Energy sector reform will continue with or without the United States, said former Mexican official

Though recent political tensions threaten the stability of US-Mexico relations, Mexico’s ongoing energy sector reform will continue without US partnership, if necessary, according to Mexico’s former deputy secretary of energy.

“Mexico’s energy reform does not depend on the United States,” Lourdes Melgar, who now serves at the Robert E. Wilhelm Fellow at the Massachusetts Institute of Technology Center for International Studies, said at the Atlantic Council on March 16. “If the United States does not want to have business with Mexico,” Melgar cautioned, “I think they’re missing the picture, because Mexico has options.”

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While Saudi Arabia’s King Salman was on the fourth leg of his three-week Asia tour, his son, Deputy Crown Prince Mohammed bin Salman (MbS), became the first Saudi royal to visit the White House during the administration of US President Donald J. Trump. With the king wrapping up his state visit in Japan before going to China, and MbS in Washington, the timing sent a message that Riyadh is seeking to work with allies, friends, and partners across the world. These visits occurred at a time when the kingdom is pursuing an economic transformation in line with Vision 2030, a blueprint for improving the future of Saudi Arabia. Riyadh is also facing a host of financial challenges stemming from cheap oil as well as ongoing security crises near and within its borders.

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Three years ago this month, Russia illegally annexed Crimea and laid the groundwork for its ongoing campaign to destabilize Ukraine.  That moment marked the end of a period of more than twenty years when the countries of the West looked to Russia as a partner. Of course, even before 2014, Russia had demonstrated a pattern of destabilizing countries in its neighborhood, particularly Moldova and Georgia. But Russia’s aggression against Ukraine—including the first changing of borders by force in Europe since World War II—represented a new strategic reality, and a wake-up call for the United States and its allies.

That new strategic reality is even starker today:  Russia has not only continued to undermine the post-World War II and post-Cold War international order through its illegal occupation of Crimea and its continuing war of aggression in eastern Ukraine; Russia has also engaged in political aggression against our societies, using cyberattacks, disinformation, propaganda, and influence operations to affect the outcome of elections and undermine confidence in our democratic institutions.   

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We are entering a new era of clean energy disruption. This transformation will have a global impact, including on energy security, climate change, economic development, that will have repercussions for geopolitics and international relations.

More and more governments are realizing the importance of renewable and sustainable energy resources. Hydrocarbons will continue to play a role in industrial processes, but will gradually fade out as a transportation fuel. Electric engines and batteries for cars have been developing rapidly, as a result, electric cars have become an attractive and economically feasible option for the public, with an unprecedented increase in sales in the past couple of years.

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When approaching security in the Asia-Pacific region, new trends such as deepening intra-Asian defense cooperation and significant increases in Asian defense spending, now on par with that of North America, must be considered, said an Atlantic Council analyst.

“There is a trend of very significant increases in Asian defense spending, as well as concomitant intra-Asian defense cooperation” which provide opportunities for “multilateral hedging against some of the uncertainties associated with China’s rise,” and “in some cases North Korea,” said Barry Pavel, senior vice president, Arnold Kanter chair, and director of the Atlantic Council’s Brent Scowcroft Center on International Security.

Pavel said recent agreements between Singapore and Vietnam, Japan and Australia, India and South Korea are all examples of how Asian countries can “train together, exercise together, develop new capabilities together,” with the broad mission of promoting security and prosperity in the region.

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German chancellor’s visit to Washington puts focus on US-German, US-European relationships, says Atlantic Council’s Fran Burwell

German Chancellor Angela Merkel faces a tough re-election battle in September and a meeting with US President Donald J. Trump is perhaps not the best way for her to burnish her credentials with the German electorate. The fact that she is making the trip across the Atlantic is an indicator of her determination to shore up the US-German and US-European relationships that have been buffeted by often controversial rhetoric from Trump.

“If she were looking at this from a purely electoral calculation, she may not have even done this visit because no one in Germany wants to see her necessarily being close to President Trump,” said Fran Burwell, a distinguished fellow at the Atlantic Council.

Making the point that the visit is more about the US-German and the US-European relationships, she added: “She is coming not only as the chancellor of Germany, but as the leader of Europe.”

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Political realities on both sides of the Atlantic have a significant impact on economic opportunity, and policymakers must address this dynamic in order to begin the process of stimulating European economic growth, José Manuel Barroso, a former president of the European Commission and former prime minister of Portugal, said at the Atlantic Council on March 10.

“There is a possibility to do things, but that depends on the politics,” said Barroso, who also serves as a co-chair of the Atlantic Council’s EuroGrowth Initiative.

“The most important risks today are political and geopolitical,” said Barroso, “but I believe there are conditions for Europe to prosper.”

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US President Donald J. Trump’s new actions intended to expedite approval of energy and infrastructure projects were hailed by industry groups and decried by environmentalists.   If those actions are implemented in ways that cut regulatory or procedural corners, they likely will slow down infrastructure development by increasing the risk of successful court challenges and trade disputes.

If the agencies reviewing Dakota Access and Keystone XL pipelines do not take the time to provide justifications for their recent decisions on those projects—influenced by Trump—courts may invalidate pipeline approvals. Implementing explicit local content requirements for steel in pipelines could embroil the United States in trade disputes.  Further, the administration’s memorandum to expedite federal infrastructure review and permitting creates uncertainty about the application of a more carefully thought out process Congress established in 2015. 

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Despite the tentative March 13 agreement between the European Commission and Gazprom on the liberalization of gas markets in Central and Eastern Europe, it is still premature to declare an end to the Russian energy giant’s dominance in the region. In its statement of promises, Gazprom pledges to remove destination clauses in its long-term contracts barring the re-exporting of excess gas imports, to renegotiate pricing to reflect spot hubs in Western Europe, and to drop its refusal to allow virtual gas transfers along the Gazprom-dominated transit pipelines. However, Gazprom’s behavior would depend on the political will of its clients to directly challenge it amid its allegedly receding market power in Europe amid greater competition, liquidity, and supply sources.

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The rapidly climbing numbers of Russians fleeing the country in search of political freedom and economic opportunity in the West has become the greatest threat to the stability of the Russian Federation, said an Atlantic Council analyst.

According to Alina Polyakova, director of research for Europe and Eurasia at the Atlantic Council, “the fact that you have this outward migration is a significant national security threat to the Russian Federation.” She said: “this is the number one threat to a Russian Federation that seeks to gain its foothold in the world again.”

Russian President Vladimir Putin’s leadership ushered in an era where a revanchist Russia has clamped down on social freedoms at home in order to exert its aggression and influence on the global stage. However, these efforts may be impacted by instability at home. Between 2000 and 2014, approximately 1.8 million Russians left the country “under [Putin’s] watch,” said Polyakova, citing official numbers from the Russian Federation. “This trend has only intensified,” she added.

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