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In response to Russian aggression in Ukraine, European nations have drastically reduced imports of crude oil, refined petroleum products, and natural gas from Russia. The 2021 levels of these energy imports were around 2.2 million barrels per day (mbd) of crude oil, 1.2 mbd of refined products, and 155 billion cubic meters (bcm) of natural gas on an annual basis.In addition to extreme difficulties in obtaining new sources of natural gas and to a lesser extent oil, the price increases throughout Europe since the onset of the war have been of historic proportions. In the days following the invasion, natural gas prices shot up by 62 percent, and UK energy prices were up by 150 percent. The full impact of the war, along with the related need to rein in the highest inflation numbers in over 40 years, has pushed Europe into a recession that threatens households and small businesses as well as European manufacturers’ ability to remain competitive. As a result, if the region cannot quickly assemble alternative supplies, the European commitment to assist in containing Russian aggression may weaken.  Swing Producers Alternative sources of crude oil and refined products are more readily available than natural gas since the latter requires costly new infrastructure to be put in place. Building new pipelines, liquified natural gas (LNG) facilities, and transportation infrastructure and ramping up production all require permitting and financing that is difficult to obtain , at least in the developed world. Saudi Arabia and other OPEC members were the traditional swing producers of crude oil and some refined products until the fracking revolution in the US. OPEC has decided to cut back production in the current situation, apparently at least in part to placate its Russian fellow traveler. Both the Saudis and the Emiratis, despite embarrassing entreaties from the Biden administration, have publicly sided with President Vladimir Putin on the question of supplies in the short run. Both Venezuela and Iran, whose oil sectors are now under US sanctions, could conceivably put new supplies on the market. The ongoing negotiations to renew the Joint Comprehensive Plan of Action (JCPOA)—which the European Union and some voices in the Biden administration are promoting—and behind-the-scenes US-Venezuela talks are both intended in part to address existing shortages and high prices. In addition to how agreements with these two rogue powers would damage long-standing US policy, relying on these authoritarian states would set back any hope of progress in reducing atmospheric pollution. Figure 1 shows some of the world’s largest emitters of methane, which is 80 times more potent as a greenhouse gas than carbon dioxide (CO2). Methane is responsible for about 25 percent of today’s global warming, according to the Environmental Defense Fund. Russia, Iran, and Venezuela rank among the world leaders in this race to the bottom, even though the much larger US, European, and Chinese economies produce more of this gas. Figure 2 shows that, in terms of methane intensity, the US emits about 35 tons of CO2 equivalent in methane per million dollars of GDP. The equivalent number is 404 for Russia, 733 for Iran, 137 for Saudi Arabia, and 1,864 for Venezuela. Figure 3 gives similar comparisons for CO2 intensity for leading countries. Again, Russia is much more profligate in its performance than the US or EU, releasing about 1,006 tons of CO2 per million dollars of GDP. Iran, Venezuela, and Saudi Arabia spew out 2,162, 1,756, and 651 tons of CO2 per million dollars of GDP, respectively.  China now produces about 750 tons of CO2 per million dollars of GDP, compared to 225 for the US and 174 for the EU. China is by far the world’s largest producer of CO2, with higher levels of greenhouse gas emissions than all members of the Organization for Economic Cooperation and Development combined (see figure 4). This measurement does not include emissions that will occur after the completion of 94 thousand megawatts (MW) of new coal-fired electric generation capacity that is now under construction or the 196 thousand MW of new capacity already permitted. China is not a major oil and gas producer but has built up 30 percent excess capacity in oil refining, using crude oil imports in large and growing quantities from Russia, Venezuela, and Iran at favorable prices. Figure 5 shows recent data, derived from Chinese customs statistics, on the level and price of crude oil imports from Russia.   As the US and Europe have closed refineries in recent years, due in part to policies that made the financing of new fossil fuel projects uneconomic, China could possibly rush to compensate for current shortages of diesel fuel and aviation fuel. Whether for crude oil or refined products, relying on US- or European-based products is clearly preferable from an environmental point of view.  There are of course many other producers of crude oil: Norway, the United Kingdom, Brazil, and Africa. The reserves of these countries are large, and for the most part, their production has not been subject to political instability, except in certain African countries. Nonetheless, there are limits to their future expansion in the near term. Much of the production outside Africa is offshore, where the fields are difficult, expensive, and time-consuming to ramp up. Many Sub-Saharan countries rely on Chinese development assistance, which has already resulted in distressed debt in 60 percent or more of these countries. Volumes from these areas are unlikely to meet immediate needs. Finally, as figure 6 illustrates, Central Asia and the Caucasus have been exporting around 1 mbd to the EU. Much of this comes to Europe through a pipeline from Tengiz in Kazakhstan to the Black Sea and onto Europe and other destinations. But the pipeline passes through southern Russia and is potentially subject to sanctions from the EU and the US. Russian firms hold about 36.5 percent of the project while US majors own about 22 percent. Russia could cut off the flows through this pipeline at any time. Huge amounts of oil reserves are available in this region but must be transported via Russia or Iran to reach western destinations. Neither of these allied powers is keen on competition from non-aligned sources of petroleum, although Russia has allowed some exports of oil from Azerbaijan. Larger supplies of oil from Kazakhstan across the Caspian Sea could be brought through pipeline via Turkey, but these too are complicated by the interests of the Iran-Russian entente. Sources of Natural Gas for Europe Since February 24, 2022, Europe has only had partial success in replacing the huge amounts of natural gas that either EU sanctions or Russian actions have cut off. Most of the replacements have been in the form of LNG. A relatively mild summer in East Asia and price arbitrage allowed cargoes contracted to this region to be resold to Europe, but this source of supply is beginning to decline as winter approaches. The EU also has negotiated new pipeline supplies from existing sources in North Africa and Norway. Prior to the Russian aggression, Norway regularly supplied Europe with about 100 bcm yearly. It has raised supplies by some 8 percent since late 2021, but this represents only a small proportion of the 155 bcm that Russia previously delivered. There is huge potential to increase pipeline imports from Central Asia and the Caucasus. But again, the difficulty of bypassing Russian and Iranian territory and these countries’ opposition to competition makes any near-term additions unlikely. The existing “Southern Corridor” pipeline from Baku is delivering about 10 bcm of Azerbaijani gas through Turkey and into southern Italy. Plans to increase production and pipeline throughput are in place but remain difficult due to political instability in the Caucasus and hesitations of both buyers of the gas and financial providers to undertake long-term, risky investments at this time. Figure 7 shows the largest LNG exporters as of 2021. The Gulf Cooperation Council members have ample supplies of gas, but only Qatar ships LNG in any material amount to Europe. Its exports via LNG to Europe were about 11 bcm in 2021. Qatar has plans to expand capacity significantly, but not until 2026 at the earliest. Its plans also depend on securing long-term contracts with buyers, and European buyers remain hesitant to agree to these. Australia was the biggest LNG exporter in 2021 but sent only 0.037 bcm directly to Europe that year. Australia has no current plans to expand its capacity for exports, and internal politics have turned against new exports in any case. Role of the United States The US will have the largest volume of LNG export capacity in the world when new plants that are now being built and are expected to become operational in the next two years start production. Figure 8 charts the progress of LNG export capacity in the US, which in 2022 has already become the largest exporter of this comparatively clean fossil fuel resource, with projected exports of 114 bcm. New capacity coming online between 2023 and 2025 represents more than 50 bcm of capacity. The newest facility started exporting in August and represents 17 bcm of additional capacity. The US has already exceeded President Joe Biden’s pledge in March to increase LNG exports to Europe by 15 bcm this year, and it is estimated that the total increase will reach 45 bcm in this calendar year.Total production of natural gas in the US has reached all-time records throughout 2022, facilitating increases in exports. The US is thus poised to steadily increase its exports to Europe and the rest of the world if public policy does not undermine further gains in production or infrastructure construction. It is worth noting that, as of 2020, only 11 percent of total natural gas production in the US originated on federally owned lands. Reliance on private property for gas production will limit the current administration’s ability to reduce production, although it does have other means to prevent the building of new infrastructure and discourage financing of new projects. In short, the US does have the means to be a swing producer and exporter of natural gas to address the current energy crisis. US production of crude oil and refined petroleum products remains below peak levels set prior to the pandemic. The pro-production policies of the Trump administration, as well as the de facto tolerance of the Obama years, facilitated production and export capacity growth. In contrast, the Biden administration has adopted a whole-of-government effort to discourage and prevent crude oil exploration and development, as well as the construction of infrastructure required to bring supplies to refineries, chemical plants, and export facilities. Over 25 percent of crude production in the US originates on federally owned lands. New federal leases for exploration and development on federal lands are at the lowest levels since just after World War II, partially explaining the loss of production in recent years. Crude oil production in 2022 is averaging about 1 mbd below the peak reached in late 2019. Total exports of crude oil and petroleum products declined in 2021 but grew to early 2020 levels during the summer months as prices rose and the administration depleted the national petroleum reserve to levels not seen since the 1980s. However, exports of crude and refined products to leading destinations in Europe are trending upward. Figure 9 shows that EU imports of oil and gas from the US by volume have increased substantially in the last five years. The pace of increases has accelerated since February 24. Summary Europe is in a desperate economic slump. High prices for energy are sapping the ability of homeowners to heat their homes, small businesses to remain solvent, and energy intensive industries to keep operating. High prices are also affecting other countries around the world, including close allies in the Pacific Rim. The US has the raw resources of oil and gas to be a bridge producer to meet much of the current shortage. The Biden administration ought to make a more substantial contribution to alleviating these problems. Instead, it asserts that the US must concentrate its ambitions and funding on developing renewable energy resources, even though these new sources will require decades to replace oil and gas power in the modern economy. Biden’s approach also ignores the fact that renewables production relies on China—which accounts for 80 percent of global supplies of solar panels, 58 percent of wind turbines, 60 percent of the rare earths needed for solar energy and ubiquitous semiconductors to power the modern economy, and nearly 80 percent of the lithium-ion batteries needed for electric vehicles and power storage in a renewables-based electric grid. China is also the largest emitter of CO2 and methane in the world and continues to build new fossil fuel capacity. The US needs a realistic course correction to address the economic and political crisis caused by Russia’s aggression against Ukraine, and to minimize the environmental damage caused by the need to replace Russian oil and gas from other sources.

IntroductionDuring a break in the COVID-19 pandemic, the foreign ministers of China, Russia, Japan and the United States boosted Mongolia into international headlines. Returning from the Shanghai Cooperation Organization meeting in Moscow, for instance, Chinese Foreign Minister Wang Yi stopped in Ulaanbaatar (15–16 September) with a message: Do not take sides with China’s competitors if Mongolia wants to rely on the Chinese economic powerhouse. Within the week, Mongolian Foreign Minister Enkhtaivan Nyamtseren was invited by Russian Foreign Minister Sergey Lavrov to meet on short notice. Even though the ministers jointly announced the finalization of a treaty on the permanent comprehensive strategic partnership, the Kremlin showed its will to lead trilateral economic projects (such as a gas pipeline) with China and impose the Eurasian Economic Union agenda on Mongolia. Then on 29 September, the United States Secretary of State Michael Pompeo announced the inclusion of Mongolia in his trip to visit allies in East Asia—Japan and the Republic of Korea.2 Although the trip was ultimately cancelled due to an outbreak of COVID-19 cases among White House officials, Pompeo talked by telephone with President Battulga Khaltmaa and highlighted their shared commitment to democracy and regional security. A few days later, Japanese Foreign Minister Toshimitsu Motegi, considered a key insider of then Prime Minister Shinzo Abe’s geopolitics, flew to Ulaanbaatar. In addition to updating the strategic partnership plan until 2022, the Japanese Foreign Minister’s interests centred on Mongolia’s inclusion in the Free and Open Indo-Pacific strategy. Mongolia has declared strategic partnerships with each of these great powers and is thus entering a complicated geopolitical setting. It is not entirely new. A similar scene occurred in the summer of 1991. Chinese President Yang Shangkun, Japanese Prime Minister Toshiki Kaifu and the United States Secretary of State James Baker each visited Mongolia within a month’s time. China wanted agreement to non-interference in its internal affairs, whereas Japan and the United States imposed non-reversal conditionality on Mongolia’s democratic transition to receive much-needed economic assistance. The primary difference then was the absence of Russia. This policy paper discusses the renewed geopolitical rivalries of the great powers, explains Mongolia’s challenges to manoeuvring in this tough geopolitical terrain and then proposes pursuit of a pragmatic, neutral foreign policy option similar to Finland’s strategic concessions to its neighbouring great power, the Soviet Union.Renewed geopolitical rivalriesThe great power competition also is nothing new. Even after the Cold War, China, Japan, Russia and the United States were watching each other suspiciously while avoiding unnecessary tension. In the 1990s, policymakers and academics in Japan, Russia, and the United States debated over the China threat and the consequences of China’s economic rise. Russian leaders, such as Foreign Minister and later Prime Minister Yevgeny Primakov and President Vladimir Putin, sought ways to balance with the United States and to integrate into the European economic and security framework. It was not a surprise when Putin hinted at Russia’s inclusion in the North Atlantic Treaty Organization (NATO) because the country was already supporting American military operations in Afghanistan. Similarly, in 2000, the United States Congress mandated its Defense Department to report annually on China’s security strategy and military development. China and Japan had similar outlooks. China was wary of the United States, whereas Japan remained vigilant of both China and Russia. In the mid-2000s, all these countries reassessed their long-term geopolitical and economic objectives as the geopolitical setting began to shift. With similar geopolitical concerns about American strategies, China and Russia advanced their partnership by conducting an annual joint military exercise (Peace Mission, beginning in 2005) and even demanded the withdrawal of American forces from Central Asia. When the United States proposed another round of NATO’s expansion into Ukraine and Georgia and new missile defence systems in the Czech Republic and Poland, Russia quickly reacted. This resulted in a brief military conflict with Georgia in 2008. Following the breakdown with Europe, Russia began pursuing policies to reassert its influence in former Soviet republics through the Eurasian Economic Union as well as the Collective Security Treaty Organization. China and Russia jointly strengthened the Shanghai Cooperation Organization and created a new bloc with Brazil, Russia, India and South Africa (BRICS) for collaborating on major geopolitical issues. From 2012, the great power rivalries intensified. Chinese President Xi Jinping renounced the “hide and bide” principle of Deng Xiaoping by pledging that China would take an active role in global politics. A year later, China unveiled a new grand strategy, known as the Belt and Road Initiative (BRI), to invest in infrastructure that increases global connectivity. Chinese leaders explained that the BRI is a “win–win” developmental initiative. The ambitions and ambiguity of the BRI, however, immediately raised geopolitical concern from all the great powers, as if China was about to reshape the global and regional order for its geopolitical advantage. For example, building on its earlier strategy (Pivot to East Asia), the United States launched a series of measures to contain China. It endorsed Japanese Prime Minister Shinzo Abe’s quadrilateral security dialogue (for the alliance of Japan, India, Australia and the United States) and strengthened ties with India, Myanmar, Singapore and Vietnam, all of whom are cautious of China’s economic and military powers. Meanwhile, in 2014, Russia annexed Crimea and intervened in Eastern Ukraine, based on its geopolitical concerns for Ukraine’s potential membership in NATO. Then, in 2015, Russia deployed its military to Syria to check the United States’ interventions while declaring its strategic partnership with China. In response, the United States cited China and Russia as the biggest threats in its National Defense Strategy (2018), which is the country’s long-term strategic defense document.6 The American Defense Department released its Indo–Pacific Strategy Report, and the State Department defined its Free and Open Indo–Pacific vision. Both documents prioritized containing China’s growing economic and military power in the Indo–Pacific region. In addition to sanctions against China and Russia, the United States pressured its allies to ban Chinese telecommunication companies from participating in the development of the 5G network. In contrast, Russia welcomed the Chinese telecommunication giant—Huawei—to develop its 5G network and pledged to develop Chinese missile defence capabilities. This new round of great power rivalries is changing the geopolitical setting for a small State like Mongolia.Challenges for MongoliaThe primary challenge for Mongolia is to maintain its sovereignty. For centuries, geography has dictated the country’s fate as a classic buffer State between two expansionist and rival great powers—China and Russia. While serving the Kremlin’s geopolitical interests from 1921 to 1986, Mongolia gained United Nations membership and its independence from China. During this period, Mongolia remained under close control of the Kremlin and became a militarized buffer State whenever Russian geopolitical interests were threatened. The Kremlin deployed its military three times: in 1921, 1936 and 1960. Following the Sino– Soviet rapprochement and the collapse of the Soviet Union, Mongolia normalized its relations with China and developed new ties with the United States and its allies. In the 1990s, Mongolia did not experience any geopolitical pressure from the great powers and firmly declared a series of neutrality policies. At the time, Mongolia’s two neighbours were preoccupied with maintaining their domestic matters and also coping with security concerns elsewhere. The United States and Japan focused on Mongolia’s political and economic transition while explicitly avoiding developing security ties. In that period, Mongolia adopted a series of neutrality policies: the constitutional prohibition on foreign military transition and basing, a non-aligned foreign policy stance, declaration of a nuclear weapon-free zone and bilateral treaties with all the great powers, with a “against no third party” principle. In this favourable geopolitical context, Mongolia increased Its engagement with international and regional organizations and sought ways to attract the interests of so-called “third neighbours”. The most important endeavour was its military deployment in support of American operations in Iraq, when China and Russia were strongly opposing the United States war in Iraq. Then, Mongolia deployed its military to Kosovo and Afghanistan. This military contribution resulted in close political and defence ties with the United States and NATO members as of 2003. The other endeavour was the conclusion of an investment agreement with Anglo–Australian mining giant Rio Tinto and Canadian Ivanhoe Mines to develop the Oyu Tolgoi copper and gold deposit. These endeavours triggered reactions from China and Russia. China’s security experts cautioned Mongolia’s inclusion in the American “strategic encirclement” of China, whereas Russia was wary of losing its geopolitical privileges in Mongolia to NATO members. China and Russia jointly pressured Mongolia to join the Shanghai Cooperation Organization. As a result, Mongolia became an observer in 2005. Since then, Russia has taken assertive action to secure its geopolitical and geo-economic interests in critical areas such as railway construction, the energy sector and uranium mining. To be clear, neither China nor Russia attempted in this period to influence Mongolia’s domestic politics, especially its elections. Now all these great powers want to include Mongolia in their competing geopolitical visions. China declared a comprehensive strategic partnership in 2014 and included Mongolia as one of six economic corridors of the BRI. Beijing leaders hope that Mongolia will join the Shanghai Cooperation Organization to fulfil its regionalization strategy of Central Asia. They also want Mongolia to commit to non-intervention in its internal affairs, especially in matters related to Tibet, Xinjiang, Hong Kong, Taiwan and Inner Mongolia, in return for economic assistance and market access. In 2019, Russia quickly upgraded its strategic partnership with conclusion of a permanent treaty, which imposed Mongolia’s adherence to the Russian geopolitical agenda. Specifically, the treaty prioritizes bilateral consultations, renews defence technical cooperation and requires Mongolia’s adherence to the 1,520 mm (Russian standard railway gauge) for the railway extension. As hinted by some Russian officials, the Kremlin even dreams of Mongolia’s inclusion in the Eurasian Economic Union and the Collective Security Treaty Organization, considering how Mongolia is traditionally wary of Chinese expansion. The United States and Japan have included Mongolia in their Free and Open Indo–Pacific strategy because Mongolia shares similar values (democracy, human rights) and security concerns regarding China and Russia. Interestingly, the American Pentagon’s Indo–Pacific Strategy (June 2019) identified Mongolia as a “reliable, capable and natural partner of the United States,” while designating Mongolia’s two neighbours as the biggest security threats: China as a revisionist power and Russia a revitalized Malign Actor. The American State Department’s Free and Open Indo–Pacific visionary document highlights Mongolia as one of the beneficiaries and supporters of its strategy. Japan also included Mongolia in its Partnership for Quality Infrastructure (PQI), a developmental assistance alternative to China’s BRI, and designated a new international airport and railway flyover (Sun Bridge) in Ulaanbaatar as PQI projects. Like many small States, Mongolia’s challenge is determining how to manoeuvre in this round of great power competitions without compromising its sovereignty and undermining its institutions of democratic governance.Options for MongoliaIdeally, the best option for Mongolia is to maintain friendly ties with all the great powers and to benefit economically as it sits at the merging point of different geopolitical strategies. In fact, this has been the case to a certain degree. Mongolia’s nuclear weapon-free zone status has been endorsed by all permanent members of the United Nations Security Council. The country’s peacekeeping efforts, whether military deployments or hosting training events, have been supported by all the involved great powers. Both China and Japan have aided in road development, such as with the Chinese-built Moon Bridge (BRI funding) and the Japanese Sun Bridge (PQI project) in the capital city. At the moment, China and the United States are assisting to improve the capital city’s water supply and infrastructure. Hopefully, China and Russia will construct a natural gas pipeline through Mongolia, which would increase trilateral economic cooperation. Current trends, however, force a consideration of the likelihood of consequences in the worst- and best-case scenarios. The most likely worst-case scenario has China alone or together with Russia entering into conflict with the United States. This circumstance would force Mongolia to limit its relations with the United States and even to stand with its neighbours against the United States and its allies. The other worst-case scenario, which is less likely at the moment, is the emergence of Sino–Russian geopolitical tension. This would create the direst situation, in which Mongolia could easily fall into the control of either neighbour or become a battleground. The best-case scenarios are also possible and would create a favourable overarching setting for Mongolia to manoeuvre and maintain its sovereignty. The best-case scenarios have all the great powers seeking strategic stability because they are intertwined with domestic challenges or geopolitically distracted elsewhere. In all these scenarios, the primary objective for Mongolian leaders would remain the same—to maintain sovereignty and independence. However, Mongolia’s options to maintain its sovereignty are limited. First, it is a regionless country. Therefore, it cannot rely on any regional security alliance, such as NATO or the Collective Security Treaty Organization. The only close alliance is the Shanghai Cooperation Organization, but Mongolia is wary of jeopardizing its sovereignty if it joins. Second, it is impossible for leaders in Ulaanbaatar to gain security guarantees from one or several of the great powers, with the possible exception of Russia. Leaders in Washington and Tokyo are not likely to make any such deal as with the Philippines or Taiwan. Mongolia is too cautious of losing its sovereignty to Russia and provoking China by renewing the mutual defence clause with Russia. Lastly, Mongolia is too economically poor to build its defence capabilities in a way that is similar to Singapore, Switzerland and the Democratic People’s Republic of Korea. Therefore, the most suitable option would be to make strategic concessions to the great powers following the example of the Finnish experience during the Cold War. This option requires that Mongolia avoid joining in the security alliance of any great power, just as Finland avoided joining NATO and the Warsaw Pact. In this sense, Mongolia should not attempt to upgrade its current level of confidence-building security defence relations with members of NATO, the Collective Security Treaty Organization and, potentially, the Shanghai Cooperation Organization (if it turns into a regional security organization). In regard to the Free and Open Indo– Pacific, Mongolia should limit its security cooperation to specific areas: peacekeeping, humanitarian assistance, disaster relief and defence diplomacy. This type of neutrality policy would also require Mongolia to abstain from taking any stance on controversial matters related to its neighbours and their geopolitical competitors. Such avoidance would help Mongolia to promote itself as a neutral place for all great powers to negotiate, such as the Finnish model of the Helsinki process. At the same time, Mongolia should strengthen its democratic governance: the parliamentary system, civil society and the rule of law. Democratic governance would distinguish Mongolia’s identity within the authoritarian great powers and ensure self-rule free from those great powers. One of the downsides of this type of neutral, pragmatic strategy, however, is its limit on participation in foreign policy decision-making processes. This requires that only professional diplomats handle foreign policy matters while encouraging informed public discourse. In return for this neutral policy, Mongolia would expect the great powers to respect its sovereignty and restrain any actions to influence its policies.ConclusionWhen the foreign ministers of the great powers gave some attention to Mongolia in the fall of 2020, Mongolia reacted with proactive diplomacy amid the pandemic. On 29 February, Mongolian President Battulga became the first foreign dignitary to visit China during the pandemic and extended a gift of 30,000 sheep as a goodwill gesture. On 21 June, the Mongolian airline, MIAT, conducted a long-awaited flight to North America and delivered more than US$1 million worth of assistance and 60,000 personal protective equipment to the United States. On June 24th, despite Russia having the second highest number of coronavirus cases, the Mongolian military marched in the Victory Day Parade, marking the 75th anniversary of the Soviet victory in the Second World War, in which Mongolia stood as a close ally. As with the proactive diplomacy, the renewed geopolitical tensions among the great powers will require unity, patience and deft diplomacy from Mongolian leaders to steer through the rough sea.

Was the balloon that suddenly appeared over the US last week undertaking surveillance? Or was it engaging in research, as China has claimed? While the answers to these questions may not be immediately known, one thing is clear: the incursion of the Chinese balloon tested the bounds of international law. This incident has also added another layer of complexity to the already strained relations between the US and China. US Secretary of State Antony Blinken’s planned visit to Beijing has been postponed. And China has reacted to the shooting down of the balloon with diplomatic fury. Both sides have long disagreed over the presence of US warships in the South China Sea and Taiwan Strait, which China claims as its own waters and the US considers international waters. Will the air be the next realm to be contested by the two superpowers? A long military historyHot air balloons have a somewhat benign public image. But they also have a long military history that extends back to the Napoleonic era in Europe during the late 18th century and early 19th century when they were used for surveillance and bombing missions. The early laws of war even included some specific measures designed to address the military use of balloons during armed conflict. The modern military significance of balloons now appears to be understated, especially in an era of uncrewed aerial vehicles or drones, which have proven effective during the current Ukraine war. However, while balloons may no longer be valued for their war-fighting ability, they retain a unique capacity to undertake surveillance because they fly at higher altitudes than aircraft, can remain stationary over sensitive sites, are harder to detect on radar, and can be camouflaged as civilian weather craft. Who has sovereignty over the air?The international law is clear with respect to the use of these balloons over other countries’ airspace. Every country has complete sovereignty and control over its waters extending 12 nautical miles (about 22 kilometres) from its land territory. Every country likewise has “complete and exclusive sovereignty over the airspace above its territory” under international conventions. This means each country controls all access to its airspace, which includes both commercial and government aircraft. But the upper limit of sovereign airspace is unsettled in international law. In practice, it generally extends to the maximum height at which commercial and military aircraft operate, which is around 45,000 feet (about 13.7km). The supersonic Concorde jet, however, operated at 60,000 feet (over 18km). The Chinese balloon was also reported to be operating at a distance of 60,000 feet. International law does not extend to the distance at which satellites operate, which is traditionally seen as falling within the realm of space law. There are international legal frameworks in place that allow for permission to be sought to enter a country’s airspace, such as the 1944 Chicago Convention on International Civil Aviation. The International Civil  Aviation Organization has set an additional layer of rules on airspace access, including for hot air balloons, but it does not regulate military activities. The US also has its own “air defence identification zone”, a legacy of the Cold War. It requires all aircraft entering US airspace to identify themselves. Canada has its own complementary zone. During the height of Cold War tensions, the US would routinely scramble fighter jets in response to unauthorised Soviet incursions into US airspace, especially in the Arctic. Many other countries and regions have similar air defence identification zones, including China, Japan and Taiwan. Taiwan, for instance, routinely scrambles fighter jets in response to unauthorised incursions of its airspace by Chinese aircraft.Testing the waters – and airSo, given these clear international rules, the US was on very firm legal footing in its response to the Chinese balloon. Overflight could only have been undertaken with US permission, which was clearly not sought. China initially attempted to suggest the balloon malfunctioned and drifted into US airspace, claiming force majeure. If the balloon was autonomous, it would have been entirely dependent on wind patterns. However, a report in Scientific American said the balloon appeared to have a high level of manoeuvrability, especially when it appeared to linger over sensitive US defence facilities in Montana. Washington displayed a lot of patience in dealing with the incursion. President Joe Biden authorised military jets to shoot down the balloon, but it took some days before that could be done safely without endangering lives on the ground. The balloon incident has clearly tested the Biden administration and the US response to China’s growing military assertiveness. Similar events occur on a regular basis in the South China Sea, where the US Navy conducts freedom of navigation operations through Chinese claimed waters. The US presence is vigorously challenged by the Chinese Navy. China has also responded aggressively to the presence of US reconnaissance planes over the South China Sea, raising the risks of an accident that could spark a wider conflict. What is remarkable about the balloon incident is China has asserted its physical presence well within America’s sovereign borders. How both sides respond in the aftermath will determine whether China-US tensions worsen further and if we can expect potential future provocations between the two sides in the air, as well as at sea.

The Biden Administration’s national security strategy, as released to the public, has some praiseworthy elements, stressing, for example, the “need for American leadership.” But it does not take its own words seriously enough. Its discussion of “leadership” is confusing, and the administration is not providing for the kind of military strength that would make US leadership effective. A Preliminary Word on Precision A strategy should not use vague and ambiguous language (let alone mind-numbing repetition). Having said that no nation is better positioned than the United States to compete in shaping the world, as long as we work with others who share our vision, the strategy declares (the italics are mine), “This means that the foundational principles of self-determination, territorial integrity, and political independence must be respected, international institutions must be strengthened, countries must be free to determine their own foreign policy choices, information must be allowed to flow freely, universal human rights must be upheld, and the global economy must operate on a level playing field and provide opportunity for all.” The fuzziness—incoherence—of using the word “must” should be obvious. For example: “The United States must...increase international cooperation on shared challenges even in an age of greater inter-state competition.” But “some in Beijing” insist that a prerequisite for cooperation is a set of “concessions on unrelated issues” that the US government has said are unacceptable. So the strategy effectively declares that cooperation with China is a “must” even when China says we cannot have it. In other words, the word “must” doesn’t really mean “must.” In this case, it expresses no more than the administration’s impotent preference. This strategy is 48 pages long. It uses the word “must” 39 times. To drive home that President Biden is not his predecessor, the strategy constantly emphasizes allies and partners. It uses the word “allies” 38 times and “partner” or “partnership” an astounding 167 times. Meanwhile, it does not use “enemy” even once. Two of the three times it uses the word “adversary” it is referring to “potential” rather than actual adversaries. The third time, it says only that America’s network of allies and partners is “the envy of our adversaries.” Enemies and Hostile Ideology The strategy identifies, correctly in my view, America’s “most pressing challenges” as China and Russia. China is described as the only “competitor” with both the intent and power to “reshape the international order.” Russia is called “an immediate threat to the free and open international system,” while the Ukraine war is rightly characterized as “brutal and unprovoked.” The discussion of enemies, however, is euphemistic and misleading and does not give explicit guidance on confronting them. Alluding to China and Russia, it talks of “competing with major autocratic powers” as if everyone in the “competition” is playing a gentlemanly game with agreed rules. That creates a false picture of the problem. The strategy states that China “retains common interests” with the United States “because of various interdependencies on climate, economics and public health.” In discussing “shared challenges”—such as climate change or COVID-19—it implies that Chinese leaders see these challenges the same way the administration does, but the well-known recent history of Chinese secretiveness about COVID-19, for example, refutes that assumption. There are references to pragmatic problem-solving “based on shared interests” with countries like China and Iran. The strategy does not explain, however, what US officials should do if such cooperation is inconsistent with other US interests. Should they work with China at the expense of opposition to genocide against the Uighurs? Should they work with Iran at the expense of that country’s pro-democracy resistance movement? Iran and North Korea are called “autocratic powers,” but being autocratic is not the key to their hostility and danger. Rather, it is that they are ideologically hostile to the United States and the West. There are two passing references to “violent extremism,” though no discussion whatever about anti-Western ideologies. US officials are given no direction to take action to counter such ideologies. The strategy is entirely silent on jihadism and extremist Islam. Leadership and Followership—Ties to Allies and Partners While it properly calls attention to the value of America’s “unmatched network of alliances and partnerships,” the strategy does not deal adequately with questions of when the United States should lead rather than simply join its allies. It does not acknowledge that there may be cases when the United States is required to go it alone. President Biden is quoted as telling the United Nations, “[W]e will lead...But we will not go it alone. We will lead together with our Allies and partners.” But what if American and allied officials disagree? Sometimes the only way to lead is to show that one is willing to go it alone. Failing to distinguish between leadership and followership is a major flaw. While asserting that America aspires to the former, the strategy declares that “we will work in lockstep with our allies.” Such lockstep would ensure that the United States is constrained by the lower-common- denominator policy of our allies. If President Biden really believes what he is saying here, he is telling his team to refrain from initiatives that any or all of our allies might reject. Instead of soliciting ideas from administration officials that would serve the US interest even if they require campaigns to try (perhaps unsuccessfully) to persuade our allies to acquiesce, his strategy discourages initiative and efforts to persuade. That is the opposite of leadership. The strategy says that “our alliances and partnerships around the world are our most important strategic asset.” But that is not correct; our military power is. This is a dangerous mistake. Our alliances can be highly valuable, but to suggest that they are more important than our military capabilities is wrong and irresponsible. The document says, “Our strategy is rooted in our national interests.” This assertion is at odds with the insistence that America will not act abroad except in concert with our allies and partners. The strategy claims that “Most nations around the world define their interests in ways that are compatible with ours.” That, however, is either banal or untrue. Our European allies have important differences with us regarding China, Iran, Israel, trade and other issues. Before the Ukraine war, they had major differences with us regarding Russia. The strategy says, “As we modernize our military and work to strengthen our democracy at home, we will call on our allies to do the same.” What if they do not heed the call, however? For decades, US officials complained vainly that NATO allies underinvested in defense, confident that the United States would cover any shortfalls—what economists call a free-riding problem. Along similar lines, the strategy declares that America’s alliances “must be deepened and modernized.” But how should US officials deal with allies who act adversely to US interests, as Turkey has so often done under Erdogan—in buying Russian air-defense systems, for example—and as the Germans did, before the Ukraine war, in increasing their dependence on Russian natural gas? Interestingly, on strengthening the US military, the strategy does not say that US allies have to agree or cooperate. It says “America will not hesitate to use force when necessary to defend our national interests.” This part of the document reads as if it had different authors from the rest. Nuclear Deterrence The strategy makes an important point about nuclear deterrence as “a top priority” and highlights that America faces an unprecedented challenge in now having to deter two major nuclear powers. It makes a commitment to “modernizing the nuclear Triad, nuclear command, control, and communications, and our nuclear weapons infrastructure, as well as strengthening our extended deterrence commitments to our Allies.” But the administration has not allocated resources to fulfill its words on deterrence and Triad modernization. Promoting Democracy and Human Rights “Autocrats are working overtime to undermine democracy and export a model of governance marked by repression at home and coercion abroad,” the strategy accurately notes, adding that, around the world, America will work to strengthen democracy and promote human rights. It would be helpful if it also explained why other country’s respect for democracy tends to serve the US national interest. This is not obvious and many Americans, including members of Congress, show no understanding of how democracy promotion abroad can help the United States bolster security, freedom and prosperity at home. The strategy does not explain how its championing of democracy and human-rights promotion can be squared with its emphasis on respecting the culture and sovereignty of other countries and not interfering in their internal affairs. Nor does it explain how officials should make tradeoffs between support for the rights of foreigners and practical interests in dealing with non-democratic countries. Officials need guidance on such matters. The public also would benefit from explanations. The administration just announced that Saudi Arabia’s crown prince, who is also prime minister, has immunity from civil liability for the murder of Jamal Khashoggi, a Saudi journalist who worked for the Washington Post. The strategy does not shed light on how the relevant considerations were weighed. It says the United States will make use of partnerships with non-democratic countries that support our interests, “while we continue to press all partners to respect and advance democracy and human rights.” That’s fine as far as it goes, but it does not acknowledge, for example, that we sometimes have to subordinate human rights concerns for national security purposes, as when President Franklin Roosevelt allied with Stalin against Hitler. A strategy document should be an aid in resolving complexities, not a simplistic list of all the noble things we desire or wish to be associated with. Refugees Regarding refugees, it is sensible that the strategy reaffirms the US interest in working with other countries “to achieve sustainable, long-term solutions to what is the most severe refugee crisis since World War Two—including through resettlement.” But there is no mention of why US officials should press Persian Gulf states to accept more refugees from the Middle East, given that those states share language, culture and religion with those refugees.Willing Ends Without Providing Means The strategy does a lot of willing the end but not specifying or providing the means. As noted, the administration is not funding defense as it should to accomplish its stated goals. On Iran, the strategy says, “[W]e have worked to enhance deterrence,” but US officials have been trying to revive the nuclear deal that would give Iran huge financial resources in return for limited and unreliable promises. The strategy says, “We will support the European aspirations of Georgia and Moldova...We will assist partners in strengthening democratic institutions, the rule of law, and economic development in the Western Balkans. We will back diplomatic efforts to resolve conflict in the South Caucasus. We will continue to engage with Turkey to reinforce its strategic, political, economic, and institutional ties to the West. We will work with allies and partners to manage the refugee crisis created by Russia’s war in Ukraine. And, we will work to forestall terrorist threats to Europe.” But these items are presented simply as a wish list, without explanation of the means we will use, the costs involved or the way we will handle obvious pitfalls along the way. Setting Priorities A strategy paper should establish priorities, but this one simply says we have to do this and that, when the actions are inconsistent with each other. It is line with the quip attributed to Yogi Berra: When you get to a fork in the road, take it. It says we should act in the US national interest, but we should also always act with allies and partners. We should oppose Chinese threats, but always cooperate with China on climate issues. We should pursue the nuclear deal with Iran even when Iran is threatening its neighbors and aiding Russia in Ukraine (and, as noted, crushing its domestic critics). We should insist on a two-state solution to the Israel-Palestinian conflict while the Palestinian Authority remains unreasonable, corrupt, inflexible and hostile. A strategy should not set up choices that involve tradeoffs and then give no guidance on how to resolve the tradeoffs. If it promotes arms control and other types of cooperation (on COVID-19, for example) with Russia and China, it should forthrightly address problems of treaty violations and specify ways to obtain cooperation when it is denied. Such a document cannot specifically identify all possible trade-offs and resolve them, but it can set priorities and do a better job than this strategy does in informing officials on how to handle easily anticipated dilemmas. Strategic Guidance or Campaign Flyer The administration’s strategy combines valid points and unreality. It is unclear whether it is a serious effort to provide guidance, directed at officials, or a boastful campaign document, directed at the public. Mixing the genres is not useful.

Imagine a future in which countries desperate for investment give up a patch of their territory and subcontract governance to a board chosen by a foreign corporation. Sound like the East India Company of the past? Until the 2021 election of Honduran president Xiomara Castro, the past was now—Zones for Employment and Economic Development (Zonas de Empleo y Desarrollo Económico in Spanish, or ZEDEs) had been permitted to establish their own near-tax-free paradises in company-governed territorial fiefdoms. The investor-governed territories include one that accepts its own cryptocurrency and allegedly tramples rights of indigenous and Afro-Caribbean populations, another where small farmers were forced to sell their land—all were criticized by the United Nations as threatening basic human rights and criticized by Honduran civil society for worsening problems of tax evasion and narcotrafficking. What is clear is that they violated basic democratic principles of representative government and undermined national sovereignty, including denying the validity of international labor and environmental treaty obligations agreed by the Honduran state.   It all began when a 2009 Honduran military coup ousted a democratically elected president. The next Honduran president and the Congress passed a law to cede portions of its territory to corporate investors as “charter cities” but were blocked by the Supreme Court. In response, Congress impeached the judges, packed the court, and engineered a new law to create ZEDEs. According to a study published in Central American Journals Online, ZEDEs are comparable to the Spanish colonial model, creating foreign-controlled economic zones on Honduran territory. The president of the Congress, Juan Orlando Hernández, went on to be the next president, governing two terms after his handpicked Supreme Court-sanctioned reelection. Eight years later, Hernández now sits in a U.S. jail awaiting trial for narco-trafficking, the same charges on which his brother was sentenced to life in a U.S. prison. Last year, the first opposition government elected since the coup made doing away with ZEDEs part of its electoral campaign, and among the first laws passed by the new Congress was ZEDEs elimination. The law passed unanimously, including votes from the very party that had put the ZEDEs in place. The reversal was the culmination of a broad civil society movement that brought together women, indigenous, Afro-Honduran, labor, and local business interests. Predictably, only the foreign investors want the paradises to remain. It is worthwhile to look at the record of the ZEDEs. They found resonance among conservative Honduran economists and were championed by Paul Romer, an economist who extrapolated from the experience of places like Singapore and Hong Kong to presume that cities could carve out independent regulatory regimes to promote development in the midst of poorly governed areas. Originally part of an oversight board to the charter cities, Romer resigned in response to Honduran government evasion of oversight processes and lack of “transparency.” Romer’s fears appear to have been well-founded, as the oversight board established for the ZEDEs is now a self-perpetuating body that even a think tank founded to support charter cities views skeptically for including "Ronald Reagan’s son (a conservative media personality), anti-tax activist Grover Norquist, and a member of the Habsburg dynasty.” It goes on to say that “the ZEDEs were clearly more of an ideological exercise than a practical exercise to generate development.” Romer may have gotten out just in time for additional reasons, as the record of the ZEDEs has been poor in terms of economic, environmental, and democratic impacts. Compared to what Honduras would have collected otherwise, even conservative estimates suggest the tax exemptions offered to the ZEDEs would cost equal to almost half of current sales taxes by 2025 and a value equal to all current import taxes by 2026. Worse, some of the ZEDEs build investor paradise workplaces and residences but appear to provide almost no public services, except their private police, even as they deny the Honduran state sufficient tax revenue to provide schools, health clinics, and courts. Pitched as model cities, ZEDEs are actually far from that, including one that offered preferential treatment for agricultural investments and mining concessions, evading existing environmental and other regulations on decidedly nonurban activities. In the face of social opposition to the ZEDEs, the Honduran Congress had toughened punishments for blocking property or businesses, making it easier for ZEDEs private security forces to repress protesters. Private security force and paramilitary violence against opponents of megaprojects like ZEDEs is common in Honduras—and in one case a lawyer representing indigenous communities opposed to the original charter cities law was murdered, sparking condemnation from the State Department, but impunity for the killers meant there was no proven link to his political work. In spite of this poor record, most of those who want to preserve the ZEDEs point to potential benefits without any evidence. Supporters claim ZEDEs will be a boon to employment, but rates of unemployment have remained unchanged since ZEDEs began, estimates of the actual number of ZEDEs jobs created hover around 15,000 in the eight years ZEDEs have been on the books, and ZEDEs undermine and evade existing labor legislation. Supporters present ZEDEs as complementary to U.S. nearshoring, but estimates of benefits to Honduras from nearshoring lag behind eight other Latin American countries, none of which have ZEDEs. Supporters argue ZEDEs will head off growing Chinese influence, but China is one of the countries interested in investing in ZEDEs. Supporters suggest ZEDEs will address problems of corruption, but the director of the ZEDE oversight board was secretary of the presidency to the jailed former president and has continued to draw a salary even after fleeing to neighboring Nicaragua to escape his own corruption and narcotrafficking investigations. Supporters argue ZEDEs will generate trade, investment, and growth, but since the ZEDEs law was passed in 2013, trade as a percentage of GDP dropped in five of eight years and is now lower than it was before, foreign direct investment decreased as a percentage of GDP every year except 2018, and GDP growth was below 4 percent in six of the eight years. Overblown aspirations have two main problems: first, they violate basic democratic principles of citizen representation, adherence to rule of law, and international treaty obligations; and second, in the eight years since ZEDEs were allowed, none of these promises have been fulfilled. Why the sudden kerfuffle about an obscure scheme abandoned by its founder, instituted by a corrupt politician now in jail in the United States, revoked by the country that adopted it, and that showed minimal actual impact? Perhaps because one ZEDE investor has provided grants to think tanks to start a dialogue on the issue, the results of which may have convinced some in the State Department, the U.S. Embassy in Honduras, and a few members of Congress, even threatening the newly elected Honduran government with reprisals such as withdrawal of aid, forced restitution payments, or limiting the Honduran share of the Partnership for Central America, the private sector investment plan led by Vice President Kamala Harris. For the richest country in the hemisphere to threaten to withhold or extract resources from the third-poorest country lends credence to the critiques of those who viewed the ZEDEs as colonial. Worse, withholding funds or forcing restitution would undermine the core intent of the Harris plan—invest in Honduras to stem outmigration, address low growth, and improve governance. Instead of listening to those who are advocating for a few private corporations’ desire to cash in on their fiefdoms, the United States should be supporting stronger Honduran institutions, starting with respecting the democratic will of the Honduran people.

Emmanuel Macron has just completed a state visit to the United States of which everyone, both on the American and French side, is pleased with the success. In the entourage of the French president, it is put forward that it was a state visit, therefore of primary importance in the protocol order. France also highlights that this was the first state visit by a foreign head of state to the United States since Biden's election, demonstrating the good relationship between the United States and France. . But it is always embarrassing to note that European countries systematically boast of being Washington's favorite, when the United States never boasts of maintaining good relations with a European country. This testifies to a recognition, on the part of Washington, of the peripheral status of European countries in relation to the United States. Sumptuous dinner in the gardens of the White House, successful visit to New Orleans to highlight the French-speaking world, celebration of unity against Russia in Ukraine… Some unfortunate subjects were nevertheless on the program, particularly on the economic level. . There was indeed talk of the US plan called the Inflation Reduction Act amounting to 370 billion dollars aimed at supporting the greening of the US economy, which, in the words of Emmanuel Macron, is “hyper-aggressive”. We can only be pleased that the United States is greening its economy. Moreover, at first, the President of the European Commission Ursula von der Leyen congratulated the United States for embarking on such a plan. But very quickly, France, Germany and European countries in general realized that this plan risked having extremely negative consequences on a European industry already in bad shape. Indeed, industrialists, regardless of their nationality, can recover up to 40% of their investment if they invest in the United States or in countries that have free trade agreements with them, namely Mexico. and Canada. The great fear of Europeans, exacerbated by the fact that the continent is already experiencing an economic crisis due to rising energy costs, inflation and an industry that is generally not doing very well, rests on the fact that American industrialists present in Europe can return to the United States to benefit from this aid, and even more so that European industrialists drop their investments in Europe to direct them to the United States. Some big names in European industry, particularly Germany, have already threatened to do so, also because of the extremely attractive cost of energy in the United States. Emmanuel Macron made very strong statements on this subject before his visit. This would have, according to him, allowed him to be heard by the American president. Heard okay, but not sure he was listened to. Joe Biden has indeed said that the United States does not apologize, that he does not apologize. He made no concessions to the demands of European politicians. Emmanuel Macron did not return with any tangible results. In the interview he gave to Le Parisien on Sunday December 4 on the plane that brought him back to Paris, Emmanuel Macron declared that American officials had told him that their objective was not to weaken European industry. If the goal is not this, it could be the result. Let's hope that this trip will have at least made it possible to awaken European consciences in the face of this danger for their economies. Once again, Europeans are lagging behind American decisions. Emmanuel Macron declared that for the moment no European voice had been raised against this American law. He is right, but we must now take action and not be content with good words, as was the case after the AUKUS affair. Joe Biden then assured Macron during a reconciliation meeting in Rome that the Americans would not do it again. France, which had recalled its ambassador to Washington, then sent him back. Not much had happened then. France and Europe cannot simply be satisfied with comforting, even anesthetic words from the Americans if they are not accompanied by concrete gestures and positive results. In reality, the United States defends its national interests, they are right to do so. Not acting in the same way, because divided and paralyzed, it is the Europeans who are at fault. There is not a “Buy European Act” like there is a Buy American Act. China on the one hand, the United States on the other really defend their interests, Europe does not. When France evokes the idea of defending the national interest against the United States, Paris is quickly accused of anti-Americanism. On the other hand, the United States is not accused of anti-Europeanism when it defends its national interest vis-à-vis Europe. Joe Biden is on the way to achieving what Donald Trump wanted to do, but he is doing it slowly. Donald Trump banged on the table, threatened and insulted, Joe Biden speaks in a soft and calm voice and assures Europeans of his friendship. We have often heard that it is time to get out of naivety about Russia or China. It may also be time to do it with regard to the United States because through such legislation they are not treating Europe as an ally. If the transatlantic strategic alliance is undeniable, especially in the face of Russian aggression in Ukraine, the relationship remains, from a commercial and economic point of view, a competition. With this plan, this competition is no longer quite fair from the United States. It is essential to be aware of this in Europe. From a strategic point of view, the Europeans are paralyzed by the Russian military threat, they think that only the United States can defend them against this threat and that it is worth some concessions. But in fact, there is no major Russian military threat to European Union member countries. Indeed, Russia is proving unable to conquer the Donbass as a whole, and fails to control the territories it has illegally annexed. This makes the prospect of an attack on Western Europe difficult to envisage. The Russian military threat is therefore certainly to be put into perspective. It is not a question of doing so regarding the aggressive intentions of Vladimir Putin, but of measuring this threat from a capability point of view. If this military threat is more supposed than real, then this does not imply neglecting European economic and commercial interests to benefit from American protection. Emmanuel Macron therefore issued a warning cry. Now we have to take action.

At the end of August, NATO Secretary General Stoltenberg visited Canada: he went to the Canadian High Arctic Research Station in Cambridge Bay (Nunavut), which is one of the facilities of the Northern Warning System, and the Canadian Forces Base in Cold Lake (Alberta). Based on the itinerary and official statements, it was not exactly a courtesy visit. Obviously, as part of the transformation of the NATO concept, Canada is expected to take more active measures in key fronts. And this is not only an increase in defense spending, which is a traditional requirement of the US for all NATO members. The United States and its NATO allies expect that Canada's strategic approach to developing its defense policy will take into account new challenges that, in their opinion, pose a growing threat to the security and defense capabilities of all members of the alliance in the long term. The allies list two blocs among the key challenges requiring the intensification of Canadian participation in NATO. First, these are non-military threats, including those related to climate change, which contribute to the growth of instability in this region. In accordance with the NATO Strategic Concept 2022, one of the goals and strategic challenge for the member countries of the organization Is the problem of climate change. Secondly, the threats associated with the intensification of the actions of China and Russia in the Far North. It is in this direction that Canada's policy is considered by the allies as key in terms of developing and strengthening the defense capability of the alliance. The very fact of the NATO Secretary General's visit to the northern territories testifies to possible changes in the position of the current liberal government regarding the expansion of cooperation with NATO. Previously, Canada has been reluctant to engage with allies other than the United States in discussing specific initiatives, such as conducting joint military exercises in the country's northern territories. Now the participation of the allies, according to Canadian Defense Minister A. Anand, is "acceptable." Although there is no talk of specific agreements on conducting exercises under the leadership of NATO in the Far North region. In 2019, Canada adopted a new Arctic strategy, the Arctic and Northern Policy Framework. According to the document, increasing regional competition and the strategic interest that the region represents for various countries pose threats to Canadian security. To mitigate threats, the government, in addition to increasing investment and infrastructure projects, has pledged to strengthen the presence of the armed forces and Canadian Rangers to ensure national security and protect sovereignty in the region, as well as to increase the participation of Arctic and non-Arctic allies and partners in operations in the Canadian Arctic, including in the framework of NATO. The need to expand the military presence in this region is also mentioned in the Defense Policy of Canada in 2017 (“Strong Secured and Engaged”). In this regard, the government of J. Trudeau undertook to modernize NORAD, as well as to update the composition of the combat aircraft fleet. However, according to Canadian experts, the liberals are still allocating very little money for these purposes compared to, for example, Finland or Denmark, while the socio-cultural and environmental spheres remain strategic priorities. Although the Defense Policy notes that the Arctic is a springboard for contradictions in the field of global security, however, potential conflicts among the Arctic powers are not currently visible. Indeed, for now the Canadian Arctic strategy affects the defense sphere only in the most general way, focusing on non-military threats associated with climate change, and the strengthening of the military presence implies the expansion of non-military functions of the armed forces (for example, participation in rescue operations or the fight against man-made disasters). However, Canada's readiness to come up with such an initiative can be realized in the event of increased activity on the part of China or Russia in this region, for example, in the implementation of the Russian strategy for the development of the Arctic until 2035, adopted in 2020. The implementation of the tasks set in the Russian strategy to strengthen the presence of armed forces in the Arctic zone will be perceived as a deliberate escalation that can destabilize the situation and pose a threat to regional security. At the same time, changes in the positions of legislators regarding the Arctic agenda and interaction with NATO in this direction have been outlined already at the stage of formation of the Policy Framework for the Arctic and the North. Then the Standing Committee on Foreign Affairs and International Development published a multi-page report entirely devoted to Canada's Arctic policy. In addition to climate change, it lists Russia's significant military presence as well as China's Arctic ambitions as security threats to the Canadian Arctic region. In this regard, the government of J. Trudeau was recommended to expand cooperation and interaction with NATO allies in order to quickly analyze and respond to these threats through joint efforts. Canada's position in relation to increasing its defense capabilities in the Arctic region is perceived by the United States as a factor in the alliance's vulnerability in the northwest direction. Therefore, it can be expected that pressure from the allies will intensify. Both the NATO Secretary General and the countries that are members of the block will bilaterally demand that the Canadian authorities fulfill their obligations to improve the defense potential in their northern territories, as well as to respond in a timely manner to threats, in their opinion, emanating from China and Russia. Since the alliance is one of the key factors in the Canadian security and defense system, the growing strategic competition / confrontation between NATO and the Russian Federation will dictate the conditions for Canada to interact with the Russian side in the Arctic zone, while requiring military modernization and strengthening of military potential not only to combat non-military threats. Canada will be challenged by allies to adapt to the threat of potential conflicts over access to resources, unresolved border disputes, governance issues in the Arctic region. 

With China’s rise and Russia’s war, the unipolar moment after the triumph of the West in the Cold War is over. Five scenarios for a new world order. With the invasion of Ukraine, Russia effectively destroyed the European peace order. Now, Europe needs to find ways to contain its aggressive neighbour, while its traditional protector, the United States, continues its shift of focus to the Indo-Pacific. This task, however, becomes impossible when China and Russia are driven into each other’s arms because, if anything, the key to end the war in Ukraine lies in Beijing. China hesitates to be dragged into this European war as bigger questions are at stake for the emerging superpower: Will the silk road be wrecked by a new iron curtain? Shall it stick to its ‘limitless alliance’ with Russia? And what about the territorial integrity of sovereign states? In short: for China, it is about the world order. The unipolar moment after the triumph of the West in the Cold War is over. The war in Ukraine clearly marks the end of the Pax Americana. Russia and China openly challenge American hegemony. Russia may have proven to be a giant with clay feet, and has inadvertently strengthened the unity of the West. But the shift of the global balance of power to East Asia is far from over. In China, the United States has encountered a worthy rival for global predominance. But Moscow, Delhi, and Brussels also aspire to become power hubs in the coming multipolar order. So, we are witnessing the end of the end of history. What comes next? To better understand how world orders emerge and erode, a quick look at history can be helpful.What is on the menu?Over the course of the long 19th century, a great power concert has provided stability in a multipolar world. Given the nascent state of international law and multilateral institutions, congresses were needed to carefully calibrate the balance between different spheres of interest. The relative peace within Europe, of course, was dearly bought by the aggressive outward expansion of its colonial powers. This order was shattered at the beginning of the World War I. What followed were three decades of disorder rocked by wars and revolutions. Not unlike today, the conflicting interests of great powers collided without any buffer, while the morbid domestic institutions could not mitigate the devastating social cost of the Great Transformation.    With the founding of the United Nations and the Universal Declaration of Human Rights, the foundations of a liberal order were laid after the end of World War II. However, with the onset of the Cold War, this experiment quickly ran into a quagmire. Pinched between two antagonistic blocs, the United Nations was in a deadlock for decades. From the Hungarian Revolution over the Prague Spring to the Cuban missile crisis, peace between the nuclear powers was maintained through the recognition of exclusive zones of influence. After the triumph of the West in the Cold War, American hyperpower quickly declared a new order for a now unipolar world. In this liberal world order, rule-breaking was sanctioned by the world’s policeman. Proponents of the liberal world order pointed to the rapid diffusion of democracy and human rights around the globe. Critics see imperial motifs at work behind the humanitarian interventions. But even progressives place great hopes in the expansion of international law and multilateral cooperation. Now that the West is mired in crises, global cooperation is again paralysed by systemic rivalry. From the war in Georgia over the annexation of Crimea to the crackdown in Hong Kong, the recognition of exclusive zones of influence is back in the toolbox of international politics. After a short heyday, the liberal elements of the world order are jammed again. China has begun to lay the foundations of an illiberal multilateral architecture.How will great power competition play out?In the coming decade, the rivalries between great powers are likely to continue with undiminished vigour. The ultimate prize of this great power competition is a new world order. Five different scenarios are conceivable.  First, the liberal world order could survive the end of the unipolar American moment. Second, a series of wars and revolutions can lead to the total collapse of order. Third, a great power concert could bring relative stability in a multipolar world but fail to tackle the great challenges facing humanity. Fourth, a new cold war may partly block the rule-based multilateral system, but still allow for limited cooperation in questions of common interest. And finally, an illiberal order with Chinese characteristics. Which scenario seems the most probable? Many believe that democracy and human rights need to be promoted more assertively. However, after the fall of Kabul, even liberal centrists like Joe Biden und Emmanuel Macron have declared the era of humanitarian interventions to be over. Should another isolationist nationalist like Trump or others of his ilk come to power in Washington, London, or Paris, the defence of the liberal world order would once and for all be off the agenda. Berlin is in danger of running out of allies for its new value-based foreign policy. In all Western capitals, there are broad majorities across the ideological spectrum that seek to up the ante in the systemic rivalry with China and Russia. The global reaction to the Russian invasion shows, however, that the rest of the world has very little appetite for a new bloc confrontation between democracies and autocracies. The support for Russia’s attack on the sovereignty and territorial integrity of Ukraine – values especially smaller countries unwaveringly adhere to – should not be read as sympathy for a Russian or Chinese-led order, but as deep frustration over the US empire. Seen from the Global South, the not-so-liberal world order was merely a pretext for military interventions, structural adjustment programmes, and moral grandstanding. Now, the West comes to realise that in order to prevail geopolitically, it needs the cooperation of undemocratic powers from Turkey to the Gulf monarchies, from Singapore to Vietnam. The high-minded rhetoric of the systemic rivalry between democracies against autocracies is prone to alienate these much-needed potential allies. But if even the West were to give up on universalism of democracy and human rights, what would be left of the liberal world order? Are the great power rivalries that play out in the background of the war in Ukraine, the coups in Western Africa and the protests in Hong Kong only the beginning of a new period of wars, coups, and revolutions?  The ancient Greek philosopher Thucydides already knew that the competition between rising and declining great powers can beget great wars. So, are we entering a new period of disorder? Not only in Moscow and Beijing, but also in Washington, there are thinkers that seek to mitigate these destructive dynamics of the multipolar world through a new concert of great powers. The coordination of great power interests in fora from the G7 to the G20 could be the starting point for this new form of club governance. The recognition of exclusive zones of influence can help to mitigate conflict. However, there is reason for concern that democracy and human rights will be the first victims of such high-powered horse-trading. This form of minimal cooperation may also be inadequate to tackle the many challenges humankind is facing from climate change over pandemics to mass migration. The European Union, an entity based on the rule of law and the permanent harmonisation of interests, may have a particularly hard time to thrive in such a dog-eat-dog world. Not only in Moscow, some fantasise about a revival of imperialism that negates the right to self-determination of smaller nations. This dystopian mix of technologically supercharged surveillance state on the inside and never ending proxy wars on the outside is eerily reminiscent of George Orwell’s 1984. One can only hope that this illiberal neo-imperialism is shattered in the war in Ukraine. The Russian recognition of separatist provinces of a sovereign state have rung the alarm bells in Beijing. After all, what if Taiwan follows this model and declares its independence? At least rhetorically, Beijing has returned to its traditional line of supporting national sovereignty and condemning colonialist meddling in internal affairs. There are debates in Beijing whether China should really side with a weakened pariah state and retreat behind a new iron curtain, or would benefit more from an open and rules-based global order. So, what is this ‘Chinese Multilateralism’ promoted by the latter school of thought? On the one hand, a commitment to international law and cooperation to tackle the great challenges facing humankind, from climate change over securing trade routes to peacekeeping. However, China is only willing to accept any framework for cooperation if it is on equal footing with the United States. This is why Beijing takes the United Nations Security Council seriously, but tries to replace the World Bank and the International Monetary Fund with its own institutions such as the Asian Infrastructure Investment Bank. If Chinese calls for equal footing are rejected, Beijing can still form its own geopolitical bloc with allies across Eurasia, Africa, and Latin America. In such an illiberal order, there would still be rule-based cooperation, but no longer any institutional incentives for democracy and human rights.Hard choices: what should we strive for?Alas, with a view of containing an aggressive Russia, a rapprochement with China may have its merits. For many in the West, this would require an about-face. After all, the recently fired German admiral Schönbach was not the only one who wanted to enlist Russia as an ally for a new cold war with China. Even if Americans and Chinese would bury the hatchet, a post-liberal world order would pose a predicament for Western societies. Is the price for peace really the right to self-determination of peoples? Is cooperation to tackle the great challenges facing humankind contingent on the rebuttal of the universality of human rights? Or is there still a responsibility to protect, even when the atrocities are committed in the exclusive zone of influence of a great power rival? These questions go right to the West’s normative foundation. Which order will prevail in the end will be determined by fierce great power competition. However, who is willing to rally around the banner of each different model differs significantly. Only a narrow coalition of Western states and a handful of Indo-Pacific value partners will come to the defence of democracy and human rights. If this Western-led alliance of democracies loses the power struggle against the so-called axis of autocracies, the outcome could well be an illiberal world order with Chinese characteristics. At the same time, the defence of international law, especially the inviolability of borders and the right to self-defence, are generally in the interest of democratic and authoritarian powers alike. An alliance for multilateral cooperation with the United Nations at its core finds supports across the ideological spectrum. Finally, there could be issue-based cooperation between different centres. If ideological differences are set aside, hybrid partners could cooperate, for instance, in the fight against climate change or piracy, but be fierce competitors in the race for high-tech or energy. Thus, it would not be surprising if the United States were to replace their ‘alliance of democracies’ with a more inclusive coalition platform. Politically, Germany can only survive within the framework of a united Europe. Economically, it can only prosper in open world markets. For both, a rules-based, multilateral order is indispensable. Given the intensity of today’s systemic rivalry, some may doubt its feasibility. However, it is worth remembering that even at the heyday of the Cold War, within the framework of a constrained multilateralism, cooperation based on common interests did occur. From arms control over the ban of the ozone-killer CFC to the Helsinki Accords, the balance sheet of this limited multilateralism was not too bad. In view to the challenges facing humankind, from climate change over pandemics to famines, this limited multilateralism may just be the best among bad options. For what is at stake is the securing of the very foundations of peace, freedom, unity, and prosperity in Europe.