Daily Memo: The US and Japan Sign a Trade Pact, Israel Reaches Out, Belarus Shows Concern

What's geopolitically important today.

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Deal done. Japan and the U.S. have signed a trade deal that will provide some relief to U.S. farmers hit hard by declining exports to China. Japan agreed to substantially lower tariffs on imported U.S. agricultural goods worth $7.2 billion. Though the agreement is limited in scope (it includes digital trade and agricultural goods) and falls short of the level of access to the Japanese market that the Trans-Pacific Partnership would have provided, it will marginally help reduce the U.S. trade deficit with Japan and relieve some pressure on U.S. farmers. The deal also includes “gold standard” language on digital trade – an increasingly important component of the global economy that the World Trade Organization is ill-equipped to govern. Notably absent was a formal agreement regarding potential U.S. tariffs on Japanese automobiles; Tokyo received only vague assurances from the Trump administration that tariffs will not be imposed. The U.S. is expected to fast-track the agreement to avoid seeking congressional approval, and Japan is expected to submit it in the next parliamentary session. If passed, the changes will take effect Jan. 1. The deal, however, may run afoul the WTO’s most-favored nation rules, raising the prospect of another multilateral showdown with the U.S. with much broader potential implications.

Israel reaches out. Israeli is working on developing non-aggression treaties with several Arab countries in the Gulf, Israeli Foreign Minister Israel Katz has confirmed. Katz added that he laid out his plan to several Arab countries on the sidelines of the recent United Nations General Assembly meeting. The draft of the proposed agreement reportedly calls on signatories to prevent hostilities against each other, abstain from entering security alliances with other parties that could harm each other, cooperate in the fight against terror, and advance economic interests. Katz acknowledged talking to U.S. officials about the project but did not specify which Arab countries he spoke with at the UNGA (though he has recently held meetings with officials from the United Arab Emirates, Bahrain and Oman). The initiative is part of Israel’s diplomatic efforts to form an anti-Iran coalition in the region.

Belarusian concerns. At a conference on European security, Belarusian President Alexander Lukashenko said the degree of mistrust and confrontation between Russia and the West has reached its limit – though he also said U.S. participation in Ukraine peace talks was necessary to resolve the conflict there, a suggestion Moscow quickly rejected. Lukashenko further expressed concern about upcoming NATO exercises in Poland in 2020, as part of the Defender Europe 2020 drills scheduled to take place in April-May 2020 in 10 European countries. In total, 18 nations are expected to participate. Lukashenko noted that such exercises have never before been held near the Belarusian border. It has been reported in the Polish press that the U.S. will send 20,000 troops to take part in the drills, and some have speculated that some of those troops could remain in the country even after the exercises have been completed. While Belarus has been getting more cozy with the West of late, it does not want to get caught in the crossfire between the U.S. and Russia.

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