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Daily Brief: UN Tribunal Rejects China's Maritime Claims

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July 12, 2016

Daily News Brief

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UN Tribunal Rejects China's Maritime Claims

A UN tribunal has ruled that there is "no legal basis" for China's claims to expansive stretches of the South China Sea. The Permanent Court of Arbitration at the Hague ruled in favor of the Philippines in the four year-long case, which challenged China's so-called "nine-dash line" (NYT) that encircles the majority of the body of water. The ruling is seen as a rebuke of the construction of artificial islands and restrictions on fishing in the region. Chinese President Xi Jinping rejected the ruling and said China would not accept any action based on the court's decision (Xinhua). China claims about 85 percent of the 1.5 million-square mile sea (FT), where ships carry about $5 trillion of cargo each year.


"Many in the region are worried that China will react to the decision by accelerating efforts to assert control over the South China Sea, which includes vital trade routes and fishing waters as well as potential oil and mineral deposits. The Philippines filed its case in 2013, after China seized a reef over which both countries claim sovereignty. There has been speculation that Beijing might respond to the tribunal’s decision by building an artificial island at the reef, Scarborough Shoal, a move that could set off a conflict with the Philippines and its treaty ally, the United States," Jane Perlez writes for the New York Times.

"Beijing has been working behind the scenes to blunt Tuesday’s precedent-setting rejection of its claims in the South China Sea by a tribunal based in The Hague, offering economic inducements if the Philippines would 'set aside' the decision. The strategy is a time-tested one for China — using its economic might to cajole, threaten and outright buy co-operation from its neighbours on internationally recognised territorial claims. It underlines the difficulty for Washington in convincing countries in the region to present a united front to Beijing," Charles Clover writes for the Financial Times.

"The Philippines, by contrast, has done relatively little to publicly lobby its case with the world community, even while doing an excellent job in presenting its legal claims to the tribunal it convened in accordance with the UN Convention on the Law of the Sea. The controversial election of its new president, Rodrigo Duterte, who will take office on July 1, has created uncertainty about how his government might build upon the platform that the arbitration decision may give him for a better bargaining position in any renewal of previously unsuccessful maritime negotiations with China," CFR's Jerome A. Cohen writes for the South China Morning Post


After Parliamentary Victory, Japanese PM to Launch Stimulus

Japanese Prime Minister Shinzo Abe, following a landslide victory in parliament that gave him and his allies a supermajority in both houses, will launch a new fiscal stimulus that he said could include funds for a magnetic levitation railway from Tokyo to Osaka (FT).

CFR's Sheila A. Smith writes about prospects for amending Japan's postwar constitution in this blog post.


Flagging Profits at Indian Companies

Some analysts estimate that profits at Indian companies contracted last quarter (WSJ), despite its fast-growing economy and allegedly business-friendly climate under Prime Minister Narendra Modi. Kotak Securities estimated that the earnings growth in thirty benchmark Indian companies fell 2 percent in the last quarter.


U.S. to Deploy Extra 560 Troops to Iraq

U.S. Defense Secretary Ash Carter announced the deployment of an addition 560 U.S. troops to Iraq to assist Iraqi forces in retaking the city of Mosul from the self-proclaimed Islamic State (NYT). The deployment will bring the number of U.S. troops in Iraq to 4,647.

CFR's President Richard N. Haass writes about lessons from the UK's Chilcot Report on the Iraq War.

ISRAEL: Israel's parliament passed legislation requiring nongovernmental organizations that receive funds from foreign state entities to publish the names of those sources (NYT) in all official communication. The legislation will apply to twenty-five NGOs.


South Sudan Cease-Fire Holding After Days of Violence

A cease-fire between rivals President Salva Kiir and Vice-President Riek Machar seems to be holding in the South Sudanese capital of Juba (BBC) after days of gun battles claimed at least 270 lives. UN Secretary-General Ban Ki-moon said South Sudanese leaders "failed their people" by resorting to "deadly weapons and identity politics" after the August 2015 peace deal (Africa News).

SOUTH AFRICA: A court charged two brothers with plotting terror attacks on U.S. and Jewish targets in Johannesburg (BBC).


EU to Replace Frontex With Larger Border, Coast Guard Agency

A fortified European border and coast guard agency will replace the current Frontex after the summer (EU Observer), according to Frontex officials. The new agency will be able to deploy to countries outside of Europe to return migrants and rejected asylum seekers and will also crack down on criminal networks and terrorist threats operating on the Mediterranean, according to officials. The news follows a weekend announcement from NATO's secretary-general that the bloc will add warships and potentially drones to the EU naval mission in the Mediterranean to stem human trafficking (EU Observer).

UK: Prime Minister David Cameron will resign Wednesday (Guardian), after which Home Secretary Theresa May will become the first woman in the office since Margaret Thatcher. May's only rival in the prime minister contest quit suddenly on Monday, cutting what was expected to be a nine-week race to lead the country following its vote to leave the European Union.

CFR's Edward Alden discusses how the Brexit vote underscores rising populism and a rejection of globalization in this interview.


Venezuela Seizes U.S. Factory

Venezuelan authorities seized a shuttered Kimberly-Clark factory, saying it was illegal for the U.S. factory to have halted operations (El Universal). Kimberly-Clark said it had closed the factory because it was unable to obtain raw materials (BBC); General Mills and Procter & Gamble have also scaled back production in the country.  

This CFR Backgrounder looks at Venezuela's political and economic crisis.

U.S.: Google notifies its customers of about four thousand state-sponsored cyberattacks per month, according to Senior Vice President Diane Green (Reuters). Green made the comments during a technology conference in Colorado.

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