Nightcap

  1. Is paternalism about status? Robin Hanson, Overcoming Bias
  2. Is academia corrupt or just prone to fads? Jacques Delacroix, NOL
  3. The trade deal fetish Chris Dillow, Stumbling & Mumbling
  4. The rise of kinetic diplomacy Monica Toft, War on the Rocks

Tariffs and Immigration

Pres. Trump announced yesterday (6/7/19), on returning from Europe, that the threatened tariffs against Mexican imports were suspended “indefinitely.” It looks like Mexico agrees to do several things to stop or slow immigration from Central America aiming at the United States.

Well, I am the kind of guy who, on learning that he has earned the Publishers’ Clearing House Giant Jackpot immediately worries about accountants, and about where to stash the dough. So, here it goes.

Mr Trump never did specify how much Mexico would have to do to keep the threat away durably. Two problems. First, if I were the Mexican government, I would worry about his moving the goalposts at any time.

Second, – and those who hate him won’t miss it – absent specific goals, Mr Trump put himself in a position to claim a (considerable) political victory no matter what happens next. To take an absurd example, if the number of migrants from Central America decreases, by 1% in July and August, he will be able to say, “ I told you so, my tariff pressures work.” As the French say, “ Why cut yourself the switches that will be used to whip you with?”

Part of the agreement reportedly, incredibly, includes a provision that those migrants who are waiting for their American formal court appearance will be allowed to so in Mexico, and be allowed to work there while they wait. This sounds amazingly unfair to Mexico. (I sure hope some significant money changed hands in the background on the account of his provision.) Mexican public opinion is not going to respond well to this feature if it understands it.

Another feature of the agreement is that Mexico will allow itself to be designated as a third and “safe” country. This has to do with ordinary international asylum and refugee agreements language which generally specify that an asylee or refugee may not chose his country of destination but must seek legal status in the first safe country he reaches. So, for Syrians, that would be Greece, or Turkey, rather than say, Germany, or Sweden. You know how well this provision worked out in Europe! Even more seriously, Mexico is not safe by any measure: The Mexican homicide rate is more than five times higher than that of the US – which is itself not low. (Wall Street Journal, 8-9 2019, p. A6). Imagine what it will be against an alien, vulnerable population.

As I write, Mexico is already deploying its National Guard on its southern border to impeach passage. This is a brand new force; it has no experience; expect accidents or worse. When this happens, it won’t play well with the Mexican public. The southern border of Mexico is short, only about 150 miles but still, the Mexican National Guard has only 6,000 members, total.

American conservative opinion remains badly confused about the facts of immigration in general. This, in spite of my own valiant efforts. ( See my “Legal Immigration Into the US” – in 37 short parts, both in Notes on Liberty and on my blog. Ask me for the blog’s name via jdelacroixliberty@gmail.com.) On Friday evening (6/7/19), in less than 30 minutes, I heard two different Fox News commentators refer to the migrants arriving in caravans from Central America and that are overwhelming our national processing capacity as “illegal immigrants.” That’s wrong. People who run after the Border Patrol to turn themselves in as a prelude to their claiming asylum are not illegal immigrants. There is nothing illegal about such acts, however you deplore them. And, in our constitutional tradition, nothing can be deemed retroactively as against the law. If we don’t like what the law currently produces, we must change the law. Period.

I used to hope for a wholesale, inclusive change in our immigration laws. I now think this is not going to happen in a bi-partisan manner because there are still many Dems who deny the obvious: We are currently facing an immigration crisis. If the plight of would-be immigrants held in overcrowded facilities or let loose in strange cities without resources, does not move their hearts, nothing will. I now think the administration should opportunistically seek piecemeal reform as may be facilitated by temporary situations. Big change will not happen until the GOP gains control of both houses of Congress, in addition to the Presidency. I believe that equivalent Dem control would not make immigration reform possible because there are too many liberal ideologues and too many Dem politicians who want open borders, for different reasons.

One more thing: Mainstream conservatives and some spoiled libertarians have been clamoring on the social media that tariffs are wrong, always wrong, wrong, no matter what. They point out rightly that tariffs are first and foremost taxes on the consumers of countries that impose them. I am myself completely persuaded of the merits of free trade as a means to maximize production. This does not prevent me from seeing that trade pressures, including the imposition of tariffs, can be used to extract advantages from other countries. In fact, I suspect such maneuvers may often be the best alternative to military pressure. In this case, and temporarily, I understand, Mr Trump’s tariff mano-a-mano with the tough leftist Mexican president, seems to have borne fruit. So, I would like the never-never–never tariffs people on my side to provide a rough estimate of how much this particular tariff action – against Mexico – may have cost American consumers, total.

Nightcap

  1. Japan’s robust challenge to China’s BRI Tobias Harris, War on the Rocks
  2. NATO needs to re-purpose itself…or die David Goldman, Law & Liberty
  3. Macron has learned how to fight Julia Amalia Heyer, Der Spiegel
  4. Ottawa calls on NATO for help in the Arctic Regina Leader-Post

Nightcap

  1. Modernity and the loss of human dignity Lee Trepanier, Law & Liberty
  2. Gorbachev Joshua Dill, Modern Age
  3. The old problem of old age Carol Tavris, Times Literary Supplement
  4. Silas Dinsmoor, Indian Agent yours truly at RealClearHistory

Relicts of the past? The current challenges for diplomacy

The last few weeks were quite a blast for me: I’ve interned at the German embassy in Rome. A new job in a new city. I thought to process the experiences I made here in one (or a few?) articles.

It’s been quite a rough month for Germany’s Foreign Affairs department. First, Daniel Kriener, the German ambassador in Venezuela, was forced to leave the country after welcoming Interim President Guiadó at the airport of Caracas. Interestingly, although plenty of other diplomats joined him, he was the only one to be declared a “persona non grata” for interfering in Venezuela’s internal affairs. A few weeks later, a deputy speaker of the German Bundestag (who is also a member of the liberal party) demands to expel the US ambassador Grenell for the same offence. Prior, the US diplomat has criticized Germany’s plan to break their promise of contributing more to NATO’s defence budget. Albeit I politically agree with both actions of the diplomats in these cases, they delineate the ongoing structural changes in the diplomacy sector. To illustrate this, I will first provide a theoretical framework to analyze ongoing diplomatic challenges before trying to examine the role of diplomacy in the future.

Principal-Agent Theory and decreasing relevance

I conceive diplomacy as mostly a principal-agent based problem. I believe that many problems in diplomatic negotiations can be traced back to the classic effects of asymmetric information. Since two principals, in this case two states, cannot negotiate with each other directly in most cases, these arbitrations are carried out between various agents. Those agents are of course not always the ambassadors. In a broad meaning, one can apply the principal-agent paradigm to diplomacy by every negotiating process initiated by the state.

Through the lens of the principal-agent paradigm, I perceive the main task of diplomacy to achieve a good negotiating position, for example through an informational advantage. However, due to globalization, state-to-state diplomacy has been drastically weakened. The negotiating game is now mostly carried out within other institutions with lower transactions costs. Two countries want a new trade deal? Just orientate on WTO Rules. Sue another country? Call the International Criminal Court. A few voices made reasonable arguments even for abolishing unnecessary embassies and only keeping the crucial ones. The Trump administration, for example, seems not eagerly committed to fill the around 18 vacant ambassador positions hastily.

Certainly, the globalization combined with the expansion of robust institutions leaves little space for traditional diplomacy as a driving force in interstate relations. This is not necessarily a bad development: As Paul W. Meerts points out, this can be a huge chance for weaker states since negotiating in multilateral rather than bilateral constellations tends to weaken the position of stronger states. Thus, playing out the trump cards in negotiations will be harder for the hegemon. We can currently witness this in the Brexit debate: Even though the strong states, Germany and France, have a vast repertoire of power resources to use as leverage against GB in the negotiations, the can hardly deploy them through EU’s multipolar negotiating structure.

Contrary, there are also recent examples of deploying bilateral traditional diplomacy measures successfully. China’s initiation of Italy’s accession to the Belt Road Initiative (see Tridivesh Singh Maini’s great article here for a quick overview) is a prime example for this. But no other case shows the weaknesses of bilateral diplomacy in a more drastic way: China was able to transpose their tremendous power resources into a deal which heavily favours the Chinese economy. The very ambiguous agreement laid down a strategy of “closer economic collaboration.” The oppositional criticism of the deal coming from the very left and the right is based on economic nationalism and thus misses the important point. Chinese government exerts immense influence on key enterprises like  Tencent, Alibaba, and Badoo: Digital fundamental research topics such as AI were distributed to the firms not through competition but through the state ( I highly recommend Amy Webb’s EconTalk if you want to dig deeper into this.). Once they build sufficient digital infrastructure here in Europe, network effects and technological advantage will come into effect and engender high entry barriers and exit costs. This makes it easy for China to enforce its regulation rather than obeying European ones. Although it is hard to finally determine if multilateral negotiations would have secured a politically better deal, I favour higher short-term transaction cost of multilateral negotiations over the long-term threat showed above.

Embassies as service provider

Of course, taking care of a good interstate negotiation position is not the only task of an embassy. A popular counterargument is that the principal-agent perspective neglects the vital daily business of embassies to help their citizens abroad. Speaking of large and prestigious Embassies though, I estimate that their role as service provider for abroad living citizens will further decline. Most of their maintenance work for citizens living abroad will be redundant due to technological process and further institutionalization. Renewing a Passport, issuing visas and transporting back coffins (yep) are a frequent task, but easy to “source out” to private actors in the future.

But what is the role for ambassadors and embassies then?

This question is where it gets interesting in my opinion. Deeply rooted in international conventions and international customary law, discreet and silent work has been prerequisite for an ambassador. Carefully collecting small pieces of information and building bridges to local actors were the key for a good negotiating position. But as elaborated above, international institutions do the job more efficiently. A new role of ambassadors as advocates for concrete policy measures would be diametrically opposed to international conventions. Based upon the “legality creates legitimacy” premises, a further politicization of diplomacy seems not at present having a majority and thus is unlikely to be buttressed by legal means.

However, if we fall back into a narrative of nationalism, bilateral diplomacy will regain relevance. Otherwise, it will continue to slowly lose importance and eventually wane. Hence, the main challenge nowadays is to look for the right niche for traditional diplomacy – and it seems that it has not been found yet.

Nightcap

  1. A global history of the Communist Party Tony Wood, the Nation
  2. The issue is the issue Scott Sumner, MoneyIllusion
  3. The case of Ilhan Omar Irfan Khawaja, Policy of Truth
  4. Early US diplomatic culture and the Native Americans Zachary Conn, Age of Revolutions 

The nature of the China-US-Vietnam economic triangle

While addressing a joint press conference in Hanoi, after his summit with North Korean Leader Kim Jong Un, US President Donald Trump spoke not just about the Summit, but also the current state of US-China relations. Trump criticised his predecessors for not doing enough to address the trade imbalance with China, while also making the point that he was all for China’s economic progress and growth, but not at the cost of the US.

If one were to look beyond the Summit in terms of the US-Vietnam economic relations, top US companies – Boeing and General Electric – sealed some important deals.

Given the focus of Trump’s visit (which was the Summit with Kim), perhaps these deals did not draw the attention they ought to have. The fact is that the US has begun to recognise Vietnam’s economic potential, as well as its geopolitical significance in Asia. This long note will give a backgrounder to Vietnam’s economic growth story in recent years, highlight some of it’s key strategic relationships, and then examine the nature of the China-US-Vietnam economic triangle.

Vietnam’s growth story: The key reasons Continue reading