GREAT DECISIONS Spring 2017 Update The future of Europe • U.S. foreign policy and petroleum Latin America’s political pendulum • Afghanistan and Pakistan • Nuclear security The future of Europe E mmanuel Macron took office as France’s president on May 14—the culmination of a tumultuous election season. Macron, whose centrist party, En March!, was formed just over a year ago, defeated Marine Le Pen of the far-right National Front by a margin of two to one in the second round of voting. The contest was anxiously watched as a critical test of the populist sentiment that fueled the Brexit vote in the United Kingdom, and Donald Trump’s political rise in the United States. A Le Pen victory might easily have signaled the end of the European Union. Still, Macron faces major hurdles in governing. The election was characterized by the highest abstention rate since 1969. Meanwhile, Macron is the only president France has ever elected from outside traditional left and right parties, with the exception of Valéry Giscard d’Estaing, also a centrist. The collapse of President François Hollande’s governing Socialist Party, in combination with the demise of the center-right candidate François Fillon due to an embezzlement scandal, helped pave an unlikely path to victory for Macron. Yet he has no party in Parliament, and must establish a working majority there via legislative elections, scheduled for June 11 and June 18. Macron is a strong supporter of the European Union and a valuable ally for German Chancellor Angela Merkel. He has taken a tough stance on Britain’s decision to leave the European Union, known as Brexit, saying that Britain will come out the weaker player in the so-called “divorce” negotiations. In March, British Prime Minister Theresa May announced the country’s formal intention to leave the EU, triggering Article 50 of the Lisbon Treaty and setting in motion a two-year procedure for withdrawal. She faces difficult negotiations ahead, as well as domestic tensions, including the possibility of another independence referendum in Scotland, and uncertainty surrounding the 1998 Good Friday peace agreement in Northern Ireland. Prime Minister May has called for early elections, to take place on June 8, despite a previous promise not to do so. She is seeking a stronger parliamentary majority before Brexit negotiations begin in earnest. If her Conservative party wins a majority, a general election won’t be required again until 2022. EU leaders, meeting without May, set guidelines for Brexit negotiations in late April. Agreed priorities include protecting citizens’ rights, ensuring that Britain meets its financial obligations, and safeguarding the terms of the Good Friday agreement. Leaders also agreed that Britain must reach a deal on the terms of its exit before talks on post-Brexit relations can begin; namely, talks on a trade deal, which May insists can be worked out simultaneously with the divorce negotiations. In March, the EU celebrated its 60th anniversary in a climate of crisis and uncertainty. But populist success at least seems to have crested: Le Pen was decisively defeated; Geert Wilders’ farright party lost in parliamentary elections in the Netherlands; voters in Austria rejected their farright presidential candidate. All eyes are now on the German election in September. Chancellor Angela Merkel looks primed to win, and her Social Democratic opponent, Martin Schulz, is also a mainstream, pro-EU candidate. FOREIGN POLICY ASSOCIATION • 470 PARK AVENUE SOUTH • NEW YORK, NY 10016 PHONE: (212) 481-8100 • FAX: (212) 481-9275 • WWW.FPA.ORG Recommended Readings Andrew Moravcsik, “Europe Is Still a Superpower,” Foreign Policy (Apr. 13, 2017). Charles P. Ries, “The Snap Election, What’s in It for Theresa May,” The Rand Blog (Apr. 23, 2017). Thorsten Benner and Thomas Gomart, “Meeting Macron in the Middle,” Foreign Affairs (May 8, 2017). U.S. foreign policy and petroleum P resident Donald Trump took action on his “America First Energy Plan” in April, with an executive order meant to expand the United States’ domestic energy production. The Interior Department took the first steps toward implementation in early May. The action begins to make good on campaign promises to roll back Obama-era environmental protections, which then-candidate Trump said undermined U.S. national security and energy development. He promised renewed oil and gas drilling to create thousands of jobs. Just before he left office, President Obama banned new oil and gas drilling in federal waters in the Atlantic and Arctic oceans, putting them off limits until 2022. President Trump’s April 28 executive order, on the “America First Offshore Energy Strategy,” directs the Interior Department to review and replace the current five-year oil and gas development plan for the outer continental shelf, and the ban on drilling off the southeastern Atlantic and Alaskan coasts. It also orders a review and revision of safety rules intended to reduce the risk of accidents similar to the 2010 Deepwater Horizon oil spill. The order further instructs Commerce Secretary Wilbur Ross to reduce and review the boundaries of some federally protected marine sanctuaries, with the goal of adding territory for energy exploration. The new order could open up drilling in the Atlantic, Pacific and Arctic oceans, as well as the U.S. Gulf of Mexico. “Our country is blessed with incredible natural resources, including abundant offshore oil and gas reserves, but the federal government has kept 94% of these offshore areas closed for exploration and production,” Trump said at the signing of the order. Still, industry demand is weak for this territory. Oil prices are low, stalled at about $50 per barrel with the world markets inundated, and onshore production skyrocketing. GD 2017 UPDATE/SPRING In another fulfillment of a Trump campaign promise, the State Department in March reversed Obamaera policy and granted permission for construction of the controversial Keystone XL pipeline to go ahead. The pipeline will link oil producers in Canada and North Dakota to refiners and exporters on the Gulf Coast. Most of the refined product is likely to be exported, or used to allow domestic producers to export more of the product produced in Texas, Louisiana and Oklahoma. The decision comes amid limited interest from oil companies in the Canadian oil sands, due to low oil prices. When the pipeline was originally being planned, the U.S. shale boom had yet to hit, and the country was still highly dependent on Middle East oil. Subsequently, domestic production has nearly doubled, exports have steeply increased, and oil prices have been slashed in half over the past three years. Increased output from the U.S. shale boom contributes to the likelihood that OPEC members will extend production cuts in a meeting in Vienna in late May. The current deal to cut production expires at the end of June, but members are expected to extend it until the end of the year. A Reuters survey released in April anticipates that the extended cuts could relieve the current oil glut by the close of 2017. Recommended Readings Clifford Krauss, “U.S., in Reversal, Issues Permit for Keystone Oil Pipeline,” New York Times (Mar. 24, 2017). Gregory Korte, “Energy independence, not climate change, becomes priority under Trump order,” USA TODAY (Mar. 28, 2017). Robbie Gramer, “Oil Companies Cool on Arctic Drilling. Trump Wants It Anyway,” Foreign Policy (Mar. 24, 2017). Latin America’s political pendulum V enezuelan President Nicolás Maduro is facing yet another month of protests against him this May. The latest wave began after the country’s Supreme Court, packed with Maduro loyalists, decided in March to divest the opposition-led legislature of its power. The body is largely seen as the last democratic check on Maduro’s expanding authority. The Supreme The UPDATES take into account events up to May 14, 2017. 2
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