In Geopolitics Today: Monday, July 17th
Black Sea Grain Deal ‘Terminated’, The United Kingdom Joins the CPTPP, and other stories.
Black Sea Grain Deal ‘Terminated’
Russia has officially notified Turkey, Ukraine, and the UN that it opposes extending the Black Sea grain export deal, which aimed to allow the export of grain from war-torn Ukraine and ease the impact on global food prices. The deal, brokered by the UN and Turkey in 2022, allowed 32.9 million metric tonnes of food to be exported from Ukraine, with more than half going to developing countries. However, Moscow's demands over a prisoner exchange and exports have not been met, leading to the termination of the deal.
The termination of the Black Sea grain deal could lead to further price increases in grain, adding pressure to the already strained food access in countries like Egypt, Tunisia, and Turkey. The deal had provided some relief to the global food crisis caused by the Russian invasion of Ukraine. Turkish President Recep Tayyip Erdoğan believes that Russian President Vladimir Putin wants the humanitarian bridge to continue, indicating potential negotiations in the future. The rise in Chicago wheat futures in response to the news shows the market's sensitivity to the deal's termination.
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Tunisia and EU Finalize Agreement to Address Irregular Migration
Tunisia and the European Union (EU) have finalized a strategic and comprehensive partnership agreement aimed at addressing irregular migration and strengthening economic ties between the two entities. As a major route for migrants and refugees seeking to reach Europe, Tunisia's significance in combatting human trafficking and irregular migration has prompted renewed talks between EU leaders and Tunisian President Kais Saied. The agreement includes measures to disrupt the business model of human traffickers, enhance border control, and improve registration and return processes.
The partnership agreement between the EU and Tunisia holds implications for the broader issue of migration management and EU-North Africa relations. Europe's approach to reshaping African mobility and designating North African countries, including Tunisia, as disembarkation platforms for refugees and migrants underscores the EU's efforts to police migration. Italy's consideration of Tunisia as a safe third country and the increase in migration arrivals on the Italian coast highlight the complexities of addressing migration flows. Within Tunisia, growing anti-migrant sentiment and a lack of legal frameworks for migrant integration raise questions about the future for migrants within the country. The success of the partnership will depend on effective cooperation and a balanced approach to address the needs of host countries like Tunisia.
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Turkey's Defence and Aerospace Exports Increase by 37.5% in 2022
According to new industry figures, Turkey's defence and aerospace industry exports experienced a significant surge in 2022, with a 37.5% increase compared to the previous year. Total exports reached $4.4 billion, and the sector's revenue reached $12.2 billion, a 20% increase from 2021. The rise in demand was mainly attributed to land systems and drones, with research and development investments also showing a significant increase.
The increase in defence exports is crucial for Turkey's defence industry as it provides a source of revenue, boosts the domestic economy, and establishes Turkey as a global player in the defence sector. The country has found a niche in several areas in the export market, particularly in armoured vehicles and drones. Combat-proven technology, like the Bayraktar TB2 drone, has enhanced Turkey's profile and attracted interest from various foreign buyers. However, despite the positive growth, Turkey faces competition in the market for land systems, and the need for exports becomes even more critical to sustain a growing defence industry amid economic challenges. There is a global trend of increased military exports, making Turkey, along with other middle-rank defence equipment suppliers like Israel and South Korea, key players in fulfilling the rising demand for defence equipment.
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The United Kingdom Joins the CPTPP
The United Kingdom has formally signed a treaty to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), marking the biggest trade deal since Brexit. Business Minister Kemi Badenoch signed the accession protocol in New Zealand, emphasizing that the agreement opens doors for the UK in the fastest-growing region and provides a seat at the table in the bloc. The CPTPP, agreed upon in 2018, aims to reduce trade barriers among 11 countries, including Australia, Canada, Japan, and others, promoting elimination or significant reduction of tariffs and commitments to opening services and investment markets. The deal is a strategic move to deepen trade ties in the Pacific region after Brexit, and it also functions as a bulwark against China's influence.
The UK's decision to join the CPTPP represents a significant step in its post-Brexit trade strategy, as it seeks to tap into the faster-growing economies of the Asia-Pacific region. By becoming a part of this trading bloc, the UK is expected to boost exports, imports, and GDP in the long term. However, the benefits may not fully compensate for the economic damage caused by leaving the EU, and the UK may face challenges in securing free trade deals with major economies like China and the United States. Nevertheless, the move is aligned with the UK government's “Global Britain” strategy, which aims to strengthen economic ties with countries outside the EU and diversify trade opportunities to drive future growth. With half of global growth forecasted to come from the Indo-Pacific region, the UK's membership in the CPTPP is a strategic manoeuvre to position itself in a dynamic and promising market.
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Explosions Force Closure of Kerch Bridge Linking Crimea to Russia
The Kerch Bridge, connecting the Crimean Peninsula to Russia, has been closed after explosions. The bridge was constructed by Russia after its annexation of Crimea from Ukraine in 2014. The 12-mile bridge, encompassing a separate roadway and railway, holds significant symbolic value for the Kremlin. Russia has blamed Ukraine for the attack, claiming it was carried out by two Ukrainian sea drones, while Ukrainian officials have not publicly taken responsibility. This incident marks the second time the bridge has been targeted, impacting its supply route to Crimea, which is a crucial point for Russian forces.
The attack on the Kerch Bridge raises concerns about further escalation in tensions between Russia and Ukraine, with both countries involved in the conflict's blame game. The closure of the bridge, a vital supply route to Crimea, can disrupt the movement of fuel, food, and other goods to the annexed peninsula. Additionally, it may affect Russia's Black Sea Fleet stationed in Sevastopol. The incident underscores the complexities of the ongoing situation in the region, and the involvement of drones in the attack highlights the evolving nature of warfare. While the immediate impact is on transportation and supply, there is potential for wider implications on regional security and diplomatic relations.
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Azerbaijan Accuses Russia and Armenia of Failing Ceasefire Agreement
Azerbaijan has accused Russia and Armenia of failing to fulfil a ceasefire agreement in the Nagorno-Karabakh enclave. After a Russian-brokered ceasefire in 2020, Azerbaijan gained control of areas previously held by ethnic Armenians in and around Nagorno-Karabakh. Efforts to reach a peace deal, with Russia playing a leading role, have been ongoing, but recent blockades and closures of the sole land link between Karabakh and Armenia have heightened tensions. Russia offered to host new peace talks and organize a Moscow summit to sign a peace treaty, but Azerbaijan's response has expressed disappointment and raised concerns about the full implementation of agreements.
The situation in Nagorno-Karabakh holds significant implications for regional stability and international relations. Russia's involvement as a traditional power broker in the region has been complicated by other distractions, such as the war in Ukraine, potentially leading to a diminishing influence. Meanwhile, the European Union has been mediating talks between Azerbaijan and Armenia, urging both sides to refrain from violence and harsh rhetoric and encouraging direct dialogue between Azerbaijan and the Karabakh Armenians. The United States has also been involved in pushing for a peace deal. As tensions persist, finding a lasting resolution to the conflict is crucial for the well-being and security of the population in the region, and international efforts will play a pivotal role in shaping the future dynamics of the Nagorno-Karabakh issue.