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2017-02-03 Red Flag 17-1 Commanders discuss changes to this exercise with participation from the F-35A.
A number of key perspectives are provided throughout, ranging from the key role of the reserves, to the important role of the Wedgetail, to the F-22 squadron having already learned from the Marines with regard to F-35 integration when the F-35Bs came last year, to the Typhoon pilot discussing the role of 4th-5th gen integration and off board targeting.
The sound quality is not always great; but the discussion is quite interesting talking about fifth generation aircraft, 4th-5th gen integration and the key role of Wedgetail working the air battle management across the spectrum of operations.
The USAF could cut the Gordian knot of AWACS replacement simply by buying the Wedgetail and option the UK is looking at currently.
One key take away was the discussion of how a 4th gen force would focus on KNOWN ground based SAMs versus a fifth generation enabled and redesigned concept of operations.
That discussion really highlighted not simply the difference in technology but above all the concepts of operations.
It is crucial to learn leaning forward rather than training in yesterday’s concepts of operations.
Editor’s Note: In our earlier visits to Nellis, we discussed with squadron pilots the evolution towards what is now being seen in Red Flags.
And in a briefing done in Copenhagen at the Williams Foundation-Centre for Military Studies (University of Copenhagen) seminar on airpower, Ed Timperlake encapsulated the Nellis way ahead.
Last week, I attended an airpower conference sponsored by the Norwegian Air Force and held in Trondheim, Norway.
The title of the conference was about the shaping of a fifth generation air force, but in reality the conference focused on multi-domain integration and defense transformation in the extended defense of Norway.
In effect, a new phase of NATO development is underway whereby anchor states in key geographical regions take Article III of the NATO treaty seriously and focus on national defense in an allied context.
If you don’t the ability of any other state to help you is limited.
For Norway, this means raising the bar on the defense of Norway by acquiring new platforms, fully integrating those platforms into a national C2 system, but doing so in a plug and play context whereby key allies can more easily interoperate with Norwegian defense and thereby providing simultaneously extended Norwegian defense and enhanced Northern tier defense for NATO.
The week before the conference, the Norwegian defense minister announced the decision to acquire four submarines from Germany as part of the transformation process.
The Minister is a very engaging person, who is a ball of energy and one suspects a pretty tough customer.
I would not let that elfin smile fool you!
The purchase of the German submarines is more than that.
What Norway is looking for is to be interoperable with allies who are operationally prepared to provide for defense of the Northern region.
This means that the manufacturers who sell new equipment to Norway need to understand that they are committed to effective sustainment of the force in Norway under a wide spectrum of conditions.
It is not just about selling a platform.
And for Germany, the Minister of Defense and the Chancellor need to understand that they are committing themselves de facto to active defense of the Northern region, including Baltic defense.
It is not simply about selling equipment; it is about active engagement and enhanced interoperability.
According to the Norwegian MoD, the decision involves a broad and long-term Navy-to-Navy cooperation encompassing submarines and other naval capabilities.
The cooperation will include training, exercises, spare parts, maintenance and lifetime management of the new submarines. The identical design of the six boats also would enable the swap of crews.
It is not just a market opportunity to save the German submarine maker from the end of the line which how it has generally been reported.
Illustration of German submarine published by Norwegian Ministry of Defence.
According to a press release published on February 3, 2017, the acquisition was announced by the Norwegian MoD.
After a comprehensive evaluation process, the Norwegian Government decided on Germany as strategic partner for new submarines.
The partnership is based on a German-Norwegian common purchase and lifetime management of identical, new submarines.
The decision involves a broad and long-term Navy-to-Navy cooperation encompassing submarines and other naval capabilities.
The cooperation will include a purchase of identical submarines and cooperation on training, exercises, spare parts, maintenance and lifetime management of the new submarines.
The submarines will be based on the 212-design already in service in Germany and Italy. The cooperation also includes cooperation between Norwegian and German industry.
Submarines are amongst the Norwegian Armed Forces’ most important capabilities and is of great significance for our ability to protect Norway’s maritime interests. It is important that we have found a strategic partner that we can build a broad and long lasting cooperation with.
This lays a good foundation for the long-term relations we need to maintain a credible submarine capability in the future.
Submarine cooperation with Germany will ensure that Norway gets the submarines we require, and at the same time contributing to Smart defence and more efficient defence material cooperation in NATO, says the Minister of Defence Ine Eriksen Søreide.
The Norwegian Ministry of Defence has practised equal treatment of the suppliers and their nations.
The same amount of time and effort has been spent towards France and Germany, and the activities towards both have been balanced. It has been clearly communicated on all levels that it is the totality of the offers that will be the determining factor.
Both France and Germany offer excellent submarines that meet Norwegian needs, and both nations have been given good opportunities to come up with a total offer on new submarines and cooperation.
Norway will now enter into final negotiations with German authorities. When a government-to-government agreement is in place, a German-Norwegian negotiation towards the German submarine supplier thyssenkrupp Marine Systems (tkMS) will commence. tkMS is the largest producer of conventional submarines in Western Europe. The shipyard has long experience with building advanced submarines and a large production capability.
The plan is to sign a common contract for new submarines in 2019. This will enable delivery of new submarines from the mid-2020s to 2030.
This timeline ensures a continuous Norwegian submarine capability as the Ula-class submarines reaches end of life and starts decommissioning.
– The submarines Norway and Germany will procure ensures a submarine service for the future. Norway has an evolutionary approach to new submarines, and will base the procurement on an existing submarine design.
This way we avoid an extensive development project with the risks and costs this would involve. In addition, together with Germany, we will get a larger scale in the production, says the Minister of Defence.
Norwegian Minister of Defense, Ine Eriksen Søreide. Credit: Second Line of Defense
Independent of this decision, the work to establish further cooperation with other nations continue in order to achieve even greater synergies and economies of scale. Norway has for several years worked closely towards the Netherlands and Poland to create a broad submarine cooperation. This work will continue.
Norwegian industry is world leading on some of the technology used in submarines, and the Norwegian Government will use the procurement as an opportunity for the Norwegian Defence industry.
The procurement of new submarines will be used actively towards international partners to further develop a competent and competitive Norwegian Defence industry.
The scope of the industrial cooperation with Germany is in line with the ambition of the Norwegian Parliament.
It will provide good opportunities for the Norwegian defence and security industry in the prioritised technological areas as stated in the white paper Meld. St. 9 (2015-2016) Nasjonal forsvarsindustriell strategi.
Facts:
Submarines are a strategic capability that contribute to the Norwegian Armed Forces deterrent effect, and NATO’s collective defence. The white paper on the future of the Norwegian Armed Forces, St. prp. 151 S (2015-2016), underlines the importance of submarines and their place in the future development of the Norwegian navy.
The Ministry of Defence has been working on different solutions for the future of the submarine service since 2007. Establishing a broad and long lasting international submarine cooperation with partners has been one of the goals in this work.
The plans for the procurement of the new submarines are ready and the Government is planning to present the investment project on new submarines to Parliament in the spring of 2017.
The target of North Korea’s ballistic missile test this weekend, though aimed at the Sea of Japan, was President Donald Trump and visiting Japanese Prime Minister Shinzo Abe, who called the launch “absolutely intolerable” and demanded that Pyongyang respect all UN Security Council Resolutions prohibiting such tests in a joint news conference yesterday night at Trump’s Mar-a-Lago resort.
The test was apparently not that of an Intercontinental Ballistic Missile (ICBM) given its 500km flight range; ICBMs have a range of 5,000 to 10,000km, sufficient for a missile launched from North Korea to reach the Continental United States.
Instead, the weapon was probably a medium or intermediate-range ballistic missile of the type that North Korea had tested many times before, especially in the months before last November’s U.S. elections.
One analyst called 2016 “the busiest year of missile and nuclear testing since 2006.”
North Korea ceased testing such missiles after the elections.
Yesterday’s launch was the first since President Trump assumed office, and coincided with Abe’s first official visit to the United States under the new administration.
U.S. planners had expected such an act since the DPRK has a pattern of welcoming new South Korean and U.S. leaders with missile tests, nuclear detonations, and other provocations.
North Korean dictator Kim Jong Un said in his New Year address that his country had developed such an ICBM and was preparing to test it. Kim offered to suspend the tests if South Korea and the United States ceased their annual Foal Eagle and Key Resolve military exercises.
The missile fired is thought to be an intermediate-range Musudan similar to this. Credit: BBC News
The Obama administration increased the size and scope of these drills. Obama adhered throughout his two terms to a policy of “diplomatic patience” regarding North Korea–attacking the regime rhetorically, working with other countries to apply more sanctions on the DPRK, deploying better defenses in Japan and South Korea, and refusing to engage with Pyongyang until it recommitted to ending its nuclear program in a “complete, verifiable, and irreversible” manner.
This policy failed to achieve these results and has allowed the DPRK to test several nuclear devices as well as improve its missile-launching capabilities to the point where North Korea is presumed to have the capacity to attack Japan, Guam, and other Asian targets with its short-, medium-, and intermediate-range nuclear-armed missiles.
The flight distance between North Korean and Japan is only slightly more than 1000 km.
The Trump administration has yet to undertake a comprehensive review of its Korean policy.
During the campaign, Trump made various comments about the Korean threat, at various points offering to meet with Kim to solve the issue personally, threatening the DPRK with destruction if it failed to curb its nuclear and missile program, and charging China with failing exercise its substantial influence to compel Pyongyang to cease its provocations.
After Kim announced the DPRK was preparing an ICBM launch, Trump tweeted that, “North Korea just stated that it is in the final stages of developing a nuclear weapon capable of reaching parts of the U.S. It won’t happen!”
In remarks made earlier this month in Tokyo and Seoul during his first foreign visit as the new U.S. Defense Secretary, James Mattis warned that any DPRK nuclear test would be met by an “effective and overwhelming” response from the United States.
Mattis and his Asian counterparts renewed U.S. commitments to Asian security. For example, in Tokyo, Mattis noted how “the United States has invested in the alliance by deploying our most advanced capabilities to Japan, and by maintaining a robust force structure,” which would include advanced missile defenses and the newly deployed F-35Bs attached to the USMC Fighter Attack Squadron 121 at Marine Corps Air Station Iwakuni, which has become the second operational F-35B base.
The Marines said the new F-35, which would replace the less capable F/A-18 Hornet and AV-8B Harrier II fighter jets now at Iwakuni, would bring the allies a “unique combination of stealth, cutting-edge radar and sensor technology, and electronic warfare systems” that would “bring all of the access and lethality capabilities of a fifth-generation fighter, a modern bomber, and an adverse-weather, all-threat environment air support platform.”
Furthermore, the Marines welcomed the F-35B’s “powerful sensor suite that fuses together several different sources and provides superior situational awareness to the pilot,” making the allies “capable of countering modern threat systems beyond what legacy aircraft were designed to handle.”
Marine Corps Air Station Iwakuni also recently received the E-2D Advanced Hawkeye, equipped with the most advanced airborne radar in the world. The E-2D will reinforce the F-35Bs at the base as well as Japan’s own growing fleet of F-35A fighter jets.
Following this weekend’s North Korean missile launch, Trump consulted with his national security team as well as Abe. In a joint news conference, President Trump said that, “The United States of America stands behind Japan, its great ally, 100 percent.”
Since the missile test was not that of an ICBM or any new DPRK capability, President Trump can say that Pyongyang has not yet crossed his red line.
However, Kim Jung-un may mark the upcoming birthday of his deceased father, DPRK leader’s Kim Jong Il, with such a launch, or a nuclear weapons test, leaving the Trump administration precious few days to fashion an effective response.
2017-01-28 The Norwegian Air Force is to have a new Chief of Staff.
According to a story published on the Norwegian Ministry of Defence website on January 27, 2017, Brigadier General Tonje Skinnarland was appointed Major General and Chief of the Royal Norwegian Air Force today (CRNORAF).
“Skinnarland is an experienced, proficient and highly skilled officer.
“Her broad knowledge is based upon several years of service within the operational field in the Royal Norwegian Air Force as well as many years of practice at staff level within the Defence Forces.
“She has also served at the Ministry of Defence. Skinnarland is the first female to be appointed Chief of the Royal Norwegian Air Force.
“Skinnarland graduated from the Norwegian Defense War College in 2003, and she received the Chief of the Defense Forces’ Honorary Award.”
Brigadier General Tonje Skinnarland becomes head of the Norwegian Air Force at a crucial time in its transition.
Norway stands at an interesting global and historical point in the evolution of Western defense.
It faces directly resurgent Russia and faces the challenge with its Nordic partners of Baltic defense as well.
Then with the Arctic opening and the High North actually part of Norwegian territory Arctic security and defense are not an abstract intellectual issue for a Washington seminar, but an integral part of the shaping an effective way ahead.
In effect Norway is enhancing its core defense capabilities for national and coalition purposes.
It is part of what we have referred to as a deterrence in depth strategy whereby national components can operate as tip of the spear or support elements to core coalition partners crucial to Norwegian defense and strategic interests.
Notably, air and naval power modernization is a key part of the Norwegian effort as well as shaping the kind of ground maneuver defense capability appropriate to its territory and Arctic operations.
The Norwegian effort gains greater significance not simply from the resurgence of Russia but political developments in Europe itself, namely Brexit and its follow on consequences. It is clear that a post-Brexit defense policy highlights the importance to Britain of a North Sea and Baltic defense strategy and with that its relationships with the Nordic states.
New platforms have been or are coming into the Norwegian Armed Forces which support the evolution of a deterrence in depth strategy.
The acquisition of Aegis class ships has been an important baseline to shape a way ahead with air and potentially missile defense for the country and a major contributor to the regional capabilities for deterrence in depth.
We have argued for some time that the Aegis ships are highly complimentary to the F-35 and have argued respectively that the F-35 can contribute to the “long reach of Aegis, or Aegis could function as the wingman of the F-35.
Not surprisingly, the F-35 is coming to the Norwegian forces as a key bedrock system for the evolution of the strategic way ahead.
It is not simply about the aircraft but its integration into the national or coalition forces with which Norway operates to provide the deterrence in depth necessary for national and regional defense.
Next month, the Norwegians are holding a conference which will highlight some of the contributions anticipated by the acquisition of the F-35 for Norwegian forces.
On Feburary 7-9 2017, a conference entitled “Evolution to a Fifth Generation Air Force: Norway’s Shield and Sword?”
According to the Norwegian MoD website:
Norway is about to purchase fifty-two F-35 Joint Strike Fighters. Both the Norwegian Minister of Defense (MoD) and Chief of Defense (ChoD) argue that the F-35 will be a key capacity for the defense of Norway.
Even so, the purchase of the F-35 has generated a public debate that has raised important questions such as: How should we use the new combat aircraft? Do we have adequate competence to exploit the potential of this platform? What kind of defense structure will Norway have in the future? Are the primary rationales behind the purchase rooted in national defense, international operations or both?
The Royal Norwegian Air Force has coined the phrase “a Fifth Generation aircraft demands a Fifth Generation Air Force”. The premise seems to to be that the current air force organization needs to develop something it currently does not possess in order to fully exploit this platform once it is fully operational in 2025.
The emphasis on the idea of “a Fifth Generation Air Force” is increasing. But what kind of competence, organization, and technology must be in place over the next 8-10 years in order for us to become a “Fifth Generation Air Force”?
The Norwegian Minister of Defense claims that Norway has become a medium NATO power – presumably largely due to the fact that this is a substantial investment that most nations in NATO cannot afford. It is likely that this investment will lead to commitments to other nations that we otherwise would not have had: once you have acquired these platforms, the political pressure to use them will increase.
The question remains whether Norway can muster officers with broad and professional competence, who can influence processes on all levels (not only the tactical one) in international operations.
Thus, how we define “a Fifth Generation Air Force” is central for addressing these issues.
The conference aims to reflect on and discuss the very premises for the current debate on defense in Norway and NATO, and how airpower will play a central role in this picture. We also want to examine the key international military conceptual (strategic) trends that are likely to influence Norway in the coming decade.
Furthermore, the conference aims to challenge the Air Force to answer more specifically what “a Fifth Generation Air Force” is, and what is needed in order for us to become one.
Finally, we would like to invite the Army, the Navy and the Norwegian Operational Headquarter to present their expectations and perspectives on “a Fifth Generation Air Force”, and the purchase of the joint resource that the F-35 is.
An additional capability being added to the force are five P-8s. and the role of these aircraft will be clearly linked to coalition as well as national defense.
Notably, the first agreement signed with an ally in the military domain by the Trump Administration was with the UK and supported the UK-US-Norwegian cooperation on the P-8 and maritime domain security.
The Chute Adapter is built into the Norwegian F-35As on the final assembly line at Fort Worth.
In short, as Norway works on the integration of its Aegis ships with the F-35s and P-8s. it will be shaping a 21st century defense capability which is important to Norwegian defense and deterrence depth.
2017-02-11 With a successful tour of the Pacific in the books for Secretary of Defense Mattis, and a clear deepening of the relationship of Japan with the United States under the strong leadership of Prime Minister Abe working with President Trump, what can be expected from Prime Mnister Trudeau’s meeting with President Trump?
In this article by Danny Lam, the challenges facing the American President in dealing with the current Canadian government is the focus of attention.
The Upcoming Visit of Prime Minister Trudeau with President Trump: What to Expect?
By Danny Lam
Political leaders of major nations prefer encounters with their peers to be shrouded in ceremony, pleasantries, and to the extent possible, as little disagreements as possible.
Diplomats are trained, conditioned to deliver the most unpleasant of messages in the most plateable manner as possible to their counterparts and have their counterparts accept it. In the process, messages may get obscured, obfuscated, or just plain ignored until the issues that could have been resolved with frank and candid conversations early on become major issues.
Relations with the US and Canada illustrate these flaws inherent in classical diplomacy that to date, obscured the brewing anger and frustration with Canada under successive US Administrations.
Canadians are fond of bragging about their relationship with the US: “Canada has no closer friend, partner, & ally than the U.S.”, as the Trudeau regime recently tweeted.
From the US perspective, things are quite different. Historically, Canadians are regarded by the US Government as difficult people that are the biggest whiners whose only thing in common that they speak the same language as Americans. Canadians are insufferable: “people [American officials] roll their eyes when you talk about the Canadians”. (p.75).
True to form, the Trudeau regime have demonstrated a flagrant disregard for commitments made by the Harper government to increase defense spending at the Wales NATO meeting in 2014. Put that in the context of the Harper government’s withdraw from Kyoto Protocol in 2011, and it is self evident that commitments made by Canadian regimes have a problem with credibility and enforceability.
History will weigh heavily on any dealings between Canada and the Trump Administration.
President Trump will likely insist on legally binding, iron clad guarantees with substantial penalties for failure to meet hard targets with business like regular (e.g. quarterly and annually tracked) verification in any deal with the Trudeau regime.
The foremost issue that will be raised by the Trump Administration will be Canada’s status as a longstanding defense free rider. This was tolerated in the aftermath of the collapse of the Soviet bloc, but no longer given the rapidly deteriorating security environment in Asia and the Arctic.
Canada is not meeting their treaty obligations to NATO, NORAD, Five Eyes and failing in border security despite firm, clear, unequable, public messages from the GW Bush and Obama Administration and allies like Norway and the UK.
Synthetic narcotics trafficking from China via Canada is an example of an issue of growing concern as the Mexican smuggler route tightens as Canada loosens visa restrictions on Mexicans.
The US must choose whether to defend threats to the US or Canada and where to “build the firewall” for each class of threats.
Being a defense free rider is one thing, but to have Canadian Foreign Minister Chrystia Freeland, an ethnic Ukrainian, brazenly pester the US and allies to increase pressure on Russia while neglecting Canada’s obligation for the defense of the Canadian-Russian frontier and Canadian sovereignty is unconsciousable.
Perhaps the Trudeau regime expect the US to pay all the bills for countering Russian and Chinese moves against the Canadian Arctic because of their NATO obligations?
While the previous Harper government pleaded poverty, money is no object for the Liberal regime’s favored pet projects.
Defense cutbacks disguised as stretchouts in Canada did not prevent the Trudeau regime from turning a “balanced” budget under Harper to running CA$30 billion annual deficits (2016-18) after sharp rises in social spending.
These antics, tolerated but not unnoticed by traditional statesman like President Obama and his predecessors, will not go unnoticed and be tolerated by the Trump Administration with a business like focus on near term results and quantifiable deliverables from Canada within at most a few years. (e.g. Q3 2019)
The Canadian Ambassador to the United States has already gone out of his way to criticize the President PRIOR to taking office. What can we expect of Trudeau and his leadership role in shaping an effective defense of North America?
What is different about the Trump Administration is the willingness to ignore traditional “issue compartmentalization” between areas like trade, defense, etc.
President Trump made it clear that issues like (e.g. US-Mexico) border security that result in expensive US remedies like the proposed border wall will be paid for, one way or another, by Mexico.
President Trump’s moves are calculated to deliver results, perhaps not instantly, but not beyond the first 3 years of his term: A business, rather than politician’s pace.
Thus, the Mexican wall and options that are openly discussed included border taxes, taxes on remittance from the US to Mexico, or fees on trade and movement of people that can and will be implemented quickly with a supportive Congress.
With this precedent, Canada should expect to be treated no differently than Mexico except that Canada’s problem is being a persistent, long term defense free rider.
President Trump will get Canada to pay for security or their fair share of defense, one way or another. Fees or sanctions on cross border trade and movements of people are logical targets given the sheer volume of US-Canada interactions.
Canada’s long standing strategy of delay, delay, shadow boxing, make it look good, multilaterally tying the US Administration in knots (e.g. at NATO, UN, WTO) so it becomes the next Administration / Congress’s problem is a defunct strategy in the face of President Trump’s business like approach and timeframe.
Moreover, aggressive lobbying by Canadian interests of Administration officials and Congress against the Trump Administration is likely to increase hostility rather than produce positive outcomes for Canada. Canadian “Oh poor me” whining will be treated as just that and risk relegating Canadian influence to the level of Thailand.
The Trudeau regime love to brag about the benefits of trade with the US. Trudeau and his surrogates relish their self appointed role to educate the Trump Administration, Congress, State representatives, etc. about “free trade”.
Meanwhile, behind the rhetoric, Canada is not only just a free rider in defense, but what little pittance is spent on defense is poorly spent. Canadian lobbying in the US will raise Canada’s profile, in the process, expose Canadian hypocrisy, defense free riding.
Canadian lobbying is just as likely to increase American demands for fair trade and access to closed Canadian markets; and raise issues like reimbursement for US defense spending expected and commonly received from allies like Japan, South Korea, etc.
Americans will discover that Canada is operating one of the most protectionist trade regimes in defense and government procurement comparable to trade regimes of the People’s Republic of China and the Democratic People’s Republic of Korea (North) under Juche.
Bilateral trade that is roughly in balance with the US touted by Canadian lobbyists obscures the fact that had Canada met collective security spending obligations, the trade balance will tilt substantially in the US favor. “Free trader” Canada played the depression era competitive devaluation game to the hilt with CAD falling from par in 2011 to the 65 cents range US expected in 2017.
The Trump Administration, rather than focus on the overall trade balance with Canada, will instead, look at the foregone opportunities (or lost business) cause by Canadian protectionism and free riding particularly in government and defense procurement.
Typically, an OECD nation would spend a quarter of their defense procurement on equipment. Canada is spending less than 1% of GDP on defense, amounting to CAD $20 billion a year devaluation notwithstanding.
That suggests a market size of $5 billion a year. But if Canada spent 2% or more, that market for arms doubles to $10 billion annually before any consideration of the severely depleted capital stock of Canadian armed forces and the Canadian dollar.
If Canada spent according to NATO and other obligations, and provided a level playing field for US defense firms, it is reasonable to expect the US will receive at least 50% share of Canadian arms procurement business, or spend at least CAD $5 billion a year for US made defense equipment. The US is receiving nowhere near this level of business from Canadian defense procurement averaged over the past decade.
President Trump will see this as Canadian free riding and protectionism costing Americans tens of thousands of jobs with at least CAD $5 billion or more of US arms sales foregone annually. He will likely order the USTR to make Canadian protectionism in defense and government procurement a high priority for NAFTA renegotiation once the Commerce Department and USTR gears up.
Canadian defense procurement is rife with protectionist rules like requirements that bidders provide 100% of the value of the contract in Industrial and Technological Benefits (ITB): equivalent procurement from Canadian firms.
This Canadian requirement has no equivalent for the vast majority of Canadian exports to the US. Should countertrade requirements be imposed on imports from Canada to the US (e.g. on Canadian origin autos and parts, or petroleum), it would cause a collapse of Canada-US trade overnight faster than a border tax.
In the context of being a defense free rider, the Trump Administration could well take a dim view of Canadian protectionism in defense procurement where the US have a clear competitive advantage such as the Liberal regime’s pledge to not buy the F-35 Joint Strike Fighter in favor of higher cost, poorer performing “interim” solutions despite receiving about $1 billion (with a lifetime $10 billion) in JSF contracts to date on the understanding that Canada will buy the F-35. Meanwhile, Liberal negotiators are demanding Boeing provide 100% offsets for the “interim” F/A-18.
The Trump Administration will see it as only fair if the F/A-18 deal is approved that Boeing be granted 100% credit plus interest (repaid to Lockheed Martin) for any offset obligations stipulated by Canada to Boeing.
Canadians that are fond of lecturing Americans on “free trade” should perhaps begin by asking why Ottawa spent nearly CA$5,000/rifle to buy single shot bolt action rifles for the Canadian Rangers, and is presently planning to procure combat pistols at a price of about CA$2-$3,000 each when US firms can supply the items “off-the-shelf” for a fraction of the cost.
Competing bidders for the CSC program have to hand over all their intellectual property (initially including foreground and background data but later limited), supplier networks, plans, specs, drawings, tooling and details to a commercial firm (Irving Shipbuilding) just to submit a proposal. Fincantieri estimated that compliance with the RFP terms require will cost CA$10-20 million.
The project was described by Fincantieri, a reputable ship builder and potential bidder as follows:
“Current structure of the procurement limits the role of the warship designers to simply providing engineering and design services to Irving, which will then build the vessels. In return for that small role, the companies are being asked to provide valuable intellectual property to their designs, access to their established supply chains and transfer technology to Irving and Canada. In addition, the warship designers have to provide a warranty on the integration of technology into their designs, even though they are not responsible for buying that equipment.”
These are not normal commercial terms. These are in effect, terms for complete technology transfer and worldwide license to be included in the price of the contract. That may be fine if there is a stipulated minimum order quantity / volume — but there is none for a bidder a priori to handing over their knowhow and detailed proposal at their expense (estimated to be upwards of CA$20 million).
The “winner” has no assurance of minimum order quantity, nor what happen to their expertise and data handed over if the project do not proceed.
This is not a RFP. This is wholesale theft and pillage to set up a competitor in the guise of a “competition”.
This is the kind of requirements commonly seen in trade with the People’s Republic of China and tactics routinely used to steal technology. The Canadian subsidiary of Pratt and Whitney participated in such a theft by the Chinese military’s Z10 attack helicopter program and was fined US$75 million in 2012.
With this track record and the subsequent clamp down on Canadian subsidiaries access to US technologies and secrets, it is astonishing that the Trudeau regime is acquiescing to their outsourced contract evaluator Irving Shipbuilding to do the same.
The “competition” administered by a Canadian commercial firm (Irving Shipbuilding) have a partnership with BAE systems and is also a bidder with the Type 26 — a direct conflict of interest that favor the unproven BAE entry to win. Neither the Canadian government nor Irving have provided potential bidders and their governments iron clad guarantees with penalties that persons with knowledge of the details will not pilfer ideas wholesale from the best competing proposals.
The Trudeau regime is not even trying to erect firewalls.
In effect, the CSC procurement is a de facto exercise in state (and / or Irving Shipbuilding the program administrator and bidder) sponsored theft of knowhow, intellectual property, and expertise in the guise of a “competition” that no US firm is likely to be allowed by DoD to participate, let alone win.
Such behavior is normally expected from the People’s Republic of China, but Canada? Coming from a strident advocate of “rules based international order” and “free trade” Canada profess to be?
Then there are garden variety industry subsidies.
Favored Canadian firms receive CAD billions in subsidies from Federal and Provincial governments. Bombardier, tightly controlled by the Beaudoin family in Quebec, just received about USD 280 million in Family Allowance Payments from Ottawa after the Province of Quebec “invested” USD 1.5 billion in 2015 in the rail subsidiary in addition to US$1 billion “investment” for a 49% stake in the C-Series.
This is to ensure survival of a firm building competing aircraft to Boeing.
Likewise, the probable award of a de facto no bid, no compete contract valued at CAD 26 billion to Irving Shipbuilding for the CSC program is a family allowance payment for the Irvings to develop a direct competitor in the world frigate market.
Protectionism in Canadian government procurement would be somewhat less obvious had the Trudeau regime not went further to institute a “gag order” to prevent bidders and competitors from discussing the merits of their proposals in public, including advertising.
Similarly, lifetime gag orders on Canadian military personnel and officials were imposed on 235 persons involved in the replacing Canada’s fleet of fighter aircraft. Fortunately for Trudeau protectionists, Canada do not have a “First Amendment” and to date, no Canadian Chelsea Manning and Wikileaks have emerged.
The contrast between Canada and other US allies that are large, profitable customers of US defense equipment is sharp, clear, and distinct. Many US allies make little (or no) demands for “offsets” and pay handsomely for equipment procured from the US. Canada is using the leverage from defense procurement to unfairly and unreasonably pilfer technology, knowhow, and injuring US firms and costing US jobs.
Schemes like the CSC bidding requirements is not about seeking an equitable share of work from procurement of defense equipment from abroad. It is seeking to build a competitor no different than what the PRC did in steel, autos, and trying to do in semiconductors.
To sum up, Canada under the best of circumstances spends a pittance on defense, and what little Canada spends is wasted on their intricate networks of domestic subsidies and regulations that would do North Korean Chairman Kim Jong Un proud. The military capabilities Canada have represent poor value for the Canadian taxpayer’s dollar.
The US spends almost four times as much as Canada (.9%g GDP) on defense (US: 3.6%) with the Trump Administration committed to raising spending to rebuild the US military.
The Trump Administration will be asking why these scarce defense resources be deployed to defend Canada?
President Trump will wonder loudly why a free rider like Canada have privileged access to the US market?
The question is, will the Trump Administration allow this to continue?
Will President Trump allow Canada to have a one sided “free trade” deal that vastly favors Canada when Canada has a long history of being a free rider and exploiting their “close” relationship with the US?
What if President Trump reciprocated with Canadian style protectionist measures? Or demand a minimum annual purchase of US defense equipment without offsets?
Canadians have no credibility preaching “free trade” to the Trump Administration until such a time as Canada end free riding and begin to practice free trade themselves.
President Trump may elect to make a point by sitting down with Prime Minister Trudeau over a McDonald’s hamburger.
Danny Lam is an independent analyst who lives in Calgary, Canada.
Editor’s Note: Second Line of Defense recently attended this year’s Norwegian Airpower Conference which focused on building a fifth generation combat force.
During the public discussions the focus was upon how Norway was building new national capabilities to ensure that there was a high deterrent threshold for Norwegian defense, including the evolving Arctic challenges.
The US and the UK were often mentioned. Not once was Canada mentioned as part of the way ahead for Northern defense.
The only representation of Canada was a painting on the wall showing Norwegians training in Canada in World War II.
Talking privately with Norwegians at the Conference and in Oslo, there is clearly real respect for the quality of Canadian military personnel; and equally real concern about the cratering of Canadian defense capabilities,
Oh by the way, the UK and Norway are both flying P-8s and F-35s as part of their defense transformation.
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2017-01-28 The fifth generation evolution of the USAF is being highlighted as F-35s from Hill and F-22s from Langley are key integrated elements for Red Flag 2017-1.
Both are key parts of shaping new capabilities in the contested battlespace and are working with the RAF and the RAAF in incorporating cyber and EW more broadly into evolving concepts of operations.
The three-week, fourth and fifth generation’ exercise will incorporate the friendly ‘Blue Forces’ against hostile ‘Red Force’ aggressors in live and synthetic training environments, simulating air-to-air, air-to-ground and space and cyber warfare.
“The significance of this Red Flag is that it will be the first time that we have U.S. Air Force F-35 [Lightning II] participation,” said Falanga. “The F-35 will be operating with the F-22 Raptor so there will be additional fifth generation capability and integration that will occur. It is also going to be one of the first times the F-35 operates with coalition assets.”
During our visit to Nellis AFB in 2015, we discussed the roles which F-35 and F-22 could play together for the evolution of the force.
Question: The USAF is the only force with more than 30 years of OPERATIONAL experience with stealth.
And with the F-22 and F-35, is the only force flying TWO stealth aircraft with fusion cockpits.
This means that you can focus on how the two operate together but also on the F-35 global fleet flying against F-22 in future Red Flags.
This provides the USAF and its joint and coalition partners with a huge training and operational advantage doesn’t it?
Col. Spain: We are already working on the F-22 and F-35 working together piece, but you have raised an interesting prospect with regard to the aggressor role.
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According to an article by Lori Bultman, 25th Air Force, published January 25, 2017 on the Nellis Air Force Base website, ISR and cyber capabilities are being incorporated into Red Flag 2017-1.
The silent warfighters of the Intelligence, Surveillance and Reconnaissance and Cyber communities are honing their operational skills and testing new capabilities during Red Flag 17-1 at the Nevada Test and Training Range north of Las Vegas, yesterday through Feb. 10.
Red Flag is a realistic combat training exercise involving the air, space and cyber forces of the United States and its allies.
In light of military technological advances, the multi-domain exercise is evolving to include more realistic scenarios by increasing the use of cyber capabilities and other non-kinetic effects in planning and warfighting.
“We are bringing the non-kinetic duty officers into the fight at Red Flag,” said Lt. Col. Neal, chief, current operations, 25th Air Force. “These experts in ISR and cyber warfare are the newest weapons in our command and control arsenal.”
Going to Red Flag and blowing up things kinetically is no longer enough to keep us ahead of the game, Hayes said: “The new face of warfare includes land, sea, air, space and cyber.”
To test the readiness of all warfighters, Red Flag employs realistic threat systems and an opposing enemy force that cannot be replicated anywhere else in the world. The simulated battlefield allows combat air forces to train to fight together, with their cyber and ISR partners, in a peacetime environment, so they can survive and win together in combat situations.
Warfighters will also test the latest in targeting technology, Network Centric Collaborative Targeting, during Red Flag 17-1.
NCCT is the latest effort to ensure the ISR global portfolio delivers actionable data to decision-makers, airborne platforms and Air Force Distributed Common Ground Systems, said Garland Henderson, operational integration branch chief, 25th Air Force.
This new technology will improve targeting capabilities through coordination of assets.
“NCCT theoretically shortens the amount of time needed to fix targeted emitters, fleeting targets and moving ground targets by simultaneously cueing airborne with other collection assets,” Henderson said. “Correlation of assets and cross-cueing of command and control, Intelligence, Surveillance and Reconnaissance data across multiple security domains is the main objective of NCCT.”
Formal testing of NCCT at Red Flag is the last step in ensuring this technology represents a highly visible and maturable Air Force ISR enabler within the Global Integrated ISR portfolio, Henderson added.
RED FLAG was established in 1975 as one of the initiatives directed by Gen. Robert J. Dixon, then commander of Tactical Air Command, to better prepare our forces for combat. Tasked to plan and control this training, the 414th Combat Training Squadron’s mission is to maximize the combat readiness, capability and survivability of participating units by providing realistic training in a combined air, ground, space and electronic threat environment while providing for a free exchange of ideas between forces.
A typical RED FLAG exercise involves a variety of attack, fighter and bomber aircraft, reconnaissance aircraft, electronic warfare aircraft, air superiority aircraft, airlift support, search and rescue aircraft, aerial refueling aircraft, and command and control aircraft, as well as ground-based command and control, space and cyber forces. It has expanded in recent years to include all spectrums of warfare (command, control, intelligence, electronic warfare), and added night missions to each exercise period.
The role of the Hill F-35s in the exercise was highlighted by a January 20, 2017 story published by the 388th Fighter Wing.
Pilots and maintainers from the 388th and 419th Fighter Wings deployed the F-35A Lightning II to Nellis AFB, Nev., Jan. 20.
This is the first deployment to Red Flag for the F-35A and the first large movement since the Air Force declared the jet combat ready in August 2016.
Red Flag is the Air Force’s premier air-to-air combat training exercise. Participants include both United States and allied nations’ combat air forces. The exercise provides aircrews the experience of multiple, intensive air combat sorties in the safety of a training environment.
“Our Airmen are excited to bring the F-35 to a full-spectrum combat exercise,” said Col. David Lyons, 388th FW commander. “This battle space is going to be a great place to leverage our stealth and interoperability. It’s a lethal platform and I’m confident we will prove to be an invaluable asset to the commander.”
The jets will be at Red Flag through Feb. 10. While deployed, the F-35 will fly alongside fourth-and-fifth generation platforms and provide offensive and defensive counter air, suppression of enemy air defenses, and limited close air support.
“Red Flag is hands-down the best training in the world to ensure our Airmen are fully mission ready,” said Col. David Smith, 419th FW commander. “It’s as close to combat operations as you can get. Our Reserve pilots and maintainers are looking forward to putting the F-35A weapon system to the test alongside our active duty partners to bring an unprecedented combat capability.”
The F-35A is a fifth-generation multi-role stealth fighter designed to gather, fuse, and distribute more information than any other fighter in history.
The first operational F-35As arrived at Hill AFB in October 2015. The base will eventually be home to three operational F-35 fighter squadrons with a total of 78 aircraft by the end of 2019. The active duty 388th FW and Air Force Reserve 419th FW will fly and maintain the Air Force’s newest fighter aircraft in a Total Force partnership, which capitalizes on the strength of both components.
And the long range strike assets represented by legacy bombers but also in anticipation of a new bomber capability is part of the exercise as well.
In an article by Airman 1st Class Randahl J. Jenson, 28th Bomb Wing Public Affairs, published on January 23, 2017, the inclusion of assets from Ellsworth is highlighted.
The 37th Bomb Squadron launched five jets from here Jan. 20, 2017, to take part in Red Flag 17-1 at Nellis Air Force Base, Nev.
Aircrews and pilots from across the world will be working together in the joint exercise, testing their ability in air-to-air and air-to-ground combat from Jan. 23 to Feb. 10, 2017.
Along with troops from across the DoD, members of the British Royal Air Force, Australian Royal Air Force and NATO will be participating in the two-week exercise.
“Red Flag is a huge integration exercise,” said Lt. Col. Nathan Rowan, the assistant director of operations assigned to the 37th BS. “It allows us to bring in intelligence, surveillance and reconnaissance capabilities together and test them in realistic scenarios.”
The quarterly exercise is hosted north of Las Vegas on the Nevada Test and Training Range – a 2.9 million acre region with more than 15,000 square miles of airspace.
“Historically, NTTR has hosted Red Flag since the exercise’s creation,” Rowan said. “It’s a big chunk of air space that is able to accommodate Large Force Exercises like Red Flag.”
The NTTR has nearly 2,000 potential targets and an enemy force to create a simulated battlefield – providing pilots with the most realistic training possible. More than 80 aircraft will be taking off and landing twice a day.
“You don’t want an aviator’s first combat sortie to be in actual combat,” Rowan said. “By training them at Red Flag, they will be much more prepared.”
In short, the F-22s and F-35s flying with the combat fleet starts reshaping the concepts of operations of the US and allied combat fleet in innovating in ensuring capabilities to prevail in the contested battlespace.
The photos in the slideshow above are credited to the USAF.
2017-02-03 With all the global discussion about Trump and allies, a key development seems to have been missed — the reinforcement of the US-Japanese relationship and the arrival of new capabilities for the extended defense of Japan and of U.S. Pacific allies.
First, the F-35Bs arrived at Iwakuni earlier this month.
Second, the advanced Hawkeyes have joined them and together will constitute a significant expansion of maritime domain awareness strike capabilities.
U.S. Navy E-2D Advanced Hawkeyes with Carrier Airborne Early Warning Squadron fly in a “V” formation and land at Marine Corps Air Station Iwakuni, Japan, Feb. 2, 2017. VAW-125 arrived at MCAS Iwakuni from Naval Station Norfolk, Va.
The E-2D Advanced Hawkeye is equipped with the most advanced airborne radar in the world, possessing systems which increase the capabilities to defend Japan and provide security in the Indo-Asia-Pacific region.
In a story published February 2, 2017 in Stars and Stripes by Tyler Hlavc, this development was discussed.
The Navy bolstered its airborne radar and detection capabilities in the Pacific with the Thursday arrival of Carrier Airborne Early Warning Squadron 125 at Marine Corps Air Station Iwakuni, Japan.
VAW-125’s presence signifies a shift for the Navy as it continues relocating the bulk of Carrier Air Wing 5 — the USS Ronald Reagan’s aviation wing — from Naval Air Station Atsugi, southwest of Tokyo. The squadron flies the new E-2D Advanced Hawkeye early warning and control aircraft, the latest variant of the E-2 Hawkeye series.
The E-2D “employs long-range radar and electronic communications capabilities to oversee the battle space and detect threats beyond the sensor range of other friendly units,” said a Navy statement that described the aircraft as the “digital quarterback” of the fleet.
New features include an AN-APY9 radar capable of both mechanical and electronic sweeping. The new radar has been touted in defense journals for its potential to detect stealth aircraft.
The aircraft also includes an “all glass” tactical cockpit and an upgraded mission computer and data-link capabilities, the statement said.
Hawkeyes are the Navy’s longest-serving carrier-based aircraft.
Congress appropriated $12.5 billion last year for the first 40 E-2D models; the Pentagon is requesting another $9.5 billion for 35 more new Hawkeyes in future years, according to the Center for Strategic and Budgetary Assessments, a nonpartisan policy institute.
Defense Secretary Jim Mattis arrives at Yokota Air Base Japan. While in Japan, Secretary Mattis met with the Japanese minister of defense Tomomi Inada during his first overseas tour as SECDEF. (U.S. Navy photos by Petty Officer 2nd Class Marcus Castaneda)
The Japan Air Self-Defense Force also plans to use the new Hawkeye to help monitor foreign aircraft approaching their airspace, including those from China and Russia.
The Defense Ministry should acquire four E-2D Advanced Hawkeyes by March 2019, a spokesman told Stars and Stripes.
Those aircraft will be used to conduct early warning and surveillance missions, including near the Japan-administered Senkaku Islands, which China claims as its own, the spokesman said.
Stars and Stripes reporter Hana Kusumoto contributed to this report.
It should also be noted that the first overseas visit of the new Sec Def has been to Japan.
Recently, the Japanese Prime Minister made an important visit with Pacific allies enhancing capabilities to deal with evolving threats in the region.
Advanced Hawkeyes come to MCAS Iwakuni. Credit: USMC
And with Prime Minister Abe due to visit the United States next week, the Japanese government announced that it was going to invest significantly in the rebuilding of US infrastructure as well through its pension funds.
According to an article published by The Japan Times, “Japan plans to use its public pension fund to invest in U.S. infrastructure development, a source from the government said Thursday.
“The investment drive is part of a wide-ranging policy package Prime Minister Shinzo Abe is expected to present to U.S. President Donald Trump during their highly anticipated summit in Washington on Feb. 10.
“Without citing sources, the Nikkei business daily said the Government Pension Investment Fund, the world’s largest, will buy debt issued by U.S. companies to fund the vast spending program.
“In addition to infrastructure, it is hoped the package will lead to the creation of several hundreds of thousands of U.S. jobs in projects related to artificial intelligence and robotics, according to people familiar with the matter.”
“Given the state of the Chinese economy and the uncertainty of the Euro, this would seem to be a good idea.
Europe ever since the end of World War II has seen significant change.
And clearly, after an upsurge of growth in the 1950s and 1960s, growth and development have been tougher to come by.
European collaboration on the Continent began with the European Coal and Steel Community and evolved into the European Union. Britain applied for entry, a process initially blocked by President de Gaulle, but joined eventually in 1973 along with Ireland and Denmark.
In 1985 when Jacque Delors became president of the European Commission, he set in motion a number of objectives to transform the European Union into a body largely dominated by the European Council to one which is today driven by two non-elected bodies, the European Commission and the European Court of Justice.
Jacques Delors proposes that the European Community should by the end of 1992 remove a series of barriers to free trade and free movement of capital and labour creating a “single market”. Delors believes the single market programme will revive European integration by spilling over from the economic into the political arena.
In his interesting analysis of the Brexit phenomenon by a former Labor Party government Minister of Europe, Denis Macshane noted that Thatcher’s reaction to Delors was perhaps indicative of future difficulties.
“We have not successfully rolled back the frontiers of the state in Britain, only to see them re-imposed at a European level with a European super-state exercising a new dominance form Brussels.”
But this was in many ways what would come back in last year’s vote on Brexit as a key theme as well.
(Denis Macshane, Brexit: How Britain Left Europe, London: I.B. Tauris, 2016, second edition, p. 72.)
Then in 1987, the single European Act enters into force, which was a modification of the original Treaty of Rome and aims at a complete formation of a common market.
Next the 1991 Maastricht treaty on European Union, which is a major shift in the focus of the European Community and which embraced many of the reforms suggested by Delors, came into force.
It paves the way for monetary union and includes a chapter on social policy.
The UK negotiates an optout on both.
The treaty also introduces European citizenship giving Europeans the right to live and vote in elections in any EU country and launches European cooperation in foreign affairs security asylum and immigration.
With the fall of the Berlin Wall and the collapse of the Soviet Union and then with the Treaty on European Union coming into effect in 1993, the way was cleared for a major expansion of the evolving approach to the European Union.
Focused on a “peace dividend,” Europe largely turned swords into social plowshares and invested into the expansion of the European Union Eastward.
The Bosnian War in the 1990s provided a significant bump in the road but the strategic trajectory was set – the expansion of the European Union with a single currency, free movement of peoples and a new social contract.
Unfortunately, crises in the Middle East, the rise of Putin and the economic crisis of 2008 have generated significant pressures upon these strategic impulses towards an expanded and vibrant and dynamic European Union.
Very fundamental challenges face the European states – no clear economic growth strategy; no clear path towards significant debt reduction, no clear way to defend Europe against a resurgent Russia, and a porous border system penetrated by migrants and terrorists alike in the face of the commitment to free borders within the European Union.
It is against this background, that those who want to leave the European Union won the Brexit referendum in June 2016.
The actual course of negotiating a way ahead only will happen when the British government invokes Article 50 in the treaty which defines the broad process of how a member leaves the European Community and the British Parliament approves of the start of the process.
But when Britain invokes Article 50 this year, a new President in France and almost certainly a new Chancellor in Germany will provide key players in defining what the meaning of Brexit will actually be for the future of the European Union.
Brexit is NOT just about what happens to Britain; it is about defining the next phase of European development.
It is clear that the European Commission would like to handle the negotiations and protect its position as Britain is walked out.
But this is not a technical or technocrat issue; which is why the European Union is in difficulty.
It is about fundamental choices and strategic options for the other members of the European Union who are facing Brexit like pressures of their own.
If European political leadership does not materialize to deal with the challenge and strategic opportunities provided by Brexit, centrifugal pressures will accelerate on the broader European Union.
To get a sense of the dynamics of Brexit and the potential upside for Britain in the Brexit process, I had a chance to talk with a colleague who lives in London and is a well-respected political economic analyst of global change.
We did this interview on Sunday January 22, 2017 with the forthcoming visit by the British Prime Minister to President Trump anticipated towards the end of the week.
Question: Brexit has largely been focused upon an in and of itself, aberration from European development. My view is that is part of the broader tissue of the next phase of European dynamics and development.
How do you view Brexit in the broader European context?
Malmgren: Both President Trump and Prime Minister May take the position that the European Union is a fluid and unstable political entity. Voters in the Euro zone are articulating views similar to what led to Brexit. They are saying “no” and asking for access to the single market but less regulation and harder borders.
The British just had the chance to vote first but the rest of Europe is increasingly leaning in that direction too.
That’s why the Italians said “no” to their referendum. That’s why is looks like the hard right is gaining in France. All these are my personal views but I don’t think the current Chancellor of Germany is likely to be re-elected.
In contrast, European officials view their governments as stable. They think Britain will be rendered highly unstable by Brexit.
The Trump team view the British as reliable allies that share core values such as the desire to enhance growth and reduce the interference of government in the lives of their people.
Also, from a defence and intelligence perspective, Britain remains the primary partner to the U.S. in Europe.
Question: The inability of continental Europe to grow has been a clear part of the concern in Britain about Europe.
What role has this played?
Malmgren: The British received more Foreign Direct Investment than any other locartion in the EU before Brexit. It was assumed this flow would fall after Brexit. But, I hear from my clients that they are even more interested in the UK now.
That’s because money is like water. It flows to wherever it faces the least resistance – the lowest tax rates and least regulatory burden. I would challenge the British to end up with more regulation and higher taxes that the EU after Brexit. Frankly, that would take a huge effort!
But the problems on the Continent are deeper than this; The real issue is that the social contract between citizens and governments in the West are being broken. There is always a deal between citizens and their governments. But now governments are defaulting on their citizens because of the debt problem.
They can’t deliver retirement at 65. Now everybody has to work longer.
They can’t deliver the healthcare that had been expected. Frankly they can’t deliver police, fire departments or roads without potholes.
The social contract in the EU is under even greater stress because growth has been so very poor.
The night of the victory of Brexit, the markets attacked Italian banks, not British banks. What did the state in Italy do? They said they’d find 5b Euros to bail out the oldest bank which had lost 98% of its shareholder value. Meanwhile, they can’t find 5 cents for the young who are experiencing over 30% unemployment rates. This breaks the social contract and helps explain the new anti-EU sentiment.
The Europeans are also increasingly uneasy about immigration issues. It was not part of the original deal in the European contract to have completely open borders. In my view, the British are not xenophobic, but want more process around immigration. They want a more secure movement of people within Europe.
The media talks all the time about the proposed Wall by Trump in the US with Mexico, but the reality is there a wall-building spree going on in Europe.
Look at the new walls being constructed between Hungry and Serbia, between Germany and the Czech Republic, as well as new walls in Estonia, Poland and Lithuania are constructing one around Kaliningrad with watchtowers, etc.
Frankly new walls will increasingly be digital. Processing of people will begin well before you get anywhere near what you think the border is. We will pass through borders without realizing we’ve already been assessed.
We are in a period of history where the Europeans are fundamentally rethinking what they want Europe to stand for, the European Union to do, and how to generate economic growth again.
As everywhere else, the public are questioning the establishment because they have failed to deliver on their promises.
Question: How might Brexit trigger positive outcomes, including economic growth?
Malmgren: Before the Brexit vote and after, the main stream media argued that Brexit would only have negative consequences for Britain, but this has not been the case.
Across the board, almost all economic indicators have gone up, except the value of the pound sterling.
The pound had been falling in any case, because the Bank of England had been lowering interest rates and then keeping them low. But, people now blame the entire fall in the Pound on Brexit. Either way, the fall in it’s value has made British prices more competitive.
So, investors are buying goods, properties and businesses in the UK because they are temporarily cheaper.
Manufacturing is returning to Britain.
This is partly because of rising labor costs in China. Wages have risen 5 fold in three years and are on track to rise another 7-10% in 2017. This is driving skilled jobs back to the US and Britain. This means that this trend coupled with the low price for Sterling will see an improvement for the British economy in terms of competitiveness.
Britain could have been a success inside the EU but the EU leadership were making it ever harder.
It’s easier to be an economic success now that Britain will have greater control over their own rules, laws, policies and regulations.
President Trump will Meet PM May on January 27, 2017 welcoming her to the White House as the first official foreign guest. Credit Photo: BBC
Question: What will be the relationship between Britain and the European market or the United States in terms of trade?
Malmgren: The discussion about Britain and its negotiation with the European Union about Brexit is usually presented as a David and Goliath phenomenon. Britain is a small country and there is the European juggernaut with which it must negotiate.
This is incorrect.
Britain is the second largest contributor to the European budget. The loss of Britain as a fee-paying member is significant. The EU will eventually acknowledge that they need the financial contribution.
I am guessing they will eventually permit a new category of membership, especially as other member states demand the same thing.
Also, key European states, like Germany, will seek to shape an effective relationship with Britain as an economic entity for their own self interest. Britain is a big buyer of German goods. Nobody in Spain or Italy is buying Mercedes these days. The British are!
Britain is growing and is dynamic. Europe needs to trade with Britain going forward.
It can be argued that the British need the European Union, economically, less than the European Union needs Britain.
Again, this is my personal view but people worry about losing access to the Single Market because it’s so big. Yes it is.
But it’s not growing. Britain is now free to go cut a new deal with the United States, which is. The US is a far more dynamic economic growth center than Europe.
Now we have President Trump looking to renegotiate NAFTA. This is a clear opportunity to create a new treaty, one which includes Britain and Australia, Mexico and possibly even India and others in a reframed, redone and revised framework to replace NAFTA.
Question: Let us return to the immigration issue which clearly was the hot button issue which pushed the No vote over the top with regard to Brexit.
How do you view the British stance on European immigration going forward?
Malmgren: The view by some is that the British and President Trump are very xenophobic. I believe that both the British and American Administrations favor ensuring that the best quality migrants come into the country in each income and skill category. For Britain this means they will no longer be restricted to hiring Europeans for skilled jobs.
Now they’ll be able to hire Americans, Indians, Japanese…anybody they like. This will enhance the skill sets available to the British economy as opposed to simply prioritizing Europeans.
Britain will no longer obliged to hire on a European bias point of view.
I did the live coverage of of the third debate between Clinton and Trump for Sky News. President Trump made it clear that the citizenship and work application process for Mexicans was excessively slow. This caused such immigrants to bypass and stalled system and was a major cause for illegal immigration. He argued for process changes that would streamline that process to ensure that the legal process worked faster and more clearly.
Contrary to the popular view, this could help more immigrants become legal citizens. This is not the position of a xenophobe.
I am a free trader in the sense that I support the freest possible movement of human capital, capital and goods across borders.
But that doers not mean that there should be no rules and no process.
Question: What impact will the Brexit negotiations have on key states as they rework European institutions?
Malmgren: Europeans can look at this in a binary way – either you are in my club or you are not – or in a more realistic way of how can I redefine the club and its relationships with friends who allies to the club?
In order to keep the EU club, they’ll need to get along with key players who are not part of it. Clearly, the EU needs to come to terms with the Trump Administration and the British post Brexit.
The real question is whether we can we align our national interests again.
It was assumed for the past decade that Europeans had well aligned national interests. This clearly is not true any longer.
The French and Germans are no longer on the same page. The Northern members are not on the same page with the Southern states.
A realignment is clearly necessary by key nations in Europe. Put another way, Brexit is a catalyst that will inspire significant changes within the EU itself.
Editor’s Note Regarding Dr. Malmgren
Dr. Pippa Malmgren is a trend spotter who advises investors and governments about economic policy and investment strategy.
She has recently been named a Non Executive Board Member of the new Department of International Trade in the UK, advising on Brexit and underscored that views expressed in this interview are her personal views only. She anticipated the Financial Crisis in 2007, the slowdown in China, Brexit, Trump and the return of inflation.
She is also an economist who manufactures, having co-founded a robotics company that makes commercial-use aerial platforms (drones), H Robotics. She is a popular speaker and one of the few economists represented by William Morris Endeavor.
She also serves on the British Ministry of Defence Working Group on Global Strategic Trends and briefs Britain’s top Generals at Sandhurst. She serves on several advisory boards and working groups: She Chairs the Lewis PR Advisory Board (LAB) and is an advisor to Real Vision TV, the Greater London Authority Infrastructure Advisory Board and Indiana University School of Public Policy and Environmental Affairs as well as the Indiana University Manufacturing Initiative.
Additional Editor’s Note: High Court Ruling on UK Parliament and Brexit
According to an article by Eszter Zalan published on the EUObserver on January 24, 2017, the British Prime Minister must have consent of Parliament prior to invoking the article 50 close in the Treaty of Rome which can begin the official Brexit process.
UK prime minister Theresa May will have to obtain the consent of parliament before triggering Article 50, the exit procedure from the European Union, the Supreme Court ruled on Tuesday (24 January).
The panel of judges rejected by eight to three the government’s argument that it had the power to start the exit procedure based on the result of last year’s referendum.
“The government cannot trigger Article 50 without Parliament authorising that course,” Lord Neuberger, president of the court said reading out the judgement.
This means May cannot begin talks with her EU counterparts about leaving the bloc until lawmakers give their backing.
MPs are unlikely to stop the process, although the judgment paves the way for closer parliamentary scrutiny of the negotiations.
The judges ruled that withdrawing from the EU makes fundamental changes to the UK’s constitutional arrangements and removes some existing domestic rights of UK residents, therefore it requires parliamentary legislation.
“The change in the law required to implement the referendum’s outcome must be made in the only way permitted by the UK constitution, namely by legislation,” the court said in the ruling.
Lord Neuberger also added that the judgment is not about leaving the EU or staying in, but about the right of the government to trigger the exit procedure…..
We will be doing an interview soon with Dr. Malmgren based on her important book, Signals, to discuss the challenges of understanding the emerging phase of economic and global development.
To be clear, this means that BOTH the Commons and Lords must approve the triggering of Article 50.
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Illustration of German submarine published by Norwegian Ministry of Defence.
Defense Secretary Jim Mattis arrives at Yokota Air Base Japan. While in Japan, Secretary Mattis met with the Japanese minister of defense Tomomi Inada during his first overseas tour as SECDEF. (U.S. Navy photos by Petty Officer 2nd Class Marcus Castaneda)
Advanced Hawkeyes come to MCAS Iwakuni. Credit: USMC
