s, Africa gradually developed an anti-coup norm. This was institutionalised by the African Union (AU): regimes that came to power unconstitutionally were automatically suspended from membership. More recent trends are challenging this principle. Coups in Mali (2012), Burkina Faso (2014) and a recent failed attempt in Burundi have seen military leaders claiming to have intervened to 'save democracy', usually removing from office presidents failing to respect term limits. Impacts The role of African armies in peace-keeping can embolden military elites who do not have the same priorities as their Western funders. Dependence on African armies for peace-keeping acts as a bargaining chip for elites to neutralise external criticism of domestic issues. Donors still prefer African-led missions, given cost savings and the utility to bolster diplomatic relations with African states.


Subject Outlook for US policy engagement with Myanmar as the US presidential transition nears. Significance The White House is preparing to lift most remaining US sanctions on Myanmar, after President Barack Obama's September 14 announcement to this effect when he met Myanmar State Counsellor Aung San Suu Kyi. Washington will also restore Myanmar's access to the US Generalized System of Preferences (GSP) because of recent improvements in labour rights. Supporting Myanmar's democratic 'transition' has been a key Obama policy and the president is attempting to fix progress before his successor takes office in January 2017. Impacts Myanmar's government will deepen ties with Beijing, but not necessarily to the extent of eclipsing US ties. The Rohingya issue will still cause some friction in Myanmar-US ties. Policy gaps and delays on Myanmar between the US Congress and next president may expand.


Subject Israel's policy to post-agreement Iran. Significance With the international community on the verge of signing a deal with Iran that would end the decade-long dispute over its nuclear programme, Israel is preparing to deal with the consequences. The deal would bolster Israel's security by preventing Iran from becoming a nuclear weaponised state. However, it is also likely to empower Iran, by leading to the unraveling of the international sanctions regime, and giving Iran de facto international recognition as a regional power. Impacts Israel's Republican allies in US Congress will make it extremely hard for Obama to lift congressional bilateral sanctions. However, neither Congress nor Israel have the power to block a deal from going ahead. Israel will use the deal to secure 'compensation' in the form of additional US military aid. A deal would allow the army to transfer resources to confronting asymmetric campaigns against Hezbollah and Hamas. Israel will strengthen its ties with Sunni states that also oppose Iran.


Significance The standoff with North Korea has led the Senate Foreign Relations Committee to hold a hearing on the president’s authority to order a nuclear first strike. This is the first such formal examination of the executive branch’s nuclear prerogatives and procedures by Congress since 1976. Meanwhile, President Donald Trump’s administration is planning on upgrades to the US arsenal to boost Washington’s ability to wage a nuclear war and has raised the spectre of nuclear conflict with North Korea in its public remarks. Impacts The probable US deployment of new tactical nuclear weapons will not carry over to delegating attack authority to commanders in a crisis. Chinese and Russian anti-access/area-denial systems may trigger more US reliance on nuclear deterrence in the Baltics and North-east Asia. Improved weapons technology convincing policymakers that first strikes are prudent pose greater risks than unbalanced political leadership.


Significance This comes as the US Congress is finalising a bill, the Caesar Act, that would substantially increase the sanctions pressure on Syrian President Bashar al-Assad’s government. As Washington’s military footprint in the Syrian theatre shrinks, it is reprioritising the use of economic tools. Impacts With no exposure to the United States, Iranian and Russian companies doing business with Syria will not be significantly affected. The main losers could be US partners, who had hoped that a Syrian recovery would aid their own economies and regional integration. Black market activity may proliferate in the Levant as criminal groups help establish alternative mechanisms to supply goods and services. Sanctions will make life more difficult for the average Syrian, restricting economic growth and reconstruction.


Significance This is the first state visit extended to a Japanese prime minister since Junichiro Koizumi's in 2006 under the George W Bush administration. Abe was awarded the honour on April 29 of being the first Japanese prime minister to address together both houses of the US Congress. Impacts Abe has strengthened the military alliance, but fulfilling his promises to Washington will cost him political capital at home. History issues are increasingly able to cause Abe problems in the United States as well as East Asia. The economic alliance is shakier than the military one; the US Congress may still delay the TPP. Tokyo and Washington look isolated as the TPP stalls and regional governments sign up to China's Asian Infrastructure Investment Bank.


Significance Pressure on Caracas has intensified over recent weeks, elevating expectations that President Nicolas Maduro will be forced to stand down well ahead of the December 2018 presidential elections. Regional organisations and multilateral institutions are manoeuvring to engineer regime change, or to contain the fall-out from an abrupt and destabilising political shift. This is a particularly perilous period for the Maduro government with 2 billion dollars in loan payments falling due in April as international reserves hit record lows and shortages of basic goods deepens. Impacts The Venezuelan Foreign Ministry will engage in intense regional diplomacy to preclude decisive OAS action. The US Congress will push for broader sanctions on Venezuelan officials in order to support OAS actions. Speculation will intensify that Venezuela will default. Venezuelan instability may increase risks in neighbouring Colombia.


Significance Cuba is working on many fronts to advance its international insertion after the breakthrough restoration of diplomatic ties with the United States. However, progress is gradual and uneven. A first agreement on Cuba's debt has been reached with the Paris Club, underscoring Cuba's interest in regaining access to financial markets. The Latin American Development Bank (CAF) is the first international financial institution to engage with Cuba, but broader cooperation still faces difficulties. Impacts The popular pope's visit will strengthen the Church's political position as Cuba's most important non-state institution. It will also add to pressure on the US Congress from the White House to lift sanctions. Cooperation with CAF and other bodies will require Cuba to supply transparent and comprehensive economic data -- mostly still lacking. Economic reform is likely to see major new liberalisation measures before the Communist Party congress scheduled for April 2016.


Subject Future EU relations with Iran. Significance Iranian President Hassan Rouhani will make his first state visits to Europe during the autumn, to France and Italy. The EU and its member states see July's nuclear deal as opening a new chapter in relations. The EU3 -- France, Germany and the United Kingdom -- are using the subsequent political momentum to expand bilateral relations and explore new openings for engagement on Middle East security. Impacts Deeper political engagement with the EU widens Iran's partnership options beyond Russia and China. It would also allow Tehran to compete more effectively with the Gulf states for EU attention and resources. If the US Congress rejected the deal, EU sympathies would be with Iran; EU-Iran rapprochement would be hard to reverse. The success of the sanctions-plus-negotiations strategy with Iran could affect other EU sanctions policy discussions, notably on Russia.


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