Israeli-Emirati deal only formalises existing reality

Significance The agreement provides US President Donald Trump a signature foreign policy achievement ahead of US elections in November, while giving Abu Dhabi an opportunity to cement ties with Washington in case of a change of president. It also constitutes a major diplomatic victory for Israeli Prime Minister Binyamin Netanyahu, amid rising domestic woes. Impacts Some other Arab states such as Bahrain or Oman might follow the UAE’s lead. Saudi Arabia is likely to be more cautious, especially as it is preoccupied with internal succession dynamics. European countries will call for the suspension of annexation to be made permanent and Israel to return to talks with the Palestinians.

Significance The Pakistan Muslim League-Nawaz (PML-N)’s five-year term ended on May 31. PML-N President Shehbaz Sharif faces a tough fight to become prime minister, with the main challenge set to come from Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) and further opposition provided by Bilawal Bhutto Zardari’s Pakistan Peoples Party (PPP). Impacts With Khan as prime minister, the military would likely have free rein to pursue an anti-India foreign policy. Khan would step up his criticisms of the war in Afghanistan and likely have a difficult relationship with US President Donald Trump. Pakistan under any government will pursue balanced diplomacy in the Middle East, seeking good ties with both Saudi Arabia and Iran.


Subject The Trump administration's policy on the Libya conflict. Significance In recent weeks, the United States has pursued a more active foreign policy towards Libya. This is a departure from its position of the past eight years of ‘leading from the back’ on Libya and comes as US President Donald Trump faces an impeachment investigation and elections in November 2020. With the vote approaching, Trump's opponents have increasingly criticised his position on Moscow, drawing attention to the presence of Russian mercenaries in Libya. Impacts Ties with Egypt, the UAE and Saudi Arabia, and the relative influence Russia has with them, will weigh on the administration’s thinking. The State Department may push more actively for a ceasefire when a conference of external actors in Libya takes place in Berlin. A ceasefire could fragment the forces fighting Haftar without robust external guarantees that his forces would not violate it.


Subject Spanish foreign policy. Significance Spain does not see itself replacing the United Kingdom as one of the ‘Big 3’ in driving EU policymaking and cooperation after Brexit. Instead, the government of Prime Minister Pedro Sanchez will seek to prioritise Spanish interests in the Mediterranean and on Brexit, and will become less preoccupied with EU cooperation and integration. Spain is seeking a more balanced and broader relationship with the United States, but there is tension over the political crisis in Venezuela and trade issues. Impacts Relations with the United States will become more difficult, especially if President Donald Trump is re-elected. Although Spain would like to shift its regional emphasis towards Asia, Venezuela and the coronavirus could nullify that ambition. Immigration is now a priority, as further illegal inflows would fuel support for the far-right Vox party.


Significance The political status of the deal has been impaired by the departure from office of two of its architects, former US President Donald Trump and former Israeli Prime Minister Binyamin Netanyahu. The promised economic and business dividends have also been slow to materialise. Impacts Contacts between Israeli and UAE businesses and officials will continue but will likely focus on small-scale projects. Strain on Riyadh-Abu Dhabi ties has dimmed the prospects of the UAE becoming a bridge that Israel could use to access the Saudi market. Success for DP World in its bid for Haifa port might provide a catalyst for development of the economic relationship.


Significance Canada’s Liberal Prime Minister Justin Trudeau is preparing to welcome a more predictable and stable partner in Biden than outgoing Republican President Donald Trump. However, Biden is also expected quickly to cancel the Keystone XL pipeline, cutting another lifeline to Canada’s oil industry and creating some strain in Canada-US ties. Impacts Improved Canada-US ties will persist even if Trudeau loses the next federal election to Conservative Erin O’Toole. Canada will re-engage militarily with UN peacekeeping and NATO deployments. Trudeau will encourage Biden to end US prosecution of Meng Wanzhou, allowing Canada to release her; Biden may agree. Canada’s border with the United States will open in stages as COVID-19 recedes. Ottawa will push Biden to end ‘Buy American’ procurement policies, with little success.


Significance However, the departure of former US President Donald Trump -- who was an enthusiastic supporter of Brexit and UK Prime Minister Boris Johnson -- has made this harder to achieve. Impacts Johnson will consider holding a snap election in 2023 to capitalise on the successful vaccination campaign and economic reopening. The failure to conclude a US-UK FTA would increase the prospects of an EU-UK veterinary agreement. Without a UK-EU veterinary agreement, the chances of persistent disruption on trade between Great Britain and Northern Ireland will grow.


Significance The reshuffle involves some significant changes, including the promotion of Economy Minister Nadia Calvino as first deputy prime minister. Other notable changes include new ministers at the head of foreign policy and territorial policy, which deals with relations with Catalonia. Impacts Sanchez has increased the number of women and young people in the new cabinet; this could broaden his appeal among centrist voters. While Madrid will continue to respect EU policy parameters, Sanchez’s continued reliance on UP and ERC support will worry investors. Sanchez’s leadership of the PSOE could come under threat if he is seen as ‘giving too much’ to Catalan nationalists.


Subject Outlook for Pakistan-Gulf relations. Significance Pakistan's parliament last month voted against joining the Saudi-led military intervention in Yemen. Since then Pakistan's Prime Minister Nawaz Sharif and Chief of Army Staff Raheel Sharif have visited Riyadh to clarify the decision, reassuring Saudi Arabia of Pakistan's support in case of any external aggression against the kingdom. The Yemen intervention has exposed some faultlines in the relationship between the two allies, as well as in Pakistan's ties with other members of the Gulf Cooperation Council (GCC), some of whom -- most notably the United Arab Emirates (UAE) -- described Pakistan's decision as "dangerous and unexpected". Impacts Pakistan will lose leverage in GCC states as the latter opt to provide aid via multilateral, international mechanisms. Islamabad will be reluctant to share nuclear technology with GCC states -- primarily for fear of provoking Washington. China will increasingly become Pakistan's preferred diplomatic and economic partner, despite a degree of mutual suspicion.


Significance President-elect Donald Trump plans to expand military spending as part of his "America First" foreign policy but has so far offered few details of how this expansion will be financed. The new budget will have significant commercial implications for private entities involved in US defence procurements and for Washington’s force posture abroad. Impacts Trump may focus on increasing US-based missile defence capabilities instead of regionally focused systems based overseas. Political complications over NATO deployments may ensue if US spending outstrips that of its allies. Expansion of the nuclear arsenal beyond current modernisation plans could spark an arms race with Washington’s rivals.


Subject Foreign policy after the attempted coup. Significance Before the July 15 coup attempt, foreign policy was showing signs of turning towards pragmatism from the ambitious positions associated with former Prime Minister Ahmet Davutoglu. Rapprochement was sought with both Russia and Israel, and relations with the United States and EU were relatively stable. The attempted coup introduces considerable uncertainty. President Recep Tayyip Erdogan's insistence that US-based cleric Fethullah Gulen was behind it is drawing the United States into Turkey's most serious political trauma in decades. Impacts Relations with the West are unlikely to return to their pre-coup warmth soon. The most likely result for US-Turkish relations is what may be termed a 'stressed-out partnership of convenience'. How both US-Turkish relations and Turkey's conflict with the PKK develop will determine Turkish policy on Syria and the ISG.


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