The Second Nuclear Age and American Security: Trump Channels His Inner De Gaulle

Notably in the first Presidential debate, Donald Trump directly raised the nuclear threat question and identified it as a much more pressing issue that climate change.

He then highlighted his concerns with Russian nuclear modernization and failure son the US side to modernize effectively.

He then underscored that the Iran-North Korean and Chinese nexus was a critical dynamic in shaping the threat to the United States.

All of these concerns have been highlighted in our treatment of the Second Nuclear Age.

Hillary Clinton represents the current thinking on how to deal with the problem, namely through arms control with such measures as the Iranian agreement.

And she clearly highlighted her continued commitment to the global dispersal of US military forces to deal with global threats.

Very de Gaulle like, Trump focused on the most immediate threat to the United States, namely the nuclear one.

Rather than dispersing resources, perhaps these should be concentrated on shaping real policies and capabilities to ensure deterrence prevails.

Trump also has posed the question of what specialists called extended deterrence.

This is the question of whether Washington would risk Washington DC for the deterrence of a state like Japan?

Without a clear capability where the US with relevant high end conventional and effective nuclear warfighting tools can answer that question by saying: “I can do this without the need to bring Washington DC into the equation” extended deterrence is a concept not a reality.

States will then seek nuclear weapons, which is what Trump has said. The response from Hillary Rodman (Clinton) is very traditionalistic – it is US policy not to see the nuclear proliferation.

But how does this happen if states allied with the United States facing second nuclear age threats do NOT believe that the US has either the will or the capability to respond?

That is the question which (Charles) Donald (De Gaulle) Trump is asking.

The answer can not be simply to provide a mechanical reading of the history of US past policies or asserting that a deeply flawed Iran agreement is reassuring any one who is likely to pursue independent nuclear weapons.

The response to Second Nuclear Age threats is not simply telling us what our ancestors did: It is crafting capabilities and approaches for our own age, one very different from the past twenty years.

When we interviewed the head of NORTHCOM/NORAD, Admiral Gortney, hardly a hot button political animal, it was clear of his growing concern as the central combatant commander.

Both the Chinese and Russians have said in their open military literature, that if conflict comes, they want to escalate conflict in order to de-escalate it.

Now think about that from our side. And so now as crisis escalates, how will Russia or China want to escalate to deescalate?

They’ll definitely come at us through cyber.

And they’ll deliver conventional and potentially put nukes on the table. We have to treat the threat in a global manner and we have to be prepared to be able to deal with these through multiple domains, which include cyber, but that’s not in NORAD or NORTHCOM mission sets.

We clearly need the capacity to have the correct chain of command in order to confront this threat; and if you look at where we are today with NORAD or NORTHCOM, we are only dealing with an air defense threat and managing to that threat.

We are not comprehensive in a manner symmetrical with the evolving threat or challenges facing North American defense.

Admiral Gortney added:

But one has to think through our deterrence strategy as well.

What deters the current leader of North Korea?

What deters non-state actors for getting and using a nuclear weapon?

What will deter Russia from using tactical nuclear weapons in the sequence of how they view dealing with conventional war?

It is not my view that matters; it is their view; how to I get inside the head of the 21st century actors, and not simply stay in yesterday’s set of answers?

Let me put this in stark terms: It is not what the US non-proliferation community believes that is central to deterring nuclear adversaries.

It is about rebuilding US credibility in high end warfare, including nuclear options, which is central to the decade ahead.

At least Trump has raised the core questions rather than citing scripture from the Holy Writ of the High Priests of yesterday’s strategies and realities.

And below are two papers which I wrote whilst at CNA on the French nuclear deterrent:

center-for-naval-analyses-the-french-strategic-dilemma-original-november-1984-pdf-7-june-2004

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Can Trump Rebuild American Infrastructure with Repatriated Profits? A Feasible Pathway

Donald J. Trump told us during the Presidential debate that America’s infrastructure is crumbling while China, Dubai, Singapore, etc. have state-of-the art infrastructure.

Trump asserted that it is possible to finance the rebuilding of American Infrastructure by letting corporations repatriate profits presently held abroad.

How feasible is this proposal?

The infrastructure deficit in America is well known and documented.   Physical infrastructure like bridges, roads, schools, has been crumbling for decades.   The American Society of Civil Engineers estimated that $3.6 trillion is required by 2020 to update this infrastructure.

Other infrastructure, like telecommunications, internet, and other “soft” infrastructure, can easily absorb trillions in additional investment.

Meanwhile, major US corporations hold $2.4 trillion in profits offshore.

During the debate, Mr. Trump stated that he believe the true amount to be closer to $5 trillion.     Whether it is $2.4 or $5 trillion dollars is irrelevant to the point that American Corporations have collectively decided that it is better to “warehouse” the funds abroad instead of repatriating the funds to USA where they will have to pay corporate income taxes.

The question is whether Mr. Trump has a plausible way to bring this money home, and more importantly, turn them into productive investments in USA.

As long as there is a significant corporate tax on these profits, it will serve as a disincentive to repatriate the funds unless there are substantial offsetting advantages.   A general, across the board cut in corporate income tax would be disastrous fiscally as corporate income taxes account for about 10.6% of federal tax revenues (2014) aside from raising issues of equity.

But if a special “one time” window is opened for profits to be repatriated from abroad tax free, it is conceivable that a significant portion of the $2.4-5 trillion held abroad will come home.

America is still a good place to invest, with stable institutions, a highly productive and educated work force, and very much a safe haven for assets in a turbulent world.

What would attract those profits to not only “come home”, but be diverted to rebuild America?

Trump pointed out that outdated regulatory systems that make it costly to build and invest in America is a major hurdle.

He is also fond of pointing out that most infrastructure built by governments (federal, state and local) and agencies are overpriced.

Trump knows he can do better because he has routinely completed projects ahead of schedule and beat competitors on cost.

A major reform of the system of managing Federal, State, Local and Agency infrastructure projects will likely yield substantial cost savings.

While Trump has not explicitly stated that is what he intend to do, fundamental reform / streamlining of the administration of infrastructure projects funded by the Federal Government is an opportunity that have not been on the agenda of any Administration since FDR.

While it is impossible to say at the outset how much more efficient reforms can be, it is worth noting that a similar, but much limited reform at the Pentagon that brought in Commercial Off-the-Shelf (COTS) procurement in 1994 is responsible for much of the present US superiority in conventional weapons systems.

If COTS can improve on infrastructure projects funded by the Federal Government by a fraction of what it did for DoD, it would be a revolution.

Improving the cost and efficiency of infrastructure spending would likely be a threat to many incumbent interests who have profited handsomely from their ability to navigate through the present cumbersome and costly system.

The experience of DoD in bringing in COTS is an interesting lesson.   The Mil-Spec constituency fought COTS tooth and nail for decades, and only grudgingly surrendered in 1994 when Secretary of Defense issued the Perry Memo.

If Mr Trump is to even begin to reform the Federal Infrastructure procurement system, he can expect a much bigger fight.

But one weapon he may have that few realize is that if it is an Administrative Reform that do not require Congressional funding, he may have a freer hand as it is the prerogative of the Executive rather than the Legislative Branch.

Trump’s ideas lead to a vision whereby new infrastructure being built will be mostly privately funded — so as to bypass Congress and their inevitable porking and earmarkings of appropriations.    

Updating of Federal rules and regulations to enhance efficiency, simplifying and expediting infrastructure projects is likely to produce considerable improvements.

The final piece of the Trump agenda is to make it attractive for the repatriated funds to be diverted into these infrastructure projects — rather than invested in hedge funds or other investment vehicles.

Repatriated profits from abroad who qualify for the “one time” corporate income tax exemption only if the funds are invested in qualifying infrastructure projects.  

Qualified infrastructure projects will have to meet a new set of performance standards for both building and operating that either meet or exceed private sector performance standards and provide their investors a return competitive return.

How much impact would such a program have?

Suppose $1 trillion out of the $2.4-5 trillion abroad take up the Trump Administration’s program.

That amount would dwarf the American Recovery and Reinvestment Act of 2009.

Danny Lam is an independent analyst based in Calgary.

Why an Ostrich Policy Won’t Work: It is More Than Just Trump

Lieutenant-General Robert Baden-Powell (1857-1941), the founder of the “Boys Scouts” movement, was a British army officer who had served in India and was a veteran of the second Boar War, one of the less glorious, though ultimately successful, imperial interventions by the British in South Africa.

The young Winston Churchill enhanced his reputation as a result of his imprisonment and escape and miscellaneous adventures during that colonial conflict. Robert Baden-Powell become famous for his defence of Mafeking during a 217 day siege.

He had employed subterfuge he had learnt in India and in Africa against an enemy where the British were outnumbered by seven to one. He became a British national hero as a result.

In 1910 he retired from the army and formed the Boy Scouts association.

He adopted for the boy scouts the motto: “Be Prepared.” 

I was a “cub” scout  many years ago. I learnt all sorts of (fairly useless) skills, like the ability to tie various types of knots, how to go “tracking” in the “outback” (there was in fact no “outback” where I grew up), and how to go about pitching tents (which I did when I saved up my pocket money and bought a very small tent for myself which l pitched during the summer months on the front lawn of my parents house.)

But it was all great fun. I enjoyed it all immensely.

Baden-Powell ‘s motto “be prepared” stuck with me. 

The international foreign policy elites, who have so unanimously and contemptuously dismissed the thought of a Trump presidency, however, should begin thinking seriously about what a Trump presidency might mean.

Since it could well happen after the November presidential election.

Even though they have, almost unanimously, rejected the thought.

The same “experts” of course also rejected the thought of Brexit, before the British voters decided otherwise. American voters may well also vote for Trump, despite (or in many cases because) of the advise of the “experts.” 

In fact, Trump has said he regards the opposition of the foreign policy establishment to him as a “badge of honour.”

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In Britain the more the “experts” warned against Brexit (and they included the British Treasury, the Bank of England, the IMF, and the OECD, as well as Janet Yellen, chair of the Federal Reserve, as well as President Obama), the stronger the support of Brexit became.

Which may well prove to be true as well in the USA about the dire warnings of assorted “experts” about the consequences of a Trump victory in November.

In fact it is high time Baden-Powell’s scout motto was taken seriously again, and some serious thought was given to the real dilemmas a President Trump would face in 2017 and to recognize that several key questions he has raised are clearly part of the period of historical transition which we face, with or without President Trump.

Shifting Tectonic Plates

Firstly: It is evident that the world is at a moment undergoing a profound shift of the tectonic plates of the past seventy years, not only Post-WW2, but also post-Cold War.

It is not yet at all clear where, or how, the new world order (or disorder) will crystallise.

But what is clear is that profound shifts are underway, and that many of the the old formulae for dealing with these challenges are in urgent need of reevaluation, especially for the USA, as well as for the “west” more generally.

Russia has shown that a combination of the use of raw hard power ( in Syria and in the Crimea), combined with a skilful use of clandestine, unconventional, indirect “soft-power” and cyber-power, can promote Russian national interests.

China has expanded its ambitions in the South China Sea. North Korea continues with its nuclear ambitions regardless of international condemnation.

The US ambitions to “nation build”  in Iraq and in Afghanistan have both produced dubious results and at very great cost.

Not to mention the continuing disastrous situations in Syria where the US faltered in its red line policy and in Libya where the US “led from behind” letting France and the UK take the lead in removing colonel Gaddafi, but then doing virtually nothing to deal with the consequences of producing a failed state, and a open gateway for tens of thousands of migrants to attempt to cross the Mediterranean into Europe.

Financial and Commercial Policy Consensus Collapsing

Secondly: The consensus which has dominated financial and commercial policy is under challenge, particularly over the merits of free trade and protectionism.

The anti-Nafta and pro-Brexit voters, post-industrialised, previously unionised  industrial workers, who have seen their factories closed, and moved from the old rust belt cities of the upper midwest to  Mexico, while they see undocumented immigrants flood in to the country.

And in the UK similar patterns have taken place over the last two decades in the north and northeast of England and in Scotland where many rightly or wrongly blame uncontrolled European immigration for their problems.

The consequences have been the almost total collapse of the Labour Party in Scotland where deindustrialization has devastated old Labour Party bailiwicks, and seen the  rise of the Scottish nationalists (SNP), and in England the rise of the United Kingdom Independence Party (UKIP) and of Nigel Farage.

In France similar impacts of globalisation and deindustrialization has seen the rise of support for the National Front, and in Germany of the right wing Alternative for Germany party (AfD) and the deep opposition within the CDU and its sister Bavarian CSU to chancellor Angela Merkel’s open door immigration policy.

Lack of Accountability

Thirdly: The failure of the ruling elites to punish or hold accountable anyone involved in the speculative orgy which led to the financial collapse of 2008/2009 and the sharpest collapse of world trade since the 1930s. The banks were bailed out, but the taxpayers footed the bill, and paid the price with deep austerity measures which continue. A new “Great Depression” was avoided to be sure.

But the costs for the credibility of the world financial and trade system are now becoming evident.

For the first time since the network of international trade tariff agreements were made on 1948, though the treaty of Rome in 1956, through the establishment of the World Trade Organisation in 1984-94, though the North America free trade area agreement of 1994, there is now major opposition to the US-EU trade deal, as well as to the Transpacific partnership been to US, Japan and 10 other pacific nations, which is opposed by both Trump and (now) by Hilary Clinton.

Domestic Threats

Fourth: domestic tranquility is now seen as under threat by substantial segments of the population, and this treat is linked to the question of immigration and to citizenship to disenchanted voters throughout the west.

This has been a concern in the US since 9/11.

But it has been enhanced since the threat Islamic terrorism has been manifested on the streets of Paris, Nice, and in Belgium and in Germany.

It is true that Europe there have long been complaints about the “democratic deficit” of EU institutions.

People were bemoaning the “democratic deficit” as long ago as a meeting I attended on Berlin two months before the Berlin Wall came down, and long before the EU expanded to incorporate what was then communist dominated nations of Eastern Europe.

The concern at the time was to incorporate post dictatorship Spain, Portugal and Greece into the European community.

But the problems have only become worse since.

Never Underestimate Your Political Opponent

Fifth: “Political correctness,” the “under-decided,” and the “disreputables.”

It is never a good idea to underestimate your opponents.

Much less to insult them.

But this is precisely what the Labour Party did in Scotland in the run up to the independence referendum where although the unionists won the day, the voter turn out was one of highest on British electoral history.

And the three leaders of the Westminster political parties who signed a pledge to give Scotland more powers (Cameron, Clegg, Miliband) in the run up to the vote have all been deposed since.

The referendum on Brexit also produced a similar high level of voter participation. And the result also cofounded the experts, even those who had campaigned for exit from the European Union, who had not prepared at all for the success of the exit result.

Even Nigel Farage, who had campaigned for over 20 years for Britain to leave the EU, was surprised by the result.  It was in fact “a very British coup” which brought Theresa May in as prime minister (although she bad been an anti-brexiter), and three leading bexiters (Boris Johnson, Liam Fox and David Davies, but not Michael Gove who had attempted to stab his old friend Boris on the back during his own leadership attempt and had been defenestrated when he failed) into the cabinet charged with making “Brexit” work.

The problem with Brexit was those you led the campaign to exit the European community never planned for what a victory would actually mean.

But what is already abundantly clear is that the “under decided” had decided to vote.

And that these alienated, but now mobilised and galvanised, “disreputables,” made their views very clear indeed on the day.

The old political and economic establishments are at loss to explain the rise of Trump.

They bemoan how he “refuses to be educated.”

But he may well know the key problems to address for the new strategic environment; he may not want to be educated on how to repeat the past. 

In any case, it is hard to be a strategic elite guiding the future of your society with your Ostrich head in the sand.

How would they deal with the widespread discontent and disconnection between the political elites and the population?

Brexit showed this.

The America presidential election may well confirm the trend.

France and Germany may follow.

It is high time, as Baden-Powell advised, to “be prepared.”

Dr. Kenneth Maxwell is a regular contributor to Second Line of Defense and now has returned to live in the United Kingdom after living and working for many years in the United States.

Kenneth Maxwell was the founding Director of the Brazil Studies Program at Harvard University’s David Rockefeller Center for Latin American Studies (DRCLAS) (2006-2008) and a Visiting Professor in Harvard’s Department of History (2004-2008).

From 1989 to 2004 he was Director of the Latin America Program at the Council on Foreign Relations, and in 1995 became the first holder of the Nelson and David Rockefeller Chair in Inter-American Studies. He served as Vice President and Director of Studies of the Council in 1996. Maxwell previously taught at Yale, Princeton, Columbia, and the University of Kansas.

He founded and was Director of the Camões Center for the Portuguese-speaking World at Columbia and was the Program Director of the Tinker Foundation, Inc. From 1993 to 2004, he was the Western Hemisphere book reviewer for Foreign Affairs. He has been a regular contributor to the New York Review of Books and is a weekly columnist since 2007 for Folha de São Paulo.

Maxwell was the Herodotus Fellow at the Institute for Advanced Study, Princeton, and a Guggenheim Fellow. He served on the Board of Directors of The Tinker Foundation, Inc., and the Consultative Council of the Luso-American Foundation. He is also a member of the Advisory Boards of the Brazil Foundation and Human Rights Watch/Americas. Maxwell received his B.A. and M.A. from St. John’s College, Cambridge University, and his M.A. and Ph.D. from Princeton University.

This is the latests in our series on the Second Line of Defense Forum, which is looking at the coming Administration, its approach and its impact.

Trade and Jobs: What changed post 2008?

The Great Depression was a seminal event that upended the political and economic ideologies of its day.   Ardent free marketers who opposed any government intervention in the economy was upended by John Maynard Keynes ideas that advocated government intervention.

70 years onwards, the 2008 crash ushered in an era of low economic growth despite massive, coordinated efforts by governments worldwide to stimulate and restore growth.

The Obama era that coincided with this ear is noted for its below norm growth of 2%.   In this context, slow growth accentuated the problems of “factor mobility”:   a fact that mainstream economist is beginning to recognize.

Rather than adjust seamlessly, a recent study by Autor, Dorn and Hanson from the NBER largely confirmed Trump’s view that trade is a problem for US job losses:   “[E]mployment has fallen in U.S. industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize.”, the authors stated.

It could have been said by Donald J. Trump.

Mr. Trump is on record as demanding that trade deals being re-negotiated — as with many politicians before they take office.

But if the deals are reopened, that also means that the benefits from the pending deals (TPP & TIPP) are also foregone as they too, will be back on the table.

The author is of the opinion that in this case, the Priesthood will prevail on the TPP / T-IPP because it does not involve the biggest source of trade friction presently: China.

Trump is likely to call for a review of NAFTA which has never been done.

Post review, Trump will likely turn to some of the tried and true instruments of US policy to rebalance trade:   forcing offending countries like China and Mexico to substantially appreciate their currencies.   He might make some face saving calls for countries like Japan and Korea to buy more from the US, but bona fide trade retaliation will likely be limited.

Indeed, if allies raised their defense spending and acquired more US military equipment, it may be more than enough to satisfy Trump.

Does Trump really need to renegotiate trade treaties?

During the 1980s and 1990s, the USTR was extremely aggressive in pursuing campaigns against countries like Japan, Taiwan, etc. to ensure market access and acceptance / protection of institutions like Intellectual Property Rights.   Those campaigns went hand in hand with demands for currency appreciation.

But somewhere along the line, for much of the 2000s, these kind of campaigns, except for calls for Chinese yuan appreciation, petered out particularly with respect to China.   The 2015 USTR Report to Congress on China’s WTO Compliance noted: “China appears to be in compliance with its trading rights commitments in most areas.” (p.23)

What is wrong with this picture?

China Trade: The Gorilla in the Room.

By far the most egregious offender of intellectual property rights and the purveyor of unfair trade is China.   What trade statistics fail to even enumerate, let alone quantify is the sheer scale of foregone / lost revenues from intellectual property theft from China.

Many companies elect to remain silent in the face of the issues in China, whether it is outright, rampant theft of intellectual property, or systematic state sponsored hacking for commercial secrets.   Techniques like forced transfer of knowhow and technology, the use of “anti-monopoly” laws to extort from firms, or crackdowns on “corruption” are widely used.

The extent of these losses is only occasionally revealed, for example, when Steve Ballmer of Microsoft let it be known that their revenues in 2011 from China is about the same as the Netherlands.   That is to say, 5% of US revenues when the market is in theory the same size.   Ballmer noted that on a revenue per PC basis, India pays six times more than China.

Trump, while he may not have the trade deficit issue fully explained, did highlight how successive US Administrations have failed to use the leverage the US and allies do have with China.

It is clear that problems of this scale and magnitude cannot be simply fixed by forcing the Chinese Yuan to appreciate.

The Trump Administration would have to find new ways to deal with these problems.

Low Hanging Fruits: Enforce Existing Laws

Neither Trump and Clinton have drawn attention to the mechanics of enforcing existing trade agreements and laws.

The US, as the world’s largest market, still has considerable clout.   But such clout is not well used.

The process of enforcement of existing laws against importations of goods and services based on pirated intellectual property is antiquated and cumbersome.

Organizations like the US International Trade Commission charged with investigating trade cases of import injury, IP theft, etc. operate a cumbersome, slow, and costly process that make it effectively inaccessible to a majority of small to medium sized US businesses injured by trade.   Customs officers, likewise, are overwhelmed by the task with concerns about the highest priority issues — with enforcement of IP theft a relatively low priority.

The problem is not about hiring more officials to enforce the law, as is often advocated by politicians.

The issue is a management one of looking hard at existing processes, modernizing and simplifying it, then automating the process (applying technologies as needed) and lowering the “minimum cost” of accessing the service, and finally, monitoring cycle time and effectiveness.

And once the process begins, continuously monitoring and improving it over time.

These are basic business management issues that would be familiar to any businessmen who have run a major operation.

Yet, no candidate for public office in recent memory have raised this issue.

Trump has focused on the need to address the trade deals: renovation is not the only path he might pursue.

Actually, enforcing provisions where appropriate and managing trade processes in a modern business manner are important as well.

Beyond modernization of Public Administration in general, and the administration of investigation of trade complaints and their enforcement, the logical next step is to coordinate the upgrading and enforcement of existing trade laws with all OECD members.

As a group, OECD has sufficient clout to take on China and be heard.

Perhaps it is time for OECD to create a NATO for trade?

Danny Lam is an independent analyst based in Calgary.

 

Are Objections to TPP / T-TIPP by Trump and Clinton For Real?

Trade deals between governments rank right up there with Papal conclaves and US Supreme Court post hearing deliberations for their lack of transparency.   It is also the one item that most often subject to popular objections, become political footballs, and then, mysteriously, signed and ratified by governments after the requisite posturing.

Will TPP / T-TIPP go the same route?

The history of election rhetoric vs. what politicians actually do in office is illustrative: Bill Clinton, under attack from Ross Perot on NAFTA, pushed for the ratification of a treaty negotiated under G HW Bush with minor side agreements on labor and environmental issues.

Newt Gingrich, within days of becoming Speaker of the House, despite opposing NAFTA as House Minority Leader, abruptly reverse course and passed NAFTA.

This track record suggests that both Hillary Clinton and Donald Trump’s present views opposing TPP need to be taken with a grain of salt.

The power of the priesthood of free trade, to date, endured.

Economics Theory vs. Reality

Every student of economics undergo the indoctrination that “Free Trade Good, Protectionism Bad”, very much like “Four Legs Good, Two Legs Bad!”.

But what is free trade in reality?

If it is really free trade, the agreement can be summarized as, “All trade barriers are henceforth, eliminated between Party A and B”.

Instead of this, “free trade” agreements like NAFTA or TPP are encyclopedia length documents that contain tens of thousands of pages of verbiage, annexes, interpretations, regulations, etc. together with their own tribunals.

The complexity of these agreements means that it is virtually impossible for any one person to truly grasp the significance of the document or its cost vs. benefits.

Moreover, without detailed clause by clause, firm-by-firm analysis of the details over time, it is nearly impossible to make anything beyond a general statement based on macro-economic data as to whether a deal is “good” or “bad” or who “won” or “lost”.   Macro-economic analysis of “gains” from trade do little for a 50 year old person laid off as the plant they worked at moves to Mexico.

Details are where it matters.

There is always a trade negotiator in the shipping container pile.

Economies are not fixed, but living, breathing organisms that evolve and rapidly change.

Things that appear to be of great value to negotiators of one era like US access to Canadian oil & gas during the 1970s and 80s for the Canada-US Free Trade Agreement and NAFTA, are now regarded as non-issues in the era of plentiful domestic shale oil and gas.

Likewise, the great concession given to Canada for access to US market for manufactured goods like autos since the 1960s is nearly irrelevant today as Canada’s industrial heartland Ontario deindustrialized themselves.

Free Trade and Property Rights

Free trade agreements have gradually expanded in scope, beginning with physical commodities early days of the GATT, expanding to freedom of movement of labor and capital (investment), intellectual property, electronic commerce, environment, labor standards. It is a continually evolving, living set of institutions.

What is constant is that the United States have played a leading role from the post-war era in promoting free trade.   Central to US policy is to simultaneously establish, define, and creating new property rights, first domestically, and then through the use of its market power, imposing new property institutions abroad via trade agreements.

Thus, property rights that are created and ultimately well-established like copyright protection for semiconductor designs — an extension of copyright law into a novel territory, became de rigor in NAFTA, and ultimately around the world.

The same process is occurring with non-tangible property rights like motion pictures, digital rights management, software, business processes, free trade in data, etc. that forms a key part of the TPP and its companion T-IPP.

With this long history of success as a key instrument of US power abroad, it is not surprising that the “free trade” community is one of the most powerful and secretive of the priesthoods.

In peacetime, commercial interests are the dominant force of the foreign policy establishment.

Trump’s Trade Rhetoric

Donald J. Trump’s initial rhetoric focused on the apparently large trade deficits the US runs with many trading partners.   That is regarded in the free trade community as a non-issue as the “losses” is more than made up in the gains from the places where the US is most competitive — exports of higher value added services and intangibles.

This is an area that few outside of the specialist community (the Priesthood) really understand.

It is best illustrated by examples.

When Boeing or Lockheed-Martin exports an aircraft, that is a well-defined item that registers “correctly” on the statistics.   Less well accounted for is that such an export comes with it a stream of exports for future services that include maintenance, repair, upgrades, refurbishment that can last for decades.   These “tied” services exports are often strong monopolies for the vendor and highly profitable.   Third party firms can do some of the business, but it is extremely hard to compete with the OEM who has many proprietary knowhow, equipment, logistics, etc.

A customer for a Dassault Mirage is largely “married” to Dassault for spares, maintenance, etc. who will charge whatever the traffic will bear.   This is the dominant pattern for most high valued exports or infrastructure sold by the US abroad.

Any consideration of the raw numbers of trade deficits must begin by disaggregating the numbers and sorting out the lifecycle benefits.   Sales of Boeing aircraft and its associated engines generate very long “tails”.

Thus, the loss of the sale of a single Boeing 777 jet ($300 million sticker price) that generates considerable post sale revenues is a much more devastating loss than the loss of the identical sum in a commodity like beef or oranges — where there are no follow-ons sales of high margin goods or services.

The US dominates the business of long lived capital assets.

The advent of software and services in the 1970s onwards morphed the picture.   Suppose a company manufactured packaged (or pre-installed) software using a 1970s business model like Microsoft.   The OEM may report the export as the sale of one copy of the data storage media (floppy disc back in those days) for an export price of $5 to a subsidiary based in a low tax jurisdiction like the British Virgin Islands. (BVI) The subsidiary based in BVI in turn, license and collect royalties from a subsidiary say, based in the Netherlands for copies of the software sold in the EU.

Only one physical copy of the software may actually be “imported” to EU valued at the price of the physical media.

Data, or software on the media, as distinct from the physical storage media, is exported and imported free of duties and taxes. Such a “sale” will not show up as an export from the United States to the EU, but an “intangible” from EU to BVI.

But the truth is it really is a profit generated by the US corporation.   Just not accounted for well in trade statistics that are oriented towards counting the value of physical commodities.

Expanding the model to the export of services.   Suppose a US firm operate a web based data or information service. The data and software is warehoused in the US, or “in the cloud”.   The “smarts” of the business (e.g. Twitter or Facebook) is based in Silicon Valley, where the key functions like product definition, marketing, etc. is done.

Everything else that is non-core can in theory be outsourced: coding, customer service, etc.   The service can be sold via a subsidiary in BVI (as with above example), who in turn operates subsidiaries in China, Japan, EU, etc.

The cost stream mostly accrues to the US operation where the highest value added work is done.

The revenue from abroad registers in the subsidiaries, who in turn transfers the profits to a subsidiary in a low or no tax jurisdiction via management fees, royalties, and license fees. The profits can be kept at the overseas subsidiary and not repatriated to the US where it will be taxed.

This whole activity would not be recognized as an “export” from the US.

But in fact, it really is even though nothing physical except bits and bytes of data need to be communicated — tax free.

Assessing Trump’s Rhetoric

Donald J. Trump’s initial rhetoric that focused on the trade deficit with countries like China did not focus on services and intangibles exports that are not well accounted for, and the incredibly valuable work that the USTR have done to install the institutional arrangements that make it possible to capture the benefits via trade negotiations that he is not, and would not be privy to until the day he takes office.

As noted earlier, more than one politician did an about face after being briefed.

While one can argue with the inherently secretive nature of elite deal making that lead to free trade deals, the USTR have done a reasonably good job subject to their institutional constraints and blunders made by their political masters.

But that still leaves questions: how good are the deals like NAFTA and TPP T-IPP?   And, what about the losers from trade deals?

And could Donald Trump do better?

The biggest gains from trade deals in the post war era is in the opening of new markets in Europe and East Asia, the blunting of the European state subsidies to favored state firms like Airbus, and the installation of intellectual property regimes in the same markets by forcing acceptance of many institutional innovations that originated in the US abroad.

The extent to which the US dominated the world economy in the post war era that is part and parcel of this success is rarely recognized.

But that is not to say there are sizable numbers of “losers” who lost their job to free trade.

Economists, and trade negotiators, are rarely concerned with these losses as they argue that people who lost jobs are assumed to be able to find other, similarly or better jobs elsewhere.   This was gospel in the economics profession that until recently was not challenged by reputable, mainstream, credible economists.

Donald Trump is asking the right questions even though what remains are the specifics.

Free trade deals generally worked pretty well up until the mid-late 2000s.

The changes post 2008 will be addressed in a subsequent article.

Danny Lam is an independent analyst based in Calgary.

The What If of a Trump Presidency in Defense

Trump is proposing a fundamental reappraisal and reassessment of U.S. foreign and defense policy that questions core assumptions and consensus in the U.S .foreign and defense policy establishments.

It is not surprising that many in these establishments have made their opposition known, even prior to a possible Trump Administration.

But what would Trump do based on his perspective, and orientations?

There has been little published on this topic other than rhetorical attacks on his positions.

Taking Trump’s ideas seriously but critically and sympathetically evaluating them reveal that there are viable, practical, and plausible pathways for Mr Trump to simultaneously achieve the seemingly contradictory goals: increasing US Military capabilities; bring well-paying jobs back to America; without large increases in Federal expenditures.

These goals are feasible providing that longstanding core foreign and defense policy goals are restructured and alliance commitments renegotiated as Trump proposed.

This conclusion is arrived at by examining Mr Trump’s track record as a businessman, and assessing “what if” he applied the same methods and means, philosophy and acumen demonstrated during his business career to lead the Executive Branch of the U.S. government.

“Win-win” deals might well be very popular in the U.S. can be achieved and the spinoff benefits generated.

Though Trump’s terms will be less well received abroad.

How might he proceed?

We can look at history and look at the case of Sir Jacky Fisher, when faced with the dilemma of modernizing the Royal Navy at the turn of the 20th Century, did not have the option of sharply increasing the Navy budget.

Instead, he reorganized the Navy to fund his modernization from exiting budgets.

How?

The Royal Navy was transformed from a far flung scattered force to a core force concentrated against Britain’s most likely rival Germany, with trade routes protected by lesser vessels.

Existing vessels were divided into sheep, goats and llamas.

Sheep were obsolete ships that are still battle worthy and kept with a skeleton crew in reserve.

Goats were scrapped or sold, and Llamas are “undecided.”

This, and the reduction of manpower and operations and maintenance, enabled Fisher to fund the HMS Dreadnought: the vessel that set a new standard for lethality per tonne displacement, per crew, per UKP expended.

Sir Jacky Fisher’s new Royal Navy became a far more powerful fleet for the same money before the outbreak of World War I.

The Trump Administration can reprise this strategy to meet his commitments to the American publicsimultaneously to  hold the line on defense spending, modernize and rebuild the military with the best by realigning American foreign and defense policy.

Clearly, Donald J. Trump’s election would be a watershed event.  

He is challenging, or at least questioning longstanding assumptions about American Foreign Policy since the 1940s, which in turn, dictates what defense capabilities are required to support and sustain the policy.

The question is, how will commitments and  capabilities change under President Trump?

Trump explicitly rejects the globalist / liberal internationalist agenda of the foreign policy establishment in favor of “America First”.

He is not isolationist, but calling for a much more cautious approach to the use of America military power, which he see has taken on too many missions, many of which the U.S. does not do well.

Trump disagrees with the idea that the U.S. can uncritically export democracy, and the use of American forces in Iraq and Afghanistan under President George W Bush to achieve goals like nation building.

Allies, who have benefited from American protection, must pay their fair share for defense.

Trump pledged to rebuild the U.S. military into the world’s strongest.

Prima facie, it is difficult to see how such goals can be reconciled with the fiscal constraints that Congress imposed on the Administration.

Part of the answer is clearly working with Congress to remove some of these constraints and any threat of sequestration.

If she remains true to her past, a President Hillary Clinton will be one of the more aggressively interventionist governments, a “super hawk” more willing to achieve policy goals with the use of military power compared to the Obama Doctrine.

A Trump Administration will likely make fewer, or at least prevent the growth of new demands on the US military from day one.

That, however, leaves many questions as to how President Trump will operate as Commander in Chief and to achieve his stated goals and square the budget circle.

The Foreign Policy establishment, Democrat and Republican, argue somewhat rabidly it cannot be done.

That stance ignores that he has in mind major changes to US Foreign Policy.

Historically, new Administrations have failed to make a dint in the operations of the vast labyrinth of the US Government.

Many government functions still operate much the way they did in the 1940s, impervious to reform as politicians have chosen to expend their political capital on more urgent priorities like passing laws that are notable for its poor implementation.

Therefore, the opportunity is there for Donald Trump to repeat his success on a grand scale by deploying the core skills of senior businessmen: recruit and retain talented administrators to implement his agenda.

Shaping a Way Ahead in the Redesign of U.S. Defense Policies

Central to Donald J. Trump’s ethos that he demonstrated throughout his career is “more for less”.

Trump will be intensely interested in how a different businesslike approach, as opposed to the present highly politicized system, might help in rebuilding U.S. defense capabilities and those of the allies.

But here is where another piece of the Trump agenda fits in: jobs for Americans.

The only ready way to stimulate jobs, especially in manufacturing in a big way in the short run is in defense.

Defense represents nearly 54% of discretionary spending and is the only pie big enough to make a difference in the short run.   Jobs in defense are relatively well paying and many are in manufacturing protected from trade.

Bringing back coal mining (except stimulating exports) may be downright impossible given the advent of cheap shale gas, but bringing defense sector manufacturing jobs that ex-coal miners can do is a viable and feasible path.

Problem is, much of defense expenditures are already committed to existing programs and obligations.

How would Trump free up defense spending?

Retirement of many legacy systems and their replacement with newer equipment designed to reduce both manpower requirements and maintenance is a logical step that serves many purposes.  

Trump is no stranger to this.

He did this for buildings in real estate and personally witnessed the transformation of his own businesses by technology.

Headcount (both government and contractor), the most expensive component of American military power, will have to be freed up either by downsized or redeployed to other tasks.

Likewise, the exorbitant expense of maintaining and operating legacy systems and updating them will be slashed when replaced with newer equipment.

Freeing up resources tied up by legacy systems also enable a new round of procurement of up-to-date systems that pack far more punch per dollar.

Re-equipping the Military

Foreign and defense policies are inextricably linked.

Clausewitz famously observed, “War is the continuation of politics by other means.”

With resources freed up from retirement of obsolescent equipment, the Trump Administration’s next dilemma is to what to buy to re-equip US forces in alignment with Trump’s foreign policy, and in parallel, how to reform the procurement process to streamline and simply the system.

Procurement reform is an issue that require will require Trump acquire persons with extensive familiarity with the existing system, but yet, is able to step back and complete a reform from within.

A difficult issue that is beyond the scope of this essay.

Thematically, expect Trump to focus on what made him successful: labor saving administrative, management and technical innovations (i.e. reduce manpower requirements through the use of automation / unmanned / robotics);   questioning and seeking alternatives to forward bases that are increasingly costly to defend and operate, especially those operations that are largely symbolic.

The Trump Administration will likely move in parallel to re-equip the U.S. military to deal with the very different range of threats “offshore balancing” presents.

Cleaning out the “inventory” will allow the U.S. to leapfrog major changes that historically had the U.S. entering World War II on December 7, 1941 with more battleships than carriers, and resorting to refitting surviving battleships that primarily operated as anti-aircraft and amphibious landing support ships rather than purveyors of naval superiority.

Replacement platforms that greatly improve on lethality vs. cost, simplify operations and maintenance, however, are well known and largely proven, but their adoption have been slowed by the inertia of existing in-service systems, lack of developed doctrine and tactics and uncertainty as to how to piece together the right technologies, training, doctrine, for effect.

Trump, the consummate entrepreneur, will likely run many experiments in these areas.

Once resources are freed up by defense reforms, many projects can be funded and tried – an era of experimentation very much like the dawn of aerial combat or the advent of aircraft carriers.

As with Trump’s business experiments, many will fail, but enough of them will work to improve America’s power vs. the default of minor changes at the margins.

Expect Trump to simultaneously focus on emerging domains of conflict like space, bio, cyber and other forms of warfare.

He will likely ask tough questions as to the validity and viability of post-war constructs like treaties limiting use of space for war, Biological Weapons Convention, or the likely viability of quaint regimes like INF and MTCR.

Trump has already made clear he intend to closely look regimes like the Geneva convention and seek changes.

Significant changes in each of these issues have the potential to fundamentally reshape and alter the defense of the United States and allies.

Danny Lam is an independent analyst based in Calgary.

 

A Turbulent World: Trump and Strategic Re-Direction

The United States now faces an increasingly turbulent world.  And if one were to ask the question is the United States closer to war with a peer competitor now than 7 years ago, the answer is clearly yes and sadly are we less equipped, yes again.

The decade ahead will almost certainly see significant strategic discontinuity, yet much of the strategic discourse is that shaped in the 1990s with an update for 9/11 and the land wars.

But are the strategic thrusts of the 1990s – the creation of the Euro, EU and NATO expansion, and the intended starving of US power projection forces – the way ahead?

Those thrusts were then modified by 9/11 and the land wars, but both the strategic elites of the Republicans and Democrats seem committed to the use of the U.S. military to reshape the world in their image, whether that face being neo-conservative or liberal.

Does this trajectory make any sense or is a fundamental strategic redirection need to be made?

The Brexit vote certainly will force reconsideration of the 1990 trajectory of the European Union and the election in France could prove interesting in shaping new ways ahead as well. European turmoil provides a clear challenge to U.S. policies and raises fundamental questions.

Putin pushing the envelope in Europe and the Middle East has raised fundamental questions about the ability of NATO as currently funded, constructed and deployed to deal with a power capable of pushing into the seams and challenging Western leadership.

And simply reading through the litany of NATO declarations about the way ahead and matching those to real capabilities on the ground, air and sea, can lead to intellectual shock and disquiet.

The barrier to change is as much a failure to rethink the foundations of Western defense and foreign policy as it is a failure of those policies themselves.

Recently, former military chief Sir Richard Barrons, former UK head of the Joint Forces Command, wrote a 10-page private memorandum to Michael Fallon, the Defence Minister, where he highlighted the challenges facing the UK in its defence policies, and focused on a central one:

According to Sir Richard, the challenge is not merely one of resources or money. More fundamentally, he wrote, the issue is one of strategic oversight and planning.

In the MoD and the security organs of Whitehall, he said, there was now “almost no capacity left to think and plan strategically or generate resources for the unforeseen … our own bureaucracy struggles to get its head above managing details and events”.

https://www.ft.com/content/36f47240-7c0e-11e6-ae24-f193b105145e

The U.S. Presidential campaign is unfolding in the context of emboldened “peer competitors. ” Russia and Peoples Republic of China activities concurrently with greatly increasing dangers from the Middle East, including the growing reach of Islamic Terrorism to a very real nuclear threat from North Korea and eventually Iran.

World events inherited by the next President and U.S. actions in the global strategic environment can mean the difference between peace or war. A key question is whether the new President will roll up his or her sleeves and appoint people capable of meeting the challenge raised by Sir Richard, namely “to think and plan strategically.”

Candidate Hillary Clinton has promised to be “rock solid” on foreign and security issues, but that can be easily interpreted as reinforcing the past 15 years of behavior, whether from Bush or Obama, and projecting it forward into the future.

President Trump clearly is challenging that idea, and is putting forward a clear message that he intends to not follow the conventional wisdom and seek new answers to the new strategic situation.

One can simply put aside the question of which candidate one will support or vote for, but it is clear that Clinton sides with continuity and Trump for change.

But what kind of change might Trump actually promote?

To get some insight into this question, we sat down with former senior Defense, State, and Commerce figure John A. “ Jack” Shaw to discuss what the potential impact of a Trump presidency might be from the standpoint of change.

Shaw has many decades of experience in Republican administrations, and comes at this question with the experience of going through the Reagan Revolution on Defense and Foreign Policy initiatives, which with the continuity of President George H.W. Bush won the Cold War. He has held multiple positions at the Department of Defense under both President Ford and President Bush 43, State under President Ford, and Commerce under President Bush 41 and served in four White Houses.

Question: How do you view the potential impact of a Trump presidency?

Shaw: “Trump promises significant change. His belligerent sounding personal style which brought him so much success as a businessman was seen as uncouth and threatening to the Washington mandarin class which has dominated U.S. foreign and domestic policy ever since Franklin Roosevelt.  His demand for change was an affront and a threat to them so they individually and collectively want symbolically to kill the messenger.

The foreign and defense elites of both parties inside the Beltway agree with each other more than they disagree.  They still are operating on a series of assumptions and ideas that have been outrun by global reality.

The challenge is not simply to rotate personnel like musical chairs from the Ds to the Rs and back again, but to change the fundamental assumptions.   We need to redesign what we are doing globally, both in foreign and defense policies.

The elites, however, have wallowed for three or four generations in the near universal corruption of language that has characterized and anchored the evolving Washington social and political scenes. The corruption comes from their intellectual insights turning into moral precepts.

To them Donald Trump is both a threat to their credibility and a Neanderthal who neither understands nor appreciates the nuances they have grown to personify. He is ipso facto the incarnation of the mad bull bringing his own china shop into the sanctuary of policy they have consecrated.

Trump thus promises much creative disruption in his demand for change. It is about strategic leadership, not simply playing musical chairs to support policy continuity. The idea that Hillary Clinton has raised that “this election is about language’ is only true in one sense: She is the embodiment of the linguistic and cultural status quo, while Donald Trump is the agent of change and new leadership.

We need to fundamentally re-fabricate what we’re thinking and saying as well as what we are doing, but Trump and the elites have now become part of a truly Revolutionary political dialogue about a new way forward.”

Question: How might this be done?

Shaw: “My own experience in the Bush I Administration may be instructive as I had the chance to staff the Commerce Department with political appointees and evaluate the career people that were there.

When I joined the Commerce Department as a non-career appointee, we did not seek to load up the department with political appointees just to meet some sort of political quota system. We managed to find the very best people we could find to carry out the diverse missions of that department without much interference from Presidential Personnel. The result was one of the best run Commerce Departments in the past fifty years.

We also combed the bureaucracy to find people ready to lead innovation.  There are many folks in the bureaucracy who have solid innovative ideas but who have been bottled up by political correctness and the drone mentality. Political appointees can change that or enhance it.

My boss at Commerce had been president of the sexy part of Westinghouse and he reckoned  that the percentage of senior effective personnel both at Westinghouse and in the government — those  that could provide strategic change for innovation — was the same, about 40% percent  What was needed was removing barriers to innovation to allow them to move the organization forward.

These innovators need to be sought out and promoted to positions where they can help lead a fundamental shift in how the U.S. defines and executes its foreign and defense policies. I believe that the Trump revolution will allow that to happen across the government.

There would, however, be virtual continuity between those persons serving in the Obama Administration and a new Clinton Administration, for many of the appointees in the Obama Administration came from the Clinton stable, and are aching to continue.

But to be clear, at best, Hillary Clinton offers more of the same-old, same-old, with a new twist.  The truly imaginative pay-to-play graft she brought to the State Department with the donations of foreign contributors to the Clinton Foundation represents a quantum jump in governmental corruption which will go government wide if she is elected president.

She will introduce a New Deal, which will join the cultural and linguistic corruption of the last fifty years with a venality, which would have embarrassed Tammany Hall. We will indeed have a continuity of policy with the Obama administration:  It will be as she says, “about language” and lies…and about the diminution of America at home and abroad.

The question is whether the country wants continuity or fundamental change.  But it is also the analytical question of whether these policy continuities can provide any more effective answers to a world in fundamental change than those of Barack Obama.

We need to shape policies, which deal with the world as it is becoming; not the world we wish was there.” We need dynamic change and Donald Trump is the only one who is offering it.”

Question: How would characterize the Trump movement from that perspective?

Shaw: “We have an entrenched world of ideas, which Trump is running against.  What he promises is both to challenge the entrenched ideas and to appoint persons who think differently and seek change.  He won the primaries effectively by himself but endured the death of a thousand cuts from media and the cultural elite.

We need to bring forward the persons capable of transforming the institutions as well as the concepts, which those institutions embody.  And that is what the strategic elite is most concerned about; Trump simply does not accept the inherited questions and answers proscribed by the strategic elites.

You’ve got to break eggs to make omelets.

It is a seismic moment in U.S. politics; Trump himself highlights that he part of a movement, not simply a candidate.  The foundations are shaking; Trump is not the cause but the consequence of the global shift.

The Trump self-funding process also has freed him to embrace fundamental changes, which a normal candidate funding process would clearly curtail and constrain.”

Question: How does this translate into changes in military policies?

Shaw: “There clearly needs to be change with regard to how civilians think about the use of military power and how the US military is transformed.

How do we commit ourselves to the use of military force?

What is the level and focus of military capability, which needs to be built, and modernized?

How can we commit troops, and achieve clear and limited objectives when we commit those troops, and the leave, rather than simply parking our troops on foreign soil?

It is not about deploying U.S. troops to serve the unclear objectives of neo-cons or liberal interventionists.

In that respect Donald Rumsfeld was given a bum rap as Secretary of Defense. He was a genuinely decisive iconoclast who was conned into Iraq by the neo-cons. So his withering eye was wasted on limiting the invasion force instead of limiting the mission and he became the first POW as well as the scapegoat in the Iraq War.

And it is getting clear focus on how to deal with the near and present danger of the nuclear threat to the United States, rather than sweeping this under the rug until we face the brink.”

Question: How might this be done?

Shaw: “A number of key tasks could be addressed as an integrated whole,

First, the structure of the government needs to be streamlined and layers of bureaucracy not needed eliminated.  Restructuring of how policy is made is critical.

Second, surging capabilities which can deter peer competitors while  enhancing American and allied competitiveness and to shape more credible deterrence is crucial.  And most of the weapon systems already needed are being built or on the pipeline.  We just need to get serious about surging the buying capability of the Government and then turn it on!

Third, we can look carefully at the military officer corps and the civilian structures to promote those who have sound ideas about how to accelerate the defense and diplomatic capabilities of the United States to prevail in an uncertain world. They have been undervalued and denied fast promotion for decades.

Fourth, appointing senior leaders capable of providing strategic leadership rather than tactical maneuvering in the bureaucracy can provide the path to realistic innovation and rapid upgrading of American capabilities. We need thinking warriors in our leadership, not analytic time servers.”

The U.S. presidential contest is unfolding within a broader global context, in which Brexit, Putin’s reassertion of Russian power, the growing activism of illiberal powers like Iran or China, and many other dynamics are fundamentally reshaping the global competition.

Ironically, Donald Trump, despite his army of critics, has a better preparation for the presidency than Barack Obama did in 2008 or Hillary Clinton has now, as he had had to make important international decisions, which mixed political considerations with huge personal financial downsides for himself.

President Obama was indeed right the other day when he added Bill to that list of the ostensibly prepared.  Their preparation, in reality, was a corrupt combination of half truths and lies, legal distinctions and devalued and deconstructed language: It was little more than he stock in trade of slick and dishonest lawyers. We deserve better than that and have a real option.

The choice is stark but easy; if you believe Hillary’s promises and like the record of what she has done to diminish America’s position in the world, vote accordingly.  There is only one candidate who promises and will and can deliver change, and his name is Donald Trump. Vote for him!”

Also see the following:

http://www.worldtribune.com/former-reagan-defense-official-says-next-president-needs-new-toolbox-for-2017-challenges/

 

How Would President Trump Deal with North Korea and China?

China and Asia Policy in America is the preserve of a small cadre of Area Experts that has dominated the picture since Secretary Henry Kissinger re-established relations with China — after a purge of the last generation of “China Hands” was purged for having “lost” China.

If Donald J. Trump becomes President, he will be able to claim direct, personal experience in dealing with commercial Chinese interests successfully.

How will he deal with the Kissinger generation of East Asian experts?

Donald Trump made clear during the campaign that he is unsatisfied with the state of relations with allies like Japan, Korea, and peer competitors like China in trade and security.

For China, Trump is calling for renegotiating trade deals, appreciation of the Yuan, ending Chinese IP violations, and removing illegal export subsidies and unfair practices.

Trump is adamant that allies like Japan, Korea and SE Asian states have to carry more of a share of the defense burden.

It is increasingly likely that North Korea may have the capability to strike at CONUS with nuclear weapons by 2020.

Donald J. Trump will regard it as a major threat to the US as opposed to a regional issue.

Will that alter his priorities?

North Korea’s nuclear missile threat will condition how the U.S. might use its leverage with China.

President Hillary Clinton would call for a more robust policy against North Korea by convincing China to act along the lines of inherited policy instincts.

The defense / security establishment, including the China experts, are on record as overwhelmingly opposed to Trump, but what might he do, or what kinds of change might he set in motion?

Whether Trump sees China as a credible partner in curbing the North Korean threat to the US will impact the priorities of US security vs. Trade issues.

Donald J. Trump is likely to give the existing “China experts” and diplomats at least one chance to perform better than they have historically done on the North Korean issue.

Trump, unlike Clinton, will probably have little or no faith in either the capacity or willingness of Beijing to use its leverage against North Korea when China is openly encouraging Kim Jong-Un with increases in both military and civilian aid.

The history of failures including the 2007 agreement where the “bribe” was delivered only to have the agreement broken shortly after after weighs heavily on the credibility of the China and North Korean Experts in the US.   It is highly probable that if China Experts advocate a Clinton like policy, they will not even get one chance.

Donald J. Trump would do something different.

Suppose Trump decides that China is not a credible partner, and / or, cannot deliver on North Korea.   That will free him to in parallel, pursue a military option to defend against North Korean threats, and use his leverage against China primarily on trade and commercial issues.

What would a military deterrence option look like?

Trump would focus on S. Korea and Japan look to encourage the build out of relevant defense capabilities.

Raising defense spending in the traditional manner, however, is not enough.

Put simply, as the US and its allies consider a surge in defense capability, they would look to work together in terms of transfer of available U.S. legacy stock where appropriate and increase in spending either in joint programs such as F-35 or Aegis, or the acceleration of spending on programs in the pipeline like Japanese submarines or South Korean Pumas and amphibious ships.

It is not simply about symbolic increases in defense spending; it is about accelerating deterrent capabilities against the North Korean threat.

The US could look to focus more on the air and naval side of deterrence and bulk up South Korean army defenses, include missiles and armor. For example, transfers of heavy armor from the US will greatly increase the capability of the ROK to mount an invasion should that become necessary.

As Ed Timperlake noted in an article published in early 2014:

Deterrence will rest on the ability to dismantle the offensive strike forces of North Korea and to pull apart its command structure.  It is not about preparing for a new version of the battle of the Marne.

As the US Army considers its contribution moving forward it is less about the armored forces than about the mobile defense forces.  It is less about the tank and more about the THAAD.

South Korea could virtually take over the counter-offensive ground role, and the US could transfer more ground maneuver equipment in the current inventory as the US Army worked its own transformation strategy with the US Air Force and Navy somewhat akin to the transformation envisaged in Australia.

In other words, by combining transfer of some missions to allies currently done by the United States (e.eg. the role of ground maneuver forces in the defense of South Korea( with the enhancement of their capabilities and an accelerated transformation of air and naval American forces — in conjunction with Japan, deterrent capabilities could be put in place for the deterrence of illiberal regimes in the region.

The Trump Administration would seek to usher in a new era of “Offshore Balancing” and South Korea and Japan might well be core test cases of the strategy.

Danny Lam is an independent analyst based in Calgary.

The High Priests Strike Again: Trump is Not Learning from Us

I wrote a piece earlier this year, after reading through the Washington Post’s purported interview with Donal Trump.

I simply listed the questions they asked Trump and noted the following about these “questions.”

This was a painful exercise reading through these questions but unless you are the Washington Post and have lived all your life inside the beltway, the clear thrust of these questions is “we are the custodians of the Inside the Betlway truth and the American Way of Life.” They are sort of superman in the 1930s defending their view of the American Way of Life.

When has the Post ever asked Candidate Obama such questions? Or Hillary Clinton for that matter?

If you know the “correct” answers, the questions are really tests on whether you are fit to join the Inside the Beltway priesthood.

One does not even have to like Trump to understand the importance of something akin the recovery of real journalism as crucial to the future.

I really am not interested in having your values shoved down my throat, but I really would like to understand the dynamics of change in the big world out there, for we are in a very dynamic a period of history.

Journalism properly practiced can help in this journey by informing of what is going on, rather than informing me of what you believe.

For that I can go to church.

And although the Donald does not walk or talk like a well trained Inside the Beltway guy, when he speaks of putting the trade relationship with China on the table as part of redefining the competition or calls for a new bargain with NATO or questions where and when we use troops and try to have objectives worthy of their efforts, I think we probably need a bit more “bananas” in the conversation.

We get that Donald Trump is not an Inside the Beltway guy nor does he intend to follow the pathways set down by the dons of the strategic university of US Policy.  He is PRECISELY running against that.

He may well not measure up to the challenge but the core question on the table is whether continuity in US strategic and defense policy is what the American public wants or more to the point whether the consensus built Inside the Beltway really answers the mail.

The decade ahead will almost certainly see significant strategic discontinuity, yet much of the strategic discourse is that shaped in the 1990s with an update for 9/11 and the land wars.

But are the strategic thrusts of the 1990s – the creation of the Euro, EU and NATO expansion, and the intended starving of US power projection forces – the way ahead?

Those thrusts were then modified by 9/11 and the land wars, but both the strategic elites of the Republicans and Democrats seem committed to the use of the U.S. military to reshape the world in their image, whether that face being neo-conservative or liberal.

Does this trajectory make any sense or is a fundamental strategic redirection need to be made?

The Brexit vote certainly will force reconsideration of the 1990 trajectory of the European Union and the election in France could prove interesting in shaping new ways ahead as well. European turmoil provides a clear challenge to U.S. policies and raises fundamental questions.

Putin pushing the envelope in Europe and the Middle East has raised fundamental questions about the ability of NATO as currently funded, constructed and deployed to deal with a power capable of pushing into the seams and challenging Western leadership.

And simply reading through the litany of NATO declarations about the way ahead and matching those to real capabilities on the ground, air and sea, can lead to intellectual shock and disquiet.

The barrier to change is as much a failure to rethink the foundations of Western defense and foreign policy as it is a failure of those policies themselves.

Now a group of political appointees in the diplomatic corps have decided to back Hillary Clinton versus Trump in part on the fact that she is listening to them and Trump is not.

What these denizens of foreign policy seem to not realize that they are making Trump’s core point: they are a key part of the problem or themselves key barriers to change.

Now let us turn to the guidance we get from and I am quoting here:

Together, we have represented the United States as ambassadors in 52 countries or  international organizations.  

We have hundreds of years of combined service. 

And now to the received wisdom from the High Priests:

One of  the candidates –Donald J. Trump — is entirely unqualified to serve as President and Commander -in-Chief. He is 
ignorant of the complex nature of the challenges facing our country, from Russia to China to ISIS to  nuclear proliferation to refugees to drugs, but he has expressed no interest in being educated. 

Indeed he has recently demonstrated he entirely misunderstands and disrespects the role of the  very officials who could educate him: the senior career officers of our intelligence services and of  our military services (whom he has characterized as “rubble”). 

Ok you get the point — Trump has “no interest in being educated” by the “very officials who could educate him,” namely themselves.

In contrast, Hillary Clinton listens and learns from these folks who are identified as the very bedrock of US national security policy.

By contrast, Hillary Clinton’s handling of foreign affairs has consistently sought to advance  fundamental US interests with a deep grounding in the work of the many tens of thousands of  career officers on whom our national secu rity depends. Not every one of us has agreed with    every decision she made (and the same would be true of every one of her predecessors), but we  have profound respect for her skills, dedication, intelligence, and diplomacy.

And they conclude:

In this election there is only one team to represent our nation and lead our career foreign policy and security professionals in a manner befitting our role as the world’s sole superpower. 

I think the last sentence might be rewritten as follows:

In this election there is only one team to represent our nation and lead our career foreign policy  and security professionals in a manner befitting us (who have hundreds of years of combined service) AND MIGHT IF ASKED could have imparted wisdom to Trump and shared some of the secrets of the High Priesthood of Power.

http://www.trbas.com/media/media/acrobat/2016-09/70357662189300-22064428.pdf

Or perhaps the Evil Vicar’s tutorial to neophytes is reflective of the attitude:

President Trump’s Defense Agenda and Canada

Donald J. Trump stands a good chance to be elected the 45th President of the United States.   That event would send shock waves through Canadian officialdom and send politicians that derided Trump running for cover.

Post-election, an incoming President or Prime Minister will “settle in” as campaign rhetoric and realities collide on inauguration.   Abrupt shifts in policy, like incoming US House of Representatives Speaker Newt Gingrich reversing course to help pass NAFTA after being briefed, are common.

While Canadians can take comfort in the second largest bi-lateral trading relation in the world with the US, in defense, storm clouds are gathering as Canada and the US have taken sharply divergent paths in elections a year apart.

Bromance will be no more.

Candidate Trump, like others before him, will focus foremost on national and homeland security and more likely than not an economy overdue for recession by 2017.

He must simultaneously improve defense capabilities and create new, well paying jobs for Americans.   Those priorities change the traditional dominance of trade and border security and elevate the importance of Canada carrying a fair share of the defense burden.

There will be continuity between Trump or Clinton and Obama in as US leaders share a view dictated by American interests with Canada.

The difference will be in tone and volume, but not substance.

Canada was not publicly singled out by President Obama in March, 2016 to be a free rider like Saudi Arabia and European allies despite being privately reminded of commitments made by the Harper government and since broken.

While Donald Trump has not spoken of this issue, when he is briefed about Canada’s desultory defense spending of 0.9% GDP, he will note that Canada is perhaps the most egregious free rider in NATO, comparable in scale to Germany and Japan.

Australia, with greater threats to their sovereignty than Canada, raised their defense spending to almost 2% GDP.

Why would not either President Hillary Clinton or President Trump demand at least the Australian level of effort from Canada, notably because Canada’s defensive weakness enhances direct threats to the United States as well?

Canada’s current government, through a combination of delayed procurement, cuts and stretch outs, or diversion of defense funding to personnel costs like pensions and benefits, effectively lowered defense spending to below Harper government levels.

Adding insult to injury, recent Canadian defense cuts were made along with large increases in federal and provincial government spending on favored social programs, financed by deficits.

President Obama’s speech to Parliament in June called on Canada to “contribute its full [defense] share”; it had no discernable effect.

Trump (or Clinton) will almost certainly insist that lopsided security deals like Canada’s have to be renegotiated.

Will he will renegotiate en mass with NATO all at once, bilaterally in updating agreements like NORAD, or act unilaterally?

Canada should anticipate an end to free riding on US defense expenditures and make plans to benefit from the changes coming.

A new US Administration will likely not tolerate an alliance that “does not work and is far from working” for long.

Canadians need to make a choice as to whether our sovereignty, freedom, democracy and values are worth defending.

And do what it takes to provide for an adequate defense.

Dr Danny Lam is an independent analyst based in Calgary.

Views expressed are his own and do not represent any organizations he is affiliated with.