Revisions Geopolitics PDF

REVISIONS GEOPOLITICS **SESSION 1:** **Geopolitical Strategies:** the geostrategic use of political power. Political leaders pursue geostrategic objectivities by employing diplomatic and military means, as well as intelligence capabilities à The Six-Party Talks on North Korea's Nuclear Tests **Ge...

REVISIONS GEOPOLITICS **SESSION 1:** **Geopolitical Strategies:** the geostrategic use of political power. Political leaders pursue geostrategic objectivities by employing diplomatic and military means, as well as intelligence capabilities à The Six-Party Talks on North Korea's Nuclear Tests **Geoeconomic Strategies:** the geostrategic use of economic power. Political leaders pursue geostrategic objectivities through the control over markets, resources, and rules that shape international economic interaction  → energy sanction and technology embargo against North Korea **GEOPOLITICS= Political power**  → major global political powers: UN security council P5 ( fifth country who have a permanent seat on the council) → major regional political powers: Germany, Japan, Brazil, South africa, Israel... **GEOECONOMICS= Economic Capacities** Economic power provides geostrategic leverage in the context of economic interdependencies among countries, such as traditionally the G7 countries Economic power is based on three components: ** Markets:** the economic weight of the respective states and its growth expectations, market access, international flows of investment and trade, and resulting interdependences, such as the increasing importance of the BRICS countries ** Resources:** the access to and control of financial, natural, and technological resources, including the OPEC(cartel pof countries that produce oil) countries' control of oil, the West's control of high-end technologies and financial assets **Rules that shape international economic interaction:** the ability to shape the institutions and regimes that define the international economic order, such as the shift from the "Washington Consensus" to "Beijing Consensus" Why do great powers rise and fall? From ancient civilizations (Rome, Persia, China) to modern times (European and American powers) →Economic power, military strength, and geopolitical influence are interconnected and play vital roles in determining a nation's status as a great power. Particularly, economic prosperity is the precondition for military and political dominance →Imperial Overstretch: excessive military spending and unsustainable commitments abroad can lead to the decline of great powers. Geopolitical events can affect the economy and crucial variables that determine financial markets; these include inflation, risk premiums, and the future cash flows of financial assets → MNCs in Russia after Russia's invasion of Ukraine Commodity prices are determined exclusively by supply and demand, both of which can be affected by geopolitical events. Some commodities, such as crude oil and gold, are extremely sensitive to geopolitical events Example: oil crises, Russia's invasion of Ukraine, etc. However, geopolitical events do not only create risks for investors but can create significant opportunities → Chinese and Indian business expansion in Russia after the Withdraw of Western businesses [Example of Donald trump populist engagement.] In a weak economy, a government might be tempted to engage in populist policies that improve voter support but might be damaging to businesses and the overall economy in a long run...whether these are left-wing or right-wing policies does not really matter; in both cases, the long-term economic impact of populist policies tends to be negative It is hard to judge whether Trump's "America First" policies or the trade war have narrowed the trade deficit, created domestic jobs, promoted liberal economic order, or backfired **II- MEASURING GEOPOLITICAL RISKS** Political risk reflects uncertainty about the future (including a possible but uncertain impact of government policies on the economy), and uncertainty averse investors want to be compensated for the risk of changing policies Political uncertainty does command a risk premium that is independent of the risk premium from economic factors Understanding, identifying, and measuring geopolitical risk is critical for MNCs and international business professionals **Geopolitics Risk Measurements were invented to evaluate the impact of geopolitical events on financial assets** **GEOPOLITICAL RISK INDEX:** Textual analysis of the keywords (such as wars, civil wars, terrorism, etc.) in 11 newspapers in the US, the UK, and Canada since 1985 Focused on the role of Americans and British in the geopolitical events The Historical GPR Index can be traced back to 1900 Prominent geopolitical events: the Two World Wars, the Falklands War, the Gulf War (1990), and the 9/11 attack, etc. Geopolitical Risk (GPR) Index From an investors' point, global financial markets are dominated by geopolitical events involving the US because it is the largest economy in the world, with the largest stock market, the leading global currency, and one of the largest bond markets Geopolitical events appear to have the greatest influence on financial markets if they appear on the radar screen of a US audience Findings a\. For a two-standard-deviation spike in the GPR index, the company fixed investments decline by 1.8% over the subsequent 12 months (Russia's annexation of Crimea in 2014, or the 2005 London bombings). Additionally, a temporary setback in consumer confidence and a 0.4% decline in employment in the 12 months following the event b\. The 9-11 terrorist attacks had a greater impact as a six-standard-deviation event Geopolitical Risk (GPR) Index **Findings:** Stock markets reacted differently in different countries The US market was close to the global average Markets in Europe tended to show bigger declines, while markets in Asia suffered less **Weakness** Limited measuring scope: English-speaking countries, and the public perception of wars/terrorism in these regions; unfriendly to predict/evaluate the market reactions in non-North American and non-British markets Regional wars/conflicts that did not involve US or British troops are underrepresented in the index Domestic unrest or civil wars were also ignored Underrepresentation of the non-conflict geopolitical events on the market, such as the trade war between the US and China **Global EPU Index** Economic Policy Uncertainty (EPU) Country-level indices, not specifically for geopolitical events, but mainly for measuring economic policy risks (such as 2008 Global Financial Crisis or 2011/2012 Eurozone Debt Crisis) with potential of evaluating geopolitical events (such as the Iraq War) Recently, the EPU index for the US has been extremely high as a result of the US-China trade war While both the GPR and EPU indices are interesting ways to quantify risks, neither of them is a panacea for investors The two indices can complement each other to provide investors with more comprehensive information and forecast SESSION 2: **I-The evolution of the international Geoconomic system** **History** It start with the **Atlantic charter:** - created during the WWII - the set out of goals and principles that would guide the post-war world older and reconstruction - 4 principles were focused on economics: - 1\. Trade barriers were to be lowered - 2\. There was to be global economic cooperation and advancement of social welfare - 3\. The participants would work for a world free of want and fear - 4\. The participants would work for freedom of the seas and with the **Bretton Woods** →The collapse of the stock market, the rapid decline in investment and consumption, the gold standard, protective economic/trade policies triggered global economic depression and resulted in war - John Mayard Keynes ( neoliberal economist) lead the project of the Bretton woods. →The Bretton Woods agreements 1\. Install the US as the world's economic leader with US dollar as the reserve currency 2\. The creation of the IMF (for providing loans) and the World Bank (for post-war European reconstruction) **+ IMF quotas** - 1\. The US (fees-17.4% with 16.5% voting rights), China (6.4% quota with 6.1% voting rights), etc. - 2\. The quotas were criticized because of its "biased" representation as the developed economies have 57.6% of quota. Do you think the Bretton Woods agreements represent the current geopolitical context? - For real NO, because if we take a look at the current geopolitical context the united is no more the the only one to control and have power over the world. We can include Russia, China, BRICS, and the occidental countries. -**The World Trade Organisation (WTO)** The Bretton Woods system did not create an institution to promote free trade **23 countries signed the General Agreement on Tariffs and Trade (GATT)**, which sought to reduce 45,000 tariffs affecting about 1/5 global trade ( France didn't signe the GATT because of the prime minister of Mitterand, Mr Balladur The **creation of WTO on 1 January 1995** Two Principles →1. National treatment: all foreign goods must be treated the same way as domestic goods in each country →2. Nondiscrimination: the principle of most-favored-nation (MFN), which requires each WTO member extends its best trade terms and treatment to all other members Unlike the IMF or the World Bank, the WTO has judicial powers over trade disputes. Additionally, the WTO can allow retaliatory tariffs if it finds existing practices to be in violation of its rules. Incoterms (contraction de l'expression anglaise INternational COmmercial TERMS) WTO & FREE TRADE Since the end of the Cold War and the Foundation of the WTO, the average tariff on imported goods declined from 8.4% in 1994 to 2.6% in 2017 In the US, average tariffs have declined from 3.8% to 1.7% and in the EU from 6.3% to 1.8% China had an average import tariff on goods of 32% in 1991. With its join in the WTO in 2001, its tariffs decreased rapidly and are now at 3.8% on average However, nontariff trade barriers are often hard to address because to prove that these measures are illegal barriers to trade is difficult. Industrialized countries use  nontariff barriers to protect local industries against foreign competition 1\. WTO identified various nontariff barriers: import licensing, pre-shipment inspections, rules of origin, custom delayers, etc. 2\. Common practices : licenses, quotas, embargoes, import deposit, etc. The WTO is in favor of free trade agreements (FTAs) 1\. An FTA between two or more countries reduces trade barriers between the members of the FTA at the cost of nonmembers (trade barriers to non-FTA countries, which is against the most-favored-nation rules of WTO) 2\. However, WTO allows FTAs as long as the increase in trade between member states outweighs the reduction in trade with outsiders 3\. These FTAs can act as a laboratory to experiment with new ideas and rules that can later be adopted on a global level In 1995, the founding year of the WTO, 49 FTAs were in force with 57 participants. In 2019, 302 FTAs were in force with 481 participants → Thanks to the GATT and the WTO, the global GDP has increased of more than 15% in 80 years. Criticism of the Free Trade: The lack of benefits for developed countries is increasing a\. Job displacement (in particular in developed countries): the relocation of industries from high-cost countries to low-cost developing countries b\. Early FTAs focused on goods and ignored services (including intellectual property), IP were poorly protected in developing countries c\. The legal system in developing countries is often less sophisticated and the risk of expropriation of assets by the local authorities is higher The developing economies are also unhappy with free trade a\. Weakened sovereignty: joining global trade agreements require countries to conform to relative rules and regulations, limiting their ability to implement certain domestic policies or protect local industries b\. Environmental impact: environmentally unfriendly production is transferred to developing countries, and the natural resources of developing countries are "plundered" More recent events concerning the Geoeconomic system: Due to the US-China trade war, the US average tariff on import goods increased to 8% in 2019 from 3.5% in 2017 Analysts believed such outcome as a result of economic policy being increasingly used as a tool to other political ends II- GEOECONOMICS & INTERNATIONAL SYSTEM 1\. Geoeconomic statecraft enables new policy choices The increased economic power and capacity of a country allows it to manipulate geopolitics to achieve political goals. Both Russia and China in the 1990s had difficulty in achieving political goals through geoeconomic capacity, but today's Russia and China have such economic strength to challenge Western economic domination Many countries that the United States dislikes or are sanctioned, such as Angola, Ecuador, Guinea, Venezuela, Zimbabwe, North Korea, Myanmar, and North Korea, etc. may use the economic power of Russia, China, Qatar or other power non Western countries to weaken the impact of Western sanctions (1989 in China : Tian\'anmen) 2\. Geoconomics enables states to use new foreign policy tools, some of which are unavailable to U.S. and other Western leaders Emerging economies have a large number of state-owned enterprises (SOEs) or government-controlled assets that can help governments achieve their geopolitical and economic goals a\. China's choice of buying Airbus or Boeing aircraft has become a "battlefield" between Europe and the US in China, and China is good at using this tactic because the potential of China's aircraft market cannot be replaced by other countries Emerging economies use more flexible strategies and rules than the West in achieving geopolitical and economic goals a\. Developing countries are more likely to borrow from emerging markets than from Western financial institutions, and non-Western financial aid is more concerned with economic and financial interests than other criteria from the West (such as human rights or ideologies) 3\. As certain states come to employ geoeconomics tools, it can change not only the nature of diplomacy but that of markets as well Nonmarket behavior begins to play an important role in commerce and international business Strategic alliances are used to deal with the existing trade and financial institutions a\. Emerging economies unite to increase negotiating leverage with Western counterparts. Increasing number of non-Western and regional political and economic cooperation mechanisms are established to enhance political trust while promote economic integration, such as African Union (AU), Association of Southeast Asian Nations (ASEAN), Arab League (AL), Caribbean Community (CARICOM), Shanghai Cooperation Organization (SCO), Union of South American Nations (Western) private companies struggle to compete with state-backed entities in many developing countries. At the same time, enterprises with state background are also accused of threatening national security and banned by Western countries 4\. These geopolitically motivated deals can become important factors in a given state's foreign policy calculus Unlike Western practices, Chinese investment was once welcomed in developing countries with a reputation for a "policy of non-intervention" in local politics. In recent year, China has directly involved in political decisions such as Sudan, Zimbabwe, and Venezuela in order to maintain its interests, in particular, its energy security During the decades when the West abandoned Africa, China quickly grained African markets. It has become Africa's largest trading partner, and China has the largest number of UN peacekeepers in Africa among the P5 members of the UNSC 5\. Many of these contracts, often negotiated autocrat to autocrat, seem designed to bolster the respective regimes in question, often proving effective Chinese loans and investments are vital resources for an authoritarian leader to achieve his/her campaign objectives (such as for Hugo Chavez of Venezuelan) Russian and Chinese support for nondemocracies is strongly and exclusively motivated by material factors, such as China's quest for oil and energy security and Russia sells conventional weapons and nuclear reactors for more revenue The US has also been criticized for its long-term economic cooperation and political support with Saudi Arabia and its neglect of human rights violation based on its own energy security and geopolitical goals, such as sanctions against Iran and support for Israel (Read more on Los Angeles Times of US's Complicated and Contradictory Relationship with Saudi Arabia) 6\. Once-distinct security and economic tensions tend to reinforce each other to a greater degree than in previous eras Economic sanctions and other geopolitical and geoeconomic practices that only carried out by developed countries in the past are now widely used by emerging economies to protect their own interests, in particular, China The rise of China has challenged the rule-based international order formulated by the West, and the confrontation between the two sides has gradually intensified in recent years, bringing challenges to the economic globalization and liberalization The rise of India, Arabic countries, Southeast Asia, and rapidly growing populations in Africa will also exacerbate geopolitical and geoeconomic tensions in the future. The civilization and politics of these countries do not exactly follow Western, Chinese, or Russian ideas. III-GEOECONOMICS INSTRUMENTS TRADE POLICY The strategic use of trade-related measures and policies by countries to achieve geopolitical and geoeconomic goals Tools and practices: tariffs, non-tariffs barriers, market access, sanctions and economic coercion, supply chain control, support for strategic industries, etc. * Example: Western Trade Sanctions on Russia over Its Invasion of Ukraine* *a. Diamond imports from Russia have been banned in the UK and the US, worth £4 billion in 2021* *b. Gold exports from Russia were also banned, worth £12.6 billion in 2022* *c. The EU stopped importing Russian coal and banned refined oil imports, with no sanctions on Russian gas because it relies on it for 40% of its gas needs* *d. The EU and G7 countries set a price cap of \$60 a barrel for Russian crude oil* *e. The US and UK banned all Russian oil and gas imports (EU countries need Russian oil and gas)* INVESTMENT POLICY Forty years ago, 90 percent of all cross-border flows were trade-based; in 2014, 90 percent were financial Twenty years ago, the US enjoyed a dominant position regarding where capital originated, how it was intermediate, and where it ended up. Today, wealthy emerging economies and Middle Eastern petrostates are major global investors Gross capital transfers to emerging markets have quintupled since the early 2000s, while South-South capital flows are also rising sharply. South-South investment cooperation challenges the global economic order of developed countries and the domination of the US *Example: Western Investment Sanctions on Russia over Its Invasion of Ukraine* *a. The EU, US, UK, and Canada have frozen assets of Russia's central banks in their countries* *b. Western companies withdrew from the Russian market* *c. Major Russian banks have been removed from the international financial messaging system SWIFT, delaying payments for Russian oil and gas* pays petrolier en monté de pouvoir : Quatar, saoudi arabia and UAE ECONOMIC SANCTIONS Sanctions, like trade and investment, have traditionally been a story about the perks of size. While most countries have practiced some form of sanctions, their effectiveness depends on two basic variables: domestic market size and global market share The use of sanctions between adversaries is more frequent than sanctions applied between friendly states, and extract fewer geopolitical concessions, as adversaries tend to prefer near-term economic costs over long-term geopolitical ones. This fact has accounted for the general failure of US economic coercion to achieve its goals against Iraq, Cuba, China, and North Korea. ECONOMIC AND MILITARY ASSISTANCE The practice of deploying aid -- whether military aid, bilateral development assistance, or humanitarian assistance -- to buy strategic influence is one of the most straightforward examples of geoeconomics tools * Examples* *a. The US has the largest and longest-running foreign military financing, worth \$5.5B per year. The US and its allies use military aid and support to the Philippines to intensify confrontations in the South China Sea with China, thereby giving the US an advantage in Asia-Pacific geopolitics and challenging China's leadership in the region. The US has 313 military bases around China by Marianne Williamson (Read more on: China Says Growing US Military Presence on Philippines Bases "Endangering Regional Peace" amid Taiwan Tension by CBS News)* *b. Armenia was considering strengthening links with the EU in 2013 but received pressure from Moscow. Russia stepped up with nearly \$1 billion in military aid to Azerbaijan, which intensified tensions over the Nagorno-Karabakh War from 1988 to 1991. Later, Armenia announced joining the Russia-led Eurasian Customs Union rather than signing an association agreement with the EU* FINANCIAL AND MONETARY POLICY Currency has always been one of the "weapons" of global geopolitics and geoeconomics The creation of EURO is one of the most powerful geopolitical projects in Europe. Even the Eurozone is fraught with crisis, some countries (such as Latvia and Lithuania) joined to keep Russia's influence low The US dollar is the only truly global currency The US dollar serves as "disaster insurance" at the time of global financial or geopolitical crises. Money flees to dollars, boosting US buying power and the nation's capacity to respond effectively The US dollar affords the US the unique ability to run sizeable discal and current account deficits while borrowing in its currency The US dollar enables the sort of financial sanctions that -- whether leveled against particular banks or companies or meant to isolate entire countries, as with Iran. **SESSION 3:** I- THE NATIONAL DILEMMA  Nationalism: Nationalism first emerged in the late 18th to early 19th centuries during the time of French Revolution ("nationalisme") Nationalism as a political, social, cultural, and economic ideology, connects with identity building, nation building, ethnicity, pride, and loyalty, and impacts on nation- states' governance, historical claiming, cultural preservation, economic policies, national defense, and foreign relations The Theoretical Elements of Nationalism a\. Primordialism: ancient and innate -- ethnicity, religion, language, culture, history b\. Modernism: state-building through modernization and industrialization c\. Instrumentalism: nationalism as a strategic tool used by political leaders to achieve goals d\. Post-colonialism: the creation and re-formation of national identity under colonial oppression Economic Nationalism Economic nationalism is one aspect of nationalism, and both share emphasis on the interests of the nation-state. The core idea is to prioritize domestic jobs and opportunities and to achieve self-sufficiency over cross-border free trade Economic nationalism originated from the belief that the country's economic well-being should be safeguarded from external influences in order to protect domestic industries and resources Protectionist measures: tariffs, nontariff trade barriers, inspections, import restrictions, sanctions, etc. (geopolitical and geoeconomic instruments) Draw from Ernest Gellner's political nationalism (independent state as the ultimate fulfillment of nationhood), many economic nationalists want to build an independent economy, one that is populated by co-nationals. They will seek to promote trade and investment between compatriots, and restrict economic contact with foreigners isolationist motive; Why do nationalist want economic policy to accomplish ? Nationalists have a vision of what they prefer their nation to look like a\. Irish nationalists and Thomas Jefferson of the US imagined their countries as the stronghold of small farmers b\. Gandhi preferred to think of Indians as small-scale weavers of textiles c\. 19th century German "Romantics" saw themselves as a nation of guild-bound medieval artisans Nation-building is only the first step of nationalism. After the strengthening of national power, countries begin to seek expansion to prove their advancement and others' "backwardness" Expansionist nationalism is different from the desire to raise individual utility of liberal economics. They care about economic growth at the national level rather than at the individual level à building military power and political dominance over personal consumption The Nationalist Dilemma Nationalists normally have two aims: isolation and expansion However, these two aims are mutually incompatible à Nationalist Dilemma Isolation makes it difficult for a country to be politically and economically strong to make expansion Expansion will inevitably fail to allow the country to achieve the purpose of isolation Not all nationalists have acknowledged the nationalist dilemma, such as China's Mao Zedong and his political campaign of the Great Leap Forward (1958 to 1962) Nationalists have often accepted the necessity of international exchange, but at the same time have attempted to place it within closely circumscribed limits Some countries are willing to trade goods and services, but have reservations about technological and industrial exchanges (example: the West to developing countries) Other countries are screening multinational companies and foreign investment(example: the developing countries to the West) Economic Nationalism beyond Economic Activities Tariffs, banking, or sanctions are not the only economic nationalist tactics, anti-immigration and discrimination against minorities are also at the heat of building a nationalist economy → Examples Activists from South Europe oppose Euro membership amid fears of unemployment and social chaos Trump used Coronavirus as an excuse to limit overseas seasonal labors and immigration visas to secure jobs for Americans Populist Discontents since the 21st Century Populist nationalism played a powerful role in the backlash against globalization in the past two decades (Trump as the latest example) Actions against globalization started more than a decade earlier in the poorest countries of the Global South. Unlike Baltic states, China, or Malaysia, poor countries had less independent agency to structure the forces of globalization a\. The sacrifice of economic sovereignty had not brought improvements in living standards b\. Globalization had not benefited the poor was supported by economists, NGOs and activists c\. A wave of democratic reforms in the Global South European integration and economic globalization are also opposed by some politicians and the public in the Global North The Eurozone crises accentuated calls for monetary sovereignty in Hungary, Germany, and Britain Populist politicians in both Europe and the US connected economic pressures to cultural fears with increasing anti-immigration measures à Brexit & Trumpism II-AMERICA FIRST POLICY The Rise of Isolationist Doctrine in the US Economic nationalism has a long history in the US, and the US-China Trade War is only the latest act of it The formation of American economic nationalism a\. The decline of US manufacturing employment since 1980s, which provided fertile ground for protectionist appeals from the right and the left, including the boycotts of Japanese products and hostility and opposition to North America Free Trade Agreement (NAFTA) b\. Long term supporting from the American ethno-cultural nationalism (such as Steve Bannon) on cultural and racial issues as elderly white men feared marginalization in the US with increasing culturally and ethnically diversity Trump and his advisor Steve Bannon followed the philosophy of European populist right, which opposes immigration to protect the economic interests of local workers and see 'foreign' cultures as a threat to 'traditional' American society Japan Bashing PA. It was hosted by an angry auto dealer who charged motorists \$1 to hammer and destroy a Japanese-made car In the early postwar decades, American generally viewed globalization as proceeding in line with their interests because of US' strong manufacturing power In the 1980s with the rise of East Asia, particularly, Japan became a geostrategic rival and economic competitor to the US a\. The rise of Japanese industry and manufacturing replaced the market for American products and job opportunities for American workers (Declining US competitiveness) b\. Japanese market was not fully accessible to the US MNCs c\. With domestic pressure, President Reagan raised tariffs and asked the Japanese government to limit exports (trade deficit for the US is rapidly increasing) Blaming American economic woes on its Asian competitor - Japan Bashing - thus became a political slogan The rise of "Buy American Movements" proliferated from the late 1980s onwards à Trump was one of participants of the movement The Plaza Accord (1985) In the 1980s, the US was experiencing a severe trade deficit with Japan and Germany. The US dollar was "overvalued" while Japanese yen and Deutsche Mark were "undervalued" In 1985, representatives from France, West Germany, Japan, the UK, and the US gathered at the Plaza Hotel in New York to "make American goods more competitive globally" Key Elements of the Agreement a\. Intervention of foreign exchange markets and currency depreciation b\. Agreed on specific exchange rates to devaluate the US dollar c\. Coordination of monetary policies to support the desired exchange rate adjustments Impacts on Japan a\. Japanese goods became more expensive b\. The rapid appreciation of the yen led to a burst in Japan's asset price bubble -depression of 50% of the US dollar compared to the yen, "lost decade"  Patrick Buchanan and NAFTA (1994) Besides Japan, a one-time Reagan aide, Pat Buchanan who moved to the far right of the Republican Party during the 1990s targeted on domestic elites and NAFTA/Mexico The trade relationship with Mexico to Buchanan was almost as deleterious as the one with Japan He complained, companies could easily move their production south of the border to take advantage of lower wages. American workers were forced 'into a Darwinian competition' with Mexican workers who 'have to work for 50 cents an hour' He criticized Washington elites on immigration and believed that the Mexico 'exports its jobless to us' His ideas and writings provided a detailed blueprint for Trump's presidency Economic Nationalism under Trump: Americanism over Globalism Trump's predecessor, Obama, realized the threat to the US from the structural transformation of the global economy, crafted the ambitious Trans-Pacific Partnership (TPP) with Asian countries to counter China's influence in the region Bannon's appointment in the Trump Administration strengthened the economic nationalist core of the Trump policies. Bannon's nationalism was largely based on ethno-cultural issues since he showed little interest in economic issues Trump's central point of his policies focused on the defense of American 'sovereignty' against international agreements, which are the 'global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth, and put that money into the pockets of a handful of large corporations and political entities' à the US then withdrawal from the TPP The trade war with China massively disrupted the previously close trading relationship, initiating a gradual decoupling of supply chains between both countries Joe Biden continued Trump's trade policies and followed the new anti-globalization consensus **Techno-Nationalism** Early economic nationalists/isolationists had skepticism toward technology change, such as Gandhi saw machines, including railways, as destroyers of egalitarian village communities. These isolationists have generally been in minority nowadays Most nationalists cherish a 'modern' image for their country, including India and China Techno-nationalism refers to a series of policies that promote and protect domestic technology and digital industries to strengthen a country's political power, economic power, and national security interests Techno-nationalist policies involve encouragement of domestic innovation and R&D investment, protectionist measures, indigenous technology development, strategic industrial policies, talent attraction and retention, and geopolitical and geoeconomic competition **Ha-Joon Chang's Kicking Away the Ladder (2002)** Today's rich countries developed only because they relied on interventionist trade and industrial policies. The liberal ideology underlying free trade and laissez faire works to the exclusive benefit of the rich world 19th century Germany, the US, and Japan invested in domestic research and encouraged the appropriation of British technology via reverse engineering, copying blueprints and smuggling advanced machines The rich countries have now devised global institutions that prohibited developing countries from utilizing the same set of tools. Thus, the rich world was 'kicking away the ladder' Thus, because the global rules limiting the use of industrial policies were unfair, developing countries could not blamed for breaking these rules **HU Jintao's Blueprint for An Innovative China** Since the reform in the 1970s, China has rapidly integrated into the world and become the world's factory, but it also faces the middle- income trap like other developed countries in history The new leader HU Jintao (in office 2002-2012) and his team were concerned about three issues: a\. China's domestic capacity to generate marketable innovations was underdeveloped b\. The use of foreign patented technologies triggered a steep outflow of royalty payments c\. Few Chinese firms had been successful in acquiring up-to-date technologies from their foreign partners since MNCs had only introduced older technologies for transfer **HU Jintao's Blueprint for An Innovative China** Chinese leadership feared that China's rapid growth in quantitative terms was not enough to raise the country above the middle-income level. The economy would remain stuck in low-grade manufacturing and dependence on foreign technologies Thus, qualitative growth must be developed with the building of domestic technologies and upgraded manufacturing capabilities HU Jintao in 2006: "enhancing indigenous innovation is the national strategy which guides the various aspects of modernization and inspires the innovative spirit of the entire nation" His Premier WEN Jiabao (2002-2012): "Indigenous innovation is the soul of science and technology development, the source for a nation's development, and the backbone for the rise of the country Without indigenous innovation, it will be hard for us to gain a fair standing on the international arena, hard to gain a nation's dignity, and even hard to stand up among the world of various nations" **XI Jinping's Tech Ambitions** The Xi administration carried forward the emphasis on the development of domestic technologies. His new plan was released in 2015, called "Made-in-China 2025 Strategy" (MIC 2025). Xi aims to upgrade Chinese industry from labor-intensive production to the technology frontier in 'smart manufacturing' à slowing GDP growth thus is accepted and as a cost Three Pillars of the Made-in-China 2025 a\. Increasing funding for basic research at universities and research institutes, and to improve the links between universities and enterprises b\. Strengthening intellectual property rights, which the upper echelons of the leadership recognized as central to securing domestic innovation c\. A proactive approach to internationalize Chinese technological standards, such as to internationalize China's 5G standards d\. State protection for investment and research to achieve political and economic goals **Xi's ambitions suffer from "kicking away the ladder" theory** The Made-in-China 2025 made it a major bone bone of contention between China and the Trump Administration (Fore more information, read South China Morning Post) One of Trump's first trade war policies against China was targeted on Made-in-China 2025 because he called it "insulting" as he took offense to the idea of China as the world's leader in tech China later tries to play down and softens Made-in-China 2025 voice and President Trump claimed victory in this trade battle with China (Read more on Business Insider **SESSION 4:** I-THEORIZING GLOBALIZATION The Ancient Silk Road (1st Century BC-5th Century AD, and 13th-14th Centuries AD) a\. As of the 1st century BC, for the first time, luxury products from China started to appear in Rome, and trade had stopped being a local or regional affair and started to become global b\. As a percentage of the total economy, the value of these exports was tiny, but global trade links were established  The Spice Routes (7th-15th Centuries) a\. With the spread of Islam, and by the early 9th century, Muslim trades and merchants dominated Mediterranean and Indian Ocean trade, even reaching to Indonesia and Moorish Spain b\. Islamic business was the spices trade. Similar to the Silk, spices were also luxury products, and trade remained relatively low in volume c\. Globalization did not take off, but the original Belt (sea) and Road (silk) of trade between East and West did now exist First Wave of Globalization (19th century - 1914) The First Industrial Revolution (the steam engines, weaving machines, etc.) made twin engines of global trade a\. Steamships and trains could transport goods over thousands of miles b\. Industrialization allowed Britain to make products that were in demand all over the world The share of exports of global GDP increased from 6% in the early 19th century to 14% on the eve of World War I Investment in joint stock companies became possible in New York, Paris, London or Berlin Britain was the country that benefited most from this round of globalization The first wave of industrialization and globalization also brought dark times, European countries colonized and occupied Africa and India, once great powers such as India, China, and Mexico failed in the competition of industrialization and trade restrictions of imperialism Second and Third Wave of Globalization The US as the hegemon led the global economic integration after the WWII with technologies from the Second Industrial Revolution (cars, planes, etc.) a\. In 1989, exports once again counted for 14% of global GDP (same as the year 1914) With the collapse of the Soviet Union, globalization became a truly global phenomenon a\. With the creation of WTO and China's join-in in 2001, the 'new' economic order was formed. In the 2000s, global exports reached about a quarter of global GDP b\. The use and development of the Third Industrialization (Internet) allowed for further global integration of the value chain c\. A majority of the global population has benefited from globalization: declining poverty rate and increased middle-class d\. In some countries, like Singapore and Belgium, trade is worth much more than other countries What is Globalization? Globalization is a spatial concept referring to a set of social processes that is transforming out present social condition of conventional nationality into one of globality à economic, political, cultural dynamics, but also in environmental, technological, religious, etc. issues Forms of globalization a\. Embodied globalization: the interconnectedness and mobility of people across the planet, such as refuges, migrants, travelers b\. Disembodied globalization: the worldwide interconnectedness and mobility of ideas, data, and information, such as words, images, electronic texts, blockchain c\. Objectified globalization: the worldwide interconnectedness and mobility of things and objects, such as fashion, greenhouse gases, viruses d\. Institutional globalization: the worldwide interconnectedness and mobility of social and political institutions, such as the half-million US military personnel stationed around the world Francis Fukuyama's the End of History (1992) Politically, Fukuyama concludes that with the end of Cold War and the collapse of communism, liberal democracy has emerged as the dominant and final form of government, making the 'end of history' in terms of ideological revolution Economically, the victory of liberal democracies and the spread of capitalism were seen as reinforcing each other a\. Global spread of capitalism will facilitate the opening up of borders and increased trade b\. Liberal democracy and capitalism are drivers of global trade and investment c\. Emergence of multinational corporations as a result of liberal political globalization d\. Liberal democracies encourage technology and information exchange and development e\. Liberal democracy and capitalism are fostering economic cooperation and interdependence based on shared values Challenges from the National Populists Anti-globalism and nationalist populism has been successful in both liberal democracies and authoritarian countries such as Victor Órban's Hungary, Vladimir Putin's Russia, Jair Bolsonaro's Brazil, Norbert Hofer's Austria, Marine Le Pen's France, Matteo Salvini's Italy, Jarosław Kaczyński's Poland, Nigel Farage's UK, Pauline Hanson's Australia, Iván Duque's Colombia, Rodrigo Duterte's Philippines, and, of course, Donald Trump's US After WWII, the manufacturing advantage of the US was challenged by Germany and Japan in the 1980s and fell behind China significantly after the new millennium World economic integration has been in decline since the 2008 global financial crisis, ushering in an era of 'slowbalization' or even deglobalization. Falling from 60.1 in 2008 to 57.2 in 2021 The 2008 financial crisis had turned into a great recession, and \$14.3 trillion, or 33% of the value of the world's companies, had been wiped out National debt levels rose in almost every country and became a severe European Sovereign Debt Crisis and a banking crisis The US-China trade war, Russia's invasion of Ukraine, and the COVID-19 all played a negative role in influencing global trade The DHL Report data show that the pandemic did not lead to the collapse of globalization, its enduring spillover effects included, for example, massive disruption of global supply chains caused by extensive and repeated lockdowns in China, congested seaports around the world, disorganized shipping container management, and record freight rates The UK, Germany, the US, and India all experienced a slight deglobalization trend, but the Netherlands, Ireland, Japan, and China saw a slight increase in global integration Over the past four decades, East Asia has maintained high and steady economic growth, but the economies of Africa and Latin America have declined sharply in the past decade Joseph Stiglitz on Anti-Globalization and Inequality Why did globalization fail?: growing inequality, economic instability, social and environmental costs, limited policy space Why the Global North is not happy with globalization? a\. Job loss and wage stagnation b\. Rising inequality c\. Environmental damage d\. Cultural and identity challenges e\. Political backlash Why the Global South is unhappy with globalization? a\. Unequal distribution of benefits b\. Structural adjustment policies à worsening social welfare c\. Labor exploitation d\. Environmental degradationJoseph Stiglitz on Anti-Globalization and Inequality Why did globalization fail?: growing inequality, economic instability, social and environmental costs, limited policy space Why the Global North is not happy with globalization? a\. Job loss and wage stagnation b\. Rising inequality c\. Environmental damage d\. Cultural and identity challenges e\. Political backlash Why the Global South is unhappy with globalization? a\. Unequal distribution of benefits b\. Structural adjustment policies à worsening social welfare c\. Labor exploitation d\. Environmental degradation From Decoupling, to De-risking, to Diversify Supply Chains Affected by tight COVID controls in China in 2022, Russia's Invasion of Ukraine, fears over a war in Taiwan, and great power competition, Western governments and companies are trying to decouple, de-risk from China, and diversify their supply chain and improve economic resilience The EU softens China's strategy by adopting a 'de-risking' approach from "decoupling" (Read more on The Guardian) Germany's first-ever China Strategy in 2023 called for measures to 'de-risk' Berlin from the national security vulnerabilities of economic dependence on Beijing (Read more on the Atlantic Council) Chinese companies are also moving supply chains out of China to manage geopolitical risks, with India, Malaysia, and Indonesia benefiting. However, rising manufacturing costs and industrial upgrading in China are also reasons for the relocation of low-end industries (Read more on the CNBC and South China Morning Post) **Friend-shoring** Ideological and political-based economic practice Proposed by US officials, it refers to encourage companies to shift manufacturing away from authoritarian states (such as China and Russia) and toward free-market democracies and allies (G7 countries, South Korea, Philippines, EU countries, New Zealand, Australia, etc.)  Vietnam, Indonesia, Malaysia, S Korea, Japan, Brazil, and EU could benefit from friend- shoring Challenges  a\. Relocation of foreign manufacturing to Vietnam or other Southeast Asian countries also poses political concerns, such as Vietnam is also a one-party state b\. Bloomberg Intelligence estimated that it would take about 8 years to move just 10% of Apple's production capacity out of China c\. China's huge middle-class market cannot be replaced by other emerging markets including India in the short-term d\. The global economy as a whole will suffer declined global domestic products by about 5% **Regionalization** **Future Prospects: Deglobalization or Re-globalization?** ** Pessimists** posit a retreat of globalization measured by its allegedly diminishing component parts. They tend to focus on the economic and political domains such as trade, FDI, and lagging global governance structure ** Optimists** read the current moment as an advance of globalization on the basis of intensifying technological and cultural aspects such as digital flows and cultural mixing **SESSION 8:** **I- FROM "WASHINGTON CONSENSUS" TO THE "BEINJING CONSENSUS"** The Return of Great Power Competition In the 19th century, the British Empire and French Empire were the dominant great powers a\. Challenged by Germany, Austria-Hungary, the Ottoman Empire, and Russia b\. Resulted in the World War I After the World War II, the US and the Soviet Union were two superpowers a\. Resulted in political, military, and economic confrontations between the capitalist world and communist world b\. With the collapse of the Soviet Union, Fukuyama believed that liberal democracy is the final form of huma society. The US become the only hegemon and superpower in the world Today, China's rise is challenging the US hegemony and the West-led world order a\. China's economic growth was initially welcomed by the West because they believed that economic liberalization would eventually lead to institutional/regime change b\. However, capitalism and authoritarianism coexist in China c\. With confident economic power, China is demanding its rightful place in the existing world order **The Washington Consensus** Fiscal Discipline: avoid excessive budget deficits Redirecting Public Spending: from non-merit subsidies to public goods Tax Reform Financial Liberalization A Competitive Exchange Rates Trade Liberalization Openness to Foreign Investment Privatization Deregulation: to encourage entrepreneurship and private sector Protect Property Rights **The Post-Washington Consensus Consensus** The Washington Consensus was proposed to signal the success of neoliberal economic policies of the East Asian newly industrialized countries (the Asian Tigers: Singapore, HK, South Korea, Taiwan), and aims to provide development models to Latin America countries, as well as Eastern European countries after the fall of the USSR The Washington Consensus was a 'purely' economic term (free market, coincide with the IMF and the World Bank institutions) but then developed as an ideological and political term (liberal democracy) However, political leaders in Latin America argued that the Washington Consensus failed to achieve its goals but made the social and economic conditions of many of the citizens worse and the US and other financial institutions were accused of adopting Washington Consensus to benefit US economic and financial interests Joseph Stiglitz: the Washington Consensus ignored market failures and viewed government as the problem...the Washington Consensus had proved neither necessary nor sufficient for successful development **The Beijing Consensus** Emerged in the early 2000s, not a term used by the Chinese government (the China Model), but formed by China watchers, including Joshua Cooper Ramo (2004) Treated as an alternative development model to the "Washington Consensus" policies of free-market and neoliberalist economic policies and institutions (such as the IMF and the World Bank) a\. Innovation-based development and constant experimentation in reforms b\. Economic success (measured not only by GDP per capita but also by level of equality) c\. Commitment of Self-determination: opposition to the Washington Consensus, globalization on its own hands, non-military influence, development of asymmetric capabilities to balance against the US **State-led development** rather than private- sector-driven development **Controlled and gradual market reform** rather than once-for-all economic liberalization ** Export-led growth** by taking advantage of low labor costs, a large workforce, and hardworking people **Investment in infrastructure and human capital** as the foundation for economic expansion **State-owned enterprises**' (SOEs) control over strategic sectors, as 71% of China's Fortune 500 companies are state-owned ** Economic liberation without political liberalization,** unlike the linkage of economic liberalization and political liberalization in the Washington Consensus **The China Model - China's Development Path** Political Meritocracy and Limits of Democracy by Daniel A. Bell Economic development, social stability, and the common prosperity are more important than individual (political) freedom Limited political participation and opposition to western democracy to reduce underlying resistance to (the overall) economic development The cultural specificity (Confucianism) and modern history have reshaped China's development model **Capitalism with Chinese Characteristics by Yasheng Huang** A blend market-oriented policies and state control rather than Western-style capitalism, and strong and pro-development state who has capacity to create an environment of national consensus conducive to economic growth The China Model includes many Washington Consensus elements such as trade liberalization, deregulation, globalization and foreign direct investment, so the Washington Consensus fits with the Chinese experience A red and white text on a table Description automatically generated **From the "China Threat" to the "Strategic Competitor" Narrative** China and the UK under David Cameron was described as the "Golden Era" a\. The new prime minister Liz Truss called the end of the "Golden Era" as China is now a strategic threat to the UK security and the world's biggest threat, and she called to established the "economic NATO" against China b\. The current British prime minister Rishi Sunak softened his words, and described China as a "systematic competitor" The Biden Administration identified China as the "most consequential geopolitical challenge" facing America in a post-Cold War era a\. The US Defense Secretary Lloyd Austin called China the greatest danger to American security b\. Secretary of State Blinken: "China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it. Beijing's vision would move us away from the universal values that have sustained so much of the world's progress over the past 75 years" German's first China Strategy, published in mid-2023, called China a "systemic rivalry" **II- THE US' RESPONSE TO CHINA'S RISE ** **Obama's "Rebalancing Strategy" (Asia Pivot)** The Rebalancing Strategy: the US government to relocate 60% of the US Navy to Asia and the Pacific region while de-emphasize both Europe and the Middle East in US geo- strategic interests despite the conflicts in Ukraine and Syria Under Obama Administration, China was identified as the US' main "international enemy image." The Biden Administration has inherited and deepened Obama's and Trump's strategy of containment of China Obama designed and the Trans-Pacific Partnership (TPP) agreement with countries around Pacific Rim as a geopolitical and geoeconomic containment strategy on China a\. Australia, Brunei, Canada, Chile, Japan, Malaysia, New Zealand, Mexico, Singapore, Vietnam, Peru with US' withdrawal under Trump Administration b\. The nickname of the TPP: "Anybody but China" Club c\. The US was trying to weaken China's economic influence in the region by deepening economic and trade ties with Asia-Pacific countries d\. Obama Administration also initiated the US "New Silk Road" in the Central Asia and South Asia to manage issues in Afghanistan and promote commercial relations with surrounding countries **China's Response to Obama's "Rebalancing Strategy"** After the withdrawal of the US from the TPP under the Trump Administration, China and Southeast Asian Countries accelerated the trade negotiations, which finalized as the Regional Comprehensive Economic Partnership (RCEP) a\. The RCEP covers 15 countries, with 46% of global population and 32% of global GDP b\. Without the US, the TPP only covers less than 10.5% of global population and 14% of global GDP c\. The EU covers 7% and 16% of global population and GDP respectively d\. NAFTA covers 6% and 18% of global population and GDP respectively The BRI was ultimately launched by China in response to America's de facto containment policy on China under the Obama Administration The trade war started with US Section 201 tariffs on solar panels and washing machines imported from China Section 201 of the Trade Act of 1974 allows the US president to temporarily introduce tariffs and other non-tariffs barriers on foreign goods to protect domestic producers of like good. It was rarely used in history until US solar module producer Suniva fell into bankruptcy in April 2017 and filed a Section 201 complaint with the US government On 23 March 2018, the US introduced additional tariffs on imports of Chinese steel and aluminum under Section 232 of the Trade Expansion Act of 1962, which allows the institution of tariffs if imports of certain goods threaten the national security of the US Limited economic impacts during Trump Administration a\. Small decline of GDP of 0.13% in the US and Mexico and 0.05% in lower-income Asian countries. In the US, the agriculture and manufacturers of final goods are hit the hardest b\. China's GDP could get a small boost of 0.06% by redirecting exports from the US to other parts of the world as the export to the US decreased by 14.6% but exports to Europe and Asia increased by 6.6% and 5.1% respectively **US' Containment of Chinese Innovation, Technologies, and Businesses** - The Attack against Huawei Huawei was founded in 1987 by a veteran Ren Zhengfei in Shenzhen a\. It has the world's largest number of 5G technology patents, has business operation in more than 170 countries/regions, and serves more than 3 billion people around the world b\. Second largest mobile phone maker (after Samsung) in 2018 before the US sanction against Huawei c\. Ranked 96th in Fortune Global 500 companies (2021) d\. Global top 3 R&D investor in 2021 (a combination of BAT + Foxconn + TSMC) As one of the strategic sectors, especially during Xi's administration, Huawei was believed that receiving up to \$75 billion government subsidies or financial assistance The US and its allies, including the UK, Australia, Canada, New Zealand, Japan, Germany, and some CEE countries (such as Lithuania) have all either imposed ban on Huawei's products or doing so due to the accusation of 'national security concerns' a\. The West believes that the Chinese government could use Huawei to spy, or can be used to disrupt US military communications b\. The US and global companies have accused Huawei of stealing trade secrets c\. The US claimed that Huawei has violated American sanctions on Iran and North Korea d\. The US and its allies are trying to persuade developing countries to ban Huawei, including Saudi Arabia and countries in the Southeast Asia On December 1, 2018, Huawei's CFO MENG Wanzhou was arrested in Vancouver on a provisional US extradition request for fraud and conspiracy to commit fraud in order to circumvent US sanctions against Iran In 2017, the Congress restricted some Department of Defense networks from using Huawei or ZTE equipment In 2018, the Trump Administration banned more US federal agencies from using Huawei, and AT&T walked away from a deal to sell Huawei's smartphones following pressure from regulators In 2019, Trump signed an executive order prohibiting US companies from doing business with Huawei, and the Commerce Department added the company to its 'entity list,' restricting it from buying US goods a\. Google later restrict Huawei's access to its products, including its Android operating system b\. The Federal Communications Commission voted to designate Huawei and ZTE as national security threats, which prevents US internet providers from using federal funds to purchase their equipment In 2020, the US issued new rules to block foreign semiconductor manufacturers that use US machines and software from shipping products to Huawei without a license **The Long-arm Jurisdiction** The long-arm jurisdiction was only a domestical legal practice in the US between different states, which refers to a local court can exercise jurisdiction over defendants in other jurisdictions A very small umber of Western countries require other countries to comply with their countries' sanctions or face punishment The long-arm jurisdiction is considered a form of economic coercion In Huawei's MENG Wanzhou case, she was charged of "defraud multiple international institutions" refers to the US sanctions against Iran, which China is not part participating party **The Long-arm Jurisdiction -- Reactions** China a\. China's Ministry of Commerce issued new rules to fight the unjustified long-arm jurisdiction of foreign laws in 2021 (Read more on the South China Morning Post) b\. China's Ministry of Foreign Affairs issue report to unveil the US 'unlawful' practice of extra-territoriality entitled "The US Willful Practice of Long-arm Jurisdiction and Its Perils" The EU a\. The Council passed Council Regulation No 2271/96 -- protecting against the effects of the extra-territorial application of legislation adopted by a third party b\. In 2018, it was upgraded to "Extraterritoriality (Blocking Status)" to protect EU businesses c\. The European Commission indicated that "The European Union does not recognise the extra-territorial application of laws adopted by third countries and considers such effects to be contrary to international law" **Continued Sanctions and Trade Barriers against China and Chinese Companies for** **Security Concerns, Geopolitical Motivations, and Geoeconomic Interests** The Biden Administration Continues the Trump Administration's Containment Strategy Toward China a\. Since 2014, Chinese entities feature more prominently on the entity list b\. The US added 58 Chinese parent-companies and 180 Chinese companies in 2019 and 2020 respectively c\. Most of sanctioned Chinese companies were in the technology and surveillance sectors, primarily companies that specialize in artificial intelligence, facial recognition, and integrated circuits d\. Notable Chinese companies to the entity list include Huawei, SenseTime (the most valuable AI startup in the world), Hangzhou Hikvision Digital Technology Co. and Zhejiang Dahua Technology Co. (two of the largest video surveillance firms in the world) **Meanwhile, the US tries to build a more 'secure' global communications network** **The Clean Network** The Trump Administration's approach to safeguarding the national interests from aggressive actors, such as China The program addresses the long-term threat to data privacy, security, human rights and principled collaboration posed to the free world from authoritarian malign actors **SESSION 10:** I- EUROPEAN STRATEGIC AUTONOMY Challenges for an ever closer, deeper, and broader European Union → Trumpism  →the brexit  → shortage of medecine during covid in europe  → russo-ukrainian war The Timeline of European Strategic Autonomy 2007: the concept is first used in the European Galileo space program, in competing with the US GPS and Russian GLONASS global navigation systems →  EU Transport Commissioner Jacques Barrot (2017): "Europe needs Galileo...\[it\] is very important for the strategic autonomy of Europe" 2013: European Council published the strategic autonomy concept → Europe needed to develop a more "integrated, sustainable, innovative and competitive defense technological and industrial base (EDTIB)...\[to\] enhance its strategic autonomy" 2017: Macron called on the goal of European sovereignty and set out his aim for strategic autonomy in five areas: defense, ecology, the economy, food sovereignty, and technological infrastructure 2020: The European Commission emphasized strategic autonomy to FDI screening, digital infrastructure, the EDF and integration of the defense-industrial base, and pharmaceutical strategy "A New Industrial Strategy for Europe (2020) by the European Commission" → "Europe's strategic autonomy is about reducing dependence on others for things we need the most: critical materials and technologies, food, infrastructure, security and other strategic areas\...\[which\] provide Europe's industry with an opportunity to develop its own markets, products and services which boost competitiveness' Reducing Europe's external 'dependence' on third countries here remains as a key objective but the range of possible 'depen- dencies' has expanded beyond questions of defense. In connection to this, initiatives such as the special state aid regulations for Important Projects of Common European Interest (IPCEI) are intended to promote projects in key technological areas such as data infrastructure and batteries, as part of a broader focus on achieving 'technological sovereignty'\" A Divided European Union? EU member states hold contrasting views on strategic autonomy, with France strongly in favor of European autonomy for military, economic, and scientific and technological sovereignty, CEE and Northern countries against it, and Germany hesitant **Europe vs. the Atlantic? & Paris vs. Berlin?** Divergent Strategic Autonomy Perspectives between France and Germany, while Northern and CEE member states sought to soften the agenda and limit the protectionist overtones of the strategic autonomy  → With the help of the US in the post-war reconstruction, Western Europe integrated and became the US bloc and formed the trans-Atlantic partnership →  With the military support of the US and the NATO mechanism, Europe is under the military umbrella of the US during the Cold War and in the post-Cold War era → At Britain's strong insistence, European defense policy adopted a strong Atlantic orientation, allowing Western and subsequent CEE states to join NATO for protection → Brexit and Trump's criticism of European countries' financial contributions to NATO have led Europe into a state of insufficient defense capacity to deal with the potential threat from Russia Macron: argues that Europe needs to reduce its reliance on external powers, including the US and China, and achieve defense and security autonomy, economic independence, political sovereignty, and energy and scientific- and technological- sovereignty Germany: is wary of Macron's vision as Germany relies heavily on US military assurances, in addition to its deeper economic crossover with the US and China. Its financial and budgetary contribution to the EU is increasingly questioned by the public at home. European security through NATO therefore remains a priority for Germany. Despite its belief in the need for European strategic autonomy, it is hesitant in its security and economic interests Ireland: fears that the EU's drift towards protectionism is seen to lie behind the use of the oxymoronic "open strategic autonomy" Poland, the Czech Republic, Lithuania, and Sweden: concerned that the push for strategic autonomy would weaken the trans- Atlantic alliance and reduce the US presence in Europe, which threatened their national security ( pro united state because of history and suffering with RUSSIA) Trade ministers from Sweden, Denmark, Finland, the Netherlands, the Czech Republic, and Germany met in early 2020 to consider how they might counter French-led initiatives "Friends of the Single Market", including Austria and Poland, have voiced concern that strategic autonomy could serve to simply empower Franco-Germany industry at the expense of their own firms Strategies and Measures for Strategic Autonomy Unstable Trans-Atlantic Relations: Biden's election has reduced the willingness of EU member states to be strategically autonomous, but Trump's possible re- election in late 2023 has created dissent among member states EU's investment screening mechanisms: by controlling inbound foreign investments to manage the effects of the geoeconomic actions of other countries a\. Scrutinizing Chinese technology investments in Europe to reduce the possibility of Chinese access to high-end European technology and to keep European tech firms competitive b\. As a bargaining chip in economic negotiations, e.g. allowing Chinese investment in Europe in exchange for access by European companies to strategic sectors in China II- THE FRAGMENTING EUROPEAN UNION Euroscepticism Euroscepticism has accompanied the process of European integration Critics and Skeptics a\. Despite the Treaty of Rome (1957) received general support, some critics raised concerns about the supranational nature of the EEC institutions and the erosion of state sovereignty b\. Majority support to join/stay in the EEC for Denmark (1972) and UK (1973) with Eurosceptic sentiments c\. During the ratification process of the Treaty of Lisbon (2009), some member states faced opposition from Eurosceptic groups, leading to the rejection of the treaty in Ireland and the need for special arrangements in the Czech Republic d\. The 2008 financial crisis and Eurozone Crisis intensified Euroscepticism e\. The Brexit referendum in 2016 marked the most significant manifestations of Euroscepticism over divided views on sovereignty, immigration, economy, and identity \- Brexit Brexit is just one event along with anti-austerity protests in the Mediterranean countries, a reassertion of economic sovereignty in Hungary and Poland, and the return of financial nationalism to Germany However, Brexit marked the key moment in the resurgence of economic nationalism in the 21st century The beginning → The Maastricht Treaty paved the way for the single currency -- the Euro, monetary autonomy from member states was surrendered to the European Central Bank →Resistance against abandoning the traditional currency in Britain had stronger political backing → Cameron's "sweeping austerity policies" provided a golden opportunity for radical-right UKIP → Attacks and Doubts on UK's contribution to the EU budget a\. In 2015, UKIP claimed that "taxpayers could get so much better value for their money if we left the EU" after they studied Britain's annual contributions to the EU budget b\. Eurosceptic Conservative PM Boris Johnson said in 2016: "We send the EU £350 million a week -- let's fund our NHS instead" Attacks on European overregulation a\. UKIP claimed that "the tentacles of the EU stretch into almost every area of our British life. The EU completely controls British financial services, fishing, farming, energy, and trade. It dictates UK business and employment legislation and immigration rules" b\. UKIP on migration: safeguard the sovereign right to control our borders will end the current 'open door' policies for European labor that have driven down wages in recent years (2006） Consequences of the Brexit The EU has lost the strongest military armed support within Europe: the EU could lose 20% of its military and 40% of its defense-industrial capacity Increased barriers to investment and trade between the EU and the UK and projected drop in bilateral investment and trade. Economic costs vary for member states EU firms adapt supply chains, and pull out of UK operations in response to higher tariffs, while total production costs for all countries increase Europe as a whole will have less soft power and influence in global politics Increasing Success of Right-Wing Populist Parties in Europe Le Pen's RN defeated Macron's party in the 2024 EP elections, while Germany's far-right Alternatives for Germany also gained a victory over the Chancellor's center-left Social Democrats Italy has seen the rise of soft Eurosceptics to power since the 2010s, which current PM Georgia Meloni belongs to the Brothers of Italy, a party that aims to reduce EU influence over Italian law-making The latest EP elections also showed victories and growth for right-wing parties in Hungary, Spain, the Czech, the Netherlands, and Slovenia Greece has the most negative opinion of the EU (29% negative) even 15 years after the financial crisis Some Post-EP Election Impacts on Business The far-right coalition has gained more voice and power, as well as 100+ new MEPs who have not yet declared their political alignments, which creating increasing uncertainty for business Although Ursula von der Leyen's party has maintained its position as the largest party, she needs to spend more time and effort on harmonizing policies to achieve European strategic autonomy Right-leaning MEPs are likely to prioritize economic growth and energy security over climate change actions and green transition More protective trade policies at the national and EU levels may be put in place to protect European firms from competition with foreign companies, such as potential trade wars and disputes with China, India, and even the US **Why is the party of the far-right Le Pen becoming more and more popular?** The RN has shifted its policies to focus on general social concerns, including rising inflation and falling living standards, thus expanding its constituency from the traditional low-income population to the middle-class The RN's voters are predominately lower-educated from smaller towns, but Macron's "pro-business" and "pro-wealth" policies have been challenged by the highly educated middle class from the bigger cities The RN disseminated that the areas they govern have lower crime rates and fewer immigrants than the Renaissance, but their claims have been questioned and criticized **SESSION 14:** 1-The role of Government in korean cultural industry  Government Roles toward Business From a liberal perspective, the government (in developed countries) should play an extremely limited role in industrial policies to eliminate obstacles to competition, thus three categories of government roles in businesses were identified (Porter 1990) a\. Government as a subsidizer: the government may choose certain industries as systematically important for the national economy. Such as Korean government invested a lot in terms of financial, policy, and R&D assistance to develop High Definition Television (HDTV), which now Korea is a leading force globally b\. Government as a regulator: the government can legislate various regulatory acts and measures to control and regulate market forces. Such as the government sometimes organizes "counter-firm" activities under pressure from environmental groups c\. Government as a rule-setter: The government arbitrates between firms and the counter-firm groups. The government also legislates the rules of the game to enforce the competitive market conditions that private businesses have to obey Based on the regulator-subsidizer model, Cho (1984) developed a framework for business-government relations a\. The government which neither provides too many subsidies nor imposes too many regulations would be regarded as a laissez-faire government, such as 18th-and 19th- century Europe b\. The government which plays a supportive role with various subsidies, but does not enact regulatory measures, is a mercantilist government, such as 16th-century Europe c\. The government which regulates rather than subsidizes is considered a constitutional government, such as early 20th-century US d\. The government which provides many subsidies and institutes many regulations at the same time is considered a paternalistic government, such as 1930s in US after Depression, 1950s in Japan for post-war 'restoration', and 1970s Korea for development Korea's industrial policy has gone through different stages since the WWII, including Laissez-faire (1945-1960), Mercantilism (1961-1972), Paternalism (1973-1979), and towards to Constitutionalism after 1980 **The Evolution of Korean Government's Role in Cultural Industry** Both Legal Regulations and Subsidization were Meager (1945-1967) a\. Cultural-related activities were treated a form of political propaganda at the time despite of the exactment of a series of legal documents, including the Copyright Act (1959), the Performance Act (1961), and the Film Act (1962) b\. Thus, the government has strict restrictions and controls on the production of films. A film producer in Korea was required to attain the government's approval before producing a movie c\. The government also wielded unfettered power in film imports. Government recommendation was a mandatory requirement when a foreign film was imported, and the government could choose to recommend only those film producers that had good tract records in producing Korean films d\. There was virtually no systematic legal framework before the enactment of the Music Recording Act in 1967, since then, increasing regulations have been established Legal Regulations Far Outnumbered Subsidization (1967-1993) a\. The revision of the Film Act in 1986 opened Korean market to foreign firms, including Warner Brothers, 20th Century Fox, or Columbia, which established sales subsidiaries in Korea from 1988 b\. However, alarmed by a sense of crisis, the Korean film producers came to demand a strong enforcement of institutional mechanisms such as the screen quota and government support, which the government provided Both Regulations and Subsidization Increased (post-1994 era) a\. In 1994, the Cultural Industry Bureau was established, which promoted the cultural market and government subsidies b\. The Six Ts in 2001: the subject of pan-governmental support in preparation for the 21^st^ century of future, including culture technology, information technology, biology technology, environmental technology, nanotechnology, and space technology. Since then, culture started to transform from a part of "leisure" and political propaganda to a new growth engine The Evolution of Korean Government's Role in Cultural Industry The Role of Government in Korean Film Industry a\. The Laissez-faire period (1945-1986): before the open-door policy was adopted (in 1986) for the 1988 Seoul Olympics, the government recommended the import of foreign movies only to producers with an excellent production tract record and foreigners were not permitted to enter the Korean market directly, which explains the high number of Korean movies and their high market share b\. The Constitutional period (1986-1994): after the opening of the film market to foreign companies in 1986, the market share of Korean films fell rapidly from more than 40% to less than 20% by 1994 c\. The Paternalistic period (post-1994): after 1994, the government increased its support for domestic film companies, and the Korean film market share started to re-rise d\. Because the Korean government's different control, intervene, and support policies, the role of government in the film industry is inconsistent with the role of government in industry in general Culture as one of the Ts (technologies), was selected by the Korean government strategically with resources support based on a comprehensive consideration of national human and material resources, growth potential, competitiveness and entry barriers of the industry on the grounds of environmental and core competence analyses.