US-Australian submarine deal causes rift with France

French officials on Thursday canceled a gala at the country’s Washington DC, embassy over the Biden administration’s decision to scrap a US$40 billion nuclear submarine deal that the European nation had signed with Australia, The New York Times reported.

The US, Australia and the United Kingdom on Wednesday announced a new trilateral security partnership in the Indo-Pacific, with the three planning to launch an 18-month review exploring how Australia could best acquire nuclear-powered submarines.

But France, which had worked on the submarines since 2016 in a US$40 billion deal to replace aging Australian subs was left behind in the deal.

Paris has angrily scrapped the “240th Anniversary of the Battle of the Capes” event meant to take place Friday evening at the French Embassy and aboard a French frigate in Baltimore, a French official told the Times. The event was meant to celebrate the French navy's aid to America's fight for independence in 1781.

Following the perceived snub, France’s top naval officer, who had traveled to Washington for the gala, will return to Paris early.

Asked about France’s displeasure later on Thursday, White House press secretary Jen Psaki said that the United States values its relationship and partnership with France “on a variety of issues facing the global community.”

She cited cooperation on economic and security issues and the coronavirus pandemic, and maintained that the Biden administration was engaged with French officials “in advance of the announcement.”

Psaki also indicated that President Biden would speak with French President Emmanuel Macron “soon” but said she had no calls with French officials to preview. 

Concerns brushed aside: Asked later what Biden thinks about the French foreign minister comparing him to former President Trump and the French cancelling the gala, Psaki answered that Biden “doesn’t think about it much” and that he is focused on maintaining US relationship with France, UK and Australia.

She also said a handful of times that it was Australia's decision to seek nuclear-powered submarine technology.

Other assurances: Secretary of State Antony Blinken also on Thursday sought to assure France, saying it was a vital partner, according to remarks made after he spoke with Australian foreign and defense ministers in Washington, Reuters reported.

France has made no secret of its displeasure over being left out of the triad. Earlier on Thursday, French Foreign Minister Jean-Yves Le Drian said the decision was “a stab in the back.”

“This brutal, unilateral and unpredictable decision reminds me a lot of what Trump used to do," Le Drian told franceinfo radio, according to Reuters. “I am angry and bitter. This isn't done between allies.”

The issue is whether the US government sought to hide its submarine deal from the French, who had their own now scrapped multi billion dollar deal with Australia, meant to be stretched out over 50 years.

French officials are accusing the Biden administration or shrouding information about its deal with the United Kingdom and Australia despite French diplomats' repeated attempts to find out more about any such plans.  

A French official told the Times that Paris sought to speak with Blinken and national security adviser Jake Sullivan but were unable to. 

 

Pakistan should review its relationship with the US

Lately I have read a few interesting but contradictory news about the US policy towards Pakistan. It is not only a mockery of diplomatic relationship, but also shows the complete disarray in the US administration. According to one of the news, the US Military Chief, General Joseph Dunford Said that no victory in Afghanistan was possible without Pakistan’s support. As against this, the US Defence Secretary, James Mattis said  that the recent decision to stop reimbursements to the Pakistani military was not a tougher new policy for Pakistan but did reflect ground realities. He went on to say that the President Trump’s administration was reviewing its policies for the entire South Asian region and not just Afghanistan.

This takes me back into the history as back as 2012 when the then US Secretary of Defence, Leon Panetta had said, “In order to really have a secure Afghanistan, ultimately Pakistan is going to have to take responsibility for taking on these terrorists and eliminating the safe havens”. He also said that the US presence in Afghanistan would continue  beyond 2014 if more of the safe havens were not dealt with more stridently than they’ve been to date.

Over the years I have been saying that the US troops will never be pulled out of Afghanistan. My point of view has been recently substantiated by General Dunford as he warned against placing the artificial timeline on operations in Afghanistan. He went to the extent of saying that additional forces for Afganistan security forces would make them more competitive.

This is not something new; over the years the US has been saying that restoring peace in Afghanistan depends on the commitment of Pakistan to fight the terrorist. Instead of stopping incursions from Afghanistan, Pakistan is often accused of providing safe sanctuaries to those who are fighting with the occupying forces.

May be the time has come to find explanations for some basic questions:

1)       Why Afghanistan was invaded by the USSR as well as the US?

2)       Why US wishes to keep its forces there?

3)       Why should Pakistan fight a proxy war of the US?

There is growing realization in Pakistan that if the USSR had attacked Afghanistan for a passage to warm waters, the US is not serious in bringing peace to Afghanistan but achieve other motives. There are suspicions that troops are being kept there for two reasons 1) to protect the opium growers and refining laboratories and 2) a built up troops for immediate attack in case US arrive at the conclusion that appropriate time has come to attack Iran.

It may not be wrong to say that soon after getting independence from the British Raj in 1947, Pakistan became subservient to the US foreign policy, dominated by ‘cold war’. Despite putting its existence at stake, it followed the US dictate of taking anti USSR and anti China stance. However, when the US wanted to make China friend, Pakistan secretly took Henry Kissinger, the then Secretary of Sate, to Beijing. Since the late seventies, Pakistan has been fighting US Proxy war in Afghanistan. Therefore the time has come for Pakistan to decide if it wishes to remain part of the US proxy war or protect its sovereignty.

Is recent oil rally sustainable?

I may sound a little outrageous saying that no one was surprised at the outcome of the latest OPEC meeting. No matter how many times OPEC and non-OPEC ministers meet to reach any accord on production guidelines, the oil glut will continue. Analysts try to create hopes that prove short-lived. Every one of these failures and subsequent price drops offers new opportunities for exploration and production companies around the globe.

I am also convinced that oil price after the bottoming in February. Backtracking of prices that seem to plague nearly every other analyst is the outcome of vested interests. Most of them talk about recent hike in oil price, now up more than 85 percent from those February lows. I believe that temporary outages from Nigeria and Venezuela as well as the Canadian fires and rollover of production in Iraq and rise of price to US$50/barrel is temporary.

In my last blog I have stated categorically that OPEC has become an impotent entity. However, some of my energy sector analysts still insist that, OPEC led by Saudi Arabia still has the potential to drive oil prices. I would once again reiterate that Saudi Arabia alone just can’t set price direction.

Many western analysts tend to term Iran, a game spoiler as it has declared categorically not to be part of any effort to contain its production unless lost market share is attained. These analysts fail to take into account that in total export of OPEC, even if Iran achieves 4.5 million barrel daily output, it will have no power to influence oil prices.

I may go to the extent of saying that oil producers are trying to make Iran an escape goat. Those who have the capacity to set direction of oil price are United States, Russia and certainly Saudi Arabia. The point to be noted that energy analysts often mention number of rigs being closed in the US. However, they also forget to mention that a decline to around 320 rigs from peak of over 1900 rigs has not made the corresponding reduction in US oil production. In fact its stockpiles hover above 500 million barrels. Oil output of Russia and Saudi Arabia also hovers at historic peaks. Therefore, an additional output of couple of million barrels by Iran just can’t make any difference.

I will conclude my reiteration that analysts of funds are trying to create storm in a cup to recover their losses. As many shale producers are inching towards default, they have to create a hype that oil prices are on the rise. Touching of US$147 price was unnatural and the realistic level over the next couple of years will be US$50.

The tail piece is that mega oil companies (seven sisters) have witnessed reduction in profit, but the world at large has benefited from low crude prices. The big economies have also been the biggest beneficiaries but analysts working for the big funds have been trying to mislead the public at large.