SWOOP:
"With the mid-term elections now a month away, the political timetable now dominates Washington decision-making. From Treasury actions to reduce its holdings in Citigroup and AIG to new State Department sanctions against Iran and Congressional votes to penalize China on the issue of its currency, all eyes are on November 2nd. It remains an open question, however, whether a Republican takeover of control in the House of Representatives or the Senate or both will significantly change the course of US foreign policy. The Republican Pledge to America, the Party’s election platform, contains only generic language on foreign policy, largely confined to promises to intensify existing efforts against terrorism. Our private conversations with senior Republicans do not suggest that they have as much passion for change on foreign policy as they do domestically. Indeed, they continue to see a continuing role for ‘big government’ internationally, especially in the military sphere, even as they want to shrink government at home. The GOP has explicitly ‘ring-fenced’ defense spending from the cuts they want to apply elsewhere. Republican congressional staffers advise if there is to be any change in this corridor it will be to place more pressure on European allies to shoulder more of the costs. Afghanistan is a likely arena for dispute. In the run-up to the review of Afghan policy to be conducted by the White House in December, attention will fall on the proposed mid-2011 date set by President Obama to begin the withdrawal of some of the additional 30,000 ‘surge’ troops. Senior Democrats are urging Obama to maintain that timing. Our Pentagon contacts tell us, however, uniformed military leaders regard this as premature. Their views would receive a wider platform in the event of Republican control of Congress. On China, the fault lines are less clear. Conservative institutions favor a robust approach to what they see as Chinese military expansion, but the very substantial US industrial investment in China together with the traditional Republican commitment to free trade will soften any ‘China-bashing’ initiatives. We expect the Republicans to support the Administration’s policy of avoiding a trade war with China. The Middle East ‘peace process’ has, as we predicted, run into severe problems on the back of the Israeli refusal to lift the freeze on settlement construction."
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