The range of possible outcomes include the following:

1. The EU oil embargo holds and the Iranian economy takes a huge hit hurting the Iranian middle class and the Green Movement more than the regime;
2. Iran closes the Strait of Hormuz prompting a US military response and potentially a military exchange between the US, NATO, and Iran;
3. Iran refuses to give in causing a spike in oil prices that cause the price of gas and food to soar in the US and EU;
4. The oil embargo is successful and Iran abandons its nuclear program.

Obviously the fourth option is the one that the EU is hoping for; however, it is the least likely and the other three possible outcomes should be of great concern to the US, Europe, and NATO. The driving force behind Iran’s nuclear ambitions lies in its desire to assert regional hegemony in the Middle East and build the strategic power necessary to counter US influence in Iraq and Northern Africa. Giving into the pressure of sanctions would destroy the image of military strength and political influence that the Iranian regime has attempted to cultivate over the past ten years. At the same time, Tehran has been very clear that they are willing to, and capable of, closing the Strait of Hormuz; recent military exercises in the Strait should be considered a clear indication that interference with their oil exports will result in the closing of the most strategically important trade route for the West

If Tehran decides that it does not want to risk a war over the Strait of Hormuz, we could be left with a combination of outcomes one and three, both of which hurt middle class, working citizens of Iran and the EU more than anyone else. In some EU countries 12-30% of the imported oil comes from Iran. An abrupt cessation of that trade would cause a huge shortage and therefore, an increase in the  price of oil for EU citizens. This leads to price increases in heating oil, gasoline, transportation, food, and the general cost of living. In the already troubled and depressed economies of the EU, this could lead to even more public discontent and economic volatility. While EU officials have said that they would be able to replace Iranian imports, they have not described their alternatives with specificity.   New agreements involving oil often require lengthy negotiations and the increased output necessary from potential suppliers like Saudi Arabia and Russia may incur new costs of their own. Also, Russia has been an ally to Iran and it is not inconceivable that they would refuse to supply the extra oil to the EU in an effort to pressure them to reverse the sanctions.

In Iran, where the government subsidizes energy prices along with bread, sugar, medicine, cooking oil, rice, and other necessities, a drop in government revenue could mean that these essential items are no longer available to those who need them. Furthermore, a worsening of the Iranian economy due to actions by the European Union only bolsters the regime who will spin the issue to convince the public that the development of a nuclear weapon and the bargaining power and deterrence ability that follows is essential to Iran’s national security and sovereignty.

Iran has consistently claimed that its nuclear program is for civilian purposes only. While IAEA inspectors have reported that Iran does have the capability to create a nuclear weapon within a short period of time, they have found no evidence of Iran actually weaponizing uranium. Also, despite bellicose statements about Israel, Iran has been careful to avoid suggesting it would actually detonate a nuclear weapon if it did possess one. Discounting the power of diplomacy could severely hinder the possibility of a peaceful solution with Iran. The first step in this process should not be an increase in sanctions, but a diplomatic effort to convince Iran to stop producing highly enriched uranium and stick with low-enriched uranium which is sufficient for energy production but not easily weaponized.

Related posts:

1. William Cohen: What the U.S. Should Do About Iran
2. Crossing the Rubicon
3. The Limits of Iran’s Reach

After America

Not so long ago, a high-ranking Chinese official, who obviously had concluded that America’s decline and China’s rise were both inevitable, noted in a burst of candor to a senior U.S. official: “But, please, let America not decline too quickly.” Although the inevitability of the Chinese leader’s expectation is still far from certain, he was right to be cautious when looking forward to America’s demise.

For if America falters, the world is unlikely to be dominated by a single preeminent successor — not even China. International uncertainty, increased tension among global competitors, and even outright chaos would be far more likely outcomes.

While a sudden, massive crisis of the American system — for instance, another financial crisis — would produce a fast-moving chain reaction leading to global political and economic disorder, a steady drift by America into increasingly pervasive decay or endlessly widening warfare with Islam would be unlikely to produce, even by 2025, an effective global successor. No single power will be ready by then to exercise the role that the world, upon the fall of the Soviet Union in 1991, expected the United States to play: the leader of a new, globally cooperative world order. More probable would be a protracted phase of rather inconclusive realignments of both global and regional power, with no grand winners and many more losers, in a setting of international uncertainty and even of potentially fatal risks to global well-being. Rather than a world where dreams of democracy flourish, a Hobbesian world of enhanced national security based on varying fusions of authoritarianism, nationalism, and religion could ensue.

The leaders of the world’s second-rank powers, among them India, Japan, Russia, and some European countries, are already assessing the potential impact of U.S. decline on their respective national interests. The Japanese, fearful of an assertive China dominating the Asian mainland, may be thinking of closer links with Europe. Leaders in India and Japan may be considering closer political and even military cooperation in case America falters and China rises. Russia, while perhaps engaging in wishful thinking (even schadenfreude) about America’s uncertain prospects, will almost certainly have its eye on the independent states of the former Soviet Union. Europe, not yet cohesive, would likely be pulled in several directions: Germany and Italy toward Russia because of commercial interests, France and insecure Central Europe in favor of a politically tighter European Union, and Britain toward manipulating a balance within the EU while preserving its special relationship with a declining United States. Others may move more rapidly to carve out their own regional spheres: Turkey in the area of the old Ottoman Empire, Brazil in the Southern Hemisphere, and so forth. None of these countries, however, will have the requisite combination of economic, financial, technological, and military power even to consider inheriting America’s leading role.

China, invariably mentioned as America’s prospective successor, has an impressive imperial lineage and a strategic tradition of carefully calibrated patience, both of which have been critical to its overwhelmingly successful, several-thousand-year-long history. China thus prudently accepts the existing international system, even if it does not view the prevailing hierarchy as permanent. It recognizes that success depends not on the system’s dramatic collapse but on its evolution toward a gradual redistribution of power. Moreover, the basic reality is that China is not yet ready to assume in full America’s role in the world. Beijing’s leaders themselves have repeatedly emphasized that on every important measure of development, wealth, and power, China will still be a modernizing and developing state several decades from now, significantly behind not only the United States but also Europe and Japan in the major per capita indices of modernity and national power. Accordingly, Chinese leaders have been restrained in laying any overt claims to global leadership.

At some stage, however, a more assertive Chinese nationalism could arise and damage China’s international interests. A swaggering, nationalistic Beijing would unintentionally mobilize a powerful regional coalition against itself. None of China’s key neighbors — India, Japan, and Russia — is ready to acknowledge China’s entitlement to America’s place on the global totem pole. They might even seek support from a waning America to offset an overly assertive China. The resulting regional scramble could become intense, especially given the similar nationalistic tendencies among China’s neighbors. A phase of acute international tension in Asia could ensue. Asia of the 21st century could then begin to resemble Europe of the 20th century — violent and bloodthirsty.

At the same time, the security of a number of weaker states located geographically next to major regional powers also depends on the international status quo reinforced by America’s global preeminence — and would be made significantly more vulnerable in proportion to America’s decline. The states in that exposed position — including Georgia, Taiwan, South Korea, Belarus, Ukraine, Afghanistan, Pakistan, Israel, and the greater Middle East — are today’s geopolitical equivalents of nature’s most endangered species. Their fates are closely tied to the nature of the international environment left behind by a waning America, be it ordered and restrained or, much more likely, self-serving and expansionist.

A faltering United States could also find its strategic partnership with Mexico in jeopardy. America’s economic resilience and political stability have so far mitigated many of the challenges posed by such sensitive neighborhood issues as economic dependence, immigration, and the narcotics trade. A decline in American power, however, would likely undermine the health and good judgment of the U.S. economic and political systems. A waning United States would likely be more nationalistic, more defensive about its national identity, more paranoid about its homeland security, and less willing to sacrifice resources for the sake of others’ development. The worsening of relations between a declining America and an internally troubled Mexico could even give rise to a particularly ominous phenomenon: the emergence, as a major issue in nationalistically aroused Mexican politics, of territorial claims justified by history and ignited by cross-border incidents.

Another consequence of American decline could be a corrosion of the generally cooperative management of the global commons — shared interests such as sea lanes, space, cyberspace, and the environment, whose protection is imperative to the long-term growth of the global economy and the continuation of basic geopolitical stability. In almost every case, the potential absence of a constructive and influential U.S. role would fatally undermine the essential communality of the global commons because the superiority and ubiquity of American power creates order where there would normally be conflict.

None of this will necessarily come to pass. Nor is the concern that America’s decline would generate global insecurity, endanger some vulnerable states, and produce a more troubled North American neighborhood an argument for U.S. global supremacy. In fact, the strategic complexities of the world in the 21st century make such supremacy unattainable. But those dreaming today of America’s collapse would probably come to regret it. And as the world after America would be increasingly complicated and chaotic, it is imperative that the United States pursue a new, timely strategic vision for its foreign policy — or start bracing itself for a dangerous slide into global turmoil.

Related posts:

1. Why EU Sanctions May Hurt the West More than Iran
2. Ambassador Linton Brooks Speaks on Nuclear Challenges
3. OP-ED: How to Weaken the Power of Foreign Oil

Washington (CNN) — Longtime observers of the Middle East are baffled by allegations that high-ranking officials in the Iranian government approved a plan to assassinate Saudi Arabia Ambassador, Adel al-Jubeir, and blow up the Saudi and Israeli embassies in Washington. Commentators have described the plan as “brazen,” but “bizarre” and ‘bone-headed” might be more appropriate adjectives.

It’s difficult to comprehend either the motives or the means selected to carry out the plan outlined by the Justice Department in its criminal indictment of Manssor Arbabsiar and Gholam Shakuri. Tensions between Iran and Saudi Arabia are not new, but Iran has been both cautious and clever enough to restrain its ambitions for regional dominance.

If the allegations of the assassination and bombing plot are true, and the covert operation had proved successful, Iran’s leaders would have invited retaliation on a scale far more vigorous than any they might have contemplated. Indeed, I think it’s fair to say that the Iranian landscape would likely have been substantially altered.

Assuming, however, that Ayatollah Ali Khamenei, the Supreme Leader, and President Mahmoud Ahmadinejad never authorized the action or were ever aware of it, both have great cause for concern. Elements in their covert, black bag, assassination/ terrorist unit were planning an attack that could have brought about the decapitation of their leadership, the obliteration of their ambitions to enter the nuclear weapons club and quite possibly have precipitated a global depression by engulfing the region in war. Rather than dismissing the plot as a Zionist fabrication, these leaders should be looking inward and holding accountable those who were responsible for undertaking such a dangerous and destructive mission.

While awaiting greater clarification from those responsible for moving forward with the prosecution against Arbabsiar and Shakuri, the United States should explore several options:

1. Bring the assassination and bombing plan to the United Nations Security Council and seek much tougher sanctions against Iran;

2. Encourage Saudi Arabia to review and revise its contractual arrangements with any country that refuses to support the imposition of tougher sanctions against Iran;

3. Intensify the effort to expose the activities of those nations who are circumventing the existing sanctions against Iran;

4. Make it clear to all members of the U.N. that Iran’s nuclear weapons program poses a serious threat to global stability. If a non-nuclear Iran initiated an assassination plan through a Mexican drug cartel, what would it be tempted to do once it possess a nuclear weapon?

5. Strengthen our ability to keep the Persian Gulf open should hostilities ever break out;

6. Force the administration and Congress to move forward on improving the defense posture of our friends and allies who are threatened by Iran;

7. Urge Saudi Arabia and the Gulf States to move more aggressively in constructing coordinated, regional defense and security policies; and

8. Release intelligence information, to the maximum extent possible, which exposes those in the Iranian regime responsible for this act — as a means of galvanizing support for the actions, such as additional sanctions, mentioned above.

The above options are illustrative only. Others may have more punitive measures in mind. But right now, the United States and Saudi Arabia should proceed with vigor and not permit Iran to hide its dagger behind its back in its left hand, while professing its innocence with the right.

The opinions expressed in this commentary are solely those of William S. Cohen.

Related posts:

1. Why EU Sanctions May Hurt the West More than Iran
2. Crossing the Rubicon
3. No-Fly Zone Over Libya: A Case for Multilateralism

Praseodymium, Gadolinium, Erbium: you may not have heard of them before, but chances are you’ve used them recently. All three are examples of rare earths, the 17 elements occupying the middle of the Periodic Table.  Rare earth elements- which, in actuality, are as globally ubiquitous as many other metals- are a critical component of both current and future technologies, helping to create products from cell phones to fiber-optic cables to electric cars.

These elemental tongue-twisters, once only the provenance of scientists and technology manufacturers, have become the object of much attention and speculation from policymakers in the past few weeks, courtesy of China. Although the PRC only has 35% of the world’s rare earth reserves, it has cleverly maneuvered its way into controlling 95% of global supply for the elements, thanks to heavy investment in the industry and a willingness to incur massive levels of environmental pollution while mining them. In the past few months, China has strategically wielded its monopoly as a diplomatic weapon, halting shipments to Japan during the two countries’ nasty territorial dispute over the Senkaku/Diaoyu islands. Now reports say that China is using the same strategy against the U.S. in retaliation for the United States Trade Representative (USTR) accepting a petition alleging that China is subsidizing green energy investment in violation of WTO practices.  All in all, it appears that China is beginning to engage in tit-for-tat diplomacy that raises serious questions about its intentions and its ability to behave like the superpower it strives to be.

Not that China has admitted to halting shipments. When questioned, Chinese government representatives have strenuously denied any official ban on exports of rare earths to Japan, and have also insisted that shipments to the U.S. have not been stopped. However, in Japan at least, every single company importing the elements has experienced delays of some sort or problems with paperwork, etc.  Japan uses one fifth of the global supply for rare earths, and, without fresh imports from China, could use up its stockpile of the materials in 5 to 6 months, with devastating consequences for industry. Whether this will happen in the U.S. remains to be seen. If it does, however, it will undoubtedly have a serious impact. While there are plans to ramp up production elsewhere in the world, including in the U.S., we are still several years away from freeing the industry from China’s iron grasp.

Obviously, the situation begs the question of how we could have let this happen, especially as the U.S. previously produced rare earths domestically and boasts reserves of about 13 million metric tons (out of a global total of 99 million). When viewed from an economist’s perspective, the answer is obvious- China did it better, it did it cheaper, and it didn’t have to worry about those pesky environmental standards the EPA is always going on about. Strategically, the answer is less clear. For decades, it has been obvious both how important and necessary rare earths are to U.S. technology and defense- rare earths, for example, are used in missile guidance systems.  It has also, for those paying attention, been fairly obvious that China was working hard to corner the industry- in 1992, Deng Xiaoping compared China’s relationship with rare earth to that of the Middle East and oil. Regardless, whatever the reason we didn’t realize China was amassing total control of the rare earth industry, the point is now moot.  The world has gotten the message, and in a few years China may or may not be glaring at mines in Kazakhstan and ruing the day they dramatically reminded the international community that they were monopolizing a key global industry.

But while the American media works itself into a frenzy about how the U.S. will get its rare-earth fix, Asia wonks are less interested in the rare earths themselves and more in how China is using them: specifically, if China’s current behavior is an aberration or an indication of things to come. Wen Jiabo would have you believe that “China is not using rare earths as a bargaining chip,” and that export cuts have nothing to do with diplomacy and everything to do with domestic considerations- specifically a mix of factors including a 2006 decision to consolidate rare earth mining companies, diminishing reserves, increasing consumption at home, concerns about environmental damage, and a desire to exercise tighter control over the industry in general. It is true that the Chinese government announced it would cut exports by 40% in July, well before the incident with Japan, and that China has been gradually decreasing exports by 5-10% a year since 2006, policies that bring up their own questions about the country’s cutthroat economic policies. However, while the Japan incident may have coincided with a general draw-down, it is difficult to believe that the halting of rare earth shipments is a case of correlation instead of causation.

So what does it say about China that the country is responding to diplomatic problems by cutting off vital supplies? Nothing good. At best, China has just rather publicly undermined its case to be taken seriously be the international community. It’s hard to respect China as a major international power when it behaves in a manner so, well, tetchy and childish. At worst, China has just moved one step closer to confirming all the allegations made by its most adamant critics: that it can’t be trusted, that its rise will seriously disrupt the world order, and that it is a military threat to the U.S.  Especially when considered with China’s other actions over the past year on key issues like climate and currency, the signal China seems to be sending the West is stark: don’t expect us to play nice.

Ironically enough, policies like these may end up hurting China the most in the long run. Every time China lashes out, it reinforces the tendency of other countries to hedge against it, often driving those countries back towards the waiting arms of the U.S., as recently demonstrated by the case of Southeast Asian and Chinese claims to the South China Sea.  It also makes it harder for Chinese allies who are viable members of the international community- countries other than, say, Iran and North Korea- to defend Chinese policy and actions in international forums like the WTO or UN. In short, it seems that any benefits China gleans from uncooperative behavior are far outweighed by the negatives.

It will remain to be seen whether China backs down on rare earths, or continues to interfere with shipments. While the extent of the impact halting exports has on global industry cannot yet be determined, the impact it has had on global perceptions of Chinese intentions is clear: China is not yet mature enough to be a respected power-player in the international community.

Related posts:

1. A High-Risk, Low Reward Strategy Could Lose the Future
2. OP-ED: How to Weaken the Power of Foreign Oil
3. William Cohen: What the U.S. Should Do About Iran

In a 2004 speech, Prime Minister Wen Jiabao summarized the basic tenets of China’s ‘Peaceful Rise’ doctrine: the growing power and clout of China, he said, “will not come at the cost of any other country, will not stand in the way of any other country, nor pose a threat to any other country.”

If only China’s neighbors still believed him. Earlier this year, China declared the South China Sea, which is partially claimed by Vietnam, Malaysia, Indonesia, the Philippines, and Brunei, to be part of China’s “core interest” of sovereignty, similar to regions such as Taiwan and Tibet on which China sees no room for negotiation.  China’s statement followed closely on the heels of past aggressive Chinese actions in the disputed waters, which have included seizing Vietnamese fishing boats, ordering foreign oil companies not to work with Vietnam on maritime oil exploration projects, planting a Chinese flag on the ocean floor, and training guns on an Indonesian naval ship. Needless to say, from the perspective of the other five nations that share territorial claims on parts of the Sea, these actions look anything but peaceful.

China’s southern neighbors are right to be worried. The past year  has produced a number of indicators that Chinese regional policy is shifting away from its previous strategy of soft-power projection to a more assertive, hard-line position.  For much of the past decade, Chinese regional policy rested heavily on a strategy of wooing its southern neighbors with economic opportunity and investment, generous foreign aid packages, diplomatic engagement, and cultural exports. In 1997, trade between China and mainland Southeast Asia (Cambodia, Laos, Burma, Thailand and Vietnam) was just over $1 billion. A decade later, that number was $53 billion. China supplemented these increasing economic ties with a heavy investment in regional infrastructure, increased participation in regional forums like ASEAN, a flurry of bilateral agreements, and high-level diplomatic visits. Dubbed a ‘charm offensive’ by foreign policy experts, China’s ‘Peaceful Rise’ strategy sought to both allay fears over the country’s growing economic and military might and to ensure access to valuable natural resources and strategic corridors.

For a while, it seemed to be working. Southeast Asia seemed increasingly Sino-centric, with regional opinion favorably inclined towards China. For much of Southeast Asia, China rapidly bypassed the U.S. as the perceived force in the region.

Recent events, however, seem to suggest that China’s soft-power offensive is taking a back-burner to protecting the country’s perceived strategic interests. The current row between China and Japan over the Senkaku/Diaoyu islands; Chinese territorial claims to the South China Sea; Chinese plans for damning the Mekong; the buildup of China’s blue-water navy: all these are sending signals that China is less concerned about its reputation amongst its southern neighbors and more about pursuing its strategic  interests, even at the cost of its popularity. Although it is too soon to tell decisively, the famed Chinese “charm offensive” may be over.

This is good news for the U.S.  ASEAN has made no secret of its desire for the U.S. to step in as a balancing power to China, and with Obama meeting tomorrow with ASEAN delegates, it seems the administration is eager to take on that role. Unintentionally, Chinese actions have cleared the way for the U.S. to once again assert itself in a region that American diplomats were lamenting as lost just a decade ago. Whether or not China will seek to backtrack and once again woo its neighbors out of the arms of the U.S. is unknown, but for now the Obama administration should enjoy its current popularity. In 2009, when Secretary of State Clinton informed ASEAN leaders that “The U.S. is back” it was unclear if she was right. From today’s perspective, it seems she was.

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We do not need to reorient our grand strategy to deal with pirates. We don’t need to reshape the U.S. Navy to fight a motley band of young men in leaky boats. As my colleague Ben Friedman has written, piracy is a problem, but decidely minor relative to many other global security challenges.

But some are criticizing the approach taken to resolve last week’s standoff. They say that the only way to truly eliminate the piracy problem is to attack and ultimately clean out the pirates’s sanctuaries in lawless Somalia. This “solution” fits well with the broader push within the Washington foreign policy community that would deal with our security problems by fixing failed states.

I have gone on at length, usually with my colleagues Justin Logan and Ben Friedman, on the many reasons why a strategy for fixing failed states is unwise and unnecessary. I won’t expand on that thesis here, other than to point out that of all failed states in the world, Somalia is arguably the most failed of the lot. “Fixing” it would require a massive investment of personnel, money, and time — resources that would be better spent elsewhere.

Mackubin Owens offers one of the more intriguing defenses of this approach in a just published e-note for the Foreign Policy Research Institute. Owens likens a strategy of fixing Somalia to Gen. Andrew Jackson’s military operations in Florida, a story that features prominently in John Lewis Gaddis’s Surprise, Security and the American Experience. As Owens notes, when some members of President James Monroe’s cabinet wanted to punish Jackson for exceeding his mandate — in the course of his military campaign he captured and executed two British citizens accused of cavorting with the marauders who had attacked American citizens – Secretary of State John Quincy Adams jumped to Jackson’s defense, and proposed a different tack. He demanded that Spain either take responsibility for cleaning up Florida, or else give it up. And we all know what happened. Under the terms of Adams-Onis Treaty of 1819, Florida became a territory of the United States. 26 years later, it became our 27th state.

I’ve vacationed in Florida many times. Walt Disney World is wonderful for the kids; I’ve been there six times. I spent three memorable days watching March Madness in Miami a few years back. Spring training baseball is great fun.  Adams couldn’t have imagined any of these things when he acquired a vast swampland; he cared only that Florida under Spanish control, or lack thereof, posed a threat.

Here is where the parallels to the present day get complicated. I’ll admit that I’ve never been to Somalia. Perhaps they have their own version of South Beach, or could have some day. But I’m frankly baffled by the mere intimation that our national security is so threatened by chaos there that we need to take ownership of the country’s — or the entire Horn of Africa region’s — problems.

And yet, that is what many people believe. And this is not a new phenomenon. In many respects, we have chosen to treat all of the world’s ungoverned spaces as the modern-day equivalent of Spanish Florida.

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