China Cyber Charges: Take Beijing to the WTO Instead

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The criminal indictment of five People Liberation Army officers for hacking into the computers of six U.S. companies for economic espionage to steal trade secrets and sensitive information sends a message but the bite has no teeth. The better way to hold China accountable is to take them to a World Trade Organization panel, which could issue a ruling that deals Chinese cyber piracy a telling blow.

The TRIPS Agreement (Trade Related-Aspects of Intellectual Property Rights) provides specific protection against theft of intellectual property. It would enable the U.S. to accomplish confluent goals more effectively than a criminal prosecution that the U.S. will never be able to enforce. First, WTO panels are comprised of distinguished international jurists. That elevates any ruling beyond the confines of what China will brand as unfair, xenophobia. Second, it would be enforceable, enabling the U.S. to apply economic sanctions that cost China real dollars. Third, while WTO proceedings do not permit class actions, the U.S. does not stand alone in its complaint against Chinese cyber piracy. Statecraft, including public diplomacy, could motivate other aggrieved nations to bring their own proceedings. The impact would be cumulative. Fourth, China greatly values its self-image as morally righteous. An adverse finding would knock it off that perch. Finally the burden of proof in a WTO proceeding is far easier to sustain than a criminal indictment in U.S. District Courts. Some WTO decision indicate that once a prima facie case is made, the burden shifts to the party against whom the claim is made. One might argue whether that is the correct standard rather than preponderance of evidence, but clearly WTO proceedings entail a burden of proof that is far less onerous that proving guilty beyond a reasonable doubt.

If the U.S. believes it can prove the latter, it clearly must feel the evidence exists to make the far more difficult case required for a criminal conviction. Exposing Chinese for its theft of intellectual property and doing something about it is long overdue. It was well described even in 1999 by the Cox Report on U.S. national Security and Military/Commercial Concerns with the People’s Republic of China. For years officials from different administrations have demanded that China cease and desist. Instead, they’ve raided our companies for their commercial secrets for which hundreds of millions have been invested. The strategic impact is substantial. Chinese pillaging costs U.S. companies not only capital but the vital technological edge that we need to stay competitive in global markets.

Bringing indictments against Chinese individuals may finesse the Foreign Sovereign Immunities Act, which except in narrow circumstances obstructs an effort to hold a foreign nation accountable in our courts. The U.S. should certainly proceed with those cases. One hopes they produce convictions. That would send one strong message to the international community that Chinese cyber piracy is unacceptable and violates international norms. But combining that with a WTO proceeding, and a strong campaign that uses public diplomacy and strategic communication to shine a light on Chinese guilt, seems likely to achieve greater impact.

China may dislike the idea of criminal convictions against PLA members in a U.S. court. That’s nothing compared to being branded a pirate in a forum of internationally sanctioned justice for theft of intellectual property. If we’re going after the Chinese, we need to be hard-nosed and give no quarter. A WTO victory would be substantive and for the Chinese, it would hurt. China won’t refrain from piracy because that’s the right thing to do. It will act only when it perceives the cost of piracy exceeds the benefits. This is the way to achieve that result.

James Farwell is an attorney and expert in cyber who has advised the Department of Defense and the U.S. SPECIAL OPERATIONS COMMAND. He is the author of Persuasion & Power (Washington: Georgetown University Press, 2012).  Darby Arakelian is a former CIA Officer and a national security expert. The views expressed are their own and do not represent those of the U.S. Government or any of its agencies, COCOM, or departments.

Image: Flickr.

TopicsCyber Security RegionsChina

Would Great Britain Leave the EU?

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This Thursday (May 22), Britain will choose its 73 Members of the European Parliament.  The other European Union (EU) member states will follow suit over the following days.  Such elections have never mattered much in Britain.  With only about one third of electors tending to cast a ballot, European elections usually are little more than half-hearted referenda on governments of the day.

This time, however, the long-term implications of Britain’s European elections could be huge, with potentially global implications.  Over recent years, an insurgent force in British politics—the UK Independence Party (Ukip)—has been amassing support at the expense of the established parties.  Offering a mix of populist policies from curbing immigration to abolishing inheritance taxes, Ukip’s flagship promise is to withdraw Britain from the EU.  Now, with pollsters, pundits and senior politicians all predicting that Ukip could top the European polls, this once unlikely ambition is closer than ever to becoming reality.

Although Ukip has no representation in the British House of Commons (it does boast a handful of members to the unelected House of Lords), the party’s dismal haul of elected officials belies a truly exceptional political achievement: Ukip has managed to place the question of withdrawal from the EU squarely onto the mainstream political agenda.

The most prominent manifestation of this “Ukipization” of British politics has been Prime Minister David Cameron’s promise that, should he remain in charge after the next General Election (scheduled for 7 May, 2015), there will be an “in-out” referendum on EU membership.  The Labour leader Ed Miliband has also promised an in-out referendum—under certain conditions. 

Such pledges will become the tip of the iceberg if Ukip performs well this week.  In such an event, the Ukip leader Nigel Farage could credibly claim that his party’s victory itself constitutes a referendum on the EU.  “The people have spoken,” Farage will announce.  Cameron, Miliband and Clegg will find it difficult to disagree.  Unimaginable just a year or two ago, a binding referendum on the EU might become politically unavoidable as the major parties scramble to occupy the newly defined center-ground of British opinion towards Europe.

This is not to say that Ukip’s gravitational pull is inexorable.  To be sure, it is no longer enough for pro-European politicians to argue that keeping Britain “at the heart of Europe” amplifies the country’s influence.  Voters do not think like foreign secretaries.  Instead, more needs to be done to convince a justifiably self-interested electorate of the value of EU membership, albeit if they must begin by acknowledging that the benefits of European integration have been unevenly distributed up until now.

Still, the potential for a British exit of the EU should be taken seriously, including in the United States.  Washington has long supported both the broad principles of the European project and the specific point of British membership.  A united, stable and prosperous Europe has the promise to buttress U.S. foreign policy goals around the globe.  A fragmented continent would be an unnecessary drain on America’s already dwindling influence.  Britain, in particular, is a valued member of the EU from Washington’s perspective because of its historic identification U.S. objectives.

At least in theory, Britain is supposed to be the bridge that lowers diplomatic transaction costs between Europe and America.  On the May 22, a large slice of the British electorate seems likely to endorse burning that bridge.  Gripped by the logic of Primat der Innenpolitik when it comes to Europe, the Westminster political class may well lack the capacity to put out the flames.  For this reason, elites in Washington—not just London, Brussels, Paris and Berlin—should care about this week’s European elections, even if most Britons will not.

TopicsEuropean Union RegionsEurope

China's South China Sea Play: The End of Beijing's "Peaceful Rise"?

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Over the last decade, China has made every effort to persuade the world that it has been rising peacefully. The term “peaceful rise” was first employed as early as 2003, when Zheng Bijian, the then Vice Principal of the Central Party School of the Communist Party of China delivered a speech at the Boao Forum for Asia. It was then used by Chinese leaders, such as Premier Wen Jiabao, in various international relations contexts.

The main principles of China’s “peaceful rise” theory, which was replaced by “peaceful development” since 2004, are that China will not seek hegemony, its economic and military rise will not pose threats to regional and international peace and stability, and other countries will benefit from China’s growing power and influence. In order for this vision to materialize, Beijing values the role of soft power and contends that promoting good relations with neighboring countries will enhance rather than undermine its comprehensive national power. As such, the peaceful rise thesis emphasizes a cooperative approach towards China’s territorial disputes, including various maritime disputes in the seas around China.

One reason for the emergence of the peaceful rise theory is to counter those who see China as a threat. Speaking broadly, the “China threat theory” argues that, Beijing’s sustained economic growth will enable it to invest in military expansion and modernization. China’s rising power capabilities will shift the regional and international balance of power in it’s favor, threatening the interests and national security of other states. Many in China believe that, this theory is being cultivated by the U.S. as a part of a strategy to contain Beijing’s rise.

Events in the Asia-Pacific since 2007, however, have proven that the China threat theory has been unintentionally cultivated by China itself, as Beijing has been taking an increasingly aggressive approach towards various neighboring countries. Chinese maritime authority vessels have been active in enforcing Beijing’s territorial claims in the East China Sea (EAS) and South China Sea (SCS). They have captured and attacked Southeast Asian fishing ships in their traditional fishing waters, harassed U.S. naval vessels when they operate in the waters in the EAS and SCS, and brutally intervened in incidents in which Chinese fishing vessels were inspected by foreign authorities accused of illegal fishing activities.

Beijing has also made various moves to challenge the status quo in territorial disputes in the SCS. In 2009, China for the first time officially submitted the now infamous nine-dash line. This claimed over 80 percent of the SCS. In 2012, China dispatched numerous vessels to challenge the Philippine presence at Scarborough Shoal and eventually took control over the Shoal. In that same year, it established Sansha city on Woody Island of the Paracels contested by Vietnam, and stationed a military garrison there to protect its territorial claims in the SCS.

From 2011, China’s National Offshore Oil Corporation (CNOOC) has expanded its reach further southwards, drawing oil blocks for international cooperation inside Vietnam’s Exclusive Economic Zone (EEZ).

In the last several weeks tensions have reached even new heights. In one of the most serious incidents in recent years China moved a giant oil rig to a location only 120 miles from Vietnam’s coast. To protect the rig from Vietnam’s maritime authority ships, many Chinese vessels, including several warships have been dispatched to the region. Chinese vessels deliberately rammed Vietnamese ships while they were attempting to approach the rig. The situation is very dangerous, risking further escalation of tensions between the two countries.

China’s behavior can only prove that its “peaceful rise” theory is dead. Beijing’s assertiveness and aggressiveness have driven many of its neighbors away. Only by respecting regional and international peace, security, and international laws can Beijing lessen regional tensions while sustaining its long term-development.

Ha Anh Tuan is a PhD Candidate in Politics and International Relations at the University of New South Wales, Australia.

Image: Wikicommons.

TopicsSouth China Sea RegionsChina

How Japan Can Support America's Pivot: TPP and a Strong Economy

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The most important and often overlooked thing Japan can do to support the U.S. pivot and the long-term strength of the U.S.-Japan alliance is to fix its economy and, in turn, further deepen and broaden U.S.-Japan economic ties. So says Dr. Satu Limaye, Director of the East West Center in Washington D.C. Success in that area, combined with further defense collaboration with the U.S. and improved Japanese relations with its neighbors, will be what Limaye calls the ‘triple crown’ of the continued centrality of the U.S.-Japan relationship to the U.S. rebalance to Asia.

According to Limaye, Japan needs to become again an engine for economic growth in the region. Without successfully addressing its economic problems, “Japan won’t be able to afford to fund its defense programs or respond to its major demographic challenges,” which include an ageing and declining population.

While the state of Japan’s economy might not be as bad as some say, Japan does have serious economic problems. Entrenched deflation resulting in weakened demand, slow growth, government debt more than twice GDP and structural problems are all issues the Abe administration is seeking to address. Limaye hopes that Japan will find the solution to its economic troubles through Prime Minister Shinzo Abe’s ‘Abenomics’.

Abenomics, which includes a loose monetary stance, fiscal stimulus and structural reforms, was launched following Abe’s election at the end of 2012. After almost a year and a half, is Abenomics working? The short answer is yes: immediate GDP growth (from 0.9 to 1.7 %), an increase in the stock market and yen depreciation leading to a hike in wages and potentially higher spending are all seen as signs that Abenomics is making progress. But the hesitation to deem Abenomics a success at this early stage is captured by Justin Wolfers of the Brookings Institute. Referring to the recent improvements in the Japanese economy, Wolfers asks whether this is evidence of a “slow adjustment to a policy that will have large long-run effects or a small initial effect because there is only going to be a small long-run effect.” Whether Abenomics will bring long-term benefits for Japan and allow it to respond to its demographic challenges and commit more to defense and foreign policy initiatives is yet to be seen. Improvements to the Japanese economy won’t happen quickly.

Part of the structural reform necessary to improve Japan’s economy includes reaching agreement with the U.S. on the Trans-Pacific Partnership (TPP), a potential economic pact among 12 nations. The TPP, which has become the economic component of the U.S. rebalance to Asia, has faced delays and the chance to clinch the deal with Japan was missed during Obama’s recent trip to Tokyo.

Speaking at an event in Washington earlier this month, former White House adviser on Asia Dr. Victor Cha asserted that, should the TPP come off, “it will be by far the most important aspect of the pivot.” Like Limaye, Cha views Japan’s economic decisions as the major area in which Japan could support the US pivot: “The best thing Japan could do is to come to an agreement on the TPP. The US has no other real demands of Japan other than that.” But as Abe campaigned on the promise to protect Japan’s agricultural sector and farming lobbies continue to exert pressure, Abe will have to renege on his promise or further petition the U.S. to exempt key Japanese goods—and Obama has his own challenges coming from Congress. With no future TPP negotiations scheduled and an elapsed 2014 deadline, the TPP looks far away.

In Washington, experts hold slightly different views on how the success or failure of the TPP would impact the overall pivot. According to Limaye, if the TPP doesn’t come to fruition it wouldn’t signal the death knell of rebalance, but it would leave a gaping hole for China to fill with its regional economic initiative, the Regional Comprehensive Economic Partnership (RCEP). A failed TPP, Limaye contends, would “be a missed opportunity to take full advantage of Asia’s rising middle class.” Cha believes similarly that if the TPP fails, “it doesn’t mean the pivot has failed: the military aspect of the pivot has reaffirmed US staying power in the region.” And, if the TPP succeeds, “the strategic balance in the region would tilt in favor of the United States.”

Other Washington-based experts are more pessimistic. One analyst said that, should the TPP fail, it would be extremely bad for the rebalance and for America. There’d be a loss of confidence in America regionally, and domestically the US would lack the capacity to reform the structure of the economy.

If Japan wants to support the pivot and revitalize its economy Abe will need to convince the US to allow Japan concessions in the TPP or he’ll need to make some difficult —and unpopular—domestic choices. On Abenomics, close attention should and will continue to be paid to its progress. But the Abe administration must be willing to withstand public discontent if the reforms cause discomfort over the longer term. In short, Japanese support for the rebalance will take both careful maneuvering and courage from the Abe administration.

Hayley Channer is an analyst at ASPI. She is currently a visiting scholar at the East-West Center, Washington D.C. This article originally appeared in ASPI’s The Strategist website here.

Image: White House Flickr.

TopicsEconomics RegionsJapan

Back to Balancing? Ukraine, the Status Quo, and American Grand Strategy in 2014

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Those responsible for crafting U.S. grand strategy grapple with a central dilemma when it comes to lofty questions of international order.  On the one hand, U.S. foreign policy is engineered towards promoting a broad diffusion of power in the international system.  Burden-sharing is both cost-effective and chimes with America’s political culture of accepting only limited liability for what happens globally.  On the other hand, American statesmen are discerning, keen to ensure that members of the Great Power club are of the correct sort.

This basic challenge of “global gatekeeping” comprises two halves.  First, how can the diffusion of influence in world politics be made to proceed in a way that guarantees that agitators and outright revisionists will be held in abeyance?  Second, how can it be ensured that today’s “responsible stakeholders” do not morph into tomorrow’s spoilers?  When friends in, say, Germany, Japan and Brazil tell U.S. leaders that their nations will maintain the international status quo, how can leaders in Washington believe that such policies will not be reversed by future generations of foreign leaders?  In short, what guarantees are there that states will continue to abide by American-made rules of the road?

One obvious way in which states can be made to “get along” in world politics is through facing a shared geopolitical threat.  Under such conditions, both sides can be sure that each will not deviate from a broad arc of commonly agreed foreign policy goals, at least vis-à-vis their mutual foe.  When national security is at stake, states are less likely to abandon their allies and renege on their commitments.  On the contrary, fear or hatred of a looming geopolitical threat will breed cooperation among those who live in its shadow.

It is not easy to predict how foreign leaders will perceive threat, however.  Allegiances are a matter of shrewd international diplomacy as much as pressing international structure.  Today, the problem for U.S. policy-makers is that they may be losing the fight for reliable allies in the next phase of world politics.  Relatively secure in their own borders, self-interested budding Great Powers appear reluctant to throw their lot in with Washington.  This bodes ill for the future of U.S. global preeminence.

Consider, for example, reactions to Russia’s transgressions against Ukraine.  If Moscow’s actions have drawn stiff criticism from NATO, the non-western geopolitical powerhouses of the future have been markedly less willing to align themselves with the United States.  China and Brazil have sat on the fence while Indian officials even voiced sympathy for Russia’s interests in Crimea.  The implication is that the U.S. cannot count on the world’s largest rising states to defend the current international order.  Beijing, Brasília and New Delhi simply do not view Russia’s assault on global rules as synonymous with an attack on their own national interests.

Only those dependent upon the U.S. for security (Europe, Japan, the world’s smaller states) have lent their support to Washington’s efforts to buttress the status quo in Eastern Europe.  Thus, while talk of a new Cold War might be overplayed, the Ukraine crisis has highlighted the bifurcation of the international system between those who truly rely upon U.S. friendship and those that, quite frankly, do not.  Whether a critical mass of states can be brought into the U.S. camp will perhaps be the greatest foreign policy challenge of the twenty-first century.

The coming era will not be one of unbridled geopolitical harmony.  Yet if the coming global turn will be a story of “who against whom?” then Washington would be wise to be more vigorous at shaping the incipient battle lines.  Instead of seeking blanket integration of all Great Powers into an inclusive world order, hard-headed decisions will need to be made about who is to be conciliated and who is to be contained.  Balancing, out of fashion since the collapse of the Soviet Union, is back.

Image: Flickr.

TopicsGrand Strategy RegionsUnited States