In Geopolitics Today: Tuesday, June 20th
EU Extends Trade Liberalization with Ukraine, Japan to Harmonize Defence Equipment Standards with NATO, and other stories.
EU Extends Trade Liberalization with Ukraine
The European Union's decision to renew its temporary trade liberalization agreement with Ukraine has sparked a heated debate among member states. The move, aimed at maintaining economic ties with Ukraine, has faced resistance from countries in Central and Eastern Europe (CEE) due to concerns over the negative impact on their agricultural sectors. As a response, the European Commission extended a ban on Ukrainian grain imports to Poland, Hungary, Slovakia, Romania, and Bulgaria.
Mounting domestic pressure within CEE member states led Bulgaria, Hungary, Poland, Romania, and Slovakia to appeal to the European Commission for measures to address the challenges posed by Ukrainian grain imports. Following Poland's decision to ban Ukrainian grain imports, Slovakia, Bulgaria, and Hungary also imposed similar bans. These unilateral actions violated EU laws and procedures but underscored the escalating tension. The European Commission adopted temporary preventive measures to ban the circulation of Ukrainian wheat, maize, rapeseed, and sunflower seed in the concerned EU states, aiming to lift the unilateral bans. Nevertheless, the member states have persisted in their efforts to secure more substantial support and address their grievances.
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Erdogan Meets with Barzani Amidst Frozen Iraqi Oil Exports
Masrour Barzani, the Prime Minister of the Kurdistan Region of Iraq, visited Turkish President Recep Tayyip Erdogan in Ankara, becoming the first foreign leader to pay a formal visit to Erdogan following his reelection. The leaders discussed bilateral relations between the Kurdistan Region and Turkey, as well as the latest developments in Iraq and the region. However, the visit took place against the backdrop of a continued deadlock over the exportation of Iraqi and Kurdistan Regional Government (KRG) crude via pipeline.
Turkey halted Iraq's 450,000 barrels per day of oil exports through the northern pipeline in March due to a $1.5 billion damages order from the International Chamber of Commerce. The order was related to the KRG's independent oil sales between 2014 and 2018. The Iraqi government initiated the arbitration case, claiming the sales were illegal. The interruption in oil flow has cost the KRG over $2.2 billion in lost revenue, affecting state employment wages in the region. The relationship between Turkey and the KRG allows Ankara to demonstrate its opposition to the PKK rather than the Kurdish people as a whole.
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EU Struggles to Reach Consensus on Energy Market Reforms
The European Union has faced a setback in its efforts to reform the energy market, as member states failed to reach an agreement on proposed reforms during a recent meeting. The impasse was primarily caused by a last-minute proposal from rotating president Sweden, which sought to extend state support for coal power. This disagreement highlights the divergent attitudes among EU members regarding different energy sources and their significance in national energy mixes.
Some countries, like Poland, argued in favour of capacity markets and emphasized the importance of coal power for their energy supply. Others, including Germany, the Netherlands, and Austria, opposed fixed-price contracts not only for wind and solar energy generators but also for nuclear and other sources of power. France, with its substantial nuclear capacity, supported the idea of offering fixed-price contracts to various power generators. The differences in opinion extend beyond coal, with disagreements also arising over state support for wind, solar, and nuclear energy. These discrepancies pose challenges in the EU’s aim is avoiding price surges by stabilizing prices through long-term power purchase agreements and contracts.
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Japan to Harmonize Defence Equipment Standards with NATO
Japan is taking unilateral steps to align the standards for domestically produced defence equipment with those of the United States and Europe. The objective is to reduce maintenance costs and create more business opportunities for Japanese defence companies.
The use of proprietary standards in most of Japan's Self-Defense Forces' (SDF) equipment has posed challenges in exchanging parts with other military forces, resulting in higher costs and extended operation periods. To address these issues, the new guidelines call for the development and production of equipment that is compatible with NATO member countries, Australia, and other allies. The aim is to standardize equipment among militaries with Japan in the Indo-Pacific and other regions. By aligning defence equipment standards, Japan seeks to lower prices, increase production for domestic manufacturers, and improve the SDF's operational capabilities.
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Indonesian Villagers Settle Lawsuit Against ExxonMobil
A group of Indonesian villagers has reached a settlement with oil and gas giant ExxonMobil, putting an end to a 22-year-long lawsuit alleging abuses. The case originated from accusations made by 11 villagers from Aceh Province in Indonesia. They claimed to have experienced torture, sexual assault, rape, and beatings in and around ExxonMobil's Oil and Gas Plant in Lhoksukon during the late 1990s and early 2000s.
The plaintiffs alleged that the abuses were perpetrated by security guards hired by ExxonMobil from the Indonesian army to protect the plant after it had been targeted by separatists. The case had been pending in US courts since 2001, facing various legal challenges from ExxonMobil and delays. The settlement brings closure to all parties involved, according to ExxonMobil, which has consistently denied knowledge of any rights violations and argued that it could not be held legally responsible for the alleged abuses. During the civil conflict in Aceh, separatists fought for autonomy from Indonesia. The conflict lasted for decades before a peace agreement was reached in 2005.