Friday, May 29, 2015

Why Is Malaysia So Important to TPP? The Strait of Malacca


The Strait of Malacca connects the Pacific Ocean to the east with the Indian Ocean to the west (source; click to enlarge)

by Gaius Publius

Because of an excellent catch by Yves Smith at Naked Capitalism, I think we can put the finger on why keeping Malaysia in the TPP is important to its proponents. Which may explain why Obama — after all, the first black president — is willing to turn a blind eye to slavery and the murder of trafficked humans. The Strait of Malacca is one of the most important shipping lanes on the planet.

Reuters (my emphasis throughout):
The 900-km long (550 miles) Malacca Strait, linking Europe and the Middle East with the Asia-Pacific, carries about 40 percent of the world’s trade. More than 50,000 merchant ships ply the waterway every year.

About 3.3 million barrels per day (bpd) of Middle East crude passed through the strait and to Japan last year. Middle East crude accounts for 90 percent of Japan’s total imports. Up to 80 percent of China’s crude imports are delivered via the narrow and congested waterway.

So China and Japan have a stake in keeping the Malacca Strait secure, as does India which has a blue water navy patrolling in the Andaman Sea at the western end of the strait.

The strait is a vital sea lane for the U.S. Navy, which sent warships to Taiwan via the Malacca Strait at a time of heightened tensions between China and Taiwan in 1996.

Although the three littoral states — Indonesia, Malaysia and Singapore — have asserted their sole right to maintain security in the Malacca Strait, Australia, India, Japan, the United States and China have all offered military assistance at various times.
That's quite a list of nations who care about the Malacca Strait. Keep those numbers in mind as you read on — according to Reuters, 40% of world trade, 90% of Japan's total imports, 80% of China's crude oil imports. (Other reports have different numbers, but the importance of the strait is not in doubt.)

The Strait of Malacca is also a choke point. Peninsular Malaysia shown in pink (source; click to enlarge).

The Strait of Malacca is also a choke point (references deleted; see original for links):
The strait is the main shipping channel between the Indian Ocean and the Pacific Ocean, linking major Asian economies such as India, China, Japan and South Korea. ... In addition, it is also one of the world's most congested shipping choke points because it narrows to only 2.8 km (1.5 nautical miles) wide at the Phillips Channel (close to the south of Singapore).
The strait is important for global shipping, yet it's also vulnerable to piracy, to terrorist attack and, potentially, to international brinksmanship, as you'll read shortly. Control of the strait matters to many in the region and elsewhere.

Who Controls the Strait of Malacca?

Direct control of the strait is shared between Malaysia, Indonesia and the island city-state of Singapore. But control is not shared equally. The size of each nation's navy limits the degree to which that nation can project power into the strait.

The Jakarta [Indonesia] Post:
Indonesia, Malaysia and Singapore are the littoral states of the Malacca Strait, one of the world's busiest shipping lanes. Indonesia controls the majority of the sea lane. Singapore controls the smallest area of the strait, but the city-state enjoys the biggest economic benefit from shipping activities.

Indonesia is often cited as the main source of pirates operating in the Malacca Strait. But it is very firm in its position that all three of the countries are fully responsible for security in the strait.

However, Indonesia lacks the capacity to exercise its duties because its Navy is smaller and not as well equipped as the navies of Malaysia and Singapore.

Other countries -- no matter how vital the security of the strait is for their economies -- can only provide technical assistance to help Indonesia, Malaysia and Singapore ensure safe and secure passage through the 805-kilometer shipping lane.
While we [Jakarta Post editorial writers] fully support the sovereignty of the three countries, we also want to remind them that all stakeholders in the strait have the right to play a role in ensuring the safety of this vital waterway. Major Asian economic powers like Japan and China want more of a role in patrolling the waters, because they depend on the strait for the transportation of commodities like oil and gas....

Indonesia can not simply claim sovereignty and reject any foreign presence in the strait, especially when it remains the main base for pirates there and has so far failed to ensure safe passage through its waters.

It is also difficult simply to dismiss whispers overseas -- although there is no evidence --- that rogue elements of the Indonesian Navy turn a blind eye to activities of pirates for a cut of the profit.

As long as Indonesia remains unable to play a credible and sustainable role in maintaining security and safety in the Malacca Strait, it will remain difficult for other countries with strong economic and political interests in the waterway simply to entrust Indonesia, Malaysia and Singapore to handle security responsibilities.

The three states have every right to maintain their sovereignty over the strait, for their commercial and security interests. They also have the rights to ask for more economic benefits from the foreign parties.

But as long as piracy and other security problems remain a concern, it will be nearly impossible for them to continue rejecting the presence of foreign powers in the strait.
And though it's not mentioned, those foreign powers include the U.S. as well.

"America's First Black President Throwing Slaves Under the Bus"

With that for context, now read Yves Smith at Naked Capitalism:
America's First Black President Throwing Slaves Under the Bus

Huffington Post has reconfirmed its reporting from over the past weekend, namely, that the Administration has a hairball to untangle to get Malaysia to sign the TransPacific Partnership. Basically, Malaysia needs to have an anti-slavery provision that was inserted in the bill in committee watered down. And the reason that that has to happen, as our reader Antifa pointed out in comments, is that Malaysia controls the Straits of Malacca, a critical shipping choke point. One of the major objectives of the pact is to strengthen America’s position in the region relative to China. Thus Malaysia’s location makes it a critically important signatory to the pact.

From the Huffington Post account (emphasis ours):

So the trade promotion authority bill that passed Friday includes the strong anti-slavery language, which the House will now work to take out to ensure that Malaysia (and, potentially, other countries in the future) can be part of the deal.

Observers are left with a deeper question: Why, in the year 2015, is the White House teaming up with Republican leaders essentially to defend the practice of slavery?

Cue Antifa:

Malaysia’s membership in the circle of TPP nations is not vital because Malaysia — it’s vital because of the Malacca Straits, through which virtually all the shipping in that part of the world passes. It’s a bottleneck, a chokepoint, and if Malaysia is “driven into the arms of China” then China can close those Straits to shipping how, when, and as they please.

Which would neuter the US Navy in that part of the world, reducing them to observer status. When people at the Pentagon talk about America’s role as the world’s policeman, they are talking about the Navy’s ability to project overwhelming force wherever and whenever needed. The three little chokepoints world trade and shipping depend on are the Strait of Hormuz, the Straits of Malacca, and the Panama Canal. Taking one of those and giving control of it to China and Friends — or to anyone but the US Navy — puts the world’s policeman in a clown suit.
Smith quotes this, from Andrew Watts, another of her commenters:
Look at a list of member states of TPP and tell me this isn’t an anti-Chinese military alliance or there are alternative shipping lanes. The transportation routes via the Eurasian Silk Road is one way to circumvent this potential naval blockade but shipping via the sea has always been cheaper than shipping by land.

The only reason why business and intellectual property rights is [a part] of the deal is because Obama needs to bribe as many domestic power centers as possible to pass it. This is straight outta his Obamacare playbook. The reason for the secrecy is probably due to the military nature of the pact. in any case nobody wants the perception that this is preparation for some future Sino-American war.

But if I were a Chinese political leader in Beijing I would not trust any assurances to the contrary that come from Washington.
By the way, here's that modern "Eurasian Silk Road" mentioned above, a rail route:

The new Eurasian Silk Road in yellow; dotted line shows shipping via Strait of Malacca (source; click to enlarge)

There is plenty more in the Naked Capitalism piece — a must-read if this stuff, geopolitical brinksmanship, is your topic.

Why Does Obama Want to Be the "Slavery in Asia" President?

I want to touch this just lightly, since motives are less important than done deeds. Motives do count toward legacy points, however, both by adding and subtracting them, so I do want to touch this some. Why does Obama want to do this, to support slavery in Asia as one of his defining late-term achievements?

First I want to stipulate this: I'm over the "he's too stupid or naïve to do things right" defense. That's both demeaning and disrespectful to Obama. After all, the man's an adult, not some child whom progressives need somehow to teach. So I'll offer three explanations, any or all of which could be right.

▪ One explanation is pretty simple. He thinks no one will notice, or if they do, they'll quickly forget. Pretty simple explanation, especially given that his best corporate friends control almost all of the messaging via corporate media.

▪ Another explanation is best expressed by Andrew Watt above. To repeat:
The only reason why business and intellectual property rights is [a part] of the deal is because Obama needs to bribe as many domestic power centers as possible to pass it. This is straight outta his Obamacare playbook.
That's actually very kind to Obama. It says that he's being a responsible president from a military standpoint, and bribing all major U.S. corporations — Nike, for example, corrupt as it is (do click) — to get the deal he needs because of solid national security concerns. As explanations go, this results in higher legacy points than the other ones do.

▪ The final explanation? He's simply cashing out, feathering his future nest, foaming his own landing, getting his meal ticket punched, setting the table for the feast of his next 20 years of life — his post-electoral, Obama Global Initiative legacy-tour life. You can't ride the corporate stratospheric rails to Davos if corporate jet owners don't like you. You can't give speeches for $400,000 each (give or take) if you don't give the check-writers a reason to say thanks.

Maybe Obama's just giving a reason to say thanks, much like this guy did back in 2000:
Bill Clinton's $80 Million Payday

On December 21, 2000, President Bill Clinton signed a bill called the Commodities Futures Modernization Act. This law ensured that derivatives could not be regulated, setting the stage for the financial crisis. Just two months later, on February 5, 2001, Clinton received $125,000 from Morgan Stanley, in the form of a payment for a speech Clinton gave for the company in New York City. A few weeks later, Credit Suisse also hired Clinton for a speech, at a $125,000 speaking fee, also in New York. It turns out, Bill Clinton could make a lot of money, for not very much work.

Today, Clinton is worth something on the order of $80 million [written in 2012] (probably much more, but we don’t really know), and these speeches have become a lucrative and consistent revenue stream for his family. Clinton spends his time offering policy advice, writing books, stumping for political candidates, and running a global foundation. He’s now a vegan. He makes money from books. But the speaking fee money stream keeps coming in, year after year, in larger and larger amounts.

Most activists and political operatives are under a delusion about American politics, which goes as follows. Politicians will do *anything* to get reelected, and they will pander, beg, borrow, lie, cheat and steal, just to stay in office. It’s all about their job.

This is 100% wrong. The dirty secret of American politics is that, for most politicians, getting elected is just not that important. What matters is post-election employment. It’s all about staying in the elite political class, which means being respected in a dense network of corporate-funded think tanks, high-powered law firms, banks, defense contractors, prestigious universities, and corporations. If you run a campaign based on populist themes, that’s a threat to your post-election employment prospects. This is why rising Democratic star and Newark Mayor Corey Booker reacted so strongly against criticism of private equity – he’s looking out for a potential client after his political career is over, or perhaps, during interludes between offices. ...
Not to say he doesn't also believe the "free trade" dominus vobiscum the Bigs are mouthing these days. It's just that he can't afford not to.

In terms of legacy points, that explanation actually subtracts them. Good thing few people are impertinent enough to suggest it. Me, I just keep seeing this:

Obama Legacy Library as envisaged by the Chicago firm HOK; lakefront view. If TPP passes, will Nike find a way to say thanks? (click to enlarge)

And then I wonder how something this grand gets paid for. Does that make me impertinent? Or just practical?

Pragmatically yours,


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At 3:02 PM, Anonymous Anonymous said...

You know, it's not even shocking anymore, just pathetic.

At 12:10 PM, Anonymous Anonymous said...

And this serves his constituent American PUBLIC electors, HOW?

At 11:55 AM, Anonymous Anonymous said...

So you think that giving the Straits to China is a good thing?

Please explain.


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