Foreign Affairs

U.S. May Export More Oil in 2017 Than Four OPEC Nations Produce

Bloomberg: “U.S. crude exports are poised to surpass production in four OPEC nations in 2017 and may grow even more if President Donald Trump honors pledges to ease drilling restrictions and maximize output.”

“The world’s largest oil-consuming country could sell as much as 800,000 barrels a day of crude overseas this year, according to four analysts surveyed by Bloomberg. That’s more than OPEC producers Libya, Qatar, Ecuador and Gabon each pumped in December. The U.S. exported 527,000 barrels a day in the first 11 months of 2016, Energy Information Administration data show.”

Keystone XL Pipeline: A ‘Canada First’ Energy Plan?

Reuters: “U.S. President Donald Trump’s move this week to revive the Keystone XL oil pipeline marked a major step under his ‘America First’ energy plan to boost U.S. drillers and create new U.S. jobs. But the project’s biggest winners may be Canadian.”

“If built, TransCanada’s Keystone XL from Alberta to Nebraska would yield about $2.4 billion (C$3.2 billion) a year for Canada, split between government revenues, shareholder profits and re-investment into the still-recovering Canadian oil patch, according to a Conference Board of Canada research note prepared for Reuters on Thursday.”

If Trump Gets His 20% Tax on Mexican Imports, These Are the US Household Staples That Will Be Hardest Hit

Quartz: “The Trump administration has today suggested it would force Mexico to pay for the wall by implementing a 20% tax on all Mexican imports. Such a move by the White House—which isn’t allowed—would hit Americans hard in their grocery carts.”

“It would be difficult for Republicans to engineer a situation in which food companies would not pass the extra cost of doing business to consumers. There isn’t an easy replacement source for these foods, as in many cases Mexico is by far America’s biggest supplier. Over time, the US has grown more dependent on Mexican imports of fresh produce, which rose by 264% between 1999 and 2014.”

Trump Could Really Mess Up Mexico’s Economy

“Remittances, however, are just the beginning of the risk Trump’s presidency could pose to the Mexican economy. If he follows through on his proposed policies, Trump could change the calculus for doing business in Mexico, and thus endanger the economic prospects of the whole country,” Lucia He writes for FiveThirtyEight.

“Among his proposed policies, Trump has threatened to renegotiate or completely withdraw from the North American Free Trade Agreement (NAFTA) and impose a 35 percent tax on businesses that ship goods to the U.S. after relocating out of the country. Either policy could be devastating for the Mexican economy.”

How to Make America’s Robots Great Again

Farhad Manjoo: “In 2013, China became the world’s largest market for industrial robots, according to the International Federation of Robotics, an industry trade group. Now China is working on another big goal: to become the largest producer of robots used for factories, agriculture and a range of other applications. Robotics industry experts said that goal could be a decade away, but they see few impediments to China’s eventual dominance.”

“There’s a way to address this problem, but it’s politically perilous: The United States should invest in robots.”

“If we don’t, robot scholars said the president’s plans for a resurgence in manufacturing could backfire. Today, we buy a lot of stuff made in China by Chinese people. Tomorrow, we’ll buy stuff made in America — by Chinese robots.”

Will Trump Go After NAFTA With Tweezers or a Hammer? 

Neil Irwin: “Trade experts say there really is room to make major change in the two-decade-old agreement. A renegotiation could well lead to a better deal for all three countries. But it will require the United States to make concessions that the Trump administration may be wary of offering.”

“If not approached carefully, revamping an agreement that has created the economic underpinning of major industries would risk American jobs as well as higher prices for consumers. And the closer the Trump administration gets to blowing up the deal, the larger those risks loom.”

The Pivot to Asia Was Obama’s Biggest Mistake

John Ford: “The pivot was based on a series of flawed assumptions, namely: That U.S. foreign policy had previously neglected the Asia Pacific, that Asia’s rising importance in the global economy called for the assignment of more military resources to the region, and that the United States could afford to pull back from the Middle East and other regions. By taking the approach it did, the Obama administration managed to make tensions in the Asia-Pacific worse while also allowing the Middle East and Europe to fall into even deeper chaos than before as a result of neglect.”

NATO in the Crosshairs: Who’s Not Paying Their Bills

CNN: “Getting more NATO members to pay their way will be something Trump and U.K. Prime Minister Theresa May can agree on when they meet Friday at the White House.”

“According to NATO statistics, the U.S. spent an estimated $664 billion on defense in 2016. That’s more than double the amount all the other 27 NATO countries spent between them, even though their combined GDP tops that of the U.S. NATO is now pushing hard for the 2% guideline to be taken more seriously.”

Trump and the TPP: Giving Away Something for Nothing

Edward Alden: “…Trump showed he does not understand the first thing about trade negotiations. In announcing the U.S. withdrawal from the Trans-Pacific Partnership (TPP) trade agreement, Mr. Trump has just unilaterally given away the biggest piece of leverage he had to deal with the biggest challenge in the world of trade, which is the increasingly troubling behavior by the world’s second largest economy, China. It is the first rule of any negotiation that you don’t give away something for nothing. Mr. Trump just did. And as foreign policy analyst Dan Drezner tweeted: ‘That sound you hear is the clinking of champagne glasses in Beijing.'”

Obama and the Limits of ‘Fact-Based’ Foreign Policy

Shadi Hamid: “The very notion of ‘facts’ has been demeaned by Republicans, and most of all by Team Donald Trump. As Trump surrogate Scottie Nell Hughes put it, ‘There’s no such thing, unfortunately anymore, as facts.’ In response, Democrats have doubled down on their tendency to wield facts as cudgels, demonstrating their righteousness in the process. It would be a loss, though, if this came to be seen as merely another partisan schism. As it turns out, Obama’s foreign-policy legacy can offer an important window into whether facts—and being ‘reality-based’—are quite as critical to real-world policy success as we might like to think.”

“I, or any critic of Obama’s foreign policy, could sit with an Obama administration official, and, even if we agreed on all the facts and specifics of a particular country or conflict, it wouldn’t matter much. Divergences in how people interpret Obama’s legacy have much more to do with fundamentally different starting assumptions about America’s role in the world and even human nature—in other words, the very reasons why we do what we do. In fact, looking back at my own meetings with officials during the Obama era, rarely do I ever recall hearing something and thinking to myself that I had just heard some gross error of fact. This is why I found such meetings so frustrating and circular: The only things we disagreed on were the most important.”

Is Trump’s Tariff Plan Constitutional?

Rebecca Kysar: “…the path to imposing tariffs — along with taxes and other revenue-generating measures — clearly begins with Congress, and in particular the House, through the Origination Clause. When presidents have raised (or lowered) tariffs in the past, they have tended to do so using explicit, if sometimes wide-ranging, authority from Congress.”

“True, tariffs are no longer used to raise money, but to protect domestic industries, and to punish foreign ones. But they unquestionably still produce revenue. And while tariffs on imports are aimed at foreigners, they affect domestic industries that use or compete with imports; they can also have an enormous impact on the overall economy by raising consumer prices. Allowing the executive to circumvent the House to enact otherwise unfavorable tax policies that affect Americans is what the clause is designed to avoid — that those furthest removed from the people have the ability to tax them.”

“America First” and Global Conflict Next

Nouriel Roubini: “Trump… may pursue populist, anti-globalization, and protectionist policies that hinder trade and restrict the movement of labor and capital. And he has cast doubt on existing US security guarantees by suggesting that he will force America’s allies to pay for more of their own defense. If Trump is serious about putting ‘America first,’ his administration will shift US geopolitical strategy toward isolationism and unilateralism, pursuing only the national interests of the homeland.”

“When the US pursued similar policies in the 1920s and 1930s, it helped sow the seeds of World War II. Protectionism – starting with the Smoot-Hawley Tariff, which affected thousands of imported goods – triggered retaliatory trade and currency wars that worsened the Great Depression. More important, American isolationism – based on a false belief that the US was safely protected by two oceans – allowed Nazi Germany and Imperial Japan to wage aggressive war and threaten the entire world. With the attack on Pearl Harbor in December 1941, the US was finally forced to take its head out of the sand.”

“Today, too, a US turn to isolationism and the pursuit of strictly US national interests may eventually lead to a global conflict.”

How a U.S. Embassy in Jerusalem Could Actually Jump-Start the Peace Process

Martin Indyk: “Previous administrations have left negotiations over the status of Jerusalem to last because of their complexity and sensitivity. But if the disruption-oriented Trump administration is intent on moving the embassy, it could try to use the move to jump-start the moribund peace process. Although the status of Jerusalem is a deeply thorny issue, a rational compromise is imaginable: the undivided city could become the shared capital of the Israeli state and its Palestinian counterpart, with the Jewish and Arab suburbs under the sovereignty of their respective state. Jerusalem’s Old City could be governed by a special administration that ensures religious authorities continue to oversee their respective holy sites.”