Connect with us

Diplomacy

Is international free trade coming to an end?

Published

on

Where in the world is “free trade” really free? The European Union, and maybe China… The number of countries that feel bound to the World Trade Organization (WTO) rules, especially considering the last “protective” measures of the USA, does not go beyond the fingers of one hand.

The Inflation Reduction Act (IRA), signed by Joe Biden, seems to be a continuation of Donald Trump’s “America First” policy to many. The law provides government support for the transition from seemingly innocent fossil fuels to green energy. It is no secret that the role of states in the transition to renewable energy should increase. It does not seem possible to make progress in such a large infrastructure transformation without public intervention.

In the IRA, the issue that bothers EU in particular is government incentives for electric cars. In addition to financial support to automotive companies producing in the United States, tax breaks are also foreseen for consumers. The summary is that an electric Ford, GM or Tesla may cost $7,500 less under this law than an electric Volkswagen or Hyundai, depending on where and how it is produced. Let’s also say that in the IRA, Canada and Mexico are granted exemptions.

South Korea and Japan are also concerned

Of course, this is not just about the EU. Japan and South Korea also have world-renowned automotive companies that produce electric vehicles. These countries also think that the US’s new industrial policy is a violation of international trade rules.

The Japanese government said in a note to the US Treasury Department in early November that the IRA would challenge the competitiveness of Japanese automotive companies in the North American market. Tokyo warned its interlocutor that the new law could deter Japanese manufacturers from making new investments in the United States, which could lead to unemployment in the United States.

The CEO of the Japanese huge company Nissan said the IRA must be given some time before its entry into force. Nissan has a factory in Canton, Mississippi, but according to the CEO, the number of these factories could increase with the IRA. Nissan expects its electric models to account for 40 percent of US sales by 2030.

The South Korean government also said that the implementation of the IRA should be given a minimum of three years. Seoul has also reported that the IRA may violate the free trade agreement signed between the United States and South Korea. Companies like South Korean Hyundai and Kia are expected to increase their investment in the US.

Speaking to Axios, a South Korean official said that the issue almost led to a diplomatic crisis. The United States and South Korea have discussed the issue twice at the presidential level, but it seems unlikely that the Biden administration will make any changes to the law.

South Korea thinks that they cannot meet every request from the USA, for example, they cannot unite against China. Some officials think that US-Japan-South Korea-Taiwan co-operation on the semiconductors issue would have been easier to move forward without the IRA.

Along with the IRA, it is stated that Hyundai Ioniq 5, Kia EV6, Subaru Solterra and Toyota bZ4X models are not impossible to compete in the USA market. Rivian Automotive, Hyundai Motor and Kia Corp recently suggested to the US that the pressure on them could be reduced by arranging “commercial clean cars” regulation for the IRA.

US barrier to chip trade angers Netherlands

Yet another trade that the Biden administration is trying to block with IRA is the chip trade.

The US has recently imposed tight barriers to the sale of advanced chip and chip-making equipment. Dutch and Japanese companies are among the leading companies in this regard.

The United States has not yet reached an agreement with these countries on banning the sale of chips. But it is reported that Dutch chip makers will resist moving out of the Chinese market.

The Netherlands-based ASML is one of the largest suppliers to the global semiconductor industry. A Dutch official told Bloomberg last month that they would protect their own economic interests when it comes to selling chip equipment to China.

Dutch officials have emphasized that the United States should not expect its own countries to unquestionably comply with Washington’s restrictions on China.

Despite this, the Netherlands refuses to sell extremely ultraviolet lithography machines to China under US’ pressure. But ASML continues to sell less advanced chip-making systems to China.

US pressure on ASML and Japanese firm Tokyo Electron continues. ASML told its staff in the US to stop doing business with Chinese customers as a result of a new regulation that came into force in the US in October.

Dutch Foreign Trade and Development Co-operation Minister Liesje Schreinemacher insisted last week that his government’s “national security interests are really important”.

Dutch Economy Minister Micky Adriaansens told the Financial Times last week that his country was “very positive” about relations with China and emphasized that Europe and the Netherlands “should have their own strategies” for controlling exports to China.

Macron’s visit and concern in Europe

“Joe Biden wants to strengthen the American economy – to the detriment of Europe,” wrote the German newspaper Die Zeit, while the French economic newspaper Les Echos cited “America First, Europe Last.”

The fact that French President Emmanuel Macron was greeted like a king in Washington last week does not seem to have solved the problem. US President Joe Biden admitted there may be flaws in the IRA, but then mentioned the negotiations of the US-EU trade delegations.

Describing the IRA as “super aggressive” during a closed-door meeting with US senators, Macron invited the EU to adopt its own “Europe First” law before heading to the US. French Economy and Finance Minister Bruno Le Maire also suggested that the United States was pursuing a Chinese-style industrial policy.

In a statement with Mr Biden, Macron said it was now time for Europe to “synchronise” itself with US’ steps. This word is thought to refer to the EU’s own state incentives.

French authorities are concerned that European companies, whose operational costs have already risen due to inflation, will start to migrate investment to North America. But Stefano Sannino, secretary-general of the EU’s Foreign Relations Service, who was in Washington for the visit, argued that a scenario in which the United States on one side, and the EU on the other, started to provide incentives would not be “rational”.

At the same time, Denis Redonnet, the EU’s trade chief, said they could report the IRA to the WTO. European Commissioner for the Internal Market Thierry Breton also announced that he will not attend the EU-US Trade and Technology Council meetings later this week. Breton argued that the meetings were insufficient to address the concerns of Europe’s industry and labour ministers, noting instead that Europe would focus on the urgent need to protect the competitiveness of its industrial infrastructure.

EU officials are considering negotiating a free trade agreement between the EU and the United States as another option. However, the fact that this process takes too long and the bureaucratic procedures reduce the possibility of this option.

Meanwhile, Italian automotive companies are more concerned about the entry of Chinese electric cars into the European market than the IRA, according to the Italian newspaper La Stampa. The Germans fear the IRA more than the Chinese.

Czech Trade Minister Jozef Síkela reminded in November that the People’s Republic of China would be the winner of the EU-US trade wars.

Giga factory investments multiply in the US

We can say that the fears of Germans and the French are coming true. While Europeans are worried about the US “sucking up” investment in Europe, alarm bells are ringing in battery production.

Until recently, Europe’s production of lithium-ion batteries was a league ahead of the United States. But with the rise in energy prices and the IRA, the picture seems to have changed.

Since the day the IRA was announced, there has been a 35 percent increase in capacity in the United States. That’s 17 percent in Europe. Despite all this, Europe is still far ahead of the United States in terms of capacity. In 2031, Europe’s annual production capacity is estimated to be 1,186.2GWh, and the US 957.6GWh.

The Turkish company Kontrolmatik announced that it is considering increasing the size of the giga factory in the United States, while Norway-based FREYR announced that it will accelerate its plans in the United States. In Europe, there are reports that such plans have been delayed.

Towards a European protectionism

“The new ambitious industrial policy from our competitors requires a structural response,” said European Commission President Ursula von der Leyen, delivering the message that the EU will start playing by the rules: “Europe will always do what is right for Europe.”

According to Estonian Entrepreneurship Minister Kristjan Järvan, the EU has always supported free trade, and this was a good thing, but “non-democratic forces” were now using free trade against the EU.

Trying to balance the trade wars between the US and China for a long time, Brussels may now start to change its attitude towards friendly fire as Joe Biden jumps on the “protectionist” train. Von der Leyen’s speech Sunday also suggested that the EU should reconsider its own state subsidies.

“There is a risk that the IRA will lead to unfair competition, close markets, and dismantle the same critical supply chains that have already been challenged by COVID-19,” Leyen said, bringing up the possibility that manufacturers will move from Europe to the US.

The fear of subsidies in the EU’s ultra-liberal and pro-free trade departments is at a heightened level. European Commissioner for Trade Valdis Dombrovskis, among them, argued that the subsidy race would be “expensive and inefficient”. EU competition chief Margrethe Vestager said no one wants a subsidy war.

However, the genie has definitely came out of the bottle. If EU takes a step towards government incentive, it will be the last nail to be put in the coffin of international free trade, which hasn’t been really practiced for a long time.

Diplomacy

Vance leads indirect push for US-Iran ceasefire and nuclear talks

Published

on

US Vice-President JD Vance has been personally involved over the past two weeks in indirect talks with Iran aimed at securing a fresh ceasefire and restarting nuclear negotiations.

According to Axios, Vance’s intense engagement indicates that he has taken it upon himself to extract the US from the conflict, which he views as responsible for the Republican Party’s shocking losses in this week’s elections.

This elevates the latest round of indirect talks to the highest echelons of the administration.

US officials and regional sources state that Trump is currently willing to let diplomatic efforts run their course to see whether any agreement is achievable.

Asked by reporters on Friday what his message was to Iran, Trump said, “We are talking to them.”

According to sources with direct knowledge of the matter, Vance speaks almost daily with Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani, Pakistan’s Chief of Army Staff Field Marshal Asim Munir, and other mediators regarding the negotiations with Iran.

White House envoy Steve Witkoff and Jared Kushner, President Trump’s adviser and son-in-law, are also involved in the process.

Sources say Vance and the Qatari and Pakistani mediators have been discussing the possibility of holding a working-level technical meeting between the US and Iran in the coming days, though this has not yet materialized.

Before the war began in late February, Vance was among the most sceptical voices in Trump’s inner circle on the issue, advocating instead for a diplomatic solution.

In April, he led the US negotiating delegation at the Iran summit held in Islamabad and was personally involved in the talks that yielded a memorandum of understanding (MOU) signed between the US and Iran in June.

Vance subsequently headed the US delegation during a series of direct talks with Iran in Switzerland.

Two weeks ago, Vance sent a letter to Mohsen Rezaei, Secretary of Iran’s Supreme National Security Council, proposing that direct negotiations resume.

Rezaei is one of the closest advisers to Iran’s Supreme Leader, Mojtaba Khamenei.

Iranian officials noted that Vance’s letter generated positive momentum toward restarting talks.

On Wednesday, Vance said the war was the primary reason for the Republicans’ repudiation at the polls.

Sources involved in mediation efforts report that while progress is being made, the process is moving very slowly.

On Friday evening, the prime minister of Qatar said, “Over the past few weeks, we worked with our colleagues in the US administration who have a sincere intention to contain the situation and de-escalate. Thanks to them and the voices of reason in Tehran, we prevented the situation from spinning out of control.”

The prime minister added that discussions with the Trump administration continued following the midterm elections, though they were not as active as in previous days “because there are other matters.”

Nevertheless, he noted that the US intention to find a diplomatic resolution “remains ongoing” and emphasized that an agreement is possible.

On Friday morning, Trump and the Emir of Qatar discussed Qatari efforts to bridge differences between the US and Iran as part of an accord.

According to a statement from his office, Sheikh Tamim emphasized the necessity of “pursuing dialogue and diplomatic channels to resolve differences, prevent the region from facing further escalation, and ensure freedom of maritime navigation as well as the security of energy supplies.”

Separately, Trump confirmed on Friday that the US military conducted a strike on an anti-aircraft missile launcher on Qeshm Island in the Strait of Hormuz after it fired a missile at a US fighter jet.

Continue Reading

Diplomacy

Ukraine faces demographic collapse as fertility rates slide

Published

on

British magazine The Economist reported that mobilization, conflict casualties, and pervasive uncertainty have left Ukraine confronting the threat of demographic collapse.

According to data cited by the magazine, Ukraine’s fertility rate has declined from 1.2 children per woman in 2020 to between 0.8 and 0.9.

This rate marks a lower level than that of any major nation except South Korea.

In the first half of 2026, the number of deaths in Ukraine surpassed the number of newborn babies threefold.

The report noted that ever since independence was gained in 1991, the number of births in the country has lagged behind the number of deaths every year.

The Economist emphasized that the demographic collapse driven by the ongoing fighting constitutes an “existential threat.”

The magazine identified mass refugee migration as the principal driver of the population loss.

More than 5 million Ukrainians reside abroad, predominantly in Europe.

The proportion of those wishing to return among those who left the country is also steadily shrinking.

According to data from the Centre for Economic Strategy (CES), the share of those seeking to return dropped from 74% in 2022 to 43%.

The fact that the majority of refugees consist of Ukrainian children and women under the age of 44 further aggravates the demographic picture.

The Kyiv government decided to exempt men under the age of 25 from mobilization to alleviate the demographic decline.

The magazine reported, however, that many young people have fled the country, while those who remain do not plan to start families.

Projections cited in the report indicate that even if hostilities cease in the coming years, Ukraine can, at best, expect merely a deceleration of depopulation.

Olga Duhnich, an expert at the Ukraine-based think tank Frontier Institute, stated that the generation born in the 1990s and 2000s is the least populous in Ukraine’s modern history, meaning the country cannot expect a post-conflict baby boom.

The United Nations (UN) projects that Ukraine’s population will decline by 0.7% to 0.9% each year over the next two decades.

Under this projection, Ukraine’s population will fall to approximately 25 million by 2040.

If hostilities drag on, people are expected to abandon plans to have children, deepening the crisis even further.

Beyond exempting men under 25 from mobilization, the Kyiv government is rolling out various support packages to boost birth rates.

Under legislation enacted in the country, parents who have children receive a direct payment of 50,000 hryvnias (around $1,100).

Parents are also paid 7,000 hryvnias each month during the first year.

Other state programmes subsidize childcare costs, while Ukrainian soldiers are granted free freezing of egg and sperm cells.

Ukrainian Minister of Social Policy Denis Ulyutin said in May to the Livyi Bereh media outlet that roughly 22 to 25 million people lived in government-controlled territories.

Ulyutin characterized the prevailing picture by saying: “This is a catastrophe.”

Ella Libanova, Director of the Institute for Demography and Quality of Life Research, estimated the population at 29 million during the same period.

Libanova attributed the steep fall from a population of 30 million in 2025 to high death rates and the demographic crisis.

In a statement in October, Libanova announced that Ukraine’s population had slipped to 28.5 million.

Institute Director Libanova said: “The population is already at 28.5 million; we lost half a million people. We lost them, but thankfully this was still caused by migration rather than casualties.”

Continue Reading

Diplomacy

Armenian opposition urged to form joint front against constitution

Published

on

Narek Karapetyan, a lawmaker and head of the Strong Armenia faction in the Armenian parliament, has urged opposition parties to unite around four core principles set out in a joint declaration.

The key points of the declaration include resisting territorial concessions and blocking the adoption of a new constitution, which the opposition has termed the “Aliyev constitution”.

According to a report by Aysor.am, Narek Karapetyan stated that the opposition meeting was originally planned to be led by his uncle, businessman and Strong Armenia movement leader Samvel Karapetyan.

“We initiated the meeting, but the authorities took preemptive steps to prevent Samvel Karapetyan from launching the national unification process,” Narek Karapetyan said.

Noting that, despite these events, opposition representatives convened and signed a joint declaration based on four agreed articles, Narek Karapetyan invited other opposition forces and members of the public to join the alliance.

“We will not allow them to implement the Aliyev constitution in Armenia. We must unite,” Karapetyan said.

Ahead of these developments, Armenian National Security Service personnel detained Strong Armenia Party leader Samvel Karapetyan following a search of his home.

The party’s press secretary, Agavni Sukiasyan, announced that on the morning of the same day, the Investigative Committee of Armenia searched the homes of both Samvel Karapetyan and Narek Karapetyan.

In a report citing the Investigative Committee, Armenpress stated that Samvel Karapetyan was detained as part of a case involving allegations of causing large-scale financial damage to the Electric Networks of Armenia (ENA) company, embezzling entrusted property, and money laundering.

According to committee figures, the total damage inflicted on the company exceeds $179 million.

Narek Karapetyan’s home was also searched at the end of July as part of a criminal case.

On 22 July, Armenia’s Central Electoral Commission approved the Prosecutor General’s request to strip Narek Karapetyan of his parliamentary immunity, and Karapetyan was charged with large-scale money laundering.

According to information reported by Sputnik Armenia, the investigation is linked to charges brought against Strong Armenia supporter Aleksan Aleksanyan.

Investigative authorities allege that Aleksanyan received approximately $4.4 million and €230,000 from the Karapetyan-owned Tashir Foundation under the guise of gifts and loans.

Several criminal cases had previously been opened against Samvel Karapetyan.

In 2025, Karapetyan was charged with publicly calling for the violent seizure of power after backing the Armenian Apostolic Church, which had been criticized by Armenian Prime Minister Nikol Pashinyan.

In January, legal proceedings were also launched against Karapetyan on charges of large-scale tax evasion and money laundering.

Separately, in early July 2025, the Armenian parliament approved a bill enabling the nationalization of the Electric Networks of Armenia company.

In March, Armenia’s Constitutional Court ruled that the nationalization process in question complied with the law.

Continue Reading

MOST READ

Turkey