Thai-US diplomatic and economic links will repair

Significance This is the first visit to Washington by a Thai prime minister since 2005. Thai-US relations have been much cooler since the mid-2014 military coup that Prayuth, as an army general, led to depose Prime Minister Yingluck Shinawatra. The visit, therefore, had high symbolism. It was also controversial because Trump is warming ties with a coup leader who has instituted a new constitution that will weaken elected government in Thailand after the next election, which Prayuth told Trump would take place in 2018. Impacts Thailand’s election could be delayed to 2019: two of the required pre-poll ‘organic laws’ will not be passed until end-2018. Thai intellectual property protections will likely be strengthened to avoid sanctions under the US Trade Act’s Section 301. Thai-US anti-Islamic State cooperation will likely be slow to build, partly given southern Thailand’s Muslim-Buddhist conflict. Thailand will push for enhanced trade ties with the EU and post-Brexit United Kingdom.

Subject The package of reforms on a new EU-UK relationship. Significance The agreement between the United Kingdom and its EU partners sets the stage for the UK referendum on EU membership, which Prime Minister David Cameron has set for June 23. Cameron said he had negotiated new terms that would allow the United Kingdom to remain in the EU. Impacts The deal bolsters the campaign to remain in the EU, but the referendum outcome is still highly uncertain. The deal will only come into effect if the outcome is for remaining, forestalling a second referendum for better terms. If the outcome is for leaving, a new relationship with the EU would have to be negotiated during a two-year transition period. It would also probably lead to a second Scottish independence referendum and UK break-up.


Significance The statement is tougher than expected, and the EU also recalled its Moscow ambassador for consultations. The EU's shift is a win for UK Prime Minister Theresa May as she attempts to build a multilateral consensus rather than relying solely on unilateral retaliation. Impacts EU sectoral and individual sanctions on Russia will be extended in July and September despite reluctance among some members. Talk of blocking Russian natural gas imports is impracticable. The US Congress will pressure the White House to target individuals identified in January 2018 'oligarch list'.


Subject Brexit outlook. Significance If Prime Minister Theresa May can get the Withdrawal Agreement (WA) and Political Declaration on future relations approved in Parliament this week, the United Kingdom should leave the EU on May 22. However, it remains unlikely that her deal will gain a parliamentary majority, setting up a different deadline. The United Kingdom must come up with an alternative plan by April 12 or face the prospect of crashing out of the EU with no deal. Impacts The United Kingdom could have a new prime minister within weeks; a general election cannot be ruled out. The EU will remain distracted by Brexit as it heads into a season of political change beginning with European Parliament elections in May. As a final option, May could commit to resigning to get support for the WA from Conservative Party MPs.


Significance The bill establishes a new statutory regime for goods and services trade within the United Kingdom, which is essential for signing trade agreements. However, it also contains clauses on the Northern Ireland Protocol which threaten to override the legally binding EU-UK Withdrawal Agreement (WA), while giving London new powers over the devolved administrations, including on state aid. Impacts The EU is unlikely to collapse the trade talks with the United Kingdom. An EU-UK deal is still possible because the alternative would seriously threaten Prime Minister Boris Johnson’s political survival. The new bill, on top of COVID-19, will give the opposition Labour Party an opportunity to overtake the Conservatives in the polls.


Significance Earlier, on August 30, the Commission said the Irish government's tax arrangements with Apple constituted illegal state aid that required a payment of 13 billion euros (14.4 billion dollars) to the Irish authorities. The cases have given rise to suspicions that the EU authorities are unfairly targeting US companies. Impacts Short-term relations with the US government will deteriorate but -- if the Microsoft experience is any guide -- without lasting damage. The Apple ruling may bolster the Commission's reputation, as concerns over corporate power and inequality resonate with the EU public. Once it is outside the EU, the United Kingdom may have few attractions as a hub for US internet operations.


Subject Erdogan's vision for Turkey. Significance Since the July attempted coup, the government has purged 81,000 real or imagined opponents. Yet it has not been in turmoil, as is frequently claimed, even though President Recep Tayyip Erdogan's refusal to compromise on any front has locked Turkey into simultaneous expensive military conflicts, including participation in the civil war in Syria, just after 3,000 serving officers have been purged and just under 40% of generals and admirals either sacked or arrested. Impacts Erdogan's supremacy faces no foreseeable internal challengers or pressures to make policy changes. Turkey's international isolation will worsen, especially the US rift; the EU will keep its soft line while Russia will be friendly. The defeat of Islamic State group and recapture of Mosul will exacerbate US-Turkish tensions. Reliance on Russian energy imports may grow and new areas of cooperation be announced. Turkey's ambitious new health system may be an early economic area to run into financing problems.


Subject Problems facing the Thai government. Significance Thailand’s government, led by a party with ties to the junta that ruled until July, is facing political and economic headwinds as it tries to establish civilian rule. The king is consolidating his authority, political opponents are pushing back on the ruling coalition and exports are weakening, raising quandaries for Prime Minister Prayut Chan-o-cha. Impacts A worsening trade outlook will prompt the government to step up efforts to secure a free trade agreement with the EU. Thailand and the United States will take time to strengthen bilateral ties, nominally mended when Prayut visited Washington in 2017. The army units under the king’s direct control could provide cover for rival factions to Prayut’s in the event of another military coup.


Significance It was the first terrorist attack in London since the July 7, 2005 bombings, and the first attack subsequently claimed by Islamic State (IS) in the United Kingdom. Impacts Security arrangements for Parliament will be strengthened; however, MPs will probably resist moves to limit the public's access. MI5 has initiated an internal inquiry into why it did not place the attacker under surveillance. Both the United Kingdom and the EU are interested in continued cooperation on counterterrorism after Brexit.


Subject US-Thailand relations. Significance The US Pacific Command's participation in the successful international collaboration to rescue 13 people from a cave in Thailand on July 10 was viewed on both sides as an affirmation of the US-Thailand alliance, and as a further boost to a new momentum in the broader bilateral relationship following a sharp slowdown after Thailand’s 2014 military coup. Improvement in relations is due partly to the reluctance of President Donald Trump's administration to emphasise democracy and human rights in foreign policy and more specifically to Thai Prime Minister Prayuth Chan-o-cha’s visit to the White House last October. Impacts Warmer ties will not necessarily translate to increased US investment in Thailand. Thailand will need to look further afield for private investment in its Eastern Economic Corridor. If a China-US trade war occurs, Bangkok would try to avoid choosing sides but could ultimately pick Washington. The Trump administration’s push to reduce the US trade deficit with Thailand could cause frictions absent a quick deal. Thailand’s new constitution gives the military a lasting political role; US-Thai military links could therefore later help ties.


Significance Trump first snubbed the EU on April 30 with a mere postponement of possible tariffs and then humiliated the E3 (Germany, France and the United Kingdom) on May 8 with his decision to withdraw from the Iranian nuclear deal. This sends a highly symbolic message from the US president to his European allies: buckle or face penalties. Impacts Trump’s decisions reinforce a growing realisation in the EU that he will interpret their search for compromise as weakness. The EU faces a difficult road ahead with multiple pressures increasing, both within and outside the bloc. The growing divide between the EU and the United States will please Russia.


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