The United Kingdom’s Defense Issues

The United Kingdom’s military spent several decades downsizing its military. Still, the UK took part in major conflicts in Afghanistan, Iraq, Libya, and Syria, showing that Britain continues to have some force projection capability.

Nevertheless, British Ministry of Defence (MoD) data shows recruitment shortfalls over the past five years. Recent data published by the UK Defence Journal show the biggest recruitment shortfalls are found in the army, where manpower gaps in land forces are most pronounced.

A major factor in recruiting failure was a several-year attempt to draw down spending, that included the army’s closure of half of its recruiting offices, according to the Royal United Services Institute (RUSI). A lack of recruiting offices only erodes the interaction between recruiters and the community. This lack of interaction dissuades civilians, who may not fully understand the benefits of military service, from joining.

Furthermore, an aging population, a rise in health risks, and an extremely long pipeline from recruitment to basic training can dissuade young men and women from choosing service. While Britain’s Air Force and elite Royal Marines remain formidable, further emphasis on naval power and regrowing the land forces is much needed.

Canada’s Rearmament Crisis

The Canadian Armed Forces are currently facing a readiness crisis. According to an internal overview by the Department of National Defence, only 58 percent of the military is ready to handle any situation. Canada’s lack of readiness is increasingly causing concern among the general public. War in Eastern Europe and Africa and brewing conflicts in Asia show the need for North Atlantic Treaty Organization (NATO) member-states to bolster each region. Canada’s military is unready to face a crisis.

A major challenge is stagnation in the Air Force and Navy, where much equipment is neglected and degraded. Because logistics win wars, Canada needs to recruit and train support personnel such as technicians, maintenance, supply, and communications personnel.

Australia’s Defense Issues

Australia, a rising regional power in the Indo-Pacific, also faces challenges for the Australian Defence Forces. Being a member of the trilateral security partnership between Australia, the UK, and the US (AUKUS), Australia is currently awaiting the construction and transfer of three to five Virginia-class submarines from the United States, which may not come in time for Pillar II of the AUKUS agreement, due to stagnant American naval production rates.

Only 80 percent of the 69,000 recruits needed to enhance the Australian Defence Forces have either signed up or met recruiting requirements. Simultaneously, younger Australians feel they have better economic and social opportunities in the private sector than in the military, drawing potential recruits away.

Continuously growing defense spending over several decades will be critical in maintaining readiness. Decades of neglecting defense forced the Australian military into a position where it must catch up to other mid-sized powers like Japan and South Korea. Furthermore, as the Australian Strategic Policy Institute noted, confidence in the military remains low. Thus, efforts to change this view are needed in the information sphere if public institutions are to effectively remilitarize, in lieu of rising threats.

Recommendations for Each Country

The United Kingdom, Canada, and Australia face major recruitment and militarization woes. However, steps can be taken for all three countries to push towards modernization and expansion. This is particularly important if these Anglo nations are to remain a close alliance.

British recruitment woes correlate with the lack of recruitment offices. The British Ministry of Defence must grow and lobby for more offices and events where promising youth can learn and gather information about military service. Furthermore, efforts are needed in the more neglected Royal Navy and Army.

The British have an opportunity to take a leadership position on the continent. Growing the British military will also support defense exports and further enhance and expand the military—albeit with an effort to increase the MOD’s budget.

Canada’s efforts must include broader government support for the military as Canadians question the credibility of a government that drew down the military to ineffectiveness. The Canadian Defence Ministry can also take lessons from NATO partners, such as Poland, Romania, Finland, and others, who are modernizing successfully.

Australia’s expansion of the military must take a two-pronged approach. First, show potential recruits the benefits of military service. Second, the government must instill a sense of patriotism and respect for the Armed Forces. The government can focus on brewing threats in the Indo-Pacific, which will eventually reach Australia, while explaining the benefits of military service.

The Commonwealth countries of the United Kingdom, Australia, and Canada all have capable yet stagnant militaries. Addressing problems with recruitment, logistics, and maintenance can reduce stagnation and help restore these nations’ military strength. As close allies of the United States, their success matters.

Julian McBride is a former US Marine. He is a forensic anthropologist and independent journalist.

Commonwealth Defense and Recruitment Hurdles was originally published on Global Security Review.

For eighty years the United States pursued a policy of globalism with worldwide military commands to implement this policy. It is prohibitively expensive and is becoming increasingly difficult to sustain. Observers point out that the US defense budget was $849 billion in 2024, but this is only part of the overall annual expenditure on defense. Most countries include veterans benefits in their defense budgets. The United States treats these costs differently. Today the Veterans Administration (VA) budget stands at $369.3 billion and is rising rapidly because of the wars in Iraq and Afghanistan, which drove healthcare and retirement costs higher.

As Table 1 shows, the VA budget rose about 10 percent per annum, resulting in the VA budget rising to the second largest amount of discretionary funding in the federal budget.  Further, as the breakdown of annual expenditure shows, medical costs are growing as the soldiers who went to war as young people are now in their forties and their health issues are becoming chronic while the injuries they suffered are becoming more difficult to treat due to age-related complications.

Table 1

Veterans Administration Budget 2018–2025

Source: US Veterans Administration (2024)

Combined expenditures for fiscal year 2025 will surpass $1 trillion. Given America’s growing debt such expenditure is difficult to sustain, especially if Washington’s global military footprint continues to expand at a rapid pace. Finding the manpower to wage war is becoming increasingly difficult for the United States.

The Afghanistan and Iraq conflicts saw the United States suffer 8,492 combat fatalities.  Compared to the 58,000 deaths in Vietnam and 53,000 in Korea this number was significantly smaller. A critical reason was excellent triage care and swift evacuation of wounded soldiers from the battlefield. To get soldiers to serve in an all-volunteer force, the United States was offering $20,000 to $40,000 enlistment bonuses. Today, those numbers are even higher.

Further, in his autobiography, Hillbilly Elegy, Vice President J. D. Vance discussed how the American working class, which his family belonged to, blamed George W. Bush and Barack Obama for making them cannon fodder in Afghanistan and Iraq. This feeling, combined with the high number of walking wounded (over 50,000) who came back from the wars with physical and psychological trauma, led to a growing reluctance amongst America’s combat-age population to go to war. In such circumstances, reducing military expenditures and the nation’s global military footprint makes sense.

In this context, Trump’s plan for hemispheric defense is a return to the Monroe Doctrine of the nineteenth century, where the United States maintained its military supremacy over the Western hemisphere and kept out foreign powers. Defending the Western hemisphere is easy. As Otto von Bismark once said, “The Americans are a very lucky people. They’re bordered to the north and south by weak neighbors, and to the east and west by fish.”

In the 21st century, the United States remains the predominant naval power in the Atlantic Ocean as well as in the Eastern and South Pacific, making it difficult for any aggressor to penetrate America’s defensive walls. Fielding an American military force that is based around a blue-water Navy and a globally deployable Air Force is a cost-effective strategy because it takes away the expense of overseas bases. In fact, recognizing that in a conflict with China there could be political unwillingness in Asia to host F-35s, the first Trump administration decided to build a new generation of lower yield nuclear weapons that could be launched from cruise missile–carrying submarines.

The Quest for Territory

Since coming to power, Donald Trump suggested Canada become the 51st state and the purchase of Greenland. Denmark has stated that Greenland is not for sale while in Canada Trump’s statements led to a revival of Canadian nationalism and a boost in the fortunes of a very unpopular liberal party. President Trump’s motivation for such efforts is clear.

In terms of minerals, a United States that has full access to minerals in Canada and Greenland is on par with the mineral wealth of Russia. Acquiring Canada and Greenland would also make the United States and Russia the two most prominent Arctic states and would freeze out attempts by China to acquire influence in the region.

Trump’s demands caused global leaders to wonder about the rationality of such pronouncements but what he said is based in political and historical facts. The United States purchased the Virgin Islands of St. Thomas, St. Croix, and St. John from Copenhagen in 1917 and, subsequently, bought Water Island from a private Danish company in 1944. If the citizens of Greenland choose, via referenda, to join the United States, such a purchase has historical precedent.

In the case of Canada, the Quebecois have periodically asked for independence and Ottawa conducted referendums to see if the population of Quebec wants to secede. So far, secessionists suffer defeat each time. It is interesting to note that the Atlantic provinces of Canada—New Brunswick, Newfoundland, Nova Scotia, and Prince Edward Island—previously said that Quebec’s secession would lead to their joining the United States. British Columbia, which is divided from Canada by the Rockies and whose economy is tied to the West coast of the United States, would potentially follow suit. Canada would then consist of Ontario and the northern part of Quebec where the native population has made it clear that they have no interest in joining the Francophone nationalists.

The fact is that Canada has a fragile economy that could breed long-term discontent.  Further, in Quebec, the Parti Quebecois’ charismatic leader Paul St. Pierre Plamondon, who is likely to win the provincial election in April, wants a third independence referendum by 2030. If that happens, Trump’s territorial realignment may come to pass. In a world where all or part of Canada is part of the United States and Greenland is an American territory, the United States is in far less need of Europe or Asia. With only 11 percent of the American economy derived from exports, an internally focused United States is not a nation in a bad position.

Amit Gupta is a Senior Fellow in the National Institute of Deterrence Studies. The views in this article are personal. He may be contacted at amit.gupta1856@gmail.com.

Hemispheric Defense: An Idea Whose Time Has Come was originally published on Global Security Review.

Over 4,300 miles of Russia’s Siberian Plateau are undergoing renovation—including a floating nuclear power plant—to support new civilian settlements and 17 full-service Northern Sea Route (NSR) ports, tightening control over regional petroleum supplies and commerce through increased Russian military presence.

Oil and gas exports top Russia’s priorities, representing 60 percent of total revenue and 30 percent of the Russian government’s overall budget. Rising ocean temperatures are providing new access to minerals on land and sea. Multi-billion-dollar contracts with Gazprom, Rosneft, and Novatek will develop the Vostok oil field and Yamal Liquid Natural Gas plant. Once complete, these facilities could rival the Nord Stream Pipeline and increase Putin’s influence.

Russia possesses the largest icebreaking fleet—40 ships compared to the United States’ two—escorting the most maritime traffic through the NSR. Warming seas will likely increase demand for shippers seeking shorter transit times between the Atlantic and Pacific Oceans, while new ports will serve increased maritime traffic. Putin is also considering a Trans-Siberian Railway between seaports and an Arctic road that expedites cargo across Russia’s interior.

The Northern Fleet projects growth to 50 icebreaker vessels as part of its full-spectrum operations to “phase NATO out of the Arctic.” One year into the Ukraine war, Russian global positioning satellite (GPS) jamming incidents affecting foreign sea vessels in the NSR nearly doubled.

In 2022, Norway reported Russian intelligence gathering drones over its Svalbard archipelago and energy-processing facilities. Russia thinly veils this activity as responses to action against it in Ukraine and correlates operations between the two theaters.

The UN Convention on the Law of the Sea (UNCLOS) decrees Arctic Circle nations possess up to 200 nautical miles of contiguous seabed, extendable with supporting scientific data. In 2007, a Russian submarine planted a flag on the seabed beyond its border, claiming the Lomonosov Ridge and 1.2 million additional square kilometers of seabed, drawing Canada and Denmark into a legal battle over economic exclusion area infringement.

On December 5, 2022, Putin updated the “Rules of Navigation on the Water Area of the Northern Sea Route.” The revision now prohibits foreign military vessels in internal waters unless heading to port, re-designates the NSR straits as internal waters (instead of international routes), requires military vessels receive permission 90 days before passage, and allows only one warship at a time. Russia enforces its perceived territorial gains with bomber overflights of the NSR, citing security, but obfuscates where security ends and militarization begins.

Seven Arctic military locations anchor Russia’s Arctic military monopoly and are or have received upgrades to military capabilities. First, the Novaya Zemlya Archipelago is where Russia conducts nuclear testing. Intelligence suggests upgrades to facilities could mean atmospheric testing may resume. Second, the Nagurskoye Air Base is seeing a runway expansion, air defense missiles added, and a new meteorological facility completed. Third, Rogachevo Air Base is getting upgrades to radars, air defense missiles, electronic warfare capabilities, and signals intelligence assets. Third, Sredniy Air Base is receiving a runway expansion. Fourth, Northern Clover Base is receiving observation, air defense missile, and equipment-testing upgrades. Fifth, Wrangel Island’s deepwater port, radar station, air defense missiles, and signals intelligence collection, used to monitor American bases in Alaska, were all upgraded. Sixth, air defense missiles were emplaced at Cape Schmidt.

These Arctic military upgrades show Russia’s intent to monopolize Arctic commerce and create a new avenue of attack against NATO. Wrangel Island can house submarines and surface ships, establishing Arctic entry control between Russia and Alaska. Bases at Nagurskoye and Rogachevo establish similar control on the opposite end of the Arctic Ocean, creating guarded entry points supported by the new military installations along Russia’s Arctic coast.

Canada’s Arctic region directly across from Russia is mostly uninhabited but contains two Cold War–era early warning radar sites supporting NATO. In 2022, then Canadian Chief of Defense Staff Wayne Eyre called the Arctic “a key area of concern,” warning North America’s Arctic coast may be vulnerable and prompting joint exercises focused on northern nuclear attacks. Exercises Joint Viking and Joint Warrior included new members Sweden and Finland but do not match Russia’s increased regional presence.

America’s early warning facility at Thule, Greenland, is crumbling from under-investment and melting permafrost, while the Danish government monitors over 400 Russian infrastructure projects. China envisions itself a near-Arctic country under its Belt and Road Initiative and acquired a decommissioned Russian military facility. Rather than pursue a large footprint, China bankrolls many of the ongoing Russian projects. The Danes warn Chinese ownership of Arctic facilities can create safe havens for Russian forces and bring both adversaries to NATO’s polar doorstep.

The once-isolated Arctic Ocean is bustling with Russian activity as former Russian Premiere Mikhail Gorbachev’s proclaimed “zone of peace” becomes militarily contested. Russia continues its brand of strong-arm diplomacy using military force as an enabler for commercial expansion and financial gain.

NATO must prepare for what a Russian Arctic Ocean monopoly could mean for international commerce and security. Simply admiring the problem is no longer an option. Deterring Russian aggression means the United States and its NATO allies must expand their own capability to levels that dissuade Russian action.

Dan Wasserman is a contributor to Global Security Review. The views expressed are his own.

Russia’s Arctic Ocean Monopoly was originally published on Global Security Review.

Realpolitik, fake news, and sociopathic dictators are nothing new. They date back more than two millennia. In their time, the social mechanisms and technology of the day were employed. Ancient Rome’s Emperor Augustus is but one example. The word realpolitik, invented in Germany in the mid-nineteenth century, describes the application of diplomacy and force in the pursuit of selfish state interests. Count Otto von Bismarck, the “Iron Chancellor,” was another master of ruthless realpolitik.

Fake news is modern slang for purposeful disinformation spread as real news. Fake news makes claims that the maker knows to be false, but intentionally packages and distributes to seem genuine, to serve their political and military purposes. English-language fake news, used as wartime propaganda, was already commonplace by the time of the English Civil War (1642–1651). It also vexed the American founding fathers during the American Revolution (1775–1781).

Sociopathic dictators have a serious psychological disorder characterized by constant deceitful manipulation and a complete lack of regard for other people. When a very ambitious and successful sociopath rises to be head of state, taking control of national armies and arsenals and even nuclear weapons, the results can be devastating.

Infamous examples of twentieth-century dictators who practiced realpolitik, propagated fake news, and were sociopaths include Josef Stalin, Adolf Hitler, and Mao Zedong. Between them, their amoral aggression and complete disregard for lives caused the deaths of tens of millions.

Understanding these three historical and contemporary phenomena is essential for America to effectively address national security concerns. Acting together, realpolitik, fake news, and sociopathy shape adversary strategic behavior and work to the United States’ serious detriment. During the nuclear age and the social media era, the risks due to this “trinary weapon” skyrocketed.

Coping with these clear and present dangers calls for a nuanced and multidisciplinary, multiagency approach to deterrence and defense. This approach needs to go well beyond traditional military strategy that focuses on applying force while maintaining secrecy. Three lines of effort are important to help mitigate the above-mentioned trinary aspects of coercive statecraft.

First, multilateral engagement is important for combating the ill effects of enemy realpolitik. Just as in World War I, World War II, and the Cold War, collective international efforts by like-minded democracies are vital to resisting expansionist tyranny. Further strengthening multilateral frameworks and alliances, to address common security challenges and deter adversarial behavior, is a useful approach. Important examples include expanding NATO and rationalizing its burden sharing. Expanding AUKUS, a trilateral security partnership between Australia, the UK, and the US, to include Japan and other Asia-Pacific allies, such as South Korea and Canada, is another option.

Second, strategic communication and information resilience is important. These hybrid-warfare, offensive and defensive weapons need further development by the United States. Clear and consistent messaging is indispensable to effectively convey America’s values and goals and to counteract bad-actor manipulation. This can help immunize allies against falling for adversary disinformation and protect victims of repression from enemy brainwashing.

To this end, enhancing resilience against fake news requires expansion within the United States. This can be done using media literacy programs, non-partisan fact-checking mechanisms, and widespread public awareness campaigns. Any information warfare efforts the US employs to target adversary populations needs to meet high legal and ethical standards. It must also be tempered by stark realism about the utility of disinformation. In short, unconstrained free speech requires an informed public.

Third, psychological profiling techniques, now standard practice in law enforcement, need further development to identify and mitigate the influence of sociopathic dictators in shaping strategic events. Such hyper-threatening individuals could, perhaps, be identified mid-career, before rising to lead nations. Overt and covert efforts to remediate or interdict the rise of such dangerously pathological persons is a tricky matter, but one the Pentagon, State Department, and Central Intelligence Agency should not neglect. This line of effort can adapt and extend approaches refined since September 11, 2001, to better understand and short circuit mental processes behind progressive radicalization leading to violent terrorism.

These lines of effort need more urgent furthering on a truly whole-of-nation basis. Government officials and private-sector executives can turn their efforts to developing the required capabilities. Social media companies are already expert at manipulating Americans. Perhaps it is time their efforts are employed for the nation rather than against it.

By addressing these new-old challenges head-on and implementing effective countering strategies, America can enhance its defense against the realpolitik and disinformation employed by sociopathic dictators. By doing so, the United States and its allies safely navigate the complexities of modern geopolitics and growing three body problem.

Aaron Holland is an Analyst at the National Institute for Deterrence Studies. Joe Buff is a risk-mitigation actuary researching modern nuclear deterrence and arms control. The views expressed in this article are the authors’ own.

Realpolitik and Fake News Complicate Nuclear Deterrence was originally published on Global Security Review.

The Arctic is rapidly becoming a major geopolitical hot spot. While the melting ice in the region is presenting significant challenges to the environment, it is also creating opportunities for Arctic states and major global powers who seek to exploit the effects of climate change. One such opportunity is the growing access to deposits of natural resources, including abundant quantities of oil and natural gas. Another fraught issue is the dispute over the opening of the Northwest Passage, as shorter maritime navigation routes become available and states argue over who controls those waterways. The U.S. Coast Guard estimates that shipping via these new routes will be two weeks faster than traditional routes, such as the Suez Canal.

To adapt to the changes brought about in the Arctic, the United States, Russia, and China have all devised strategies for how they intend to pursue their respective interests. The U.S. introduced the National Strategy for the Arctic Region in 2013, and in 2018 China released its own Arctic Policy. But far and away the most active Arctic power has been Russia, who has taken efforts to assert its maritime claims, develop resources, and even begin militarizing the region. In comparison, the United States is woefully behind as, even today, it owns a total of two active icebreakers—of which only one is functional.

To make matters worse, the United States finds itself at odds with even some of its closest partners in the region. Canada, a steadfast ally, and the United States have contrary positions on the ownership of the Northwest Passage. Canada insists the Northwest Passage is intrinsically Canadian while the United States maintains the idea the Northwest Passage is an international strait and should remain open for free navigation.

Surprisingly, this debate with our northern neighbor creates an opportunity for American cooperation with China. Much like the United States, China insists the region belongs to the “common heritage of mankind” and remains opposed to the kind of sovereignty Russia and Canada wish to apply to the region. China’s motivation is transparent: as a non-Arctic power, China cannot make the kind of territorial claims other Arctic powers can, and unless the area is internationalized, China would be dependent on adjacent countries—namely, Russia and Canada—to use these waterways. And the benefits of using these waterways would be enormous for China as Chinese shipping companies could shorten the length of their routes by approximately 30 percent, saving hundreds of thousands of dollars while also avoiding risks from piracy.

As the United States continues to play catch up in the region, Washington should consider working with Beijing to make freedom of navigation a reality in the region. Chinese support could help tip the balance within the Arctic Council and ensure Arctic waterways remain open by leveraging Chinese influence and resources in the region to conduct freedom of navigation operations (FONOPS).

China, which is no stranger to American FONOPS, has been on the receiving end of FONOPs-related lawsuits from the United States, which has challenged Chinese territorial claims in the South China Sea—claims that are more spurious than those China refutes in the Arctic. China does risk undermining its stance in the South China Sea by endorsing this approach, but the enormous benefits of free access through the Arctic may very well be worth that risk.

There are several challenges to realizing this level of cooperation. First, increasing tensions between the United States and China may make it difficult to reach an agreement, despite this issue being a place where both countries can mutually gain. Second, China may be able to independently work out a favorable deal with Russia to allow passage for its ships and use of Russian icebreakers. This is a real possibility, as evidenced by China and Russia’s willingness to cooperate in other strategic areas. And, lastly, if the United States is unable or unwilling to help China make a case for FONOPS, a Sino-Russian deal might be China’s best option.

This is not to say cooperation with China is without risks. Pompeo is right to worry about Chinese investments and influence potentially eroding the base of support that the United States already has in the region. And giving China too much power within the Arctic Council runs the risk of upsetting a political balance of power that is roughly arrayed in favor of the United States. But, these disagreements should not prevent the United States from working with China in one of the few areas where interests are aligned. It’s even possible that further cooperation in the Arctic may help cool otherwise tumultuous relations between the United States and China.

The United States Must Work with China to Ensure Freedom of Navigation in the Arctic was originally published on Global Security Review.

Over the years, global climate change severely and observably impacted the environment, resulting in rapidly melting glaciers, ice covers on rivers and lakes breaking up much earlier than anticipated, and unprecedented levels of animal migration, as increasing numbers are displaced from their natural habitats. According to the Intergovernmental Panel on Climate Change (IPCC), the global temperature could increase from 2.5 to 10 degrees Fahrenheit over the next century.

The effects of climate change are more visible than ever before in the Arctic. The Arctic sea ice extent for October 2018 averaged 6.06 million square kilometers (approximately 2.34 million square miles), the third-lowest level recorded in October from 1979 to 2018. To put this in perspective, the sea ice extent was 2.29 million square kilometers (1.42 million square miles) below the 1981 to 2010 average, and 170,000 square kilometers (105,633 square miles) greater than the record low observed for October 2012. As global temperatures rise, the natural resources within the Arctic region are increasingly easier to access, prompting greater frustration from environmentalists.

The melting of the Arctic sea ice has coincided with the discovery of energy deposits as well as the development of the technology needed to access those resources. These developments have caused the members of the Arctic Council—states with territorial claims in the Arctic—to pay increased levels of attention to the region.

The Arctic Council is made up of Canada, Finland, Denmark (Greenland), Iceland, Norway, Russia, Sweden, and the United States (Alaska). Of these, Canada and Russia hold the most territory (Russia controls the most Arctic territory of any Arctic state). Being a party to the United Nations Convention on the Law of the Sea (UNCLOS), which states that a country’s Exclusive Economic Zone extends 200 nautical miles offshore, Russian claims cover approximately 40 percent of the Arctic.

The Arctic plays host to substantial natural resources. A 2008 report released by the United States Geological Survey (USGS) estimated that the Arctic holds around 1,670 trillion cubic feet of natural gas, 44 billion barrels of liquid natural gas, and 90 billion barrels of oil—the vast majority of these being offshore. As more territory becomes accessible, excess reserves of gold, zinc, nickel, and iron already found in part of the Arctic may be discovered. From the connectivity perspective, the two major sea routes that permit ships to pass through the Arctic run along the Russian and Canadian coasts, i.e., the Northern Sea Route and the Northwest Passage.

The Northern Sea Route runs from the Barents Sea, near Russia’s border with Norway to the Bering Strait between Siberia and Alaska. The Northern Sea Route (NSR) would dramatically reduce the transit time for ships traveling from East Asia to Western Europe. On the other hand, the Northwest Passage connects the Atlantic and Pacific Oceans through the Canadian Arctic Archipelago.

Shipping lanes connecting Europe with East Asia currently run from the Mediterranean through the Suez Canal to the Red Sea, transiting the Malacca before reaching East Asia. The distance is roughly 21,000 kilometers (13,049 miles) and the typical transit time is around 48 days. The Northern Sea Route would cut the distance to 12,800 kilometers, reducing transit time by 10 to 15 days. According to a paper published by the CPB Netherlands Bureau for Economic Policy Analysis:

“The direct impact of the opening of the NSR is that international shipping (volume by distance) is reduced by 0.43%, but global trade volumes increase by 0.21%. The total percentage of world trade that will be rerouted through the Northern Sea Route will be around 5.5%.”

The paper further estimates that 15% of all Chinese trade will be through the Northern Sea Route. The optimization of the NSR will result in a significant rerouting of the world shipping lines and would have a drastic impact on the usage of the Suez Canal and the Malacca Straits to reach the Southeastern and East Asian Markets. According to CPB research, roughly 8% of global trade currently transits the Suez Canal, and it is estimated that level would be reduced by two-thirds once the Northern Sea Route becomes fully operational. To illustrate, from 2008 to 2012 the average number of commercial ships transiting the Suez Canal each year was approximately 15,000—the re-routing of vessels through the NSR, according to CPB research, would reduce that number by 10,000.

The rapidly melting sea ice has prompted some analysts to predict that the shorter shipping route could largely replace the Suez Canal Route that connects the Red Sea and the Mediterranean Sea. Such a conclusion overlooks the fact that ships using the Suez Canal Route make stops at ports in Southeast Asia and the Middle East when transiting between Europe and East Asia. In other words, to be commercially viable, large container ships using the Suez Canal route need to make deliveries to several customers along the way.

In contrast to the Suez Canal Route, the territory that lies along the Northern Sea Route is sparsely populated, meaning low demand for imported goods. Moreover, replacing one trade route with another could have a drastic impact on the economies of the countries that rely on the transit fees of the southern maritime trade route. Lastly, the Northern Sea Route is only safe to navigate during the summer when the straits are relatively ice-free. Even then, escort icebreaker vessels are often necessary to navigate the waters as there is always a risk of unpredictable ice conditions. Additional variables, such as a lack of search and rescue teams and support infrastructure, along with high insurance premiums for shipping vessels, need to be taken into account when evaluating the viability of the Northern Sea Route.

This is not to say, however, that the NSR is not a serious competitor to the southern sea route. Many scholars have argued that global shipping companies may become more interested in the NSR as it becomes more accessible and viable when compared with the longer and piracy-prone traditional Suez Canal Route. Specifically, the NSR makes more economic sense for shipments of oil and liquid natural gas (LNG). Increased energy trade through the NSR would largely benefit Russia, which has heavily invested in maritime transport ventures and energy projects in the Arctic.

The Russian government’s planned Murmansk Transport Hub will construct new roads, railway infrastructure, ports, and other facilities on the western side of the Kola Bay. It is described as one of the biggest infrastructure projects in Russia and by far the largest in the Arctic. There are also plans to upgrade the M18 highway between Murmansk and the Norwegian border. The new road will significantly improve the route between the border towns of Nikel, Russia and Kirkenes, Norway. The Sabetta Port project is a joint project undertaken by Novatek and the Russian Federal government to service the Yamal LNG project and a nearby gas field operated by Novatek. The port will facilitate gas shipments of both eastwards and westwards along the Northern Sea Route. Furthermore, the Russian government also plans to produce the LK-60 icebreaker and the LK-60 II icebreaker, which are required for cargo ships to access the NSR.

The economic benefits of the Northern Sea Route, combined with large-scale Arctic infrastructure development projects and the existence of substantial energy resources of energy resources to be tapped, make the Arctic a lucrative prospect for Russia and the other Arctic states. However, the strategic desirability of the Arctic trade route will depend on many factors, including the continuous melting of ice, development of modern vessels to sustain harsh weather conditions, an upward trend in global trade, increased demand in Asian markets, persistent piracy around the Horn of Africa, growing instability in the countries around the Suez Canal region, and heightened congestion in the Strait of Malacca. All these factors will further contribute to the geostrategic importance of the Arctic as a natural resource and transportation hub. At the same time, however, the growing importance of the region may also lead to increased competition.

Melting Arctic Sea Ice Opens New Maritime Shipping Route was originally published on Global Security Review.

English is gradually replacing Russian as the most common foreign language spoken in Mongolia, as Western corporations control increasingly large segments of the Mongolian mining industry. The mineral sector is the most essential part of the Mongolian economy. The former Soviet satellite state has approximately ten percent world’s known coal reserves.

Two companies dominate the Mongolian mining industry—Oyu Tolgoi and Tavan Tolgoi. Oyu Tolgoi, two-thirds of which is owned by Canadian and British-Australian firms, is the dominant player in the Mongolian mining sector. Despite its poor environmental record, the Canadian mining giant Rio Tinto is increasingly influential within Mongolia. Following a 2013 disagreement between the company and the Mongolian government, Ulaanbaatar was forced to fire Tserenbat Sedvachig, the executive director of Erdenes Oyu Tolgoi, the state-owned company that controls the remaining third of Oyu Tolgoi.

The second major corporation in the Mongolian mining industry is the state-owned Tavan Tolgoi. Mongolian lawmakers recently approved a plan to sell up to thirty percent of the Tavan Tolgoi coal mine, with the government officials expressing their hopes that Rio Tinto will have to maintain a level of “working cooperation” with the Mongolian mining giant.

Mining accounts for approximately one-third of Mongolia’s GDP. Mineral commodities comprise a little over eighty-nine percent of the country’s total exports. Although Western corporations like Rio Tinto maintain a strong level of influence over the country’s economy, China imports the majority of Mongolian exports. In contrast, Russia’s involvement in the Mongolian economy plummeted in the aftermath of the Soviet Union’s collapse.

By the 1990s, Mongolian trade with Russia declined by around eighty percent, as China’s diplomatic relationship with and economic influence over Mongolia increased. In recent years, however, Russia has sought to rebuild its ties with Mongolia to enhance its standing as a regional power. The Russian government wrote off ninety-eight percent of Mongolia’s state debt, and an agreement was signed to build an oil pipeline from Russia to China through Mongolia.

The Mongolian public retains a certain amount of nostalgia for Russia, and a recent flight of Western investment has reinforced such sentiments. During the Soviet era, Mongolia was considered the USSR’s unofficial 16th republic, with most people in the country being able to speak and understand Russian.

Today, the Russian language is far less popular with Mongolians, especially among the youth. Furthermore, even though the Cyrillic alphabet is the country’s official alphabet, young Mongolians increasingly use the Latin alphabet on their phones and social media. Nearly half of all comments made by young Mongolian Facebook users are written in the Latin alphabet, with the remaining portion being in Cyrillic. Going forward, Ulaanbaatar may make an effort to standardize the use of the Latin alphabet, which has been the trend in many former Soviet republics or Soviet aligned-states that used the Cyrillic script in an official capacity.

Russia is not only losing economic influence in Mongolia, but it is also losing cultural influence. English has replaced Russian as the most common foreign language used by many young Mongolians. This adoption is fueled by both migration and the desire to integrate further into the global economy. Even though a significant number of Mongolian schools and universities continue to teach Russian to their students, the presence of Russian culture in the country will continue to decline.

Russian Influence in Mongolia is Declining was originally published on Global Security Review.

In Afghanistan, the U.S. and its allies have deployed cutting-edge aerial intelligence, surveillance, and reconnaissance (ISR) capabilities. What is missing, however, is good human intelligence (HUMINT) collection capabilities. Afghans have been entrusted with the task of HUMINT collection, but multiple Taliban infiltration and sabotage operations illustrate the need for comprehensive reform of Afghanistan’s intelligence apparatus.

The Afghan intelligence community requires a robust overhaul. This includes investment in both human and technical capabilities alongside a comprehensive reform program. Afghanistan’s intelligence community is comprised of the National Directorate of Security (NDS), Police Intelligence (PI) and Military Intelligence (MI). Some coordination centers, including Tawheed, NASRAT, and the Presidential Information Coordination Center (PICC) connect and share strategic, operational, and tactical intelligence between the individual agencies.

Regarding organizational hierarchy, the Afghan intelligence community is structured like a pyramid, with the powerful National Directorate of Security at the top. The NDS oversees Afghanistan’s overall intelligence machinery as it pertains to both internal and external security.

Though vested with substantial powers, the Afghan intelligence community has become heavily politicized and suffers from a lack of investment coupled with an old and inefficient bureaucracy. Afghanistan’s intelligence collection efforts are primarily focused on gathering HUMINT through long-standing networks of tribes, local commanders, traders, and government employees. This HUMINT is augmented with basic signals intelligence (SIGINT) collection capabilities.

The Five Eyes countries (the U.S., U.K., Canada, Australia, and New Zealand) have done much to transform the Afghan intelligence community. However, more needs to be done to create professional, disciplined, and adequately equipped intelligence services. At present, arbitrary political appointments, a lack of professional intelligence schools, and the ongoing politicization of Afghanistan’s intelligence agencies have profoundly undermined their institutional integrity and credibility.

The Institutional History of Afghan Intelligence

Intelligence collection and analysis as organized tradecraft is a relatively new phenomenon in Afghanistan. It started with the creation of the Edara e Zabt Ahwaalaat of the 18^th century King Abdul Rahman Khan. The founding father of modern Afghan intelligence is former Prime Minister and President Sardar Dawood Khan; he transformed Edara Zabt Ahwalaat Sedarat to establish the first-ever State Intelligence Services—Edara Estikhabarat Dawlati. This agency was later ideologically refined as communist governments took power with the help of the Soviet KGB, and renamed as KAM, AGSA, and KHAAD.

Today, a significant number of Afghan intelligence agents and officers are graduates of KGB training centers in Russia and former Soviet republics or satellite states such as Uzbekistan, East Germany, and the former Yugoslavia. Furthermore, police and military intelligence agencies were established during the communist period to conduct surveillance on political opponents, conduct counterintelligence operations and gather intelligence on criminals and crime syndicates in major urban centers.

The institutional history of the Afghan intelligence community has created legal and policy frameworks that are in dire need of reform. Updating and revising these frameworks to define and clarify the authorities, responsibilities, and roles of the various intelligence agencies is essential to safeguard their legitimacy, integrity, and professionalism. At present, there is considerable overlap between the mandates and activities of Afghanistan’s military and civilian intelligence, especially in the areas of intelligence on criminal or terrorist activities, tactical-level intelligence, and strategic intelligence. These overlaps need to be clarified through a comprehensive, cross-agency review, which will serve as a road map for subsequent updates and revisions to the legal and policy frameworks used by the Afghan intelligence services.

Furthermore, robust investment is required to upgrade and equip intelligence training schools in the military and civilian sectors. These schools should be the Afghan intelligence community’s sole supplier of human capital to ensure job security, professionalism, and discipline while avoiding any politicization of the intelligence services. The only political appointees in positions of authority in the Afghan intelligence community should be the Director of the NDS and his first deputy; both should have a term limit of two to three years. The career professionals in the services must be immune from political appointments, while service chiefs and NDS personnel who have been discharged from service should be prohibited from engaging in any political or business activity for ten years. This will ensure that sensitive information they may have had access to will not be used for political or financial gain.

There is also the fact that the NDS is spread too thin. As such, there is a dire need to establish three new intelligence agencies: a foreign intelligence agency, a counter-intelligence agency, and a joint intelligence committee consisting of the various intelligence service chiefs chaired by the President of Afghanistan. This improved institutional arrangement will clarify the roles and responsibilities of each agency, improve oversight, increase inter-agency coordination, and enable each agency to better focus on its core mission.

The Intelligence Cycle and Modus Operandi

Afghanistan’s intelligence services currently lack a coherent methodology governing the collection and analysis of intelligence, and the delivery of final intelligence products. Little attention is paid to analyzing and corroborating raw intelligence, which is often presented as a final product. These shortcomings are primarily due to a lack of a coherent institutional culture and the absence of a system of intelligence development. The modus operandi of the three existing services needs to be upgraded with the right systems, procedures, and personnel. This process can start with the implementation of a robust intelligence development cycle, and clarification as to the roles and responsibilities of various agencies, and of departments within each agency.

Furthermore, the Afghan intelligence community would benefit from higher numbers of western-trained intelligence officers. Retirement incentives should be offered to older, KGB-trained officers. At the same time, existing intelligence training schools in Afghanistan need to update their curricula and increase their enrollment as older officers retire and demand for new officers rises.

Information Sharing and Coordination

While secrecy and information compartmentalization are fundamental aspects of the intelligence tradecraft, timely and effective sharing and coordination of information is an ongoing challenge for any intelligence service. While many improvements have been made with the establishment of coordination centers such as TAWHEED, PICC, and NASRAT, more needs to be done at the tactical and operational levels.

The fall of the provinces of Kunduz and Ghazni are examples of intelligence sharing failures in Afghanistan. Agencies were unable to coordinate and share intelligence regarding imminent Taliban attacks promptly. Information needs to be distributed in an efficient and timely manner to those with the proper capabilities to address the issue. Optimized inter- and intra-agency information sharing capabilities will change the face of the Afghan war.

Foreign Partnerships

Partnerships with external intelligence services are essential. Given Afghanistan’s geopolitical circumstances, the Afghan intelligence community can not afford to rely on a single partnership. Instead, it should diversify its foreign partnerships while distinguishing between strategic and non-strategic partners. The United States and the other Five Eye countries are examples of strategic partners.

The Afghan intelligence services should structure its foreign partnerships in three tiers. The first tier would be Afghanistan’s principal partners, such as the U.S. and the Five Eyes countries. The second tier should be comprised of the intelligence services of India, Russia, China, and neighboring countries. The third tier would include the rest of the world.

Paramilitary Forces

Like all intelligence agencies, Afghanistan retains a paramilitary force that is tasked with carrying out quick and effective counter-terrorism operations. These forces have been essential for actions taken against the Taliban, foreign terrorists, and Daesh (Islamic State, ISIS, ISIL). In the event of a reorganization or restructuring of the Afghan intelligence community, these forces and their operational capabilities should be maintained due to their critical role in counter-terrorism.

There is a critical need to improve inter-agency coordination when it comes to operational targeting, planning, and execution with other branches of Afghanistan’s security services. Due to the sensitive nature of operations carried out by paramilitary forces, there are often duplicate or overlapping operations. However, structures such as the Joint Services Operations Command (JSOC) can play an essential role in avoiding redundancies regarding efforts and resources.

SIGINT vs. HUMINT in Hybrid Warfare

The Afghan conflict has changed from insurgenct-proxy warfare to a hybrid war much like the ongoing conflict in the Donetsk and Donbass regions of Ukraine. Alongside covert involvement by Russia and Iran, Pakistan has employed a combination of proxy groups, psychological warfare operations (PsyOps), and economic blockades against Afghan forces, while simultaneously discrediting U.S. and NATO operations in the country. Much of the SIGINT Afghanistan has access to is provided by the U.S.-led coalition forces.

Afghanistan’s intelligence services primarily focus on developing intelligence products utilizing HUMINT capabilities and assets, albeit without much success given the significant number of attacks in major cities and military installations. A robust overhaul is needed to reform and develop full-spectrum capabilities that will enable Afghan government forces to counter hybrid warfare tactics employed by the Taliban and their foreign backers. Integrating HUMINT and SIGINT is a critical step that will improve the efficacy of intelligence products on the battlefield. The Afghan war won’t be won by drones, PC-12s, and other aerial capabilities alone; ground-based networks and sources can have a significant impact when coupled with the proper capabilities and resources.

Oversight and Control

During the eighties and nineties, the Afghan intelligence services—KAM, AGSA, and KHAD—were notorious for atrocities such as arbitrary arrests, mass executions, and forced disappearances. The predecessor of these agencies, Edara e Zabt Ahwaalaat Sedarat, was a tool used for domestic surveillance of political opponents and dissidents of Afghanistan’s kings. Accordingly, intelligence and spycraft are looked at with suspicion by the Afghan people, as it brings back memories of KAM, AGSA, and KHAAD. Thus far, the NDS has been successful, to an extent, in its efforts to improve its reputation, but much more needs to be done.

The Afghan intelligence community’s budget is in need of a robust legal and policy framework to ensure accountability, both operationally and fiscally. In a democratic state, intelligence agencies are required to operate within the rule of law and uphold values like human rights. To their credit, the National Directorate of Security and its sister agencies have done much in this area, but more is required to improve their reputational standing. Measures such as quarterly reports to the parliamentary intelligence committee, ensuring access to detainees by domestic and international human rights organizations, and robust oversight by and reporting to the presidency and the National Security Council are all measures that would contribute to an increase in public and international confidence in Afghanistan’s intelligence apparatus.

Information Trade and Budget Controls

Information is an asset, and if corroborated and verifiable, can be a game changer for Afghanistan. However, there is much more disinformation and rumors than solid, actionable intelligence. Raw data that is not put through a proper intelligence cycle before being included in a final intelligence product is virtually useless. In the intelligence tradecraft, most of the raw information turns out to be rumors and uncorroborated hearsay.

Meanwhile, large sums of money are spent to develop sources and produce intelligence products with little parliamentary or presidential oversight. The operational budgets of all three existing services under parliamentary and presidential oversight need to be assessed using a cost-benefit analysis that weighs the value of final intelligence products against the costs required to develop those products. While a degree of secrecy surrounding the budgets of intelligence services is warranted, there must be proper oversight to provide a check-and-balance mechanism to monitor corruption, inefficiency, and ensure a positive return on investment.

Intelligence in War: Fixing and Fitting Intelligence in the Afghan War was originally published on Global Security Review.

• The seven largest emerging market countries could grow, on average, around two times as fast as advanced G7 economies.
• Six of the seven largest economies in the world are projected to be emerging economies. In 2050, the global economy will be led by China, with India in second place, followed by Indonesia in fourth place.
• The United States is projected to be the world’s third-largest economy in 2050, based on gross domestic product (GDP).
• The European Union’s share of world GDP could fall below 10% by 2050.
• The U.K. could drop to tenth place, with France potentially cut from the top 10, and Italy falling from the top 20. They are projected to be overtaken by countries with faster-growing economies like Mexico, Turkey, and Vietnam (respectively).

The global economy could more than double in size by 2050, far outstripping population growth, thanks to continued technology-driven productivity improvements. Emerging markets will drive global financial growth, and will progressively increase their share of world gross domestic product, based on an analysis of World Bank economic projection data. The global economy is projected to approximately double in size by 2042, growing at an annual average rate of around 2.6% between 2016 and 2050.

This growth is expected to be primarily driven by emerging market and developing nations, with the Emerging-Seven (E7) economies of Brazil, China, India, Indonesia, Mexico, Russia, and Turkey growing at an annual average rate of almost 3.5% during the next 34 years, compared with an annual average growth rate of 1.6% for the G7 countries of Canada, France, Germany, Italy, Japan, the United Kingdom, and the U.S.

 Half of the seven largest economies in the world are still considered emerging markets.

A continued shift will be observed in international economic power away from high-income advanced economies towards emerging economies in Asia and elsewhere. The E7 could account for nearly 50% of the globe’s gross domestic product by 2050, while the G7’s share of global GDP declines to just over 20%.

China has already overtaken the U.S. to become the world’s largest economy in purchasing power parity (PPP) terms, while India currently stands in third place and is projected to overtake the U.S. by 2050. In terms of PPP, the United Kingdom is projected to. fall to tenth place, France is forecasted to fall out of the top ten, and Indonesia could climb to fourth place by 2050

While looking at Gross domestic product measured at market exchange rates (MERs), one doesn’t see quite such a radical shift in international economic power, representing the lower average price levels in emerging economies.

However, China is projected to be the world’s largest economy by 2030, and India the third largest in the world by 2050. This reveals a considerable and gradual shift in economic power towards Asia and the Indo-Pacific region.

Emerging economies will take center stage by 2050.

By 2050 economies like Indonesia, Brazil, and Mexico are likely to be bigger than those of the United Kingdom and France, while Egypt and Pakistan could overtake Italy and Canada. With regards to growth, Vietnam, India, and Bangladesh may be the most rapidly growing economies from 2015-2050, averaging an increase of around 5% annually.

Nigeria has the potential to be the fastest growing major African economy, and could potentially increase its national gross domestic product ranking from place to fourteenth by 2050. However, Nigeria will only realize this possibility if it can diversify its economy away from oil and strengthen its democratic institutions and national infrastructure.

Poland and Colombia exhibit great potential and are projected to be the quickest growing large economies in their respective regions; Latin America and the E.U. Many emerging economies will be supported by a relatively rapidly growing populations, boosting domestic demand and the size of the workforce.

Investments in education and improved economic freedoms are necessary to ensure there are enough jobs for the growing number of young individuals in these countries, providing a path of sustainable growth for countries with emerging markets and developing economies. 

Today’s advanced economies will continue to have higher average incomes, but developing countries will likely make progress towards eliminating that gap. With the possible exception of Italy, each of the G7 will rank above the E7 states in 2050, based on rankings of projected gross domestic product per capita.

Emerging Economies Will Hold Increasing Amounts of Global Economic Power by 2050 was originally published on Global Security Review.

The real question is, how? The post-World War II international order that enabled today’s political, economic, and security arrangements and institutions is in question as power diffuses worldwide, shuffling seats at the table of global decision making.

Today, aspiring powers seek to adjust the rules of the international order and alter the global context in a way beneficial to their interests.

This complicates any reform of international institutions such as the UN Security Council or the Bretton-Woods institutions, also brings into question whether political, civil and human rights—hallmarks of liberal values and US leadership since 1945—will continue to be so.

Norms that were believed to be settled are increasingly threatened if present trends hold, and consensus to implement and follow standards can be difficult to build as Russia, China, and Iran seek to shape regions and international norms in their favor. Some features of the evolving global order are apparent:

Rising and Declining Powers Exert Their Influence

Competition is on the increase as China and Russia seek to exert more considerable influence over their neighboring regions and encourage an order wherein US influence doesn’t dominate.

Although nations and organizations will continue to shape citizen anticipation about the future order, citizen and sub-national concerns will increasingly push states to the stage that international and domestic politics won’t be separable.

This may result in the near term in waning responsibilities to security concepts and human rights among several nations, even as many individuals and smaller groups advocate for ideas through platforms, venues, and institutions.

Authoritarian regimes are likely to reinterpret and manipulate human rights norms increasingly.  This may probably lead to decreasing consensus in the international arena on the extraterritorial obligations of nations, which might have implications for domestic societies and the resolution of humanitarian conflicts.

International Norms are Changing

The norms and practices emerging around climate change—and their influence on global and state development policies—are the more than likely candidates for fostering a twenty-first-century set of universal principles.  Majorities in 40 nations, according to a poll by Pew, say that climate change is a significant issue, with a median of 54 percent saying it’s an issue.

The near-term likelihood of international competition leading to doubt and global disorder will stay raised as long as ad-hoc internationalism persists.

As dominant nations limit cooperation to a subset of issues while asserting their interests in regional matters, international norms and institutions are likely to hamper and the global system to fragment in favor of contested regional spheres of influence.

A Multipolar Global Order Doesn’t Mean the West is “in Retreat” was originally published on Global Security Review.

As global trade has flourished in recent decades, so have trade disputes. Trading nations have created various forums to adjudicate conflicts, but they are increasingly the subject of controversy. U.S. President Donald J. Trump has long criticized trade dispute resolution panels as unfair and ineffective, particularly those the United States is party to via the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO). While some critics say dispute panels undermine national sovereignty, proponents argue they offer much-needed protections that boost confidence in global investment and prevent trade wars.

Why did dispute panels emerge?

As cross-border trade and investment increased rapidly through the 1990s, individual states as well as public and private investors sought ways to adjudicate conflicts or alleged violations of trade agreements. Over time, the international trading system has developed a number of mechanisms to do this, depending on the type of dispute and the parties involved.

The authority of these supranational bodies is established by agreements such as bilateral investment treaties (BITs) and free trade agreements (FTAs), or by membership in an international organization such as the World Trade Organization (WTO). Parties agree to accept rulings, though enforcement authority and appeals processes vary.

What types of disputes do they handle?

These bodies broadly deal with two types of disputes: state-state, in which governments challenge the trade policies of other governments; and investor-state, in which individual investors file complaints against governments.

State-State. Most state-state disputes are handled by the WTO system, the primary body governing international trade. Each of its 164 members have agreed to rules about trade policy, such as limiting tariffs and restricting subsidies. A member can appeal to the WTO if it believes another member is violating those rules. The United States, for instance, has repeatedly brought WTO cases against China over its support for various export industries, including one in early 2017 alleging that Beijing unfairly subsidizes aluminum producers. That case has not been decided yet, though the Trump administration has already retaliated by unilaterally imposing tariffs on some Chinese aluminum producers.

Investor-State. Known as investor-state dispute settlement (ISDS) cases, these disputes typically involve foreign businesses claiming that a host government abused them by expropriating their assets, discriminating against them, or otherwise treating them unfairly. For example, a Canadian gold mining company claimed that Venezuela’s nationalization of the gold industry in 2011 violated an investment treaty between the two countries. A tribunal found that while Venezuela had the legal right to nationalize private sector industries, it failed to properly compensate the company for the expropriated assets.

How does the WTO adjudicate cases?

The WTO’s forum for arbitration is called the dispute settlement mechanism (DSM). The DSM is run by a rotating staff of judges, as well as a permanent staff of lawyers and administrators. The WTO appoints a panel to hear a case if the opposing parties are unable to resolve the issue through negotiations. A panel’s rulings, if not overturned on appeal, are binding on the respondent country. If guilty, it has the choice to cease the offending practice or provide compensation. If the country fails to respond, the plaintiff country can take targeted measures to offset any harm caused, such as blocking imports or raising tariffs.

Member states have filed more than five hundred disputes since the WTO’s creation in 1995, but most of these cases have been settled prior to litigation.

A number of multilateral institutions adjudicate investor-state disputes, such as the Permanent Court of Arbitration in the Netherlands, or the London Court of International Arbitration, but one of the most important is the International Center for Settlement of Investment Disputes (ICSID). Created in 1965 as part of the World Bank, the ICSID has 162 member states, all of whom have agreed to recognize the legitimacy of its arbitration system.

Unlike the WTO, the ICSID has no permanent tribunals and does not directly rule on cases. Rather, it administers the process by which disputants choose an independent, ad hoc panel of arbitrators to hear their case. The arbitrators are generally legal experts, including professors, practicing lawyers, and former judges. The specifics on the sorts of conflicts that can be referred to an ICSID panel are set out in individual trade or investment agreements.

There are some 2,500 treaties with investment dispute provisions in force around the world, and the ISCID has administered more than six hundred disputes in its half-century existence. The number of cases accelerated through the 1990s and 2000s with the proliferation of investment agreements, reaching a peak of fifty-two in 2015. About a third of the cases are settled or withdrawn before concluding; a third are dismissed in favor of the defendant; and a third favor the investor in full or in part. An investor’s award generally holds the full force of domestic law in the country being sued.

What are the criticisms of the WTO’s system?

Most trade experts see the WTO’s arbitration forum as one of its most successful efforts, helping to institutionalize rules and reduce the threat of trade wars. However, critics, including the Trump administration, have criticized the WTO system on several grounds. U.S. Trade Representative (USTR) Robert Lighthizer has argued the WTO has an anti-U.S. bias because 134 complaints have been brought against the United States, more than any other country, and it has lost most of those cases.

Most trade experts see the WTO’s arbitration forum as one of its most successful efforts.

But many economists argue this is misguided, noting that complainant countries, including the United States, usually win cases they bring to the WTO because they tend to bring only the strongest cases. As former USTR Michael Froman points out, the United States under President Barack Obama brought more cases to the WTO than any other country during that time, including sixteen against China. It won all that have been decided.

Trump and Lighthizer have also said the WTO is incapable of policing China. The USTR’s 2018 report on China asserted for the first time that Beijing’s state-led economic policy is so inimical to global free trade rules that it renders the WTO effectively irrelevant. “No amount of enforcement activities by other WTO members would be sufficient to remedy this type of behavior,” it states.

Other analysts argue that the WTO has been increasingly undermined by its most powerful members, including the United States. For instance, the Obama administration ignored a series of unfavorable rulings and blocked the appointment of a WTO judge for the first time.

What is the debate over investor-state dispute tribunals?

Investor-state dispute tribunals have become a flash point in the debates over multilateral trade deals such as NAFTA, the Trans-Pacific Partnership (TPP), and the proposed U.S.-Europe Transatlantic Trade and Investment Partnership (TTIP).

Opponents say that these tribunals erode national sovereignty by allowing foreign corporations to bypass domestic legal systems. In 2017, a group of more than two hundred lawyers and economists warned that such provisions [PDF] give corporations “alarming power” to override domestic legislation, based on the secret deliberations of unaccountable tribunals that have no appeals process. Before the U.S.-Europe trade negotiations were put on hold in 2016, this worry was especially acute among the European public, which feared that ISDS would allow U.S. companies to challenge EU rules on labor and environmental protections, food safety guidelines, and other public interest legislation.

The Trump administration, too, is skeptical of the provision, which Lighthizer has called “offensive” for giving non-Americans a veto over U.S. law. The administration has proposed changing NAFTA’s ISDS provision to be “opt-in” rather than automatic, which Canada and Mexico have strenuously opposed.

Supporters say these concerns are overblown, pointing out that the United States has never lost an ISDS case to a foreign investor, and that investors tend to lose more cases than they win. Furthermore, they argue that ISDS protects foreign investments made by U.S. businesses, and generally boosts cross-border investment.

What are the options for reforming these systems?

At the WTO, reform discussions have focused on process, as the number of disputes and appeals, as well as the complexity of cases, have increased in recent decades. Reform proposals include expanding the pool of experts on panels, digitizing paperwork, and other tactics to streamline operations. Some have suggested the WTO’s dispute body take decisions based on majority vote rather than consensus, as it does now, though such a move would likely be opposed by the United States and others. Currently, a single member can delay proceedings.

Meanwhile, the public controversy over ISDS has led governments around the world to experiment with other approaches to investor protection. One option is to remove ISDS from some agreements altogether, as countries such as Australia have done, pushing businesses to first pursue challenges through the domestic legal system and then, if unsuccessful, allowing for state-state dispute settlement.

In another alternative, the European Union is developing an investment court that will operate more like the WTO tribunal system, with a permanent roster of judges, strict conflict-of-interest rules, public proceedings, and an appeals process. The European Union and Canada included a version of this in their 2016 trade agreement.

Are there other mechanisms to resolve disputes?

Individual trade deals have also created separate state-state arbitration mechanisms. This was the case with the Canada-U.S. Free Trade Agreement (CUSTA), the precursor to NAFTA. CUSTA’s Chapter 19, which was continued in NAFTA, allows for one government to challenge the trade policies of another via an independent, bi-national panel, which bypasses domestic court systems.

NAFTA’s Chapter 19 has proven controversial. Canada insisted on its inclusion in CUSTA because of what it saw as a long history of unfair U.S. trade policies. Ottawa has brought dozens of cases before these panels, many relating to U.S. duties on Canadian lumber. The Trump administration has called for the removal of Chapter 19 from NAFTA as part of the renegotiations that opened in 2017.

Some trade experts argue that Chapter 19 reduced trade disputes between NAFTA members because it made it likely that any trade barriers would be overturned by the panels. Removing it, some say, could lead to an increase in duties, especially by a U.S. administration that has seemed eager to apply them. This, in turn, could lead to retaliatory trade measures from Canada and Mexico.

How Are International Trade Disputes Resolved? was originally published on Global Security Review.