June was a big month for imperialist contention and geopolitics by MC5 June saw a lot pieces come together in the puzzle of imperialist contention and geopolitics. New capitalist alliances formed and expanded; the Europeans are now pissed with Bush and an oil company spelled out how it was going to get its hands on ex-Soviet oil. While World War III focuses the imperialists against the Third World, it is certainly not true that the capitalist and imperialist countries have no national conflicts themselves. Indeed, capitalism only generates national economic conflicts and has no hope of being peaceful. Oil Businesses looking at the ex-Soviet Union for quick gains see two things--the gas monopoly in Russia called Gazprom, the monopoly intimately tied up with the Russian state, and oil fields. There are 5 billion barrels of oil in Azerbaijan by itself and BP has also discovered natural gas in Azerbaijan. Thanks to that oil and gas, British Petroleum has committed itself to finishing an oil pipeline from Azerbaijan to a Turkish seaport called Ceyhan by the end of 2004 at a cost of $3 billion.(1) Until now there has been a lot of speculation about how the Western imperialists were going to get at ex-Soviet oil. The war against ex-Yugoslavia took shape partly in that light. The oil fields near Baku, Azerbaijan have an important place in Soviet history. Stalin organized workers there and Kirov spent years there putting the oil industry on its feet after the revolution in 1917. The BP pipeline will pass through Tblisi, Georgia, which is where Stalin was from. Baku and Tblisi are closer to the Iraqi border than the border of Moscow. British Petroleum is an interesting actor as a potential first oil giant to get its claws on ex-Soviet oil. The Financial Times raised the question of whether the United $tates would resist BP's getting first dibs on ex-Soviet oil. However, 40% of BP's assets are in the United $tates(2) and BP's action fulfills a Cold War dream of making Azerbaijan and possibly Kazakstan more independent of Moscow. The Italian energy company ENI is in Kazakstan and has offered to pitch in on studies for the BP pipeline.(1) It seems likely BP will have other business partners if it does build the pipeline. Kazakstan could possibly end up using the same pipeline. At the same time, BP has pledged a total of $10 billion in investments in the Caspian Sea area over the next five years. It appears to want to get back in on some business in Iran that England used to control completely before the CIA helped overthrow a parliamentary government to install a king in 1953. (See MIM Notes #210, May 15, 2000 for an article on the U.$. imperialists' belated admission of this point.) Sir John Browne of BP seems to be a key player in much imperialist contention right now. While making aggressive moves into the Caspian Sea region, he is behind one alliance of states which we will discuss in a minute. BP is also sowing seeds of dissension in the Central Asia area by helping Azerbaijan at Turkmenistan's expense. Already BP is going forward with work in the Caspian Sea on oil that Turkmenistan also claims. Turkmenistan recalled its diplomatic envoys to Azerbaijan as a result of the work which is apparently happening before the ex-Soviet republics have agreed how to carve up the Caspian Sea.(3) The conflict is proof of how capitalism gives rise to reactionary nationalism and why economic cooperation and the elimination of borders is necessary for world peace. Finally, Browne did get some digs in against the United $tates when asked about the Kyoto Treaty signed in Japan in 1997. MIM does not know why but Browne favors the treaty and says that he is confident that it will be implemented, which is just a way of appearing polite to the United $tates. The fact that Sir Browne even supports the Kyoto Treaty says something about why the European Union leaders came down hard on Bush in his trip to Europe in June. Every country including Italy criticized the United $tates. The former fascist coming to power in Italy as Prime Minister, Silvio Berlusconi was the only voice of doubt,(3b) but he was not in power yet when Bush visited Europe. The European Union has said it will go ahead with ratifying and implementing the treaty by 2002 despite Bush. Anti-Moscow alliance for oil Less than two weeks before Sir John Browne made his announcement about the oil pipeline, on June 7th five key former Soviet republics meeting in Yalta made a public show of unity sure to please Sir John Browne. The former foreign minister of the Soviet Union and now president of Georgia Eduard Shevardnadze said that the new five nation alliance called GUUAM would work on economic, transportation and security issues. To have Georgia and Azerbaijan singing the same anti-Moscow song while claiming it was not anti-Moscow was perfect for BP purposes. The alliance contains Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldova. These states are more than enough to get a lot of oil work done. With Shevardnadze signing, we can be sure there is not a bit of naivete about it really being some free trade pact amongst the five nations. Rather it is a signal to outside imperialists regarding the local investment environment. Noticeably absent from the lineup was Armenia--which has had a war and exchange of ethnic cleansing with Azerbaijan. Of course Russia was also absent, and that was the main point. One June 21st, Sir John Browne met with Shevardnadze and promised to deliver natural gas to Georgia by 2005. Currently many ex-Soviet republics feel pressure from Moscow because they get their natural gas and other cheap energy supplies from Gazprom. Other alliances forming against United $tates and BP With BP having cut Turkmenistan out, there is no surprise that Turkmenistan made a deal with Armenia to supply it with natural gas and also made a deal to buy U.$. grain harvesting machines.(6) After all, if anyone is to stop BP, it is the United $tates. MIM is not going to bet on Turkmenistan's success in derailing BP. In addition to the fact that U.$. investors also garner profits from their international investments in BP and BP-related institutions, the United $tates would have to do a lot of work and step on a lot of toes in a very aggressive way on behalf of its energy monopolies, not that it would not move aggressively with a clear enough plan from Exxon-Mobil etc. It seems likely that the United $tates has already given the green light and BP is also being sufficiently careful not to step on Russian toes too hard. Although the situation is still fluid, it looks like Turkmenistan and Armenia have reasons to tilt in Russia's direction. On the other hand, we cannot count out Turkmenistan's chance of becoming a favored U.$. lackey yet. Italy's monopoly energy company ENI is stepping on U.$. toes at the same time that it is backing up BP in Iran and Azerbaijan. The United $tates still has a law in place sanctioning anyone who does business in Iran and Libya. The law would have expired in August, but Congress appears to have renewed it another five years, despite Clinton's waiving the enforcement of it in one case. "Despite the law, ENI, Royal Dutch/Shell, TotalFinaElf and BP in recent years have agreed [on] large projects in Iran without fall-out from the US. Those oil companies, and a Japanese consortium, were now close to completing several more deals, but held back from signing them in recent months until this month's elections in Iran were held, industry executives said."(7) The Italian ENI was to be in line to sign a new $1 billion deal with Iran for development of its western region Darkhovin oil field on June 24th.(7) At the same time, the European Union caused President George W. Bush to intervene on behalf of General Electric which is trying to buy Honeywell in a $41 billion merger. The European Union has the power to cripple the General Electric deal by saying the new company is a "trust" that unfairly limits competition. Without being able to do business in Europe, GE would be in deep trouble and hence GE Chair and CEO Jack Welch has said the deal will not go through. Negotiations are still going on however. In 1997, Europe also objected when Boeing wanted to merge with McDonnell Douglas. Now, "GE dominates the market for aircraft engines and servicing, while Honeywell is the predominant suppliers of aircraft electronics for commercial jets and air traffic control systems."(8) The European Union wants GE to sell some aircraft parts of its business so that not so much is concentrated in one company.(8) Meanwhile, tensions also include Japan, which continues to support the Kyoto Treaty but has said it will not go ahead without the United $tates. The right- wing libertian-ish Cato Institute Vice-President Ted Galen Carpenter has started complaining that Japan is tilting toward China. Foreign Minister Makiko Tanaka recently cancelled visits with several diplomats and only met with the Chinese Foreign Minister, Tang Jiaxuan. She told Tang that she would not grant any visas to the former president of Taiwan, Lee Teng-hui. She also did not endorse Bush's idea of a "missile shield," even though northern Korea's state -capitalist regime is the main reason Bush gives for wanting one.(9) For its part the United $tates also angered England and others on June 5th when it set in motion a process that may result in import tariffs (taxes on imports) in steel. U.S. Commerce Secretary Donald Evans chose to announce the possibility of tariffs to a steelworkers union in the United $tates.(10) George W. Bush's father was for "free trade," when he was president and came under criticism for selling out to Japan in particular. Indeed, of Nixon, Reagan and Bush Sr., Bush was the most internationalist of the bourgeois internationalists in the Republican Party. Nixon and Reagan were slightly more willing to defend the Amerikan labor aristocracy. Now "W" Bush has the European Union trade commissioner Pascal Lamy criticizing U.$. protectionism.(10) Not surprisingly in this climate where major players like China are not yet part of the global free trade agreements, Japan is showing some skittishness about trade. May statistics showed Japan's trade surplus down 80% from the previous year, down to nearly negligible levels by Japan's standards, in the midst of recession or stagnation. Japan needs a place to dump surplus capital and find expanded trade opportunities. Apparently, the Japanese leaders have started to hedge their bets, by believing that it is possible the World Trade Organization (WTO) may fall apart soon. As a result, Japan is talking about signing free trade pacts with Singapore, Mexico, Canada and Chile while the Chinese linger in the background with their calls for increased trade in the APEC (Asian Pacific) region.(11) June also saw Iraq sign a free trade agreement in a heated political climate driven by the Israeli oppression of Palestinians. Egypt, Syria and Libya signed an agreement to eliminate tariffs on trade among the four countries, a step toward an "Arab common market." Reuters also reported that the U.S. Vice- President Dick Cheney was doing deals with Iraq through France all along, selling $73 million in oil production equipment and spare parts to Iraq as head of Halliburton before running for vice-president. While Cheney campaigned saying he had firmly opposed trade with Iraq, he is now advocating a change of policy according to Reuters: "Cheney has pushed for a review of U.S. policy toward countries such as Iraq, Iran and Libya, arguing that unilateral sanctions penalize American companies." (12) While Japan and the European Union and the United $tates are feeling each other out for trade alliances of the future, Russia and China remain the outsiders in the system. Perhaps the most stunning June development in geopolitics was the alliance of China, Russia, Kazakstan, Krygyzstan and Tajikistan joined by newcomer Uzbekistan in the Shanghai Cooperation Organization (SCO). Jiang Zemin emerged as the spokesperysn for the group. The SCO unanimously opposed Bush's missile shield idea and called for increased investment and trade. The United $tates is already the largest investor in Kazakstan's oil. Kazakstan, Kyrgyzstan and Uzbekistan already receive U.$. military aid as well. Nonetheless, the India, Russia and China triangle region and Central Asia region may be the area under least U.$. control. The six nations of SCO have co-ordinated their fire for a joint crackdown on "terrorism," especially the militant Muslim kind.(13) Russian President Putin has fired a number of effective volleys at U.$. public opinion, including the public disclosure that it uncovered a Muslim plot to assassinate President George W. Bush in June. Oddly, the "Great Powers" are talking peace to fight the Islamic "extremists." However, Islamic "extremists" get their support because of the national oppression created under capitalism. All combined, these "Great Powers" cannot put an end to Islamic "extremism," which is sometimes reactionary and sometimes progressive at this time in history. Bush wants to renege on 1972 treaty In 1972 the United $tates signed a treaty with the Soviet Union strictly limiting defensive missile weapons. The treaty is titled "Antiballistic Missile" treaty. Now Bush and Secretary of State Colin Powell openly trash the treaty as "outdated" and threaten to unilaterally break it by developing something like Reagan's discredited "Star Wars" missile defense. MIM supports the treaty as a small basis for peace. Politically originated by Lyndon LaRouche, the "Star Wars" idea is an example of militarism caused by capitalism. By imperialist reasoning, the goal is not to create a communist world of harmony where there are no threats to anyone's survival rights and hence no reason for violence. Rather, the imperialists' treaty had the underlying idea of "Mutually Assured Destruction"(MAD). The reason both sides opposed defensive weapons in 1972 is that defensive weapons gave one side reason to think it could fire its nuclear weapons at the enemy while protecting itself from return-fire missiles of the enemy. Such a thought would lead to instability and an arms race. MAD was the idea both sides said guaranteed the peace, and so they wanted to preserve MAD. Now pointing to North Korea's ability to launch missiles and nuclear warheads, Bush says he wants to welch on the ABM treaty to protect itself against rogue states like North Korea. Not surprisingly, China and Russia do not see it that way. For that matter, supporters of the U.$. position are few and far-between. The Democrats who came to power in the U.S. Senate in June promised to slow down or block the missile shield idea. However, even the Democrats said they would support research for missile defense and a scaled-down system.(14) Notes: 1. New York Times 21June2001, p. w1. 2. By Leyla Boulton in Ankara and David Stern in Istanbul, "BP Supports Baku oil pipeline," Financial Times 20June2001, http://news.ft.com/ 3. By David Buchan in London and David Stern in Baku, "Turkmenistan recalls envoys," Financial Times 11June2001, http://news.ft.com/ 4. BBC Monitoring Service, "Georgia: BP chief says Trans-Caucasus oil and gas pipelines practicable," http://globalarchive.ft.com/ 5. "Post-Soviet alliance pledges stronger trade ties," Japan Times, 9June2001. 6. BBC Monitoring Service, "Turkmen president orders purchase of American-made grain harvesters," 21April2001; "Turkmenistan to supply gas to Armenia, envoy," 26April2001. 7. "ENI deal tests US sanctions on Iran," Financial Times, 21June2001; http://news.ft.com/ft/ 22June2001. 8. USA Today 15June2001, p. 11a. 9. Ted Galen Carpenter, "Is Japan tilting toward China?" Japan Times 9June2001, p. 18. 10. "White House promises to protect US steelworkers," Financial Times 7June2001, p. 6. 11. "Japan to seek bilateral free trade alliances," Financial Times 7June2001, p. 6. Nonetheless reports said the United $tates has removed the last obstacles to China's joining: http://www.cnn.com/2001/BUSINESS/asia/06/15/china.wto/index.html The European Union also reached a deal with China for its entry into the WTO: http://www.cnn.com/2001/WORLD/asiapcf/east/06/21/china.wto.europe/index.html 12. 23June2001, http://www.reuters.com/news_article.jhtml?type=topnews&StoryID=83745 13. "China, Russia launch new alliance with four Central Asian states," Japan Times, 16June2001, p. 1. 14. "Del. senator to lead charge against missile defense," USA Today 15June2001, p. 7a.