Tag: International

Troublesome North Korea Strikes Again

The North Koreans have been busy, testing a nuclear weapon and shooting off missiles.  It seems that nothing upsets North Korea more than being ignored.

President Barack Obama expressed the usual outrage:

These actions, while not a surprise given its statements and actions to date, are a matter of grave concern to all nations. North Korea’s attempts to develop nuclear weapons, as well as its ballistic missile program, constitute a threat to international peace and security.

However, this really is all old news.  Although the nuclear test reinforces the North’s irresponsible reputation, the blast has little practical importance. North Korea has long been known to be a nuclear state and tested a smaller nuclear device a couple years ago. The regime’s missile capabilities also are well-known.

Contrary to the president’s excited rhetoric, the North has little ability to project force beyond the Korean peninsula.  So Washington should treat the North’s latest offense as an opportunity to reprogram the latter’s negotiating formula.

The U.S. should not reward “Dear Leader” Kim Jong-il with a plethora of statements beseeching the regime to cooperate and threatening dire consequences for its bad behavior. Rather, the Obama administration should explain, perhaps through China, that the U.S. is interested in forging a more positive relationship with North, but that no improvement will be possible so long as North Korea acts provocatively. Washington should encourage South Korea and Japan to take a similar stance.

Moreover, the U.S. should step back and suggest that China, Seoul, and Tokyo take the lead in dealing with Pyongyang. North Korea’s activities more threaten its neighbors than America. Even Beijing, the North’s long-time ally, long ago lost patience with Kim’s belligerent behavior and might be willing to support tougher sanctions.

Washington should offer to support this or other efforts to reform North Korean policy.  But without Chinese backing there is little else the U.S. can do.  War on the peninsula would be disastrous for all, and Washington has few additional sanctions to apply.  Beijing has the most leverage on Pyongyang, but whether even that is enough to moderate North Korea’s behavior is anyone’s guess.

North Korea is a problem likely to be long with us. The U.S. has limited ability to influence the North. Washington should offer the prospect of improved relations as a reward for improved North Korean behavior, but should let the North’s neighbors, most notably China, take the lead in managing this most difficult of states.

Cheney vs. Obama: Tale of the Tape

In case you missed it, President Obama and former Vice President Dick Cheney spoke separately today on terrorism and national security. Like two boxers at a pre-fight press conference, they each touted their strength over their opponent. They espoused deep differences in their views on national counterterrorism strategy.

The Thrilla in Manilla it ain’t. As Gene Healy has pointed out, they agree on a lot more than they admit to. Harvard Law professor and former Bush Office of Legal Counsel head Jack Goldsmith makes the same point at the New Republic. Glenn Greenwald made a similar observation.

However, the areas where they differ are important: torture, closing Guantanamo, criminal prosecution, and messaging. In these key areas, Obama edges out Cheney.

Torture

Cheney:

I was and remain a strong proponent of our enhanced interrogation program. The interrogations were used on hardened terrorists after other efforts failed. They were legal, essential, justified, successful, and the right thing to do.

Obama:

I reject the assertion that these are the most effective means of interrogation. What’s more, they undermine the rule of law. They alienate us in the world. They serve as a recruitment tool for terrorists, and increase the will of our enemies to fight us, while decreasing the will of others to work with America. They risk the lives of our troops by making it less likely that others will surrender to them in battle, and more likely that Americans will be mistreated if they are captured.

Torture is incompatible with our values and our national security interests. When we break our own rules (read: laws) against torture, we erode everyone’s faith that America is the good guy in this global fight.

Torture has been embraced by politicians, but the people who are fighting terrorists on the ground want none of it. As former FBI agent Ali Soufan made clear in Senate hearings last week, it is not an effective interrogation technique. Senior military leaders such as General Petraeus, former CENTCOM commanders Joseph Hoar and Anthony Zinni, and former Commandant of the Marine Corps Charles Krulak all denounce the use of torture.

If we captured Al Qaeda operatives who had tortured one of our soldiers in pursuit of information, we would be prosecuting them. Torture is no different and no more justifiable because we are doing it.

Closing Guantanamo

Cheney:

I think the President will find, upon reflection, that to bring the worst of the worst terrorists inside the United States would be cause for great danger and regret in the years to come.

Obama:

[I]nstead of serving as a tool to counter-terrorism, Guantanamo became a symbol that helped al Qaeda recruit terrorists to its cause. Indeed, the existence of Guantanamo likely created more terrorists around the world than it ever detained.

This is an area where Cheney is disagreeing not just with Obama but with John McCain. We would be having this debate regardless of who won the last Presidential election. Get over it.

The current political climate gives you the impression that we are going to let detainees loose in the Midwest with bus fare and a gift certificate for a free gun at the local sporting goods store. Let’s be realistic about this.

We held hundreds of thousands of prisoners of war in America during World War II. The detainees we have now are not ten feet tall and bulletproof, and federal supermax prisons hold the same perfect record of keeping prisoners inside their walls as the detainment facility in Guantanamo Bay.

Criminal Prosecution

Obama basically said that we will try those we can, release those who we believe pose no future threat, and detain those that fit in neither of the first two categories. That’s not a change in policy and that pesky third category isn’t going away.

Obama and Cheney do have some sharp differences as to the reach of war powers versus criminal prosecution.

Cheney:

And when you hear that there are no more, quote, “enemy combatants,” as there were back in the days of that scary war on terror, at first that sounds like progress. The only problem is that the phrase is gone, but the same assortment of killers and would-be mass murderers are still there.

Obama:

Recently, we prosecuted and received a guilty plea from a detainee - al-Marri - in federal court after years of legal confusion. We are preparing to transfer another detainee to the Southern District of New York, where he will face trial on charges related to the 1998 bombings of our embassies in Kenya and Tanzania - bombings that killed over 200 people.

I have written extensively on al-Marri, the last person to be detained domestically as an enemy combatant. The FBI did everything right when it investigated and indicted this Al Qaeda sleeper agent masquerading as an exchange student, only to have the Bush administration remove those charges in order to preserve the possibility of detaining domestic criminals under wartime powers. This claim of governmental power is a perversion of executive authority that Obama was right to repudiate.

The man being indicted in New York is Ahmed Gailani. If he is convicted for his role in the bombing of American embassies in Kenya and Tanzania, he will join his co-conspirators Wadih El-Hage, Mohammed Odeh, Mohammed al-Owhali, and Khalfan Mohammed in a supermax.

This is also where we hold 1993 World Trade Center bombers Ramzi Yousef, Sheikh Omar Abdel Rahman (the “Blind Sheikh”), Mohammed Salameh, Sayyid Nosair, Mahmud Abouhalima, and Ahmed Ajaj.

Not to mention would-be trans-pacific airline bombers Wali Khan Amin Shah and Abdul Hakim Murad.

Al Qaeda operatives Mohammed Jabarah, Jose Padilla, and Abu Ali will share his mailing address.

Let’s not forget American Taliban Johnny Walker Lindh, Shoe Bomber Richard Reid, Al Qaeda and Hamas financier Mohammed Ali Hassan Al-Moayad, Oregon terrorist training camp organizer Ernest James Ujaama, and would-be Millenium Bomber Ahmed Ressam.

That’s a lot of bad guys. It’s almost like we’re checking names off a list or something.

Messaging

Cheney:

Behind the overwrought reaction to enhanced interrogations is a broader misconception about the threats that still face our country. You can sense the problem in the emergence of euphemisms that strive to put an imaginary distance between the American people and the terrorist enemy. Apparently using the term “war” where terrorists are concerned is starting to feel a bit dated.

Obama: no quote is necessary here. The differences in narrative between Obama and Cheney are clear and woven into what Obama says.

Terrorism is about messaging. America finds herself in the unenviable position of fighting an international terrorist group, Al Qaeda, that is trying to convince local insurgents to join its cause. Calling this a “War on Terror” can create a war on everybody if we use large-scale military solutions for intelligence, law enforcement, and diplomatic problems.

We have to tie every use of force or governmental power to a message: drop leaflets whenever we drop a bomb, hold a press conference whenever we conduct a raid, and publish a court decision whenever we detain someone. Giving the enemy the initiative in messaging gives them the initiative in the big picture.

Conclusion

Once we get past the rhetoric, the differences are few but worth noting. I take Obama in the third round by TKO.

How Protectionism Crashed the World Economy…and How to Stop It This Time Around

A coalition of more than 70 groups around the world, from Canada to Brazil to Kyrgyzstan to Germany to China to Japan to Kenya, has joined together to stop the dangerous stirrings of protectionism.  The FreedomToTrade.org coalition (coordinated internationally by the Atlas Economic Research Foundation and the International Policy Network) has circulated a petition (signed by over 1,000 economists and thousands of others) and is now producing documentaries to alert the public to the dangers posed by protectionism.  This one is on the role the Smoot-Hawley Tariff played in turning a serious recession into the Great Depression.

The mini-documentary is also being made available in 12 other languages.  The Spanish version will be available on Cato’s Spanish-language project, ElCato.org. Others are available on YouTube.

This information is important and needs to be widely shared.  Pass it on…

New Study: How President Obama Can Help Restore the Pro-Trade Consensus

Since taking office, President Obama seems to have discovered that anti-trade rhetoric, while popular on the campaign trail, isn’t so useful to a sitting president whose policies will have lasting consequences, says trade analyst Daniel J. Ikenson in a new Cato study.

In “Audaciously Hopeful: How President Obama Can Help Restore the Pro-Trade Consensus,” Ikenson and international trade attorney Scott Lincicome argue that the time has come “to arrest and reverse America’s misguided and metastasizing aversion to trade,” which has “been shaped overwhelmingly by relentless political rhetoric.”

The authors’ suggestions for President Obama include:

  • Establish a “trade transparency initiative,” with the goal of publishing independent findings about the effects of trade and trade barriers on the U.S. economy, without political interference.
  • Reinforce for Congress the fact that a unilateralist trade policy undermines multilateral foreign policy, as well as President Obama’s personal efforts toward repairing America’s damaged image abroad.
  • Craft a pragmatic, principled approach to enforcement of standing trade agreements.
  • Adopt a China policy of carrots and sticks, including a continued push for China to open more of its markets while resorting to the WTO dispute settlement system only when the situation and facts support doing so.
  • Craft a proactive agenda now for implementation when trade consensus re-emerges.

See more Cato research on trade policy.

America Alone on Punitive Corporate Taxes

In Tax Notes International today, two Ernst and Young experts describe how corporate tax reforms in Japan have made America an even bigger outlier in its punitive treatment of multinational corporations:

Japan’s recent adoption of a territorial tax system as part of a broader tax reform reduces the tax burden on the foreign-source income of Japanese multinational corporations.

Before the Japanese reform, the two largest economies had both high corporate income tax rates and worldwide tax systems. Now the United States not only has the second-highest corporate income tax rate of the OECD countries, it is also one of the few that still have a general worldwide tax system.

The Japanese corporate tax reform is part of a global trend toward reduced taxation of corporate income, which often takes the form of a significantly reduced corporate tax rate but also is reflected through reduced taxation of foreign-source income.

The details of the president’s budget proposal to reform deferral are expected in the coming weeks. As we await the specifics, it is clear that the direction of the proposal runs counter to this strong current of global corporate tax reform with lower overall corporate tax rates and reductions in domestic taxation of foreign-source income.

In simple terms, Japan’s reforms may give firms such as Toyota or Hitachi an advantage over firms such as Ford or General Electric in international markets.

Alas, U.S. policymakers don’t seem to understand that in a globalized world of free-flowing capital we need to change our uncompetitive tax policies. At Cato, we will keep trying to educate them, but it is sad that our economy loses jobs and investment because our elected leaders are such slow learners compared to leaders in Japan, Jordan, Canada, and elsewhere.

Globalization and Tax Reform

Despite the recession, globalization continues to exert pressure for beneficial tax reforms. From Tax Notes International today:

Jordanian Finance Minister Bassem al-Salem on April 20 confirmed that the government is working on draft legislation that would cut corporate tax rates drastically, reducing them in some cases by more than half.

Al-Salem said the government will seek to introduce a single 12 percent tax rate for most corporate entities, although companies in the banking, insurance, and mining sectors would pay tax at a rate of 25 percent. The current corporate tax rates range from 15 percent to 35 percent for different profit levels and also differ by business sector.

The draft legislation would also rationalize individual income tax, custom duties, and other taxes to increase efficiency, al-Salem said. Jordan has about 100 different taxes.

Al-Salem said the tax cuts are needed because many countries in the region either don’t have taxes at all or have much lower tax rates than Jordan’s, making them more attractive jurisdictions for investment.

 The full story on taxation and globalization is here.

Law Waves U.S. Flag at Pirates

Yesterday the U.S. House passed by voice vote a resolution praising the captain and crew of the U.S.-flagged ship Maersk Alabama that was seized by Somali pirates earlier this month. It was a riveting story that ended well for the brave crew and their Captain Richard Phillips, thanks to the work of Navy Seal sharpshooters. But one question that has yet to be adequately discussed is just what that ship was doing over in such dangerous waters off the coast of strife-torn Somalia.

The answer may surprise you: the U.S. government sent them there.

The ship and its American crew of 20 were delivering U.S.-government food aid to Africa. Under the Food Security Act of 1985, food aid sponsored by the U.S. Department of Agriculture and the U.S. Agency for International Development must in most cases be delivered by U.S.-owned, flagged and crewed ships. The law is one of several, including the Jones Act, that are designed to steer business to generally high-cost U.S. shipping companies.

The laws in that narrow sense have worked: While 95 percent of international cargo arriving in the United States each year is carried by lower-cost, non-U.S.-flagged ships, 83 percent of U.S.-sponsored food-aid cargo is carried by U.S.-flagged ships. [You can read a WTO critique of U.S. cargo shipping preference programs beginning on page 121 of its 2008 review of U.S. trade policy.]

Such laws are anti-competitive and cost U.S. companies and taxpayers millions of dollars a year in higher shipping costs. But the case of the Maersk Alabama reveals another unintended cost. Almost by definition, food aid goes to regions troubled by war, civil strife and oppressive governments. The Food Security Act essentially requires American civilians to be inserted into dangerous places, which creates yet another inviting target for pirates and another argument for a U.S. military presence.

The U.S. government could ship its official cargo at lower costs, and keep civilian American citizens out of harm’s way, by repealing all its protectionist, anti-competitive cargo preference laws.