In Geopolitics This Week
Black Sea Grain Deal ‘Terminated’, EU-CELAC Summit Divided on Ukraine and Trade Deal, US Reinforces Military Presence in the Persian Gulf, and other stories.
Black Sea Grain Deal ‘Terminated’
Russia has officially notified Turkey, Ukraine, and the United Nations that it opposes the extension of the Black Sea grain export deal, leading to the termination of the agreement. The deal, brokered by the UN and Turkey in 2022, allowed the export of 32.9 million metric tonnes of grain from Ukraine. However, in the negotiations to extend the deal, Moscow's demands for a prisoner exchange and other exports were not met, prompting Russia to terminate the deal.
The termination of the deal is likely to lead to further price increases in grain, adding pressure to countries like Egypt, Tunisia, and Turkey, where food access is already strained. The deal had provided some relief to a global food crisis caused by a sharp reduction in Russian and Ukrainian exports. Turkish President Recep Tayyip Erdoğan believes that Russian President Vladimir Putin wants the humanitarian bridge to continue, indicating potential negotiations in the future.
The end of the agreement has already caused grain prices to rise, leading to instability in grain markets and supply, and countries whose economies are still recovering from the coronavirus pandemic are likely to be further affected. The termination could also increase shipping costs and times for countries in the Middle East and Africa that relied on Ukrainian grain sourced through the deal. Additionally, the termination of the Black Sea grain deal has escalated tensions in the region. Russia launched a series of strikes on grain facilities in southern Ukraine, destroying 60,000 tons of grain in the Chornomorsk port alone, according to Ukrainian authorities.
Wheat futures soared as much as 9%. While Africa has not been the top destination of Ukrainian grain exports, the increase in wheat prices likely won’t go down well with African leaders. To placate its African partners, Russia is pushing a plan to supply its own grain to Africa, with the help of Turkey and Qatar, but neither have agreed to the idea. Both Ukraine and Russia have since declared that trade heading in each direction will be considered a target, and sailing areas in the north-eastern part of the Black Sea and the Kerch-Yenikal Strait are now considered off-limits. This will increase insurance costs and pose greater risks to commercial shipping.
EU-CELAC Summit Divided on Ukraine and Trade Deal
The recent EU-CELAC summit witnessed challenges, as discussions on the war in Ukraine created divisions among the participants. The summit, the first between the European Union and Latin American and Caribbean States (CELAC) since 2015, aimed to address a stalled trade deal and find common ground on Ukraine. However, CELAC countries held diverse positions on the conflict. Despite these challenges, President Ursula von der Leyen pledged significant investment in the Latin American economy under the Global Gateway program, aimed at countering China's Belt and Road initiative.
Another significant issue during the summit was the EU-Mercosur trade deal, which faced hurdles due to concerns about deforestation and agricultural competition. The deal, aimed at liberalizing trade between the EU and Argentina, Brazil, Paraguay, and Uruguay, had yet to be ratified by some European governments. Brazil's previous government posed obstacles with aggressive agricultural development in the Amazon. Although President Lula da Silva replaced Bolsonaro, disagreements have persisted over attaching binding rules against deforestation to the trade pact. The EU's Green Deal, which links trade deals to stricter environmental standards, further complicated the discussions, causing tension between Brazil, Argentina, and the EU.
The summit was seen as a recommitment to the EU-CELAC partnership, signifying the EU's renewed interest in strengthening ties with Latin America. However, there was criticism of the EU's past indifference to a group of countries culturally and historically close to Europe. China's growing trade relations with CELAC over the past two decades have surpassed the entire bloc's trade relations, highlighting the need for the EU to re-engage and secure its commercial position in the region. The agreement's ratification could be the EU's largest-ever trade deal in terms of volume of trade, offering an alternative to China's Belt and Road Initiative.
Despite the summit's ambiguous final communiqué regarding Ukraine, the success of the meeting will be measured by its capacity for institutionalization and follow-up. The EU needs to change its geopolitical attitude toward Latin American countries and view them as close allies and partners in the emerging international order. The CELAC nations' desire to be perceived as equal partners is evident in their rejection of some of the EU's positions on Ukraine and their insistence on addressing the legacies of European colonial rule during the summit.
US Reinforces Military Presence in the Persian Gulf
The Biden administration has taken measures to strengthen the US military presence in the Persian Gulf. These actions include the deployment of a Marine Expeditionary Unit and an accompanying Amphibious Ready Group, Air Force F-16 and F-35 fighter jets, and the guided-missile destroyer USS Thomas Hudner. The decision to deploy these assets is aimed at increasing the ability of the US to monitor and control traffic in the Strait of Hormuz and surrounding waters.
The deployment of the USS Thomas Hudner is significant for several strategic reasons. First, it reaffirms the US commitment to controlling favourable maritime routes, such as the Strait of Hormuz, which is a crucial oil transportation choke point with global economic implications. The presence of a capable naval vessel like the Thomas Hudner serves as a deterrent to threats and signals readiness to address any potential disruptions in the region.
Second, the deployment comes at a time when regional security dynamics are evolving due to the formation of alliances between Iran, the UAE, and other Gulf Arab countries. The presence of the USS Thomas Hudner underscores the continued US naval footprint in the region, highlighting its role in the regional balance of power. Moreover, the USS Thomas Hudner's advanced weaponry and surveillance systems complement the capabilities of the US 5th Fleet, enabling the US Navy's operational versatility. The deployment could facilitate engagement with regional naval forces, fostering mutual understanding and the sharing of operational best practices. Such interactions can lead to stronger ties and more trust between the US and its allies, encouraging a collective approach to maritime security.
The US has also called upon Iran to immediately cease its destabilizing actions, particularly after the Iranian Navy attempted to seize two merchant vessels in the Strait of Hormuz and the Gulf of Oman earlier this month. These actions have heightened concerns about the safety of critical shipping routes for certain countries, prompting the US to increase its military presence in the area to defend its interests and the interests of its allies.