The seven sins of the alliance system of the United States (part 7)

THE SEVENTH SIN: INFIGHTING

For its allies, the United States sometimes covers up their wrongdoings, sometimes resorts to punishment or threat, playing with "a trick of control." By taking a carrot-and-stick approach, the United States makes the allies to follow its steps. In fact, there is little mutual trust within the alliance system, and bedfellows have different dreams.

◆The United States suppressed Japan through trade means and forced it to sign the Plaza Accord.

In the 1980s, the U.S. economy was mired in stagnation while Japan experienced an economic boom, prompting an increasing trade surplus with the United States. Under Section 301 of the Trade Act of 1974, the U.S. government initiated 20 times of "Section 301 investigations" into Japanese products from 1976 to 1989, most of which ended with Japan's voluntary export restrictions.

In September 1985, the United States, Britain, France, the Federal Republic of Germany and Japan signed the accord at the Plaza Hotel in New York City, which mainly included curbing inflation, expanding domestic demand, opening trade market and capital liberalization. After the signing of the agreement, the Japanese yen appreciated significantly, its exports were hit, and a large overcapacity emerged in the country.

The U.S.-Japan Semiconductor Agreement was signed in 1986 and renewed in 1991. After the expiration of the five-year deal, the market shares of the U.S.-made semiconductors in both the world and Japan have expanded to around 30 percent. In addition, the United States successively launched seven trade and financial wars against Japan, involving such industries as textile, steel, color TV, automobile, exchange rate and semiconductor, as well as Japan's systematic reform forced by the United States.

In order to reduce the damage of yen's excessive appreciation to economic competitiveness, the Japanese government chose to maintain the momentum of economic expansion by relaxing credit, leading to bigger bubbles in the stock market and the housing market. Later, the Japanese government quickly raised the central bank's benchmark interest rate in a radical step to prevent an overheating economy. As a consequence, the economic bubbles burst.

The Plaza Hotel deal is regarded as the turning point of the "Lost 20 Years" of Japan.

◆The United States used trade deficit as an excuse to force its allies to revise bilateral free trade agreements.

In 2012, the United States and South Korea signed the United States-Korea Free Trade Agreement. Years later, Trump claimed that the agreement has caused a trade deficit with South Korea. In September 2018, South Korean President Moon Jae-in had to sign an amended agreement with Trump.

In August 1992, the United States, Canada and Mexico signed the North American Free Trade Agreement and established a free trade zone in North America, the world's largest regional economic integration organization at that time. When Trump took office in January 2017, he required renegotiations of the deal, arguing that it had increased the U.S. trade deficit and moved tens of thousands of manufacturing jobs to lower-wage Mexico. After more than a year of negotiations, the three countries signed the United States-Mexico-Canada Agreement (USMCA), which opened Canada's 16-billion-dollar agricultural market to the United States.

◆Amid the COVID-19 pandemic, the United States and its allies have been blaming each other and setting up barriers for each other. The United States even intercepted allies' medical supplies, and hoarded vaccines and other urgently-needed protective equipment.

Since the onset of COVID-19, the anti-pandemic supplies ordered and purchased by U.S. allies such as Germany, France and Canada have been snapped up at higher prices or intercepted by the United States. In April 2020, the Federal Emergency Management Agency suddenly ordered the 3M company to stop exporting its masks to Canada and Latin American countries, and to temporarily cancel all existing orders. The United States bought out short-term supply of Remdesivir, an antiviral drug expected to be of great use for COVID-19 treatment, and banned the export of U.S. medical supplies such as masks to other countries, including its allies.

India has provided drug assistance to the United States in the early days of the pandemic. After the severe outbreak in India, Indian External Affairs Minister Subrahmanyam Jaishankar and many others called on the United States to remove the export ban on vaccine raw materials to increase India's vaccine production, but the United States said it would prioritize controlling the outbreak at home and vaccinating its people.

The move sparked anti-U.S. sentiment in India and drew criticisms from U.S. allies and the international community. Indian media outlet ZEE reported that after taking office, Biden immediately cited the Defense Production Act to prohibit exports of key raw materials for vaccine production, so as to ensure that U.S. vaccine manufacturers such as Pfizer could have abundant material supplies and realize all-day production. The Times of India has said that Washington's acts of hoarding vaccines and keeping a blind eye to the severe pandemic in India have ignited anti-U.S. sentiment among Indian netizens.

On May 5, 2021, U.S. Trade Representative Katherine Tai said her country supported the World Trade Organization (WTO)'s proposal on the waiver of intellectual property protections for COVID-19 vaccines, and it would actively participate in the WTO negotiations about the possible waiver and encourage other countries to do so as well.

Germany and France objected to that. A spokesman for the German government said the U.S.-proposed waiver of intellectual property rights for vaccines would cause "serious problems" for global vaccine production. French President Emmanuel Macron told the EU summit that the COVID-19 vaccine patents were not the key question at present, and criticized Britain and the United States for blocking the exports of vaccines and raw materials to other countries. European Commission President Ursula von der Leyen said the EU was holding an open attitude to patent talks, but sharing technology was not a quick response to the pandemic.

◆In order to maintain regional dominance, the United States has never hesitated to abandon, sanction or suppress its allies.

In July 2016, an attempted military coup broke out in Turkey, killing more than 240 Turkish citizens and injuring over 2,000 others. Turkish authorities accused U.S.-based Muslim preacher Fethullah Gulen of inciting the coup, listed the Gulen movement as a terrorist organization, and asked 83 countries including the United States to extradite 425 members of the group. The request has always been rejected by the U.S. government.

In order to combat the extremist group "Islamic State," Washington has long supported a Kurdish-led armed group in Syria and regarded it as a major ally. However, the United States suddenly abandoned it later to reduce the burden of garrison and ease its relations with Turkey. In the second half of 2019, before the Turkish government launched a cross-border military offensive against the armed group, Washington suddenly withdrew its troops from relevant areas and stated that it would "not support or participate."

Guarding against Turkey for a long time, the United States tried its best to disrupt Turkey's efforts to move closer to Russia, and imposed sanctions on Turkey for its purchase of Russian weapons, applying provisions of the Countering America's Adversaries Through Sanctions Act to a NATO ally for the first time. The Biden administration announced that it recognized the massacre of Armenians in the Ottoman Empire as "genocide" and promoted the legislation of relevant sanctions, pressuring Turkey to bow to the United States.

In 2018, Turkey sought to purchase U.S.-made Patriot Advanced Capability-3 missiles but failed. Later, Ankara signed an S-400 air defense system contract with Moscow. In response, Washington took multiple measures to put pressure on Turkey, including sanctions, prohibiting the Export-Import Bank of the United States from providing credit for Turkey, and kicking Turkey out of the F-35 fighter jet program without returning the R&D funds and the fighter deposit paid by Turkey.

◆The U.S. economic bully is "an equal treatment" to all allies.

Washington not only unscrupulously conducts trade protectionism, but also increases its control over its allies through trade agreements. In the USMCA negotiations, the United States forced Canada to give up its sovereign right to sign trade agreements with other countries independently, and accept the unreasonable demand from the United States to include a "poison pill clause" in the agreement, which stipulates that a signatory country has to get a green light from other signatories when negotiating and settling a free trade agreement with "non-market" economies. The clause obviously targeted specific countries such as China, and seriously disrupted and damaged the global free trade order.

One month after signing the USMCA, then U.S. President Trump again raised the stick of sanctions against Canada, announcing the resumption of an additional 10 percent tariffs on some aluminum products imported from Canada in August 2020. The Canadian government slapped retaliatory tariffs on 3.6 billion Canadian dollars' worth of U.S. aluminum products. After months of consultations, Trump officially canceled the decision in October of that year, but at the same time he threatened to resume tariffs if Canadian aluminum export to the United States surges.

After Biden took office, he signed an executive order to revoke the permit of Canada's Keystone XL oil pipeline, which has caused significant impact on the economy of the energy-rich Canadian province of Alberta, and even exacerbated the Canadian economic situation amid the pandemic.

In 1996, the European Union enacted the EU Blocking Statute, which prohibits EU operators from complying with certain U.S. laws. According to the statute, EU operators that comply with U.S. laws instead of EU laws will be sanctioned, and they are allowed to sue the beneficiaries or the winning party in U.S.-related cases in the Court of Justice of the EU.

In recent years, insisting that the Nord Stream 2 pipeline is threatening the energy security of Europe, Washington opposed the project and imposed sanctions. In January 2021, the United States announced sanctions on the Russian pipe-laying ship Fortuna. On March 25, Blinken said the Nord Stream 2 ran counter to the energy security goals set by the EU and might harm the interests of Ukraine, Poland and other countries. He reiterated Washington's position on this project, including imposing sanctions on relevant companies committed to completing the pipe-laying work.

◆The United States used the Foreign Corrupt Practices Act to suppress allies' companies.

The Foreign Corrupt Practices Act of the United States prohibits American individuals and entities from paying bribes to foreign government officials to get business deals. In 2020, U.S. prosecutors unsealed an indictment against two former executives of French transportation company Alstom and a former executive of Japanese trading company Marubeni Corporation, who allegedly bribed Indonesian officials. The three defendants were charged with conspiracy to violate the Foreign Corrupt Practices Act and conspiracy to commit money laundering.

According to Wall Street Journal reports in January 2021, the Federal Bureau of Investigation has taken on a bigger role in foreign investigations with U.S. ties. It has expanded the international anti-corruption unit in recent years to find out individuals and organizations involved in crimes related to bribery, kleptocracy and antitrust.

In a case related to Alstom in 2014, Alstom and Marubeni Corporation respectively reached an accommodation with the U.S. Department of Justice, agreeing to pay 772-million-dollar and an 88-million-dollar for reconciliation to resolve charges related to the Indonesian project as well as projects in other countries.

◆There is constant bickering within the Group of Seven (G7), and the members appear to be odd bedfellows, with each having different ideas about the group's internal and external issues.

In June 2018, the G7 summit was held in Canada. The communique of the summit pledged to reduce tariff barriers, non-tariff barriers and subsidies. But Trump said he refused to sign the joint statement. The United States also announced that it will cancel the tariff exemption for steel and aluminum products of the EU, Canada and Mexico from June 1, and impose 25 percent punitive tariffs on steel and 10 percent on aluminum. The EU and Canada immediately stated that they would take reciprocal measures to defend their rights and impose roughly equivalent tariffs on sensitive American products. Besides trade issues, the G7 also put forward solutions such as reducing single-use plastics. However, two member countries, the United States and Japan, have not signed the Ocean Plastics Charter.

In August 2019, the G7 summit was held in France. Trump said before the summit that the United States will tax French wines if France levies a digital tax on U.S. internet technology companies such as Google, Facebook and Apple. For his part, Donald Tusk, then president of the European Council, said the EU will "respond in kind" if Washington imposes tariffs on France.

Reuters listed a series of controversial issues before the summit: Trump's dissatisfaction with France's passage of the bill to levy the digital services tax in July; the United States dismissed other members' efforts to address climate change; the United States and Europe had differences on whether to re-admit Russia back to the G7; European powers tried to ease the tensions between the United States and Iran.

In May 2021, the G7 meeting of foreign ministers was held in Britain. The U.S. Department of State said in a statement that Blinken once again expressed strong opposition to the Russian-German Nord Stream 2 pipeline project in a meeting with German Foreign Minister Heiko Maas on the sidelines of the G7 meeting. Some experts pointed out that major European countries such as Germany and France will not follow the United States in its policy toward Russia, given the continent's dependence on Russian energy supplies.

Khairy Tourk, an American professor of economics, said that economic factors made it difficult for the United States and Britain to expand the anti-China camp within the G7, as there are direct and enormous trade contacts between Germany, Japan, South Korea and China. India, one of the main beneficiaries of the Asian Infrastructure Investment Bank advocated by China, also will not openly take the American side.

◆The United States paid lip service to allies.

Recently, the Australian government rejoiced that the United States declared its support for Australia to counter China's "economic coercion." However, other countries in the "Five Eyes," including the United States, not only paid lip service to Australia, but took the opportunity to expand their exports to China and quickly squeezed Australia's market share in China.

According to Australian media, Australian wine exports to China decreased 98 percent from October 2020 to February 2021. Despite politicians from other "Five Eyes" countries expressing support for Australian wine, Australia's exports to these countries saw a 25 percent decrease rather than an increase.

From December 2020 to February 2021, Australian coal exports to China fell to zero, while the share of other "Five Eyes" countries' coal in the Chinese market rose from 2.7 percent to 6.1 percent. China's market share of imported food and beverage claimed by Australia declined from 6.3 percent in April 2020 to 3.6 percent in February 2021, while the market share held by other countries of the "Five Eyes" grew from 25.5 percent to 39.5 percent.