Category: Effect of policies and politics of developed and developing countries – GS2R

CHINA – PHILLIPINES CONFLICT IN S. CHINA SEA

Issue:

  • South China Sea is a significant area in the Pacific Ocean.
  • It is the major trade route connecting South East Asia to the Pacific Ocean, China and Japan.
  • China has been claiming the sovereignty over the South China Sea. This has led to the tensions among the nations surrounding the South China Sea.
  • China has been aggressively building artificial island in the area to further their claims in the region and also to establish their military and naval bases in the region. This act has been widely condemned by the
  • Western world and also by India.
  • India’s stand: The dispute over the Sea should be resolved through International laws and consensus. Especially the laws that govern the sea under the UNCLOS.
  • On  15th  June  a  Chinese  vessel  hit  a  Phillipino  fishing  boat  which  escalated  the  ongoing tensions.
  • It  happened  near  Reed Bank over which  Phillipines  claims  sovereignity  as  it  falls within 200 nautical miles exclusive economic zone of the  country. However, Beijing also claims the ownership of Reed bank.

Exclusive Economic Zone:

  • It is a law formulated under the UNCLOS or the United Nations Convention on Law of the Sea.  It is an area beyond and adjacent to the territorial area; maximum 200 nautical miles from the baselines.
  • -Within the EEZ, the coastal state has the sovereignity over the natural resources.

Within an EEZ a state is allowed to do the following:

  • Create artificial islands. Marine scientific research.
  • Protection and preservation of Marine Environment.

IRAN – US NUCLEAR ISSUE

Context:

  • U.S withdrawn from JCPOA after Donald Trump had become the President of the country.

What is JCPOA?

  • Joint  Comprehensive  Plan  of  Action  is  an  agreement  reached  between  Iran  and  P5+1 nation on the issue of nuclear enrichment process happening in Iran.
  • It was adopted on July 14, 2015 and later endorsed by the United Nations Security Council Resolution 2231 on July 20, 2015.

Who are the Members?

  • Iran and (P5= U.S, Britain, Italy, China, Russia) + Germany

Who is the Implementing Agency?

  • Iran’s compliance with the nuclear related provisions will be verified by the International Atomic Energy Agency (IAEA).
  • Core Issue: The Western nations suspect Iran is enriching uranium to the levels required to make nuclear bombs. Such an action by Iran could trigger an all-out war in the Gulf region as Iran is a hostile nation to most of the Sunni dominated Gulf region and the Western countries.
  • Arak Reactor: JCPOA demands Iran to shut down the Arak nuclear reactor. Replace the core of the Arak reactor to reduce the weapons grade plutonium output.
  • Fordow: For 15 years no introduction of Uranium to this facility. However, after the U.S withdrawal from the deal, Iran has decided to scale back  compliance with a nuclear deal unless the signatories to the JCPOA show positive response.
  • CAATSA: Countering America’s Adversaries through Sanctions Act. This law has used by the U. S government to impose sanctions on Iran, Russia and N.Korea.

India to lose preferential trade terms with U.S.

Why in news

  • India will lose access to preferential trade terms with the U.S. under the latter’s Generalised System of Preferences (GSP) programme.

Details:

  • Trump had written to the U.S. Congress on stating his intention to withdraw GSP benefits for India, saying India had failed to assure Washington that it would provide “equitable and reasonable access to the markets of India”.
  • GSP can and is expected to be terminated via a Presidential proclamation. Indian exports to the U.S. worth $5.6 billion are covered by GSP, although India gets only $190 million in tariff savings. Nevertheless, the programme impacts crucial Indian sectors including textiles, leather, engineering goods, gems and jewellery.

GSP:

 

  • Generalized System of Preferences (GSP) is an umbrella that comprises the bulk of preferential schemes granted by industrialized nations to developing countries.
  • It involves reduced Most Favored Nations (MFN) Tariffs or duty-free entry of eligible products exported by beneficiary countries to the markets of donor countries.

TRUMP COULD MEET XI ON SIDELINES OF G20 MEET

Why in News:

  • President Donald Trump and China’s Xi Jinping could meet on the sidelines of the G20 summit to hash out their differences on trade, but no new talks are scheduled.

Details:

  • The world’s top two economies ended two days of negotiations in Washington with no deal The G20 summit is scheduled to take place in Osaka on June 28-29.
  • Mr. Trump ordered new punitive duties, on $200 billion worth of Chinese imports, raising them to 25% from 10%.
  • He then ordered a tariff hike on almost all remaining imports — $300 billion worth

Group of 20:

  • The G20 (Group of 20) is an international forum which includes 19 of the world’s largest
  • economies and the European Union.
  • G20 is a forum for economic, financial and political cooperation. It addresses the major global challenges and seeks to generate public policies that resolve them.

Significance of G20:

  • Together, the G20 members represent
  • Two thirds of the world population. 85% of the global gross product.
  • 75% of international trade.
  • 80% of global investments in research and development.

DEAL IN DANGER: ON IRAN AND NUCLEAR DEAL

Why in News:

  • Iran’s decision to reduce its commitments under the 2015 Joint Comprehensive Plan of Action, which sought to curtail its nuclear capabilities, is more of a warning than a move to break the nuclear deal

Details:

  • Iran has been under economic and political pressure since President Donald Trump pulled the U.S. out of the deal a year ago. The U.S. has since amped up its anti-Iran rhetoric and reimposed sanctions.
  • With the U.S. having ended the sanctions-waiver it had given to certain countries, including India, on purchasing Iranian oil, the Iranian economy has come under more pressure.
  • Iran will immediately stop shipping out excess enriched uranium and heavy water. Mr. Rouhani has given 60 days to other signatories to find solutions to shield Iran’s banking and oil sectors from U.S. sanctions. The big threat is that it will resume higher levels of enrichment to build weapons unless its grievances are addressed in 60 days
  • Iran’s move to put the remaining signatories on notice could be the start of the formal unravelling of the deal. If Europe doesn’t do enough in 60 days and Iran sticks to its threat, the deal will collapse, giving more reason to the U.S. to escalate hostilities
  • A collapse of the deal would not only exacerbate the Iran nuclear crisis but also set a bad precedent in international diplomacy.

Joint Comprehensive Plan of Action (JCPOA)

  • The Joint Comprehensive Plan of Action (JCPOA) known commonly as the Iran deal, is an international agreement on the nuclear program of Iran reached in Vienna on 14 July 2015 between Iran, the P5+1 (the five permanent members of the United Nations Security Council—China, France, Russia, United Kingdom, United States—plus Germany),and the European Union.

Way Forward:

  • With this decision President Trump is risking U.S. national security, recklessly upending foundational partnerships with key U.S. allies in Europe and gambling with Israel’s security.
  • Withdrawal from the JCPOA makes it more likely Iran will restart its nuclear weapons program in the future
  • The U.S. stands isolated in its decision. Europe and other powers (UN permanent members) should stick together to respect the mandate of an international agreement. Any sanctions imposed by U.S. will hurt the global economy and may force Iran to stock nuclear weapons, further complicating the situation.
  • Thus, the need of the hour is to standby with the agreement even after the U.S. has withdrawn.

IRAN SAYS IT WILL NOT HONOUR NUCLEAR CURBS

Why in News

  • Iran said it had stopped respecting limits on its nuclear activities agreed under a 2015 deal with major powers

Details:

  • The announcement came as Washington stepped up its rhetoric against Tehran, accusing it of planning “imminent” attacks and deploying an aircraft carrier strike group with several nuclear-capable B-52 bombers to the region
  • Iran said it was responding to the sweeping unilateral sanctions that Washington has reimposed since it quit the agreement one year ago, which have dealt a severe blow to the Iranian economy. Iran’s Supreme National Security Council said that it no longer considered itself bound by the agreed restrictions on stocks of enriched uranium and heavy water.

What did Iran do over the deal and why?

  • It suspended two parts of the deal, known as the Joint Comprehensive Plan of Action (JCPOA), namely the sale of surplus enriched uranium and heavy water. Under the deal, Iran is required to sell its surplus enriched uranium – which can be used in the manufacture of nuclear weapons – abroad, rather than keep it.

Joint Comprehensive Plan of Action (JCPOA)

  • The Joint Comprehensive Plan of Action (JCPOA) known commonly as the Iran deal, is an international agreement on the nuclear program of Iran reached in Vienna on 14 July 2015 between Iran, the P5+1 (the five permanent members of the United Nations Security Council—China, France, Russia, United Kingdom, United States—plus Germany),and the European Union.

What is Instex?

  • It’s a new payments mechanism set up by the UK, France and Germany to allow businesses to trade with Iran without being subject to sanctions. It is supposed to focus on “legitimate trade” in goods “where the immediate need of the Iranian people is greatest”, for example food, pharmaceutical products and consumer goods not subject to sanctions. Oil, Iran’s main source of foreign exchange, is at the moment not covered and Tehran wants the Europeans to give the system more bite.
  • But that could put traders at loggerheads with the US sanctions.

IRAN TO REDUCE COMMITMENTS TO NUCLEAR DEAL

Why in News:

  • Iran is expected to announce plans to scale back compliance with a landmark nuclear deal on the anniversary of the United States decision to withdraw from the international accord.

Details:

  • The US unilaterally withdrew on 2018, from the 2015 multilateral deal known as the Joint Comprehensive Plan of Action (JCPOA) under which Iran agreed to curb its nuclear programme in exchange for the lifting of biting sanctions.
  • Iran will convey details of the “decision to reduce its commitments” to ambassadors of the five countries still party to the agreement – Britain, China, France, Germany and Russia.
  • The US also blacklisted Iran’s elite Revolutionary Guard Corps as “terrorists”, and announced it was deploying a naval strike group to the Middle East because of indications of a “credible threat from Iranian regime forces”.
  • Iran dismissed the move as “psychological warfare”

Joint Comprehensive Plan of Action (JCPOA)

  • The Joint Comprehensive Plan of Action (JCPOA) known commonly as the Iran deal, is an international agreement on the nuclear program of Iran reached in Vienna on 14 July 2015 between Iran, the P5+1 (the five permanent members of the United Nations Security Council—China, France, Russia, United Kingdom, United States—plus Germany),and the European Union.

BELT AND ROAD 2.0

Why in News:

  • With the second Belt and Road Forum, a paradox is now apparent at the heart of the initiative.

Details:

  • Six years after it was unveiled, China’s Belt and Road Initiative (BRI) assumes another avatar.        In  its initial form, it was all things to all people, a catch-all for China’s international engagement. The first concerned domestic economics: exporting surplus industrial capacity and cash reserves overseas to keep China’s economy humming, its industrial output flowing, and its employment levels high.
  • The second concerned domestic politics: a signature foreign initiative to associate with Chinese President Xi Jinping. The third concerned security: stabilising Western provinces
  • and the Eurasian hinterland. And the fourth concerned strategy: leveraging China’s new- found economic heft for political objectives in Asia, Africa, Europe, and the Indian and Pacific Oceans, and creating new standards and institutions in a bid to challenge U.S. leadership. As the second Belt and Road Forum (BRF) concludes, a paradox has become apparent at the heart of its ambitious initiative. On the one hand, there has been a strong backlash. The economic viability of Chinese projects is now viewed with considerable scrutiny.
  • security concerns have begun to predominate as far afield as in the European Union, the South Pacific and Canada.

The Belt and Road Initiative

  • The Belt and Road Initiative is a Chinese foreign policy initiative promoted by president Xi Jinping in 2013. Initially the idea of Silk Road Economic Belt (SREB) and Maritime Silk Road (MSR) was put forward. Subsequently, the two projects together came to be known as ‘One Belt One Road’ (OBOR) Initiative. Later, it came to be known as Belt and Road Initiative (BRI). Aim of BRI. Build a trade, investment, and infrastructure network connecting Asia with Europe and Africa along the ancient trade routes. The Communist Party of China (CPC) has incorporated Belt and Road Initiative into the Chinese Constitution.

India and BRI

  • India has opposed the BRI and did not attend the 2017 BRI Summit held in Beijing. It cited issues of sovereignty, transparency and unilateral decision making.

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