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Adv 1 FDI
FDI into the U.S is nosediving now despite positive pressures
Posen 18 (ADAM S. POSEN is President of the Peterson Institute for International Economics. “How Trump Is Repelling Foreign
Investment.” July 23, 2018. Foreign Affairs. https://www.foreignaffairs.com/articles/united-states/2018-07-23/how-trump-repelling-
foreign-investment)
U.S. President Donald Trump’s hostility to globalization is ruining the United States’ attractiveness as a
place to do business. Sometimes, after all, it takes just one bad landlord to destroy a whole
neighborhood’s desirability. This year, net inward investment into the U nited S tates by
multinational corporations—both foreign and American— has fallen almost to zero, an early indicator of the
damage being done by the Trump administration’s trade conflicts and its arbitrary bullying of companies and governments. This
shift of corporate investment away from the United States will decrease long-term U.S. income
growth, reduce the number of well-paid jobs available, and reinforce the ongoing shift of global
commerce away from United States. That shift will subject the entire world economy to greater
instability .
AVOIDING AMERICA
A few months ago, I wrote in Foreign Affairs that the Trump administration’s policies could lead to the
emergence of a post-American world economy . Today, events are moving in that direction. Most
obvious, Trump’s trade war is escalating. It is displacing Americans from jobs in export industries and reducing U.S.
purchasing power. But these direct harms are limited; the global economy can adapt to Trump’s
tariffs . As I wrote, “The United States is more dispensable to the rules-based trading regime than it is in other economic spheres. .
. .Trade can be limited, but never completely squelched .” What’s more, congressional Republicans’ spending
binge and their deep tax cuts will offset most of the damage to aggregate U.S. growth and employment, at least for this year and
next (although those actions will bring bills to pay later). As a result, standard economic indicators, such as the value of the dollar,
the U.S. stock market, and interest rates on U.S. government debt, which are all currently fairly stable, do not reveal much about
whether the world economy is moving into a post-American era. Major powers have accelerated trade deals among
one another without the United States, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the
successor to the Trans-Pacific Partnership, from which Trump withdrew the United States last year, and the recently signed EU-
Japanese free trade deal, but a new U.S. administration could easily reverse that trend by jumping back
into trade negotiations, as those decisions are under direct government control.
Yet the post-American economic world, one where all investment is more uncertain and
politicized —because the U.S. government acts toward businesses as any self-enriching
autocracy would— is on its way. That is apparent in business decisions about large, long-term
investments, such as the building of major production facilities; foreign takeovers of, and
mergers with, U.S. companies; and investment in research facilities and workers . These are
reliable indicators of how markets really see Trump’s policies affecting the future . Unlike
speculative flows of capital or indicators of sentiment , these kinds of corporate investment decisions must be
taken with ten-, 20-, or 30-year time horizons in mind, and once undertaken, they are difficult
to reverse . As a result, if the relative attractiveness of investing in the U nited States compared with other
countries—in terms of freedom from government interference, of dependable access to global markets for both inputs and sales,
and of brands and hiring being helped, not hurt, by association with the United States— declines, so should direct
investment in the United States.
The numbers are clear. To compare like for like, look at flows of foreign direct investment (FDI) into the United States in the
first quarter of 2018, the latest for which data are available from the U.S. Bureau of Economic Analysis, and in the same
quarter of 2017 and 2016. In the first quarter of 2016 , the total net inflow was $146.5 billion. For the same
quarter in 2017, it was $89.7 billion. In 2018, it was down to $51.3 billion. This decline was not driven by changes in
Chinese investment, which flows both ways and so contributes little to changes in the net figure. (In the first quarter of 2016, the
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United States saw a small net inflow of $4.5 billion from China, and in the same period in 2018, it saw a small net outflow to China of
$300 million.) The falloff is a result of a general decline in the U nited States’ attractiveness as a place to
make long-term business commitments. The overall trend in FDI shows the same picture. A four-quarter moving
average of net FDI inflows to the United States shows that this year, it has fallen back to its postcrisis lows of 2012.
SELF HARM
The decline is all the more worrying since many factors should have been pushing direct investment in the
United States up this year. The massive fiscal stimulus passed by Congress should have increased FDI in three ways: by
boosting spending, which increases U.S. growth prospects; by making the tax code more favorable to production
in the United States; and by cutting the corporate tax rate. Even if one discounts the direct incentive effects for business investment
in the legislation, the corporate tax changes certainly encouraged investment. This
stimulus, along with pressure to
bring some activities and intellectual property back to the U nited States from abroad, should have
pumped up U.S. investment inflows, at least temporarily. What’s more, Chinese and other companies worried
about future access to the U.S. market might have decided to get as many deals done as possible before Congress shortly passes the
Foreign Investment Risk Review Modernization Act, which will toughen inward investment rules, just as they have stockpiled
soybeans and other imports from the United States that are now subject to tariffs. This
also should have raised the
total inward FDI in 2018. Yet despite all the positive pressure, FDI fell markedly .
A broad reach for CFIUS coupled with minimal judicial oversight deters foreign investment
Berg 18 (E. Maddy Berg, J.D. Candidate 2019, Columbia Law School. “NOTE: A TALE OF TWO STATUTES: USING IEEPA'S
ACCOUNTABILITY SAFEGUARDS TO INSPIRE CFIUS REFORM.” October, 2018. 118 Colum. L. Rev. 1763, LexisNexis)
Given FINSA's lack of mechanisms to provide for accountability and transparency throughout the CFIUS process, the existence of a
FIRRMA focused almost
recent congressional effort to reform CFIUS is unsurprising. What is surprising, however, is that
entirely on giving CFIUS greater power through broadened jurisdiction 163 rather than heeding
the aforementioned accountability and transparency criticisms 164 and proposing reforms to
limit CFIUS's power. 165
[*1790] For example, rather than clarify or limit FINSA's broad definition of national security, FIRRMA
increases the number of factors that CFIUS may consider in its discretion. 166 In addition, FIRRMA
restricts jurisdiction for challenges to the D.C. Circuit, curtailing the limited judicial review
provided for by Ralls. 167 All in all, FIRRMA expands CFIUS's authority while taking very few steps to
enhance its accountability and transparency . 168 Further, by broadening CFIUS's reach but failing
to address CFIUS's accountability --or lack thereof--in its more limited, FINSA form, FIRRMA will
in fact exacerbate the problem of CFIUS as a black box , since more transactions and parties will
be impacted by CFIUS. 169
This disregard of accountability and transparency cannot be explained by a lack of salience
among lawmakers: The Uranium One controversy, which led to calls for a congressional investigation into CFIUS's review of
the transaction, in fact suggests that such issues are quite salient within Congress . 170 Despite a lack of
legislative impetus behind this issue, improving CFIUS's accountability and transparency should be an aim of future CFIUS reform for
several reasons.
Critics assert that an opaque foreign investment review process generates uncertainty for
investors and permits CFIUS to act outside its [*1791] scope . 171 For example, while FINSA's vague
definition of national security helps to ensure CFIUS's "flexibility with an evolving concept of national security," 172 it
nonetheless "virtually eviscerate[s] any predictive capabilities " from FINSA. 173 Furthermore, this broad
instruction on national security gives CFIUS leeway to review a transaction for reasons that "may
seem quite far strayed from accepted notions of national security," 174 which is particularly
problematic in light of the apparent conflation of economic and national security concerns
under the Trump Administration . 175 Paired with CFIUS's limited judicial review , 176 CFIUS
could theoretically block a transaction for any reason --related to national security or not--with
would-be acquirors having little recourse to challenge such conduct. As a result, CFIUS may
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ultimately encourage retaliation abroad and deter foreign investment if steps are not taken to
enhance its accountability and transparency . 177
CFIUS is a black box exempt from judicial review – decisions by political executive agency
administrators deter FDI
Li 16 (Xingxing Li, Associate Professor, Jinan University Law School. J.S.D. & LL.M., The University of Chicago Law School; LL.M. &
LL.B., Tsinghua University Law School. Former senior associate at Clifford Chance LLP. “National Security Review in Foreign
Investments: A Comparative and Critical Assessment on China and U.S. Laws and Practices.” 13 Berkeley Bus. L.J. 255. 2016.
LexisNexis)
A. Predictability in the CFIUS Process: Rulemaking or Adjudication
CFIUS is known for its broad power, secrecy, and unpredictability . These features are interlinked.
Understanding these characteristics, their interplay, and their justifications is key to finding the right balance between clarity and
flexibility.
CFIUS enjoys broad power because the "national security" that it is charged to protect is not
defined: none of FINSA, the Exon-Florio Amendment, nor the CFIUS regulations 56 define "national security." For example, the
Exon-Florio Amendment construes "national security" tautologicall y: "those issues relating to 'homeland
security'." 57 In lieu of defining "national security," the Exon-Florio Amendment sets forth an illustrative list of the factors for CFIUS
and the President to consider when assessing a transaction's national security risks. 58 The listed factors raise
interpretation issues, including overly broad and vague elements related to traditional military defense, to the technology
the acquired business may possess, and to the effects of the acquisition on critical infrastructure, etc. 59 Further, by making these
listed factors serve as non-exhaustive guidelines, 60 it
leaves plenty of room for the President and CFIUS to
consider other factors as deemed appropriate . The President and CFIUS therefore have considerable latitude in
determining when to block or unwind an M&A transaction. To be sure, the Treasury Department published a "Guidance Concerning
the National Security Review Conducted by CFIUS," 61 but in terms of the national security considerations of CFIUS, it uses either
vague terms such as "facts" and "circumstances" or merely illustrative examples. 62 For instance, the Treasury expressly articulates
that regulators should consider the nature of the US business being acquired by a foreign investor, and it enumerates several
examples about the "nature of business" (such as whether $=P272 the business has government contracts or whether it houses
advanced technologies). However, an investor cannot rely on these examples to evaluate whether other occasions would similarly
trigger the "nature of business" concern.
Secrecy marks the second feature of CFIUS. Information submitted to CFIUS is confidential . 63
Each CFIUS review--even the fact that a review is being conducted-- is strictly confidential unless
the transacting parties choose to disclose the information . This helps explain why CFIUS obstacles often are not
widely known beyond the individual enterprises involved, let alone statistically computed.
The lack of clear definition, together with a secretive process in a black box exempt from
judicial review, bring in vagueness and unpredictability , the third characteristic of CFIUS
process. The CFIUS process shields the inner workings of its members from public knowledge, and therefore becomes purely
case-by-case adjudication 64 and generates unpredictable review outcomes. The suboptimal level of clarity and predictability
suggests the bolstering of CFIUS authority has outpaced the stifled definition. This may not be a huge issue in the old days when
CFIUS merely assumed a monitoring function, but is no longer apt now that it has major impact on virtually every crossborder M&A
transaction involving a US target. 65
1. Negative Effects
The combination of CFIUS's broad power, secrecy, and unpredictability gives rise to a series of
negative effects. An unpredictable process means a "lottery" for potential foreign investors .
Foreign investors now deem the CFIUS process the ultimate and major hurdle to their
investments in the United States. 66 The costs imposed on foreign investors are tremendous:
Foreign investors are unable to ex ante discern the national security implications of their $=P273
potential transactions. This risks deflecting foreign investors from the United States to other
jurisdictions.
To be sure, the case-by-case approach should not be confused with the common law adjudication process by judges. First, the
judicial decisions are to a large extent open to the public, as are the reasons on which the rulings are based. Information about the
rules or standards can therefore be summarized as doctrines and passed on to the public in the form of precedents. Stare decisis
ensures that the court follows these doctrines, therefore promoting consistency between past and future cases.
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Conversely, the black-box feature of the CFIUS works against the revelation and dissemination of
information. On one hand, since CFIUS keeps its decision-making process strictly confidential, no
reason will be offered when blocking or divesting a transaction. On the other hand, companies
going through CFIUS have every incentive to keep to themselves even the fact that they make
the filing. After completing its review, CFIUS passes little information revealing the review standards to future investors.
When secrecy is at play, foreign investors will pause in the face of the potential CFIUS
challenge when considering whether to invest in the United States. Admittedly, the CFIUS process
generates tremendous deterrence effects ; however, foreign investors are lost as to what they
are deterred from. Therefore, the deterrence effect is unlikely to be associated with improved
national security review compliance : future investors do not have much more of a clue even
after one transaction has been penalized for threatening to impair the US national security. An
increase in the number of cases going through the CFIUS process over the years does not necessarily lead to an increase in the
supply of information about the standards enforced. In this sense, the
CFIUS process has the negative effect of
deterring foreign investments that should generally be welcomed because it places the burden
of uncertainty and unpredictability on a wide array of foreign investors.
Second, judicial decisions are delivered by politically impartial judges, whereas CFIUS rulings are
made by a group of political administrators , and are thereby vulnerable to political influence .
After all, CFIUS is an interagency committee comprised of administrative agencies . CFIUS is not
authorized to take into account either political opposition or public opinion regarding a
transaction. 67 But the institutional setting of CFIUS reflects that immunity from politics may
merely be a hollow declaration ; CFIUS's secrecy adds to the difficulty of monitoring the performance of CFIUS to make
sure that it is competent and honest. The black-box process makes it possible for CFIUS to $=P274 conceal
political factors behind the mask of its broad mandate without having to expose its inner workings to the
public.
years, as observed across of variety of objective measures. Even though these entities as a group comprise a
mere 1.3% of all U.S. businesses, collectively they punch well above their weight, accounting for:
5.5% of all private-sector employment
6.5% of U.S. GDP (private-sector value added)
14.8% of U.S. private-sector employee benefits
16.0% of new private-sector, non-residential capital investment
16.7% of private-sector research and development spending
17.1% of all corporate federal taxes paid
23.5% of U.S. exports
24.3% higher worker compensation than the U.S. private-sector average
These direct contributions – and there are many more telling statistics in the report – provide only a partial
picture of the impact of international companies on the economy.
The full story must take into account the related economic activity that is spurred upstream of
these companies with their suppliers, vendors, and intermediate goods’ providers, as well as
the activity generated downstream through the spending of their employees . It must also
consider the effects of these companies on the U.S. economy over time through the reactions of
domestic companies rising to the challenge of new competition , the residual benefits delivered
through technology spillovers , the adoption of best practices in governance and workplace
management, and the hybridization and evolution of ideas that make companies more
efficient, more pioneering, and more exciting places to work .
Despite President Trump’s claims that trade killed U.S. manufacturing and that his mix of policies and threatening tweets will draw
factories and their workers back to the United States, the fact is that over $1.6 trillion (40%) of that FDI is parked in U.S.
manufacturing operations. That is by far the largest amount of FDI in any country’s manufacturing sector. If there’s been a race to
the bottom driving factories south of the border and overseas, somebody forgot to tell foreign-headquartered companies, which
continue to remain bullish on U.S. manufacturing.
Over one-fifth (20.7%) of the U.S. manufacturing sector’s GDP is generated by these international companies, which account for one-
fifth (19.9%) of total U.S. manufacturing employment. They account for almost half of all property, plant, and equipment
expenditures in the manufacturing sector (45.2%), over 17% of all manufacturing-sector R&D spending, and their effective tax rates
exceed the U.S. manufacturing average by 35.8%.
What the OFII report shows is that international companies contribute significantly to the U.S. economy,
raising average economic performance across a wide range of pertinent metrics through their
direct contributions, but also because their presence and participation in U.S. markets brings
out the best in incumbent domestic firms.
The report presents new and compelling evidence that international companies increase U. S. economic
growth, vitality, and diversity well beyond the levels that would obtain without their
contributions, and that U.S. policies should be designed to attract more of these companies—and
more of their intellectual and financial capital —to U.S. shores.
Foreign investment in the United States is a barometer of the faith of the rest of the world that
the U.S. economy is safe and strong, and will perform well, prospectively, relative to other
economies. Meanwhile, investment is essential to economic growth and higher living standards. To remain atop global value
chains and at the technological frontier, the U.S. economy requires continuous inflows of fresh capital to
replenish the machinery, software, laboratories, research centers, and high-end manufacturing
facilities that harness our human capital, animate new ideas, and create wealth.
Over the years, foreign companies have contributed significantly to the satisfaction of those capital
requirements. With the world’s largest consumer market, relatively transparent business and regulatory environments, a skilled
and productive workforce, an innovative culture, and deep and broad capital markets to commercialize that innovation, the United
States has some big advantages in the global competition to attract investment.
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Although the United States accounts for nearly a quarter of the global FDI stock, the U.S. share was much a much
larger 37%, as recently as 2000. Since then, the competition for FDI has been intensifying.
By growing their economies, improving the education and skills of their workforces, strengthening the rule of law, implementing
reforms to make their business climates more predictable, and adopting other best practices, countries once considered too risky
have started to become viable competitors for a growing share of that investment.
U.S. policymakers — even with all of the advantages the U.S. economy retains — can no longer passively assume
that foreign companies will prefer to invest in the United States over other destinations under all
circumstances. They cannot be complacent or ambivalent. They must be welcoming . And they must steer clear
of protectionist policies, which tend to deter investment inflows.
Although one or two observations on a timeline don’t make for a conclusive trend, the fact is that investment inflows
have been waning in 2018 . Whether that reflects concerns over the inward, protectionist turn
of the current administration’s trade policies is unclear but , traditionally, protectionism has been
more or a deterrent to, than a magnet for investment .
While well-considered, carefully-crafted, transparent policies intended to protect legitimate national
security interests may be necessary , the same cannot be said of measures designed to protect particular industries
and groups from foreign competition. In the 21st century, governments are competing to lure capital
investment from the world’s best companies. Those companies have options and the
importance of their contributions to U.S. economic growth and dynamism cannot be
overstated.
Slow growth causes international conflict broadly and with Russia and China specifically
Drezner 16 (Daniel, Professor of International Politics, Tufts; Nonresident Senior Fellow, Brookings. “Five Known Unknowns
about the Next Generation Global Political Economy.” Project on International Order and Strategy at Brookings. May,
http://www.anamnesis.info/sites/default/files/D_Drezner_2016.pdf)
The erosion of the trade and demographic drivers puts even more pressure on technological
innovation to be the engine of economic growth in the developed world. As one McKinsey analysis concluded, “For
economic growth to match its historical rates, virtually all of it must come from increases in
labor productivity .”78 Growth in labor productivity is partially a function of capital investment,
but mostly a function of technological innovation . The key question is whether the pace of
technological innovation will sustain itself .¶ This remains a known unknown. The pace of innovation relative to
global population has slowed dramatically over the past fifty years .79 Consider that the developed world still relies on the
same general purpose technologies of modern society that were originally invented 50-100 years ago: the automobile, airplane, telephone, refrigerator, and computer. To be
sure, all of these technologies have improved in recent decades, in some cases dramatically. But nothing new has replaced them. And even these improvements have not
necessarily had dramatic systemic effects. For example, the average speed on a passenger aircraft has actually fallen since the introduction of the Boeing 707 in 1958, because of
the need to conserve fuel. For all of the talk of “disruptive innovations,” the effect of these disruptions on both the business world and aggregate economic growth have been
exaggerated.80¶ At present, many of the fields that seem promising for innovation—nanotechnology, green energy, and so forth—require massive fixed investments. Only large
institutions, like research universities, multinational corporations and government entities, can play in that kind of game. Joseph Schumpeter warned that once large
organizations became the primary engine of innovation, the pace of change would naturally slow down. Because large organizations are inherently bureaucratic and
conservative, they will be less able to imagine radical innovations.81 What if the “secular stagnation” debate is really just a harbinger of a deeper debate about a return to pre-
19th century growth levels?¶ An obvious counter to this argument is that the pace of technological innovation in laptops, smart phones, tablets, and the Internet of things has
accelerated. This is undeniably true—but the problem is that the gains in utility have not been, strictly speaking, economic. Most of the important innovations that we think
about with respect to the Internet—Facebook, Twitter, Wikipedia, YouTube and so forth —are free technologies for consumers. As Tyler Cowen argues, “The big technological
gains are coming in revenue-deficient sectors.”82 They generate lots of enjoyment but little employment. The largest and most dynamic information technology firms, like
Google and Apple, hire only a fraction of the people who worked for General Motors in its heyday. At the same time, Internet-based content has eroded the financial viability of
other parts of the economy. Content-providing sectors—such as music, entertainment, and journalism—have suffered directly. The growth of “sharing economy” firms like Uber
and Airbnb that develop peer-to-peer markets are causing similar levels of creative disruption to the travel and tourism sectors.83 The rapid acceleration of automation is also
A
leading to debates about whether the “lump of labor” fallacy remains a fallacy—in other words, whether displaced workers will be able to find new employment.84¶
slow-growth economic trajectory also creates policy problems that increase the likelihood of
even slower growth . Higher growth is a political palliative that makes structural reforms easier .
For example, Germany prides itself on the “Hartz reforms” to its labor markets last decade, and has advocated similar policies for the rest of the Eurozone since the start of the
2008 financial crisis. But the Hartz reforms were accomplished during a global economic upswing, boosting German exports and cushioning the shortterm cost of the reforms
such reforms.¶ It is possible that concerns about a radical growth slowdown are exaggerated. In 1987, Robert Solow famously said, “You can see the computer age
everywhere but in the productivity statistics.”85 A decade later, the late 1990s productivity surge was in full bloom. Economists are furiously debating whether the visible
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innovations in the information sector are leading to productivity advances that are simply going undetected in the current productivity statistics.86 Google’s chief economist Hal
Varian, echoing Solow from a generation ago, asserts that “there is a lack of appreciation for what’s happening in Silicon Valley, because we don’t have a good way to measure
it.”87 It is also possible that current innovations will only lead to gains in labor productivity a decade from now. The OECD argues that the productivity problem resides in firms
far from the leading edge failing to adopt new technologies and systems.88 There are plenty of sectors, such as health or education, in which technological innovations can yield
slowdown is a significant “known unknown.” And if such a slowdown occurs, it would have
catastrophic effects on the public finances of the OECD economies . Most of the developed world will have to support
disproportionately large numbers of pensioners by 2036; slower-growing economies will worsen the debt-to-GDP ratios of
most of these economies, causing further macroeconomic stresses—and, potentially, political unrest
from increasingly stringent budget constraints.89¶ 2. Are there hard constraints on the ability of the developing world to converge to
developed-country living standards?¶ One of the common predictions made for the next generation economy is that China will displace the United States as the world’s biggest
economy. This is a synecdoche of the deeper forecast that per capita incomes in developing countries will slowly converge towards the living standards of the advance
industrialized democracies. The OECD’s Looking to 2060 report is based on “a tendency of GDP per capita to converge across countries” even if that convergence is slow-moving.
The EIU’s long-term macroeconomic forecast predicts that China’s per capita income will approximate Japan’s by 2050.90 The Carnegie Endowment’s World Order in 2050
report presumes that total factor productivity gains in the developing world will be significantly higher than countries on the technological frontier. Looking at the previous
twenty years of economic growth, Kemal Dervis posited that by 2030, “The rather stark division of the world into ‘advanced’ and ‘poor’ economies that began with the industrial
revolution will end, ceding to a much more differentiated and multipolar world economy.”91¶ Intuitively, this seems rational. The theory is that developing countries have lower
incomes primarily because they are capital-deficient and because their economies operate further away from technological frontier. The gains from physical and human capital
investment in the developing world should be greater than in the developed world. From Alexander Gerschenkron forward, development economists have presumed that there
are some growth advantages to “economic backwardness”92¶ This intuitive logic, however, is somewhat contradicted by the “middle income trap.” Barry Eichengreen,
Donghyun Park, and Kwanho Shin have argued in a series of papers that as an economy’s GDP per capita hits close to $10,000, and then again at $16,000, growth slowdowns
commence.93 This makes it very difficult for these economies to converge towards the per capita income levels of the advanced industrialized states. History bears this out.
There is a powerful correlation between a country’s GDP per capita in 1960 and that country’s per capita income in 2008. In fact, more countries that were middle income in
1960 had become relatively poorer than had joined the ranks of the rich economies. To be sure, there have been success stories, such as South Korea, Singapore, and Israel. But
other success stories, such as Greece, look increasingly fragile. Lant Prichett and Lawrence Summers conclude that “past performance is no guarantee of future performance.
Regression to the mean is the single most robust and empirical relevant fact about cross-national growth rates.”94¶ Post-2008 growth performance of the established and
emerging markets matches this assessment. While most of the developing world experienced rapid growth in the previous decade, the BRICS have run into roadblocks. Since the
collapse of Lehman Brothers, these economies are looking less likely to converge with the developed world. During the Great Recession, the non-Chinese BRICS—India, Russia,
Brazil, and South Africa—have not seen their relative share of the global economy increase at all.95 China’s growth has also slowed down dramatically over the past few years.
Recent and massive outflows of capital suggests that the Chinese economy is headed for a significant market correction. The collapse of commodity prices removed another
source of economic growth in the developing world. By 2015, the gap between developing country growth and developed country growth had narrowed to its lowest level in the
21st century.96¶ What explains the middle income trap? Eichengreen, Park and Shin suggest that “slowdowns coincide with the point in the growth process where it is no longer
possible to boost productivity by shifting additional workers from agriculture to industry and where the gains from importing foreign technology diminish.”97 But that is
insufficient to explain why the slowdowns in growth have been so dramatic and widespread.¶ There are multiple candidate explanations. One argument, consistent with Paul
Krugman’s deconstruction of the previous East Asia “miracle,”98 is that much of this growth was based on unsustainable levels of ill-conceived capital investment. Economies
that allocate large shares of GDP to investment can generate high growth rates, particularly in capital-deficient countries. The sustainability of those growth rates depends on
whether the investments are productive or unproductive. For example, high levels of Soviet economic growth in the 1950s and 1960s masked the degree to which this capital
was misallocated. As Krugman noted, a lesser though similar phenomenon took place in the Asian tigers in the 1990s. It is plausible that China has been experiencing the same
illusory growth-from-bad-investment problem. Reports of overinvestment in infrastructure and “ghost cities” are rampant; according to two Chinese government researchers,
the country wasted an estimated $6.8 trillion in “ineffective investment” between 2009 and 2013 alone.99¶ A political explanation would be rooted in the fact that many
emerging markets lack the political and institutional capabilities to sustain continued growth. Daron Acemoğlu and James Robinson argue that modern economies are based on
either “extractive institutions” or “inclusive institutions.”100 Governments based on extractive institutions can generate higher rates of growth than governments without any
effective structures. It is not surprising, for example, that post-Maoist Chinese economic growth has far outstripped Maoist-era rates of growth. Inclusive institutions are open to
a wider array of citizens, and therefore more democratic. Acemoğlu and Robinson argue that economies based on inclusive institutions will outperform those based on
extractive institutions. Inclusive institutions are less likely to be prone to corruption, more able to credibly commit to the rule of law, and more likely to invest in the necessary
public goods for broad-based economic growth. Similarly, Pritchett and Summers conclude that institutional quality has a powerful and long-lasting effect on economic growth—
and that “salient characteristics of China—high levels of state control and corruption along with high measures of authoritarian rule—make a discontinuous decline in growth
even more likely than general experience would suggest.”101¶ A more forward-looking explanation is that the changing nature of manufacturing has badly disrupted the 20th
century pathway for economic development. For decades, the principal blueprint for developing economies to become developed was to specialize in industrial sectors where
low-cost labor offered a comparative advantage. The resulting growth from export promotion would then spill over into upstream and downstream sectors, creating new job-
creating sectors. Globalization, however, has already generated tremendous productivity gains in manufacturing—to the point where industrial sectors do not create the same
amount of employment opportunities that they used to.102 Like agriculture in the developed world, manufacturing has become so productive that it does not need that many
workers. As a result, many developing economies suffer from what Dani Rodrik labels “premature deindustrialization.” If Rodrik is correct, then going forward, manufacturing
will fail to jump-start developing economies into higher growth trajectories—and the political effects that have traditionally come with industrialization will also be stunted.103¶
Both the middle-income trap and the regression to the mean observation are empirical observations about the past. There is no guaranteeing that these empirical regularities
will hold for the future. Indeed, China’s astonishing growth rate over the past 30 years is a direct contradiction of the regression to the mean phenomenon. It is possible that
over time the convergence hypothesis swamps the myriad explanations listed above for continued divergence. But in sketching out the next generation global economy, the
implications of whether regression to the mean will dominate the convergence hypothesis are massive. Looking at China and India alone, the gap in projections between a
continuation of past growth trends and regression to the mean is equivalent to $42 trillion—more than half of global economic output in 2015.104 This gap is significant enough
can have a feedback effect that makes more growth-friendly reforms more difficult to
accomplish. As Chinese economic growth has slowed, Chinese leader Xi Jinping’s economic reform plans
have stalled out in favor of more political repression. Follows the recent playbook of Russian President Vladimir Putin, who
has added diversionary war as another distracting tactic from negative economic growth . Short-
term steps towards political repression will make politically risky steps towards economic reform
that less palatable in the future. Instead, the advanced developing economies seem set to double
down on strategies that yield less economic growth over time .¶ 3. Will geopolitical rivalries or technological innovation alter
the patterns of economic interdependence?¶ Multiple scholars have observed a secular decline in interstate violence in recent decades.105 The Kantian triad of more
democracies, stronger multilateral institutions, and greater levels of cross-border trade is well known. In recent years, international relations theorists have stressed that
commercial interdependence is a bigger driver of this phenomenon than previously thought.106 The liberal logic is straightforward. The benefits of cross-border exchange and
economic interdependence act as a powerful brake on the utility of violence in international politics. The global supply chain and “just in time” delivery systems have further
imbricated national economies into the international system. This creates incentives for governments to preserve an open economy even during times of crisis. The more that a
country’s economy was enmeshed in the global supply chain, for example, the less likely it was to raise tariffs after the 2008 financial crisis.107 Similarly, global financiers are
strongly interested in minimizing political risk; historically, the financial sector has staunchly opposed initiating the use of force in world politics.108 Even militarily powerful
actors must be wary of alienating global capital.¶ Globalization therefore creates powerful pressures on governments not to close off their economies through protectionism or
9|M i c h i g a n G W
military aggression. Interdependence can also tamp down conflicts that would otherwise be likely to break out during a great power transition. Of the 15 times a rising power
has emerged to challenge a ruling power between 1500 and 2000, war broke out 11 times.109 Despite these odds, China’s recent rise to great power status has elevated
tensions without leading to anything approaching war. It could be argued that the Sino-American economic relationship is so deep that it has tamped down the great power
conflict that would otherwise have been in full bloom over the past two decades. Instead, both China and the United States have taken pains to talk about the need for a new
kind of great power relationship. Interdependence can help to reduce the likelihood of an extreme event—such as a great power war—from taking place.¶ Will this be true for
the next generation economy as well? The two other legs of the Kantian triad—democratization and multilateralism—are facing their own problems in the wake of the 2008
financial crisis.110 Economic openness survived the negative shock of the 2008 financial crisis, which suggests that the logic of commercial liberalism will continue to hold with
pacifying effects, arguing that interdependence is not a powerful constraint .111 Other analysts go further,
arguing that globalization exacerbates financial volatility—which in turn can lead to political instability
and violence.112¶ A different counterargument is that the continued growth of interdependence will stall out .
Since 2008, for example, the growth in global trade flows has been muted, and global capital
flows are still considerably smaller than they were in the pre-crisis era . In trade, this reflects a pre-crisis trend.
Between 1950 and 2000, trade grew, on average, more than twice as fast as global economic output. In the 2000s, however, trade only grew about 30 percent more than
output.113 In 2012 and 2013, trade grew less than economic output. The McKinsey Global Institute estimates that global flows as a percentage of output have fallen from 53
While the stock of interdependence remains high, the flow has slowed to
percent in 2007 to 39 percent in 2014.114
a trickle. The Financial Times has suggested that the global economy has hit “peak trade.”115¶ If economic growth continues to outstrip
trade, then the level of interdependence will slowly decline, thereby weakening the liberal constraint
on great power conflicts . And there are several reasons to posit why interdependence might stall out .
One possibility is due to innovations reducing the need for traded goods. For example, in the last decade, higher energy prices in the United States triggered investments into
conservation, alternative forms of energy, and unconventional sources of hydrocarbons. All of these steps reduced the U.S. demand for imported energy. A future in which
compact fusion engines are developed would further reduce the need for imported energy even more.116¶ A more radical possibility is the development of technologies that
reduce the need for physical trade across borders. Digital manufacturing will cause the relocation of production facilities closer to end-user markets, shortening the global supply
chain.117 An even more radical discontinuity would come from the wholesale diffusion of 3-D printing. The ability of a single printer to produce multiple component parts of a
larger manufactured good eliminates the need for a global supply chain. As Richard Baldwin notes, “Supply chain unbundling is driven by a fundamental trade-off between the
gains from specialization and the costs of dispersal. This would be seriously undermined by radical advances in the direction of mass customization and 3D printing by
sophisticated machines…To put it sharply, transmission of data would substitute for transportation of goods.”118 As 3-D printing technology improves, the need for large
interdependence even further.120 Russia and China have territorial and quasi-territorial ambitions
beyond their recognized borders, and the United States has attempted to counter what it sees as
revisionist behavior by both countries. In a low-growth world , it is possible that leaders of either
country would choose to prioritize their nationalist ambitions over economic growth. More generally, it
could be that the expectation of future gains from interdependence—rather than existing levels
of interdependence—constrains great power bellicosity .121 If great powers expect that the future
benefits of international trade and investment will wane, then commercial constraints on
revisionist behavior will lessen . All else equal, this increases the likelihood of great power conflict
going forward.
Extinction
Starr 17 [Steven Starr is the director of the University of Missouri's Clinical Laboratory Science Program, as well as a senior
scientist at the Physicians for Social Responsibility, 1-9-2017, "Turning a Blind Eye Towards Armageddon — U.S. Leaders Reject
Nuclear Winter Studies," FAS, https://fas.org/2017/01/turning-a-blind-eye-towards-armageddon-u-s-leaders-reject-nuclear-winter-
studies]
The detonation of an atomic bomb with this explosive power will instantly ignite fires over a surface area of three to
five square miles. In the recent studies, the scientists calculated that the
blast, fire, and radiation from a war fought with
100 atomic bombs could produce direct fatalities comparable to all of those worldwide in World War
II, or to those once estimated for a “counterforce” nuclear war between the superpowers. However, the long-term
environmental effects of the war could significantly disrupt the global weather for at least a decade,
which would likely result in a vast global famine . The scientists predicted that nuclear firestorms in the
burning cities would cause at least five million tons of black carbon smoke to quickly rise above cloud level into the
stratosphere, where it could not be rained out. The smoke would circle the Earth in less than two weeks and would form a
global stratospheric smoke layer that would remain for more than a decade . The smoke would absorb warming
sunlight , which would heat the smoke to temperatures near the boiling point of water, producing ozone losses of 20 to
10 | M i c h i g a n G W
50 percent over populated areas. This would almost double the amount of UV-B reaching the most populated regions of the mid-
latitudes, and it would create UV-B indices unprecedented in human history. In North America and Central Europe,
the time required to get a painful sunburn at mid-day in June could decrease to as little as six minutes for fair-skinned individuals. As
the smoke layer blocked warming sunlight from reaching the Earth’s surface, it would
produce the cold est average surface
temperatures in the last 1,000 years. The scientists calculated that global food production would decrease by
20 to 40 percent during a five-year period following such a war. Medical experts have predicted that the
shortening of growing seasons and corresponding decreases in agricultural production could
cause up to two billion people to perish from famine. The climatologists also investigated the effects of a
nuclear war fought with the vastly more powerful modern thermonuclear weapons possessed by the United States, Russia, China,
France, and England. Some of the thermonuclear weapons constructed during the 1950s and 1960s were 1,000 times more powerful
than an atomic bomb. During the last 30 years, the average size of thermonuclear or “strategic” nuclear weapons has decreased. Yet
today, each of the approximately 3,540 strategic weapons deployed by the United States and Russia is seven to 80 times more
powerful than the atomic bombs modeled in the India-Pakistan study. The smallest strategic nuclear weapon has an explosive power
of 100,000 tons of TNT, compared to an atomic bomb with an average explosive power of 15,000 tons of TNT. Strategic nuclear
weapons produce much larger nuclear firestorms than do atomic bombs. For example, a standard Russian 800-kiloton warhead, on
an average day, will ignite fires covering a surface area of 90 to 152 square miles. A war fought with hundreds or thousands of U.S.
and Russian strategic nuclear weapons would ignite immense nuclear firestorms covering land surface areas of many
thousands or tens of thousands of square miles. The scientists calculated that these fires would produce up to 180 million tons of
black carbon soot and smoke, which would form a dense, global stratospheric smoke layer. The smoke would remain in the
stratosphere for 10 to 20 years, and it would block as much as 70 percent of sunlight from reaching the surface of the Northern
Hemisphere and 35 percent from the Southern Hemisphere. So much sunlight would be blocked by the smoke that the noonday sun
would resemble a full moon at midnight. Under such conditions, it would only require
a matter of days or weeks for
daily minimum temperatures to fall below freezing in the largest agricultural areas of the Northern
Hemisphere, where freezing temperatures would occur every day for a period of between one to more than two years. Average
surface temperatures would become colder than those experienced 18,000 years ago at the height of the last Ice Age, and the
prolonged cold would cause average rainfall to decrease by up to 90%. Growing
seasons would be completely
eliminated for more than a decade; it would be too cold and dark to grow food crops, which
would doom the majority of the human population . NUCLEAR WINTER IN BRIEF The profound cold and
darkness following nuclear war became known as nuclear winter and was first predicted in 1983 by a group of NASA scientists led by
Carl Sagan. During the mid-1980s, a large body of research was done by such groups as the Scientific Committee on Problems of the
Environment (SCOPE), the World Meteorological Organization, and the U.S. National Research Council of the U.S. National Academy
of Sciences; their work essentially supported the initial findings of the 1983 studies. The idea of nuclear winter, published and
supported by prominent scientists, generated extensive public alarm and put political pressure on the United States and Soviet
Union to reverse a runaway nuclear arms race, which, by 1986, had created a global nuclear arsenal of more than 65,000 nuclear
weapons. Unfortunately, this created a backlash among many powerful military and industrial interests, who undertook an extensive
media campaign to brand nuclear winter as “bad science” and the scientists who discovered it as “irresponsible.” Critics used various
uncertainties in the studies and the first climate models (which are primitive by today’s standards) as a basis to criticize and reject
the concept of nuclear winter. In 1986, the Council on Foreign Relations published an article by scientists from the National Center
for Atmospheric Research, who predicted drops in global cooling about half as large as those first predicted by the 1983 studies and
described this as a “nuclear autumn.” The nuclear autumn studies were later shown to be deeply flawed, but the proof came too
late to stop a massive smear campaign that effectively discredited the initial studies. Nuclear winter was subject to criticism and
damning articles in the Wall Street Journal and Time magazine. In 1987, the National Review called nuclear winter a “fraud.” In 2000,
Discover Magazine published an article that described nuclear winter as one of “The Twenty Greatest Scientific Blunders in History.”
The endless smear campaign was successful; the general public, and even most anti-nuclear activists, were left with the idea that
nuclear winter had been scientifically disproved. REJECTION BY LEADERS Yet the scientists did not give up. In 2006, they returned to
their labs to perform the research I have previously described. Their new research not only upheld the previous findings but also
found that the earlier studies actually underestimated the environmental effects of nuclear war. Dr. Robock of Rutgers and Dr. Toon
of the University of Colorado have spent years attempting to bring official attention to their work and get follow-up research studies
done by appropriate agencies in the federal government. In a recent (2016) interview, Dr. Toon stated: The Department of Energy
and the Department of Defense, which should be investigating this problem, have done absolutely nothing. They have not published
a single paper, in the open literature, analyzing this problem … We have made a list of where we think the important issues are, and
we have gone to every [federal] agency we can think of with these lists, and said “Don’t you think someone should study this?”
Basically, everyone we have tried so far has said, “Well that’s not my job.” In the same interview, Dr. Robock also noted: The
Department of Homeland Security really should fund this. They will fund you to study one terrorist bomb in New York City. When
you explain to them that a war between India and Pakistan is a much greater threat to the U.S. homeland than one terrorist bomb,
as horrible as that is, they respond with “Oh, well that’s not my job, go talk to some other program manager” — who, of course,
doesn’t exist. After the more recent series of studies were published in 2007 and 2008, Drs. Robock and Toon also made a number of
requests to meet with members of the Obama administration. The scientists offered to brief Cabinet members and the White House
staff about their findings, which they assumed would have a great impact upon nuclear weapons policy. Their offers were met with
11 | M i c h i g a n G W
indifference. Finally, after several years of trying, Drs. Robock and Toon were allowed an audience with John Holdren, Senior Advisor
to President Barack Obama on Science and Technology. Dr. Robock also eventually met with Rose Gottemoeller, then Under
Secretary of State for Arms Control and International Security. Dr. Robock has written to me that, after these meetings, he and Dr.
Toon were left with the impression that neither Holdren nor Gottemoeller think the nuclear winter research “is correct.” But it is not
only Holdren and Gottemoeller who reject the nuclear winter research. Greg Mello, of the Los Alamos Study Group, cites a source
who confirms that the group that determines the “full range of activities related to the development, production, maintenance
(upkeep) and elimination (retirement, disassembly and disposal) of all United States nuclear weapons — the members of the U.S.
Nuclear Weapons Council — have stated that “the predictions of nuclear winter were disproved years ago.” The members of the U.S.
Nuclear Weapons Council include: Under Secretary of Defense for Acquisition, Technology, and Logistics Vice Chairman of the Joint
Chiefs of Staff Under Secretary for Nuclear Security of the Department of Energy Under Secretary of Defense for Policy Commander
of the United States Strategic Command It is important to understand that some members of this group — especially the
Commander of the U.S. Strategic Command (USSTRATCOM) — also develop the policies that guide the use of nuclear weapons.
Perhaps General John Hyten, Head of USSTRATCOM, who is in charge of the U.S. nuclear triad, and General Paul Selva, Vice
Chairman of the Joint Chiefs of Staff, the second highest ranking officer in the United States, have never seen or heard of the 21st
century nuclear winter studies. Perhaps when they hear a question about “nuclear winter,” they only remember the smear
campaigns done against the early studies. Or, maybe, they just choose not to accept the new scientific research on nuclear winter,
despite the fact that it has withstood the criticism of the global scientific community. Regardless, the rejection of nuclear winter
research by the top leaders of the United States raises some profoundly important questions: Do U.S. military and political leaders
fully understand the consequences of nuclear war? Do they realize that even a “successful” nuclear first-strike against Russia could
cause most Americans to die from nuclear famine? In 2010, Drs. Toon and Robock wrote in Physics Today: We estimate that the
direct effects of using the 2012 arsenals would lead to hundreds of millions of fatalities. The indirect effects would likely eliminate
the majority of the human population. In 2013, Drs. Toon and Robock wrote in the Bulletin of Atomic Scientists that: A nuclear war
between Russia and the United States, even after the arsenal reductions planned under New START, could produce a nuclear winter.
Hence, an attack by either side could be suicidal, resulting in Self-Assured Destruction. RENEWED COLD WAR Although president-
elect Trump appears to favor a return to the policy of détente with Russia, many if not most U.S. political leaders appear to support
the Obama administration’s policies of direct confrontation with Putin’s Russia. Mainstream corporate media,
including the editorial boards of The New York Times and The Washington Post, routinely engage in anti-Russian and anti-Putin
rhetoric that surpasses the hate speech of the McCarthy era. Under President Obama, the United States has renewed the
Cold War with Russia, with little or no debate or protest, and has subsequently engaged in proxy wars with
Russia in Ukraine and Syria, as well as threatening military action against China in the South
China Sea . In response to what NATO leaders describe as Russia’s “dangerous and aggressive actions,” NATO has built up
a “rapid-response force” of 40,000 troops on the Russian border in the Baltic States and Poland. This
force includes hundreds of tanks, armored vehicles, and heavy artillery. NATO troops stationed in Estonia are within artillery
range of St. Petersburg , the second largest city of Russia. The United States has deployed its Aegis Ashore Ballistic
Missile Defense ( BMD ) system in Romania and is constructing another such BMD system in Poland . The
Mark 41 launch system used in the Aegis Ashore systems can be used to launch a variety of missiles, including
long-range nuclear-armed cruise missiles . In other words, the United States has built and is
building launch sites for nuclear missiles on the Russian border . This fact has been widely reported on
Russian TV and has infuriated the Russian public. In June, Russian President Putin specifically warned that Russia would be
forced to retaliate against this threat. While Russian officials maintain that its actions are normal and routine, Russia now
appears to be preparing for war . On October 5, 2016, Russia conducted a nation-wide civil defense drill
that included 40 million of its people being directed to fallout shelters. Reuters reported two days later that
Russia had moved its Iskander nuclear-capable missiles to Kaliningrad , which borders Poland. While the United
States ignores the danger of nuclear war, Russian scholar Stephen Cohen reports that the danger of war with the United States is the
leading news story in Russia. Cohen states: Just as there is no discussion of the most existential question of our time, in the American
political class — the possibility of war with Russia — it is the only thing being discussed in the Russian political class . . . These are
two different political universes. In Russia, all the discussion in the newspapers, and there is plenty of free discussion on talk show
TV, which echoes what the Kremlin is thinking, online, in the elite newspapers, and in the popular broadcasts, the number 1, 2, 3,
and 4 topics of the day are the possibility of war with the United States. Cohen goes on to say: I conclude from this that the
leadership of Russia actually believes now, in reaction to what the United States and NATO have
said and done over the last two years, and particularly in reaction to the breakdown of the
proposed cooperation in Syria, and the rhetoric coming out of Washington, that war is a real
possibility . I can’t remember when, since the Cuban Missile Crisis, that the Moscow leadership came to this conclusion in its
collective head. Perhaps this narrative will change under president-elect Trump. However, he is inheriting a situation
12 | M i c h i g a n G W
fraught with danger , which retains the possibility of direct military conflict with Russia in
Ukraine and Syria , as well as increasingly militarized confrontation with China in the South China Sea .
national security review regime and reduce retaliation from other countries when its own
enterprises seek to invest in other countries . 115 Indeed, countries may implement their own
national security review programs as retaliation instrument against the protectionism they
experienced in the CFIUS process in the United States . 116 Retaliation will not only tarnish a
country's reputation for openness to foreign investment but also distract the attention of
policymakers from building the infrastructure for a genuine national security review.
FDI is key to China’s clean tech sector – solves air pollution, instability, warming and global
resource conflicts
Chiu 17 (Dominic Chiu was a research intern with the William E. Simon Chair in Political Economy at CSIS. “The East Is Green:
China’s Global Leadership in Renewable Energy.” New Perspectives in Foreign Policy Issue 13, Summer 2017,
https://www.csis.org/east-green-chinas-global-leadership-renewable-energy)
Nevertheless, the international community should be assured that China
is genuinely interested in leading the world
in one particular sector: deployment and investment in renewable energy.8 China is already leading in
renewable energy production figures. It is currently the world’s largest producer of wind and
solar energy,9 and the largest domestic and outbound investor in renewable energy. 10 Four of the
world’s five biggest renewable energy deals were made by Chinese companies in 2016. As of early 2017, China owns five of the
world’s six largest solar-module manufacturing companies and the world’s largest wind turbine manufacturer.11
This article will argue for the case of China’s future leadership in the sector by examining domestic incentives for the Chinese
government to reduce carbon emissions and pollution, China’s ambitious targets in renewable energy investment, the international
community’s consensus on climate change, geopolitical implications of transitioning to renewable energy, and current government
policy towards inbound investment in the sector. In contrast to the United States government’s retreating commitment to the
industry under President Donald Trump,12 China has the political incentive, economic capability, and moral consensus needed to
lead the global renewable energy sector.
China has an urgent domestic incentive to invest in renewable energy
The Chinese government places a priority on investing in renewable energy primarily because it enables the country to
tackle problems of air and water pollution, and mitigate risks of socio-economic instability.
Reducing air pollution is a direct reason why Chinese government promotes renewable energy .
The 2005 National People’s Congress’ (NPC) Environmental Committee observed that fossil fuel energy production and
consumption is the cause of 90 percent of the country’s sulfur dioxide emissions.13 In 2013 Tsinghua
University and the Asian Development Bank reported that 7 out of the 10 most polluted cities in the world are in China.14 Studies
also point to climate change being a contributor to China’s aggravating smog crises.15
The economic and health consequences of air pollution are also well researched. RAND Corporation estimated that air pollution in
2012 cost China $535 billion, or 6.5 percent of its gross domestic product, due to losses in labor productivity.16 A UC Berkeley study
concluded that air pollution led to an estimated 1.6 million deaths a year, roughly 17 percent of all deaths in
the country.17 A University of Chicago report found that suspended particulates is causing half a billion residents in northern China
to lose an average of 5 years of life expectancy.18
The Chinese government places a priority on investing in renewable energy primarily because it enables the country to tackle
problems of air and water pollution, and mitigate risks of socioeconomic instability.
It is hardly a surprise, therefore, to see air pollution ranked as a top concern for people in the country. A 2015 Pew poll found that
air pollution is considered the second largest problem for residents in China, s econd only to the issue of
government corruption.19 However, respondents are much more pessimistic about the prospects for air quality improvement: 34
percent of respondents believe that air pollution will worsen in the next five years, while only 18 percent of respondents believed
that corruption would worsen.
Dissatisfaction engenders unrest. Chen Jiping, a former leading member of the Communist Party’s Committee of Political
and Legislative Affairs, said in 2013 that environmental issues are a major reason for mass protests.20 As
maintaining domestic stability is the Communist Party’s top priority ,21 Premier Li Keqiang highlighted
the need to combat air pollution by developing cleaner sources of energy in multiple State Council and NPC work reports
over the years.22,23
China has ambitious goals in promoting renewable energy
China’s commitment to invest in renewables is borne out by its large potential for further
production and consumption increases. Its 13th Five Year Plan for Electricity (2016-2020) aims to raise non-fossil fuel’s
share of total electricity production from 35 to 39 percent by 2020.24 By 2030, one-fifth of the country’s electricity consumption is
14 | M i c h i g a n G W
forecasted to come from non-fossil fuel sources.25 According to the International Energy Agency, 36 percent and 40 percent of the
world’s growth in solar and wind energy in the next five years will come from China.26 Renewable
energy deployment is
also a part of a larger effort within China to develop an ‘ecological civilization ,’27 a cross-
industrial approach to lower pollution level and fossil fuel use, mitigate climate change, and
improve energy efficiency.28
China’s National Energy Administration (NEA) and the National Development and Reform Commission (NDRC) also plan to spend
more than $360 billion developing renewable energy and creating 13 million jobs in the sector by 2020.29 The country’s renewable
energy workforce far outstrips that of the United States, which in 2016 employed less than 800,000 workers in renewable energy
sector.30 China also leads by investing in a growing number of international renewable energy projects through increasing
contributions to multilateral organizations. For example, the BRICS New Development Bank, of which China is a participant, gave its
first round of long-term green loans worth $811 million last April to fund clean energy projects to its members.31
There are ecological and geopolitical reasons for China’s leadership in renewable energy
Aside from domestic considerations, there are two other reasons why the international community should respond positively to
China’s leadership in the sector. The first is ecological: China’s stated ecological objectives of developing renewable energy are
relatively uncontroversial and widely supported for the positive externality its investments in technology and deployment will bring.
This is because there
is largely a global consensus on the need to reduce greenhouse gas emissions
in order to mitigate the effects of climate change . Pew polls done in 2015 across 40 nations identify climate
change as the top global threat,32 with 79 percent of respondents of one survey saying that their countries should limit greenhouse
gas emissions as part of an international agreement.33 A unanimous decision to sign the Paris Agreement in 2015 is a formal
indication of the international community’s commitment to resolving the challenge of climate change. As the world’s leading emitter
of greenhouse gases,34 China’s transition to renewable electricity production and consumption is
crucial to its international commitment to peak carbon dioxide emissions by 2030. 35
The second reason is strategic: by increasing the proportion of renewable sources in its energy mix for
electricity consumption, China can mitigate geopolitical tensions by making the country less
reliant on unstable regions for energy security. An energy market dependent on fossil fuels
relies on securing oil and gas transportation routes to and from fossil fuel-rich countries, which
in turn requires extended military protection. The protection of oil transit choke points was one
of the reasons why China constructed its first overseas naval base in Djibouti last year .36 In contrast,
the availability of resources such as wind and sunlight for renewable energy far outstrips that of
fossil fuels and is much more evenly spread across different countries. 37
China’s leadership in renewable energy growth will benefit global geopolitics in two ways. Firstly, China will have one less
excuse to expand its regional military presence for the sake of energy security as it raises the
share of domestically-produced renewable energy in its energy mix . Secondly, as renewable energy
usage diffuses globally as an externality from China’s development of the sector, more countries
will have the potential to become energy producers and hence be less dependent on unstable
regions such as MENA and Russia for conventional fossil fuels.
This is not to say that there would be no more geopolitical concerns as a result of a renewable-led world electricity market:
questions on who controls power lines, intellectual property rights for technologies such as energy storage capacity and grid
connectivity, and the availability of raw materials for constructing renewable equipment will still remain.38 China will also most
likely find alternative justifications for expanding its military presence along maritime trade routes. Nevertheless, China’s
leadership in developing renewable technology should be seen and supported by the
international community in the broader context of mitigating both the effects of climate change
and of energy security concerns.
China’s foreign investment environment for renewable energy is evolving
While China has been a leader in market expansion of renewable energy, its openness to foreign
investments in importing foreign renewable technology is more ambiguous. On paper, China
welcomes foreign direct investment into the sector. The Chinese Ministry of Commerce’s 2017 Industry Catalogue
Guiding Foreign Investment lists renewable energy an encouraged area for investment, which would allow foreign investors to
establish wholly-foreign owned enterprises in the country.39 A separate 2016 Catalogue of Encouraged Imported Technology and
Products40 published by the State Council also grants Chinese companies import purchase discounts41 for a variety of wind,
hydroelectric, geothermal, and solar-related technologies and equipment. Ernst & Young consultants last year ranked China as the
world’s second-most attractive country for renewable energy investments, behind the United States.42
In reality however, it is difficult to assess China’s openness to foreign investment into the
industry. U.S. renewable energy companies investing in China worry about intellectual property being appropriated without fair
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compensation, the loss of financial control, and national security.43 These are valid risks to consider when investing in China, but at
the same time evidence is anecdotal and hence difficult to substantiate or to disprove.
What is more certain is that China’s
technological advances in the sector are changing the incentives for
foreign companies to invest in the country . The change takes place in two ways: the first is that other
countries could be left behind technologically if they do not partner with China in developing
renewable technology. Take solar energy as an example: China has been narrowing the gap with western
countries in developing key components of solar panels in recent years.44 Trina, a Chinese company and the
largest solar panel manufacturer in the world, broke the world record on the efficiency of multicrystalline-silicon solar cells in 2014
and 2015.45 As China becomes one of the world’s foremost developers of renewable technology, the
strategic benefits of
investing in China and cooperating with the Chinese in research and development might
outweigh the costs and risks of potential technology thefts.
China’s advances in renewable energy is also changing the nature of foreign investment entering
the sector. The country currently relies mainly on bank loans and corporate bonds for financing
renewable energy projects, which does not necessarily lead to high-quality results. This is
because these traditional methods of financing are more accessible to state-owned enterprises (SOE),
and put private companies –usually more capital efficient 46 than their public counterparts – at a
disadvantage. Private Chinese companies hence not only need more capital but also need access
to more financing channels.
Innovative financing models such as utilizing pension funds, crowd-funding, and direct leasing have already been successfully
China needs these financing
implemented by renewable energy companies and financiers in the United States.47
alternatives that were pioneered and applied in the West,48 which is why the Chinese
government has been attempting to attract foreign financiers to employ these renewable
energy investment techniques in the country through bilateral platforms such as the U.S.-China
Renewable Energy Partnership.49 Both the U.S. Department of Energy and China’s NEA are participants in the partnership to
facilitate cross-border dialogue between companies. Another prominent group involved in the partnership is the American Council
on Renewable Energy, a trade association comprising of various multinationals and investment banks who possess not only the
necessary capital but innovative funding techniques to invest in high-quality renewable energy projects. 50
The evolution of
China’s renewable technology and foreign investment needs thus presents a significant
opportunity for the country to lead the industry by cooperating with foreign investors with more
innovating financing methods to implement in its increasingly sophisticated market.
the HH index of market concentration are consistent with our theoretical expectations. High HH indices signal low levels of
competition within the oil industry and capture the importance of stabilizing a region to prevent or reduce shocks to the market.
Accordingly, the coefficient is positive and statistically significant. Model
C replicates model B but includes an
interaction term by multiplying the amount of reserves in the country at war and the balance of
trade in oil in the intervening country. This allows for the effects of oil dependence for a third party to
vary conditional on the reserves in the conflict state . The balance of trade still affects the
likelihood of intervention, negatively and significantly , but the effect now depends on the
amount of reserves in the country at war. Finally, model D includes a robustness check : if our theory is
correct, then intuitively the quantity of bilateral imports of oil from the conflict state to the potential interveners should also affect
the likelihood of intervention. There is a notable decrease in the number of observations due to missing data on bilateral trade. Yet,
this results
indicate that a dependence on oil from the conflict country increases the willingness
of a third party state to intervene when its supplier is embroiled in a civil war. Note, however, that the
coefficient of bilateral oil import is most certainly con-taminated by two sources of endogeneity, namely omitted variables bias and
reverse causality. The first is a consequence of possible unobserved co-determinants of intervention and trade not included in the
model. The second may arise from causality running both ways, i.e., the intervention may boost bilateral imports. As such, this result
must be interpreted with caution. Finally, Table 4 mimics Table 3 but uses the value of oil trade and reserves by multiplying stock
and flow variables by oil prices. As we can see, the
results are almost identical, but the coefficients are overall
smaller as the multiplied terms have higher values. The impact of oil is larger than many of the
factors stressed in other research on interventions , such as pre/post-Cold War or ethnic ties. Beyond statistical
significance, Figure 2 illustrates the implied substantive effects of our results for model A in Table 4, across differences in the
demand and the supply concerns. The shaded colors indicate how the probability of intervention for a modal dyad varies according
to combinations of the value of reserves (supply side) and the balance of trade in oil (demand side). Both axes range from the
minimum to the maximum values. Higher reserves in the conflict country make interventions more likely, while negative values of
the balance of trade for the interveners (i.e., higher net imports) also make interventions more likely. Although the absolute
probabilities are small as interventions are rare overall, the likelihood of intervention increases by a factor of about 100 from the low
likelihood to a high likelihood scenario. As such, the implied impact of oil in our model is also substantively important, consistent
with our theoretical arguments, and of a magnitude similar to the effects of other features highlighted as important for interventio,
such as ethnic kin. We provide some examples of interventions and non-intervention to illustrate the implications of our findings.
The US for most of the period studied here provides an example at the high end of the oil
dependence spectrum (i.e., high reserves, high demand for oil). Consistent with this we see recurrent US
involvements in the civil wars and internal affairs of Angola from 1975 until the end of the cold war. The US
was the country with the highest demand for oil during this period, and it was known from the
1970s that Angola had oil reserves. Oil in Angola was first discovered in 1955, and many US corporations, like Chevron,
have been operating in the oil-rich Cabinda region for more than fifty years. The US has also intervened in a number
of other countries with proven large oil reserves, such as in Guatemala , Indonesia and the
Philippines over the period covered by our dataset (1945-1999). Likewise, the United Kingdom intervened military
in the Nigerian Civil War, also known as the Biafran War, between 1967 and 1970. During this period the
UK was one of the largest net oil importers in the world , as the North Sea oil production only started in 1975;
the country had also a direct interest in the stability of the region due to the presence of BP in the oil-rich eastern region. It may
seem tempting to attribute UK intervention in Nigeria to ties to its former colony. However, the UK did not intervene in
civil wars in other former colonies which did not have known oil reserves , such as in Sierra Leone and in
Rhodesia (later Zimbabwe). The history of military interventions of the USSR (and later the Russian Federation) is
also consistent with the predictions implied by our oil-centered motivations for third party
interventions by oil-poor countries . Two notable military interventions in oil-rich countries took place in
periods where the oil-production capacity of the USSR was at its infancy: Indonesia in 1958 and
Nigeria (Biafran War) in 1967-68. The 1973 oil crisis encouraged further Soviet intervention in oil-rich Iraq, despite the fact that
USSR exports were growing. Interestingly, subsequent Russian military interventions have mostly been unrelated to the presence of
oil, in line with the Russian Federation gradually becoming a major oil (and gas) exporter. At
the low end of the oil
dependence spectrum we have several examples of nonintervention. Among the top net oil exporters in
the period considered by our study, we have the Gulf Arab States such as Bahrain, Omar, Qatar, Saudi Arabia and the United Arab
Emirates. Over
the period 1945-1999, Saudi Arabia has just intervened once, in 1962, in
neighboring Yemen, which did not have any know oil reserves at the time and started production only in
17 | M i c h i g a n G W
1985. All
the other Arab states of the Persian Gulf have no history of external military
interventions , although they have very high military spending and arguably capable military forces. Other potential
regional powers and major oil-producing countries such as Indonesia and Mexico have likewise
always refrained from intervening in civil wars.
Johan Rockström and colleagues have identified nine planetary boundaries, which “if crossed could have
disastrous consequences for humanity ” (Rockström et al., 2009). Conversely, if the planet is stewarded in a way that
the boundaries are not crossed it is considered to be in a safe space. One of the planetary boundaries entails
atmospheric CO2 , with the proposed boundary being 350 ppm, which of course we have already crossed. While there is no
solid evidence that in fact 350 ppm is a threshold across which existential risk increases, there is little doubt that at
some point greatly elevated CO2 atmospheric concentrations might trigger a series of events
that could indeed produce apocalyptic outcomes for humanity (Van Aalst, 2006). These could
include changing major ocean circulation patterns , causing massive sea level rise , and
increasing the frequency and severity of extreme events (e.g., droughts, storms, floods) that displace
people, and ruin economies .
An Article III court that ensures judicial oversight and balances security and economic
considerations solves politicization
Wang 16 (Yang Wang. J.D. Candidate at the University of Houston Law Center and Chief Articles Editor of the Houston Journal of
International Law. This Comment received the Scott S. Cramer Award for Outstanding Comment in International Transactional Law.
“INCORPORATING THE THIRD BRANCH OF GOVERNMENT INTO U.S. NATIONAL SECURITY REVIEW OF FOREIGN INVESTMENT.” 38
Hous. J. Int'l L. 323, Winter, 2016. LexisNexis)
A wealth of academic writing has criticized the politicization of the CFIUS process and its harm
to foreign investment . 247 [*362] Within the U.S. tripartite government , the framers designed the
federal judiciary to be insulated from political pressure . 248 Thus, judicial review helps cool
down the often-overheated CFIUS process .
Politicization often steers decision makers with emotion rather than fact . 249 Although decision-
making processes in Washington are colored by political influences in varying degrees, CFIUS
review invites more manipulation because the catchy phrases, foreign ownership, and national
security easily grab attention from constituents who may oppose certain foreign investors due
to their particular worldview or self-interest . 250
The opposition to the Dubai Ports Acquisition took advantage of the anti-Arab sentiment after the
attacks of September 11, 2001. 251 Dubai Ports World, a firm based in Dubai, had obtained the CFIUS clearance in its acquisition of
Peninsular and Oriental Steam Navigation Company (P&O), a ports operator owned by a British firm. 252 However, after public
denunciations from Congress, CFIUS came back with a more rigorous review . 253 Senator Frank
Lautenberg (D-NJ) stated: [*363] "Don't let them tell you this is just the transfer of title. Baloney. We wouldn't transfer title to the
Devil; we're not going to transfer title to Dubai." 254 Another congressman's press conference invited families of victims of the
September 11 attacks to appeal to the hearts and minds of the American public. 255 The
saga ended with a Capitol Hill
newsletter titled "House Puts a Bullet in Port Deal's Corpse" and has since cast a shadow on
Gulf States' investments in the United States. 256
A small company's self-interest apparently catalyzed the political controversy. 257 A small firm based in
Miami, Eller & Co., had a long-standing commercial dispute with P&O. 258 In order to increase its leverage in negotiations with P&O,
18 | M i c h i g a n G W
the company lobbied Congress to block the deal; before then, the Dubai World transaction had
received almost no attention on Capitol Hill. 259
Another transaction, CNOOC's proposed acquisition of Unocal, was blocked by a strong anti-China
sentiment in Congress. 260 Other than the fear that "the Chinese are coming, the Chinese are coming," 261 the strong
interest of a domestic company, Chevron Corp., in competing for the bid also fueled the [*364]
sentiment. 262 After a month-long attack by members of Congress, CNOOC withdrew its bid . 263
From a market efficiency standpoint, Chevron's bid of $ 1 billion less than that of the CNOOC's should not
have won. 264
In marked contrast to CNOOC's Waterloo in bidding for Unocal, CNOOC successfully acquired Nexen's assets in the Gulf of Mexico
seven years later. 265 Other than the fact that Nexen's moderate name recognition drew less political attention and that CNOOC
stepped up their political lobbying efforts, no other reason could seemingly explain why the same company succeeded in the Nexen
acquisition but failed in the previous one. 266
the ultimate
CFIUS may keep a better balance between open investment and national security than Congress, 267 but
decision to block or divest a transaction falls to the President . 268 Many observers noted that the rare
presidential order to block the Ralls transaction came at the time when President Obama [*365] was
accused of being too soft on China during the 2012 presidential campaign. 269 Giving the
executive branch unfettered discretion increases the chance that a future protectionist-minded
administration will overzealously block benign transactions . 270 As critics have noted, national
security is susceptible to too many interpretations , and this could easily lead the President to
abuse the CFIUS power and deter foreign investment . 271
Compared to Congress and the President, Article III judges enjoy lifetime tenure and salary
protections, so they are insulated from the motivation to please constituents . 272 Article III directs
that "[t]he judicial Power of the United States[] shall be vested in one supreme Court" 273 and serves to "safeguard litigants' right to
Judicial
have claims decided before judges who are free from potential domination by other branches of government." 274
oversight of the decision-making process is necessary to maintain a cool, balanced approach
in evaluating whether a proposed transaction poses a national security threat . 275
VII. CONCLUSION
CFIUS review of foreign investment was born amid the national sentiment that foreign enemies might take control of key U.S.
industries and that the existing statute, IEEPA, could not adequately protect national security in situations where [*366] declaring a
hostility against the country was improper. 276 Yet, unlike IEEPA, CFIUS'sauthorizing statute, FINSA, granted the
agency and the President unchecked power by precluding judicial review . 277 The no judicial-
review provision is improper when it violates investors' due process rights and could result in
the executive branch's abuse of power. Moreover, courts regularly review antitrust issues, a major
component of the CFIUS review, so the scope of judicial review should extend to the President's
substantive decisions as it does in matters of antitrust regulation.
To balance necessity of judicial review and the sensitivity of national security, this comment
proposes to allow Article III courts to review foreign investors' complaints in camera, or establish a special court
much like the court established by the Foreign Intelligence Surveillance Act ( FISA ). 278 The FISA Court
decides whether to grant warrants related to domestic surveillance in national security
investigations. 279 Just like 'the FISA Court's duty to watch for Fourth Amendment violations, a
similar court could help decide whether national security concerns may warrant the
President's decision in prohibiting, blocking, or divesting a foreign transaction under FINSA.
19 | M i c h i g a n G W
foreign investment opportunities as well as Trojan horses , which will make CFIUS’s screening
role more difficult. In particular, U .S. adversaries will have an incentive to swamp the Committee
with applications because, by requiring the disclosure of unclassified evidence, Ralls II raises
the risk of involuntary disclosure of U.S. intelligence operations .209 In essence, the D.C. Circuit’s
opinion will open the floodgates to all types of foreign investment, while watering down the
executive branch’s ability to monitor such transactions for national security threats.
see nuclear weapons as one option among a spectrum of choices available in deterring or
fighting wars under exigent conditions and as a means of supporting assertive diplomacy and
conventional operations when necessary. Nuclear-strategic parity, as measured by quantitative indicators of
relative strength, may be less important to China than the qualitative use of nuclear and other means
as part of broader diplomatic-military strategies .
Second, China is expanding its portfolio of military preparedness not only in platforms and
weapons but also in the realms of command, control, communications, computers, intelligence,
surveillance, and reconnaissance ( C4ISR ) and information technology . Having observed the US success in
Operation Desert Storm against Iraq in 1991, Chinese military strategists concluded that the informatization of warfare under all
conditions would be a predicate to future deterrence and defense operations.5 As Paul Bracken has noted, the composite
effect of China’s developments is to make its military more agile—meaning, more rapidly
adaptive and flexible.6 The emphasis on agility instead of brute force reinforces traditional Chinese military thinking. Since
Sun Tzu, the acme of skill has been winning without fighting, but if war is unavoidable, delivering the first and decisive
blows is essential. This thinking also stipulates that one should attack the enemy’s strategy and
his alliances, making maximum use of deception and basing such attacks on superior intelligence
and estimation. The combination of improved platforms and command-control and information
warfare should provide options for the selective use of precision fire strikes and cyberattacks
against priority targets while avoiding mass killing and fruitless attacks on enemy strongholds.
Escalation Control
Another characteristic of the Chinese military modernization that is important for nuclear
deterrence and arms control in Asia is the problem of escalation control . Two examples or aspects of this
problem might be cited here. First, improving Chinese capabilities for nuclear deterrence and for
conventional warfighting increases Chinese leaders’ confidence in their ability to carry out an
A2/AD strategy against the United States or another power seeking to block Chinese
expansion in Asia . This confidence might be misplaced in the case of the United States. The
United States is engaged in a “pivot” in its military-strategic planning and deployment to Asia
and, toward that end, is developing US doctrine and supporting force structure for “AirSea Battle”
countermeasures against Chinese A2/AD strategy .
Another problem of escalation control is the question of nuclear crisis management between a
more muscular China and its Asian neighbors or others . During the Cold War era, Asia was a comparative
nuclear weapons backwater, since the attention of US and allied North Atlantic Treaty Organization policy makers and military
strategists was focused on the US-Soviet arms race. However, the world of the twenty-first century is very different. Europe,
notwithstanding recent contretemps in Ukraine, is
a relatively pacified security zone compared to the Middle
East or to South and East Asia, and post–Cold War Asia is marked by five nuclear weapons
states: Russia, China, India, Pakistan, and North Korea . The possibility of a nuclear weapon use ,
growing out of a conventional war between India and Pakistan or China and India, is nontrivial,
and North Korea poses a continuing uncertainty of two sorts . This latter nation might start a
conventional war on the Korean peninsula, or the Kim Jung-un regime might implode, leaving uncertain
the command and control over the nation’s armed forces, including nuclear weapons and
infrastructure.9
The problem of keeping nuclear-armed states below the threshold of first use or containing
escalation afterward was difficult enough to explain within the more simplified Cold War context.
Uncertainties would be even more abundant with respect to escalation control in the
aftermath of a regional Asian war . There is also the possibility of a US Chinese nuclear
incident at sea or a clash over Taiwan escalating into conventional conflict , accompanied by
political misunderstanding and the readying of nuclear forces as a measure of deterrence . The
24 | M i c h i g a n G W
point is US and Chinese forces would not actually have to fire nuclear weapons to use them.
Nuclear weapons would be involved in the conflict from the outset , as offstage reminders that
the two states could stumble into a mutually unintended process of escalation .
An important correction or cautionary note must be introduced at this point. Policy makers and strategists have sometimes talked as
if nuclear weapons always serve to dampen escalation instead of exacerbating it. This might be a valid theoretical perspective under
normal peacetime conditions. However, oncea crisis begins—and especially after shooting has started—the
other face of nuclear danger will appear. Thereafter, reassurance based on the assumption that
nuclear first use is unthinkable may give way to such an attack becoming very thinkable . As
Michael S. Chase has warned, miscalculation in the middle of a crisis is a “particularly troubling
possibility,” heightened by uncertainty about messages the sides are sending to one another
and/or leaders’ overconfidence in their ability to control escalation .
The “Thucydides Trap” and Nuclear Signaling
Chinese decisions about nuclear force modernization will not take place in a political vacuum. One important issue for US-Chinese
strategic planning is whether China and the United States will allow their political relations to fall into the “Thucydides trap,” which
refers to the relationship between a currently leading or hegemonic military power and a rising challenger—as in the competition
between a dominant Athens and a rising Sparta preceding the Peloponnesian War. The Thucydides trap occurs when a leading and
rising power sees their competition as a zero-sum game in which any gain for one side automatically results in a commensurate loss
in power or prestige for the other side. It is neither necessary nor obvious that US-Chinese diplomatic-strategic behavior be driven to
this end. However, China’s challenges in Asia against US or allied Pacific interests might provoke a
regional dispute with the potential to escalate into a more dangerous US-Chinese
confrontation, including resort to nuclear deterrence or threats of nuclear first use .
Even if both Washington and Beijing avoid the Thucydides trap, China has the option of using nuclear weapons for
diplomatic or strategic objectives short of war or explicit nuclear threats. We miss important possibilities
for the political exploitation of nuclear weapons if we confine our analysis of China’s options to threats or acts of nuclear first use or
first strike. The following list includes some of the ways China might signal nuclear weapons use to support its foreign policy in
possible confrontations with the United States or US Asian allies:
• Nuclear tests during a political crisis or confrontation
• Military maneuvers with nuclear-capable missile submarines or naval surface forces
• Generated alert for air defense forces to reinforce declaration of an expanded air defense
identification zone closed to all foreign traffic
• Open acknowledgment of hitherto unannounced—and undetected by foreign intelligence—
long- and intermediate-range missiles based underground in tunnels on moveable or mobile
launchers
• Adoption of a launch-on-warning policy in case of apparent enemy preparations for nuclear
first use
• Cyberattacks against military and critical infrastructure targets in the United States or against a
US ally, including important military and command-control networks in Asia, preceded or
accompanied by movement of forces to improve first-strike survivability against conventional or
nuclear attack
• Relocation of People’s Liberation Army Second Artillery command centers to more protected sites
• Preparation for antisatellite launches against US or other satellites in low earth orbit
• Mobilization of reserves for military units that are nuclear capable • Shake-up of the chain of
command for political or military control of nuclear forces or force components
None of the preceding activities would necessarily be accompanied by explicit threats of nuclear first use or retaliation. Chinese
political and military leaders would expect US intelligence to notice the actions and hope for US
forbearance. China’s expectation might include either a willingness to settle a disagreement based on the status quo or on some
newly acceptable terms. Creative analysts or experienced military and intelligence professionals could expand the preceding list; it is
neither exhaustive nor definitive of China’s options for nuclear-related signaling.
Contrary to some expert opinion, the relationship between China’s ability to exploit its nuclear arsenal for political or military-
deterrent purposes and China’s apparent expertise in cyberwar deserves closer scrutiny. It is true nuclear war and cyberwar inhabit
separate universes in terms of organization, mission, and technology. Moreover, the consequences of a nuclear war would certainly
be more destructive than any cyberwar fought between the same states or coalitions. In addition, deterrence seems easier to apply
25 | M i c h i g a n G W
as a concept to nuclear war, compared to cyberwar. Among other reasons, the problem of attribution in the case of a nuclear attack
is simple compared to the case of a cyberattack.12
Notwithstanding the preceding caveats, in the information age it
is likely that cyber and nuclear worlds will have
overlapping concerns and some mutually supporting technologies . For the foreseeable future,
nuclear-strategic command and control, communications, reconnaissance and surveillance, and
warning systems—unlike those of the Cold War—will be dependent upon the fault tolerance and fidelity
of information networks, hardware and software, and security firewalls and encryption . Therefore,
these systems and their supporting infrastructures are candidate targets in any enemy version
of the US Nuclear Response Plan (formerly Single Integrated Operational Plan). In thinking about this nuclear and cyber
nexus, it becomes useful to distinguish between a state’s planning for a preventive versus a preemptive attack.
During the Cold War, most of the nuclear-deterrence literature was focused on the problem of nuclear preemption, in which a first-
strike nuclear attack would be taken under the assumption that the opponent had already launched its nuclear forces or had made a
decision to do so. On the other hand, preventive nuclear war was defined as a premeditated decision by one state to weaken a
probable future enemy before that second state could pose an unacceptable threat of attack. Most Cold War political leaders and
their military advisors rightly regarded preventive nuclear war as an ethically unacceptable and strategically dysfunctional option.13
In a world in which the day-to-day functioning of military forces and civil society is now
dependent upon the Internet and connectivity, the option of a preventive war with two phases
now presents itself to nuclear-armed states . In the first phase, selective cyberattacks might
disable key parts of the opponent’s nuclear response program —especially nuclear-related
C4ISR. In the second phase, a nuclear threat of first use or first strike might follow against an
enemy partially crippled in its ability to analyze its response options or to order those responses
into prompt effect. If this scenario seems improbable in the context of large states like the United States, Russia, and China
because of their force and command-control diversity and protection, consider how it might work in the context of confrontations
between smaller nuclear armed states, including hypothetical future India-Pakistan or Israel-Iran showdowns.14 Even in the
cases of US conflict with China or Russia (or between China and Russia), nuclear crisis
management would certainly include preparation for possible cyber attacks preceding or
accompanying nuclear first use or first strike.
critical weapon, a
classifying authority would not find it difficult to craft a reasonable argument
that release of a certain document could harm the country’s national security interests.
The result, particularly in light of the broad definition of national security that applies in the CFIUS
process,127 is that the classification system could become overzealous, prohibiting the
development of a more open and accountable society . The conflict between accountability and
security interests is well documented.128 The Ralls decision, however, notably demonstrates that
the debate on this question is not solely between competing ideologies or political factions. In
the matchup between openness and discretion, the headlining pugilists may in fact be the
judicial and executive branches of the federal government . But where the D.C. Circuit Court landed a solid
blow with Ralls, the President failed to counter with the best remaining strategy available to him—an executive privilege claim.129
Over-classification destroys foreign policy coherence – collapses agency coordination and intel
sharing – key to counter terror
Koppuzha 17 (Ann Koppuzha graduated from Berkeley Law in 2015. “SECRETS AND SECURITY: OVERCLASSIFICATION AND CIVIL
LIBERTY IN ADMINISTRATIVE NATIONAL SECURITY DECISIONS .” Albany Law Review, Vol. 80.2 2016/2017,
http://www.albanylawreview.org/Articles/vol80_2/501%20Koppuzha%20Production.pdf)
The classification system can weaken national security by stifling communication within the
government . First, overclassification harms American society because it clutters the national
security information system, making it difficult to find valuable information. Justice Potter Stewart once
noted: “When everything is classified, then nothing is classified, and the system becomes one to
be disregarded by the cynical or the careless, and to be manipulated by those intent on self-
protection or self-promotion.”305
Second, overclassification prevents information sharing between agencies . For example, the second
Iraq War featured at least one instance of an unclassified document that lacked important
classified details but nevertheless influenced the decision to go to war .306 In October 2002, Senator Bob
Graham, then chairman of the Senate Intelligence Committee, asked the CIA for the classified National Intelligence Estimate (“NIE”)
on Iraq’s weapons of mass destruction.307 The CIA provided Graham with the classified ninetypage NIE but Graham also requested
an unclassified white paper that legislators could debate and share publicly.308 The twenty-five page unclassified version was more
assertive and did not contain the nuances that the classified version did.309 The CIA excluded or relegated dissent or precautions to
footnotes.310 This helped the Bush Administration more forcefully argue for the Iraq War and made it less likely that the public and
Congress would have the information necessary to challenge the Bush Administration’s argument.311 If
the CIA had
discussed more of its unknowns in the unclassified version, perhaps Congress would have called
for more information or chosen not to support the war.
Indirectly, excessive classification contributes to a culture of secrecy that fosters inter-agency
rivalries and prevents information sharing .312 President Truman believed that classification
compartmentalized information and kept valuable intelligence away from him .313 The 9/11
Commission Report stated the lack of information sharing contributed to 9/11 because
though the INS had immigration records of al-Qaeda members, and the FBI had classified
information about these individuals as terrorists, the two agencies did not communicate .314
This made it impossible to deport suspected terrorists . More recently during the lead up to the Iraq War, the
Director for Intelligence of the Joint Chiefs of Staff prepared a classified report that bluntly stated the weaknesses of U.S.
intelligence: “Our knowledge of the Iraqi (nuclear) weapons program is based largely—perhaps [ninety percent]—on analysis of
imprecise intelligence. . . . We’ve struggled to estimate the unknowns. . . . We range from [zero percent] to about [seventy-five
percent] knowledge on various aspects of their program.”315 Yet, the Joint Chiefs of Staff only shared this report with former
Defense Secretary Donald Rumsfeld, and did not share the report with the State Department, the CIA, or the National Security
isolated analysis hampers productive foreign policy because it prevents
Council.316 This type of
decision makers from having a comprehensive understanding of U.S. vulnerabilities and
strengths. Perhaps if this report was shared widely with both government executives and the public, Secretary of State Colin
27 | M i c h i g a n G W
the
Powell would not have argued for the war at the United Nations and the war would not have happened. Thus,
classification system can undermine the very thing that it was meant to protect.
Creating a special CFIUS court is the best way to solve – creates certainty and equilibrium
Gent 16 (Will, * J.D. Candidate, University of Oregon School of Law, 2016; Executive Editor, Oregon Law Review, 2015–16; B.A.
Politics and Government, University of Puget Sound, 2012. “Tilting at Windmills: National Security, Foreign Investment, and
Executive Authority in Light of Ralls Corp. v. CFIUS .” OREGON LAW REVIEW [Vol. 94, 2016]
https://law.uoregon.edu/images/uploads/entries/Gent.pdf)
Globalization has made international markets increasingly interdependent, but it has also made
potential security threats more diffuse, proximate, and clandestine . As foreign capital pours
into U.S. assets, there are more opportunities than ever for American adversaries to infiltrate
the nation’s critical infrastructure and spy on its military capabilities. In this context, CFIUS’s role in
identifying national security threats in foreign transactions has taken on a heightened
importance. From port terminals in New York City to green energy development in rural Oregon, the federal government must
assess international mergers and acquisitions for risk. But, as the Ralls Corp.’s attempted purchase of four wind farms demonstrates,
the complexities of international trade can pit the protections of the U.S. Constitution against
the executive branch’s national security prerogatives.
The D.C. Circuit’s opinion in Ralls II, however, fails to adequately address this core conflict. By
creating minimum due process standards for CFIUS review without reference to specific
threats, the Ralls II decision intrudes on presidential authority, yet in a way that makes
additional CFIUS transparency improbable. Rather than allow the judiciary to erode executive
discretion and reflexively lurch from one decision to the next, Congress should create a
special court of national security judges to review foreign transactions . This court would
impartially supervise executive national security assessments in a way that affords due process
to affected parties. In attempting to balance the fundamental tension between liberty and security, a special CFIUS
court is the best way to bring certainty and equilibrium to foreign transactions.
29 | M i c h i g a n G W
Solvency
PLAN!
A specialized Article III court creates the appropriate balance between business certainty and
national security concerns – ensures a fact-specific procedural due process that protects
executive privilege and dissuades espionage while providing an independent judicial that
makes CFIUS accountable and creates investor certainty
Gent 16 (Will, * J.D. Candidate, University of Oregon School of Law, 2016; Executive Editor, Oregon Law Review, 2015–16; B.A.
Politics and Government, University of Puget Sound, 2012. “Tilting at Windmills: National Security, Foreign Investment, and
Executive Authority in Light of Ralls Corp. v. CFIUS .” OREGON LAW REVIEW [Vol. 94, 2016]
https://law.uoregon.edu/images/uploads/entries/Gent.pdf)
traditional Article III courts are the improper forum to review national security
Simply put,
decisions of CFIUS’s magnitude. As argued above, this kind of judicial oversight is unlikely to lead to
concrete improvements in CFIUS’s transparency , but will undermine the executive branch’s
constitutional authority to make national security decisions . There is, however, a way forward.
Rather than subject the United States to unnecessary security risks, Congress should create a
specialized Article III court that can oversee the CFIUS review process . Modeled after the FISC,
the CFIUS court could independently review classified national security evidence and tailor
procedural safeguards to the intricacies of a specific foreign transaction .218 In this way, the CFIUS
court could defer to the national security determinations of the President, while still providing
foreign investors with the requisite amount of due process.
In 1978, Congress passed the Foreign Intelligence Surveillance Act (FISA),219 in order to, amongst other things, provide judicial
supervision of warrantless wiretaps.220 FISA created the FISC, which exclusively authorizes national security-related electronic
surveillance.221 FISC was intended to provide judicial review of electronic surveillance in a way that could protect basic civil liberties
while also allowing for the kind of flexible executive discretion that is necessary in national security decisions.222
FISC is composed of eleven U.S. district court judges, who are appointed by the Chief Justice.223 The government applies to FISC for
electronic surveillance warrants, which a FISC judge reviews in highly-secure hearings.224 If the Attorney General signs a sworn
affidavit stating that an adversarial hearing would harm U.S. national security, this hearing is conducted in camera and ex parte.225
Under the standards laid out in FISA, a FISC judge determines whether electronic surveillance is justified.226 Any appeals from the
denial of a warrant go to a three-judge panel of federal appellate judges, also designated by the Chief Justice.227
Pursuant to Congressional action, a
CFIUS court could easily be modeled after the FISC . First, the Chief Justice
could appoint a pool of federal judges who are experts in national security law to the CFIUS court, much like FISC. If
CFIUS
chose to initiate an independent review, both the Committee and the affected company could
submit their initial briefing and evidence—including the government’s classified intelligence
evidence—to the CFIUS court . The court could then review the relevant evidence and conduct
a fact-specific procedural due process analysis based on the parties’ filings. After determining
the size of the of the CFIUS applicant’s property interest, as well as the magnitude of any
national security threats posed by the application, the CFIUS court could tailor a hearing that
would properly balance these two interests . For example, the CFIUS court could turn over classified
pieces of evidence to the applicant if the applicant’s interest in reviewing that evidence
exceeded the government’s national security reason for keeping it secret. The CFIUS court could
also devise a hearing for the two parties, and then decide whether to uphold or reverse
CFIUS’s recommendation that the President veto a particular transaction.
Creating a special Article III CFIUS court would preserve presidential war powers and still
allow for executive discretion in matters of national security . Because the court would
evaluate the specific national security threat posed by a transaction, the executive branch would
not be pigeonholed into providing blanket procedural protections across the board. Instead,
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CFIUS would retain the flexibility to adjust its review process based on the magnitude of a
particular threat. Although the CFIUS court would conduct an independent analysis of a national security threat, this analysis
would be largely deferential to the executive branch. Moreover, the CFIUS court could protect vulnerable U.S.
strategic assets . By highly scrutinizing a company’s application materials, the court could deter adversarial
shell companies from applying and could smoke out illegitimate enterprises . Finally, by
carefully screening government evidence before turning it over to the other side, the CFIUS
court could prevent the inadvertent disclosure of sensitive information .
Additionally, to the extent that CFIUS is plagued with opacity, a special court would depoliticize the CFIUS
process and restore transparency to national security reviews . Independent judicial
supervision would make CFIUS review more predictable , thus decreasing the uncertainty that
can surround foreign investments. By taking the CFIUS review process out of the sole purview of
the executive branch , a special court could also help the Committee avoid the political theater
of decisions like DP World. Furthermore, by tailoring a fact-specific hearing, the CFIUS court could
ensure that applicants receive meaningful due process and access to all relevant, non-
sensitive evidence . Each of these steps would improve investors’ perception of CFIUS by
making the Committee more accountable.
A CFIUS court, modeled after the FISC, is the best hope to balance foreign-owned property interests
with U.S. national security. As the Ralls saga illustrates , the CFIUS system is currently in a state
of judicial limbo , which tarnishes the investment credibility of the U nited S tates while also
subjecting American strategic assets to serious risks . Although further exploration is needed, an
independent Article III court could provide parties with the judicial review and constitutional
protections they need, without sacrificing national security.
.
.
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Plan
The United States federal government should establish judicial restrictions on the executive
power of the president by establishing an independent Article III court, modeled after the
Foreign Intelligence Surveillance Court, to review foreign investment determinations by the
Committee on Foreign Investment in the United States.
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2ac
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Oil
Oil prices are high now
Beals 3/19 Rachel Koning, "Oil prices extend climb to multimonth highs as OPEC supply appears in check,"
https://www.marketwatch.com/story/oil-prices-extend-climb-to-multimonth-highs-as-opec-supply-appears-in-check-2019-03-19
Oil prices extended their climb to multimonth highs in Tuesday action, buoyed further by
expectations major global producers outside the U.S. will hold back output.
U.S.-traded prices on Monday scored their highest finish since November, as OPEC and its allies
looked set to continue their crude production cuts u ntil June.
Early Tuesday, April West Texas Intermediate crude CLJ9, +0.10% added 32 cents, or 0.5%, to $59.41 a barrel. The contract settled at
$59.09 Monday on the New York Mercantile Exchange — the highest finish since Nov. 12, according to Dow Jones Market Data. WTI
tallied a weekly gain of about 4.4% based on the most-active contracts last week.
May Brent crude LCOK9, +0.22% added 56 cents, or 0.8%, to $68.10 a barrel on ICE Futures Europe.
“Oilprices have risen by over 25% since the start of 2019 as output cuts by OPEC+ and
involuntary cuts by Iran and Venezuela have prompted fears about supply ,” said Caroline Bain, chief
commodities economist with Capital Economics. “However, given our forecast of weak growth in demand, we think the oil market is
still amply supplied.”
2ac CO2 Ag
The 97 percent consensus is real, their authors are hacks
Abraham 2016 - professor of thermal sciences University of St. Thomas School of Engineering
John, "Fossil fuel funded report denies the expert global warming consensus," Feb 22, www.theguardian.com/environment/climate-
consensus-97-per-cent/2016/feb/22/fossil-fuel-funded-report-denies-the-expert-global-warming-consensus
We all know about the various organizations that fund or support the climate-change denial industry. Perhaps the best known is the
Heartland Institute, which actually puts on climate “conferences” and publishes materials that appear at first glance to be
scientifically sound. We who work and follow the climate change science and public discussions know enough to be skeptical about
anything produced by groups like the Heartland Institute – their veneer of scientific credibility is very thin. On the other hand,
perhaps the intended audience isn’t scientists are even people who closely follow the science. Perhaps their intended audience is
legislators, teachers, and others who have influence over society? With this as a backdrop, I received a copy of a humorous report
from an elected official in the USA. The report was entitled “Why Scientists Disagree about Global Warming,” published by
Heartland. Since elected officials have too much going on to do a thorough debunking, I looked into this report to see what
substance was there. As a scientist, when I read any manuscript I ask a number of questions. Who wrote it and what is their
expertise in the field? When statements and conclusions are made, what is the evidence? How do these conclusions fit into prior
work in the field? Is the new study confirming prior work or in conflict with it? If there is conflict, why? The authors of this
manuscript are Craig Idso, the late Robert Carter, and Fred Singer. These three are
not exactly (or even nearly) a trio of
reputable climate scientists. According to a literature search performed using the search engine SCOPUS, neither
Idso nor Singer published a credible paper on global climate change or its implications in
years. One way to measure the authors’ impact is by counting how many people have read and
cited their work. For both of these authors, the number of people who have cited them is shockingly
low. To put their impact in perspective, a scientist like Kevin Trenberth receives three times more
citations each year than the combined citations of Singer and Idso in their entire careers. So, having
these guys be lead author on a climate change document is a bit like hiring retired scientists or op-ed writers to do your research.
But just because they are not active and reputable scientists, could they be correct? Sure, they could be. So let’s look at the content.
The central theme of this manuscript is an attack against the expert consensus on human-
caused global warming. The consensus refers to the very strong and repeatable measure of
what scientists think about climate change . What do the best scientists say? It turns out multiple groups
have measured the consensus. The measurements have been done many different ways, all
leading to the same conclusion – the consensus is strong. Not only is the consensus strong, contrarian scientists
are less talented than those in the consensus. They publish less on the subject, and peer review
has found the work of most high-profile contrarians to be faulty. So, on the one hand, you have
approximately 97% of the best scientists in agreement , and on the other hand, you have about 3%
of the less-talented scientists in dissent . Dr. Naomi Oreskes conducted the first major study that
looked at consensus more than a decade ago. Dr. Oreskes examined the abstracts of hundreds of
papers and found that they strongly confirmed the human influence on climate . In fact, she found no
papers that dissented. The Heartland publication falsely calls Dr. Oreskes a “non-scientist.” In fact her scientific impact measured by
citations is approximately four times that of the combination of Idso and Singer. Instead, they try to refute her with references to
think-tank non-reviewed publications and websites. Peter Doran
and Margaret Zimmerman performed the second
major consensus study in 2009. This was the first peer-reviewed study that quantified that 97%
agreement among climate scientists. The authors accessed a large database of Earth scientists and created a secure
polling system to ask about their level of agreement. The authors broke the scientists into groups based on whether climate change
was their field of study and whether they published a majority of their papers in that field. Approximately 10% of the respondents
were in the most expert category. There were a series of questions for the respondents and a very strong consensus that
temperatures had increased and humans were the cause. The Heartland Institute falsely claimed that the survey was only two
questions, and their sole reference used to rebut the paper was an article in the National Post. William Anderegg and his
colleagues completed the third major measure of consensus in 2010. They created a database of the most prominent climate
scientists by searching the scientific literature for papers and citations. They found that only 2% of the experts were
36 | M i c h i g a n G W
unconvinced on the extent of human impact. Importantly, the contrarian scientists were found to
publish less and publish less impactful studies – simply put, the best scientists agreed. How does the Heartland
document counter this study? They claimed that the mainstream scientists are “hyper productive.” They even accuse these scientists
by saying “It is unlikely these scientists actually participated in most of the experiments or research contain in the articles bearing
their name.” Next, they point out that the contrarians tend to be older and retired. I wouldn’t disagree with either of their
conclusions. The 97% of scientists that agree are more productive and younger than those who disagree. The references that the
Heartland uses to support its conclusions are from its own website, from the Wall Street Journal, and other non-scientific outlets.
Not very convincing. The Heartland document finally attacks the 2013 study by John
Cook and colleagues of the
scientific literature. The authors examined over 12,000 abstracts and found that among those
taking a position, less than 3% rejected or minimized human-induced climate change. Among the
abstracts that gave a position, 97% were in agreement. Just like before, in response to this the Heartland document cites no peer-
reviewed scientific sources — just think-tank literature, websites, and blog posts. What was surprising was that the Heartland report
actually cited a consensus in favor of their viewpoint. The article “Scientists’ Views about Attribution of Global Warming” was
published in 2014. The authors found a strong correlation of expertise with recognition that humans are a cause of climate change.
For instance, for scientists who have published more than 10 papers on the topic, there is a 90% consensus that human influences
dominate. I could go on, but you get the point. What we see is that it doesn’t matter how you measure the consensus. Whether you
ask the scientists, whether you read the papers, or whether you trawl the literature in other ways. The results are reinforcing, which
why we know there is such a strong consensus. While I won’t spend too much time on the scientifically incorrect or misleading
statements in the Heartland report, I will mention a few. In chapter 4, they claim that a doubling of carbon dioxide would result in
approximately 1°C warming. They neglected to remind the readers that we have nearly already reached that and we are nowhere
near doubling of carbon dioxide yet. The report claims that meteorological observations are consistent with a climate sensitivity of
1°C but they provide no support for this assertion and in fact, the research does not support this. The report falsely claims that
climate models assume all the warming since the industrial revolution is from carbon dioxide. Climate models include many factors
in addition to carbon dioxide. The report also falsely claims that models do not attempt to simulate internal climate oscillations. They
claim that thawing of permafrost is not likely to emit dangerous methane, which will add to the warming, but they give no evidence
to support their claim. This
is what happens when you have a fossil fuel-funded political organization
parade a document as a scientific publication. You get nonsense and non-science. This is why we
should be skeptical of anything published by an advocacy organization such as Heartland. Fortunately, we are used to their
nonsense.
Warming swamps the benefits of CO2, cutting food production by 10 percent and locking in
price spikes
McDonnel 2016- citing a 2016 Nature paper about warming and crop production
Tim, "Climate change could have a bigger impact on developed countries' food systems," Jan 6, grist.org/article/climate-change-
could-have-a-bigger-impact-on-developed-countries-food-systems/
For billions of people around the world, the most immediate threat posed by climate change is at the
dinner table, as staple crops face a steadily worsening onslaught of drought, heatwaves, and
other extreme weather events. The United States certainly isn’t immune to these challenges; for proof, just look at
California, where an unprecedented drought has cost the state’s agriculture industry billions. Still,
the conventional thinking among many scientists is that developing countries, particularly in sub-Saharan Africa and
Southeast Asia — where people are typically hit harder by food price spikes and generally more reliant on
agriculture as a primary source of income — are the most vulnerable to food-related climate impacts. A
paper published today in Nature may add a wrinkle to that assumption . Scientists often track the impact
that an individual weather disaster has on crops (again, see California), but the new research takes it a step further. A
team of scientists from Canada and the United Kingdom compiled the first-ever global tally of
how weather disasters over past 50 years cut into production of staple cereals. After merging a
database of global weather records with a United Nations record of country-level crop production, the researchers found that, as a
rule of thumb, droughts and heatwaves typically cut a country’s cereal production by 10 percent .
That basically accords with predictions from the United Nations’ Intergovernmental Panel on Climate Change’s predictions for
agricultural vulnerability in the future. But unexpectedly, the researchers also found that the impacts were 8 to 11 percent more
severe in developed countries than in developing ones. “That was a surprise to us,” said Navin Ramankutty, an agricultural
geographer at the University of British Columbia. Ramankutty said it’s not yet clear why droughts and heatwaves tend to hit yields in
the United States, Europe, and Australia harder than those in Asia, Africa, and Latin America. But he suspects that it relates to how
farmers set their priorities. In developed countries, the emphasis is often on maximizing profit with big monoculture farms that work
great in good climates but get trashed when the weather turns sour. Farmers in developing countries, by contrast, may prioritize
minimizing their risk, taking a smaller yield in exchange for better resilience. Of course, these findings don’t mean developing
37 | M i c h i g a n G W
countries are out of harm’s way. They still face major challenges from climate change, since comparatively small yield losses can
have an outsized impact on local economies and food security. But Ramankutty says the
new research shows that even
in the developed world, farmers may be more at risk from climate change than anyone
previously realized.
Even if they win CO2 helps plants – The negative effects outweigh
Abrams 15 - Reporter for SALON environmental section (Lindsay Abrams, 5/22/2015, "Scientists destroy another climate denier
myth: Rising CO2 levels aren't good for plants"
www.salon.com/2015/05/22/scientists_destroy_another_climate_denier_myth_rising_co2_levels_arent_good_for_plants/)
Plants need carbon dioxide to grow. Humans are emitting the stuff into the atmosphere in
excess. Therefore, humans are helping plants. So goes one of the more long-lived arguments put
forward by people who deny the reality of man-made climate change — an who attempt to turn the CO2 –
> global warming –> bad narrative on its head. The Heartland Institute, most recently, made it the focal point
of a campaign asserting that CO2 is actually good for human and environmental health . There are
already a number of flaws in this line of reasoning, but new research from Montana State University illustrates
how, in reality, the benefits of added CO2 can’t necessarily compete with the harmful
downsides of a changed climate. The study, published last week in the journal Nature
Communication, examines one Montana meadow over 44 years — a period during which
atmospheric carbon dioxide concentrations increased by about 75 ppm (they were 20 percent lower
when the study started, in 1969, than they were when it ended in 2012). At the same time, the greater Yellowstone
climate became more arid — and the grasslands’ productivity, by the study’s end, had
decreased by half. “Our long-term results of declining grassland production contrast with the
results of some models and short-term experiments,” study coauthor Jack Brookshire explained in a statement.
“We find that increasing dryness over the last several decades is outpacing any potential growth
stimulation from increasing atmospheric carbon dioxide and nitrogen deposition.” In other words, as
the Daily Climate explains, studies that look solely at carbon’s direct impact on plants through fertilization, and even at the benefits
conferred by slightly warmer temperatures, fail to take the entire picture into account. Factors like altered rainfall, that occur as a
result of climate change, can cancel out the positives, as they do here. Might
some plants, in some regions, still
benefits in a warmer climate? Sure. But that’s a long way from saying that continuing to pump
CO2 into our atmosphere will be, in the aggregate, anything but a disaster.
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2ac SO2
Dimming crushes economies and causes droughts
Ramanathan et al 2016 - Distinguished Professor of Atmospheric and Climate Sciences at the Scripps Institution of
Oceanography at the University of California, San Diego
Veerabhadran, Jessica Seddon, and David Victor, "The Next Front on Climate Change," Foreign Affairs March/April
ACT FAST As governments build on what they achieved at the Paris climate conference, they must set politically feasible targets for
future action. Focusing on aerosols could help. Whereas greenhouse gas emissions will bring about relatively distant and diffuse
dangers, aerosols cause immediate and localized harm . That should raise the incentives for governments to act
against them, and it should raise the willingness of their constituencies to accept such action. Indeed, in the case of aerosol
reductions, the parochial interests that have so often stymied broader climate diplomacy need not hinder progress. That is why
some countries that have long been reluctant to do much about global pollution—from China and India to Brazil and the United
States—have pursued bolder policies when it comes to pollutants that have localized effects, such as aerosols. As states sharpen
their pledges to reduce greenhouse gas emissions in the coming years, they should also make distinct pledges to cut aerosols. (So
far, few states have done so: of the 186 emissions-reduction pledges submitted before the Paris climate conference, only a handful,
including Chile’s and Mexico’s, mentioned aerosols.) And they should broadcast the promise of these reductions to build public
support for the policies needed to achieve them. As such policies take hold, they will generate rapid, tangible benefits, encouraging
even more progress on the changing climate’s other challenges. Unfortunately, even
the most effective climate
diplomacy will leave the world’s poorest states exposed to the higher temperatures, rising sea
levels, and disruptions in rainfall caused by industrial pollution. As a result, governments will have to work to
adapt. Today, the countries with the highest emissions—among them, China, Japan, the United States, and the members of the
European Union—are on track to raise around $100 billion per year by 2020, much of which will be used to help vulnerable states
adjust to the dangers of a changing climate. As for how to spend these funds, a variety of efforts will be needed, and states should
be willing to experiment to determine which programs work best, sharing the know-how they gain with one another. As they do so,
they should invest in infrastructure and technologies that address the effects of both warming and dimming, such as irrigation
methods that can better protect farmers from erratic rainfall and new kinds of drought-resistant crops. Indeed, innovation in water-
conservation technologies remains massively underfunded, despite their huge promise. Finally, governments should remove
protectionist policies in their countries’ agricultural sectors, which limit the ability of consumers to access foreign sources of food
when erratic rainfall and higher temperatures harm local production. The
dimming caused by aerosols has already
made the world’s water supplies less secure. It is both economically and technologically feasible
to reverse this process. Doing so will require a concerted global effort, but failing to do so will compound the
risks of drought and poverty already in store as a result of the world’s changing climate .
Science isn’t on their side – new research proves that increased aerosols heat the climate, not
cool
Schuttenhelm 16 – Earth Sciences communication specialist Science writer specialised in Geosciences, Biosciences, resources,
energy, demography Involved in scientific debate concerning geoengineering and other large-scale climate mitigation options Over
2007-2009 involved (media reporting, NGO activities) in political process towards COP15 and the new UN Climate Treaty Written
1500+ news articles on climate change (Rolf Schuttenhelm, 3/23/16, bits of science, Real Global Temperature Trend, part 3 – Global
Dimming declining, but could still mask 50 percent of CO2 warming(!), http://www.bitsofscience.org/real-global-temperature-trend-
global-dimming-still-masks-50-percent-co2-warming-6990/)//A-Sharma
Amidst a storm of climate records here at Bits of Science we’re searching for ‘The Real Global Temperature Trend’. Today is part
three of the series – the second episode about ‘Global Dimming‘. Although
worldwide aerosol pollution is slowly
declining (see the first graph of this article, below), it could still mask about half of the actual
global warming temperature trend, a publication in Nature from 2007 suggests – that looked at
the 3D temperature effects of the ‘Asian Brown Cloud‘.
We took a proper look at aerosols in our previous article, that focused on the role of sulpur dioxide pollution, SO2. SO2 is a general
climate cooler, because it is light-coloured, therefore reflects sunlight. It is also acts as a condensation nucleus helping to create or
alter clouds. Again SO2′s effects are cooling: water droplets in clouds become smaller, therefore the clouds become ‘whiter’ and also
more reflective. Also increased water condensation lowers air humidity, the concentration of water as a gas, which is a powerful
greenhouse gas.
But if we look at the reality of aerosol emissions sulphur particles are only part of the story .
Equally interesting is plane old soot – airborne black carbon. Black carbon aerosols have a rather
39 | M i c h i g a n G W
more complex climatic influence: being dark-coloured they reflect very little sunlight, and are
net energy absorbers.
So what is the general influence of an atmosphere with a mix of sulphur and carbon aerosols? Like the one in South Asia, that covers
much of the Indian subcontinent, a result of a combination of (incomplete) combustion of fossil fuels (oil and coal) and biomass
(wood, for cooking), and generally referred to as the Asian Brown Cloud – or in climatology, the ‘Atmospheric Brown Cloud’ (ABC).
The Nature authors write that their climate models show a net
Well, it’s an interesting picture.
warming effect of the Asian Brown Cloud , at the atmospheric altitude where aerosol concentration is highest
(approximately 3 kilometers up in the troposphere). Although both reflective and absorbing aerosols have a
dimming effect – effectively lowering solar radiation at Earth’s surface – higher up in the
atmosphere the brown cloud amplifies the greenhouse gas warming:
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Pakistan Scenario
Climate change threatens Pakistan collapse – migration, water wars, and ecological collapse
Nazar ’16 – PR and Communication Professional in global politics at Fate Softworks, graduate of University of Karachi; “Pakistan’s
Big Threat Isn’t Terrorism—It’s Climate Change”; Sualiha; 3/4/16; foreignpolicy.com/2016/03/04/pakistans-big-threat-isnt-terrorism-
its-climate-change/; 6/19/16; mbc)
For decades, Pakistan has struggled to manage urgent crises, ranging from infrastructure woes
to terrorism. While its policies focus on short-term conventional threats , a potentially
devastating danger lurks in the shadows: climate change . As the impact of global warming
continues to grow, the political and economic instability it brings will threaten Pakistan’s
security. The Pakistani government must prioritize its response to climate change in order to mitigate environmental threats and prevent future
calamities. Much like the government, the Pakistani public finds it difficult to prioritize climate change when the average citizen is deprived of life’s
most basic necessities. For the population, immediate and clear hazards to their livelihood trump long-term, still largely invisible threats. In 2007-2008,
a Gallup poll found that only 34 percent of Pakistanis were aware of climate change, and only 24 percent considered it a serious threat. However, this
perception is changing as global warming starts to impact everyday life. Over
the past several years, Pakistanis have
witnessed, firsthand, the devastating effects of climate change . Catastrophic floods displaced
millions, and severe droughts in Thar and Balochistan portend the damage global warming can
cause. The frequency of those floods has increased over the last five years, due to melting
glaciers and heavy rainfall. Karachi, Pakistan’s most populous metropolitan city, suffered a heat wave so severe it claimed the lives of
almost 1,200 people. These recent disasters could account for the change in public opinion from the 2007-2008 Gallup poll to the situation in 2015,
when Pakistan joined the list of 19 countries where the majority of the population now considers climate change a top global threat. Perhaps the
biggest security threat facing Pakistan today is the possibility of climate change and
environmental factors destabilizing Karachi, which is regarded as the country’s economic
backbone. With a population of approximately 17 million people, the city attracts almost a
million migrants every year due to its vast pool of employment opportunities , per a report by Express
Tribune. It is also Pakistan’s main port city, and accounts for 42 percent of its total GDP. It generates about half of Pakistan’s tax revenue, and houses its
stock exchange, central bank, and the priciest real estate in the country, according to the CEO of real estate portal Zameen.com. Karachi is also close
to the Indus River Delta, where the Indus flows into the Arabian Sea. Due to rising sea levels, the
delta is now almost at-level with the Arabian Sea. This threatens the stability of the ecosystem
because it leads to land erosion and increases the salinity of creeks flowing from the Indus,
creating an inhospitable environment for aquatic creatures and mangrove trees that depend on
fresh water. Sea intrusion can cause temporary and permanent flooding to large land areas,
negatively impacting local ecosystems and fresh water supplies that villagers rely on for food
security and drinking water. The repercussions of climate change are exacerbated when
combined with man-made modifications that have a drastic effect on the overall ecosystem. It
not only upsets the balance of the environment, but also increases susceptibility to natural
disasters like cyclones and tsunamis . Alarmingly, the area of Pakistan that is covered by mangrove forests has decreased from
400,000 hectares in 1945 to 70,000 hectares today due to land grabbing, rising sea levels, and the decreasing flow of fresh water into the sea.
According to the World Wildlife Federation (WWF), the mangrove trees play a critical role in buffering the coastline from erosion caused by waves and
storms. In an interview with me in January, Dr. Asif Inam of the National Institute of Oceanography (NIO) said, “Mangrove trees cannot stop cyclones
and tsunamis. Instead, they act as the first line of defense against these natural calamities, minimizing their damage.” Once home to a dense mangrove
forest essential to the sustenance of the delta, 205 acres have been razed to make way for several coal-fired power plants. With the mangroves gone,
the Karachi coastline is now more prone to natural disasters such as cyclones and tsunamis. Last year, the United Nations conducted a drill simulating a
major earthquake in the Indian Ocean. The exercise was based on a hypothetical 9.0 magnitude quake in the Makran Trench, where the Arabian and
Eurasian tectonic plates meet off the coast of Pakistan, which could trigger a catastrophic tsunami. Tauseef Alam, the chief meteorologist who
As the
supervised the tests, warned that the disastrous tsunami waves could reach Karachi in one and a half hours and “wipe out the entire city.”
sea line creeps closer to the city limits because of land erosion resulting from Mangrove tree
deforestation, the danger to Karachi’s population increases. In 2014, the United Nations released an assessment of
what would happen to Karachi if it faced another Tsunami like the one it faced in 1945 that claimed the lives of almost 4,000 people. So far, no tangible
evacuation plan exists, despite efforts to implement an early warning system to prepare the city’s residents in case of an emergency. An additional
strain to Karachi’s stability is the Port Qasim Power Project, part of the China-Pakistan Economic Corridor program, currently in development along the
coastline of the Arabian Sea. Though created to alleviate Pakistan’s energy crisis, the project has wreaked havoc on the lives of people in close
proximity to it, and damaged one of Pakistan’s most critical ecosystems. Many Pakistanis living along the coastal belt rely on the ecosystem’s stability
41 | M i c h i g a n G W
for their livelihood, to farm and fish. Changes in the ecosystem, caused both by manmade developments and climate change, have displaced as many
as 80 percent of the five million Pakistanis who once lived along the banks of the Delta. Climate-induced
migration has spread
across much of Pakistan, as droughts, floods, and sea intrusion disrupt local communities. With
sea levels rising, there is also an increased chance of trans-boundary migration . According to a report by
Dawn, sea level rise is expected to produce 35-40 million climate refugees. These Pakistani refugees will have no
place to go: migration to India will not be possible because of the tense political history between the nations, and Bangladesh will not be able to absorb
the vast number of refugees as it suffers from its own low-lying coastal belt. Dr. Inam of the NIO agrees that the danger is imminent unless drastic
actions are taken. “Time for Karachi is quickly running out,” he said. “Some parts of Karachi’s Malir have already gone under water. And with the
current rate of climate change, the economic hub of Pakistan has 35 to 45 years before it completely submerges into the Arabian Sea.” K arachi’s
stability is critical to Pakistan’s security . As climate change increases the intensity of natural
disasters and threatens economic stability, the fate of the metropolis could shape that of the
entire country. Pakistan runs on an agrarian economy. From 1949 to 1950, Pakistan’s agriculture sector was responsible for 53 percent of the
total GDP. By 1980 to 1981, this number had dropped to 31 percent; in recent years, it has fallen even further to 21.4 percent. Among other factors,
experts blame the drop on increased floods and droughts. The decrease in agricultural contributions to national GDP have stunted the economic
growth of the country. According to leading economist Ishrat Husain, the economy grew by 2.9 percent per annum in the last five years, but it could
have exceeded a projected rate of 6.5 percent if flooding had not caused economic and human losses. According
to a report
published by the U.S. Department of Defense, “climate change will exacerbate global instability,
posing an immediate threat to national security.” Among other factors, the report identified
strained water supplies due to melting glaciers as a factor that could trigger instability. Pakistan ranks
as the sixth-most populous country in the world, and is already unable to meet the growing water demand. The flooding and droughts destroy billions
of dollars’ worth of crops every year, increasing the rates of inflation and unemployment. In addition to the water shortage, the long-term damage to
fields and crops will lead to food scarcity. If this trend continues, Pakistan will be unable to meet the demands of its
population, which is growing by nearly 2 percent each year. It is imperative that Pakistan makes climate change a
priority. Failure to do so would jeopardize the country’s national security. Where water and food shortage catalyze s civil
unrest and conflicts, it will also hinder the government’s ability to properly manage its
resources. Currently, Pakistan has allocated 58.8 million rupees to combat climate change, a commitment that must be increased. Since Pakistan
is not financially secure enough to afford climate change implementation programs on its own, it needs assistance from foreign entities as well as
climate change experts who can design comprehensive programs, bearing in mind the government’s limitations.
42 | M i c h i g a n G W
Readiness
No reverse causal IL
Igor Volsky 8, contributing writer @ NYT, “NYT Blogger: No Health Care For You! Because It Would Undermine Military
Recruitment.” ThinkProgress. May 30th, 2008. https://thinkprogress.org/nyt-blogger-no-health-care-for-you-because-it-would-
undermine-military-recruitment-102bc4cf8511/
In today’s New York Times, blogger Floyd Norris suggests that universal health care reform
would reduce military recruitment rates by undermining the military’s generous health benefit incentive: A significant
factor for many recruits, it turns out, is the military’s generous health benefits for dependants…It seems a bit perverse that the
incentives for a young person with children to join are greater than the incentives for his childless friend. But that is the way it is. All
that could change if the push for some kind of national health insurance program were to be successful. The notion that Americans
Norris’
should be deprived of health insurance for national security purposes is both perverse and illogical. In fact,
implication, which suggests that the government must maintain a disparity between civilian and
military entitlements, overstates the financial benefit of enlisting and contradicts the needs of
the military . Few Americans cash-in from their military service. “The Department of Defense
estimates that its employees take a $20,000-per-year pay-and-benefits hit relative to civilians
the same age throughout their careers.” Moreover, according to Christopher Jehn, former U.S.
assistant secretary of defense for force management and personnel, soldiers who are forced
into service weaken the military ’s capabilities . Second, because service members are all volunteers, the military
has far fewer discipline problems, greater experience (because of less turnover) and thus, more capability. Based on this experience,
U.S. military leaders today are thoroughly convinced that a return to the draft could only weaken the armed forces. This is why,
when students at the Naval Postgraduate School (mainly U.S. military officers), are asked whether they would like to return to the
draft, there are few takers. As one put it, “Why would I want to be in charge of people who don’t want to be there?”
No readiness impact
John Mueller 16, Woody Hayes Senior Research Scientist, Mershon Center for International Security Studies; Adjunct Professor,
Department of Political Science, Ohio State University, 6/5/16, “Embracing Threatlessness: US Military Spending, Newt Gingrich, and
the Costa Rica Option,” http://politicalscience.osu.edu/faculty/jmueller/CNArestraintCato16.pdf
The U nited S tates seems to be substantially free from threats that require a great deal of military
preparedness .
To begin with, it really seems time to consider the consequences of the fact that a conflict like World War II is
extremely unlikely to recur. Spending a lot of money for an eventuality—or fantasy—of ever-receding likelihood is highly
questionable. Some envision threat in China’s rapidly-increasing prosperity. But, although its oft-stated desire to
incorporate (or re-incorporate) Taiwan into its territory should be watched, armed conflict would be extremely—even
overwhelmingly—costly to the country. And Chinese leaders , already rattled by internal difficulties, seem to
realize this . Russia’s recent assertiveness bears watching, but it does not suggest that the game has
been crucially changed. It might make sense to maintain a containment and deterrent capacity against
rogue states in formal or informal coalition with other concerned countries. However, the military requirements
for the task are limited . Humanitarian intervention with military force is unlikely due to a low
tolerance for casualties in such ventures, an increasing aversion to the costs of nation-building, and the lack of political gain from
successful ventures. Concern about nuclear proliferation is overwrought: long experience suggests that when
countries obtain the weapons, they “use” them only to stoke their national ego and to deter real or imagined threats. Europe
seems to face
no notable threats of a military nature , the Taiwan/China issue remains a fairly remote
concern, and Israel’s primary problems derive from the actions of sub-state groups. The military
relevance of the terrorism “threat” has been substantially exaggerated, and it mainly calls for policing and
intelligence work and perhaps for occasional focused strikes by small units.
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Lack of a new process for dealing with CFIUS suits ensures inevitable constitutional
showdowns – the aff resolves that
Fitzpatrick 16 (Christopher M. Fitzpatrick, B.A. International Studies, Boston College, 2013; Candidate for J.D. Cornell Law
School, 2016; Senior Online Editor, Cornell Law Review, “WHERE RALLS WENT WRONG: CFIUS, THE COURTS, AND THE BALANCE OF
LIBERTY AND SECURITY.” CORNELL LAW REVIEW [Vol. 101, 2016] http://cornelllawreview.org/files/2016/05/Fitzpatricknotefinal.pdf)
A deceptively obvious solution to the Ralls problems is the President’s executive privilege;
however, that option is far from ideal. An executive privilege claim is an assertion “of a constitutional right to withhold
information from Congress, the courts, or persons or agencies,” which is derived from Article II.130 Though The Federalist Papers
suggest that Hamilton and Jay supported this privilege, not all of the founders agreed.131 Nevertheless, executive privilege has
played a vital role in the American presidency, taking on particular importance in the post-World War II world.132
Executive privilege involves two broader forms of privilege: the state secrets privilege and the official information privilege.133 The
former “arises only when secret military or diplomatic information is sought,” whereas the latter applies more broadly, “based on
the theory that optimal efficiency in the governmental decision-making process depends upon a free flow of ideas, and frank
discussion.”134 As the Supreme Court has made clear, however, there is not “an absolute, unqualified Presidential privilege of
immunity from judicial process under all circumstances.”135 Notably, a privilege claim does not itself end the matter. Instead, the
claim must be brought before a court, which has the power to rule on it and decide whether the privilege will apply.136
The President’s information about CFIUS investigations should fit into both forms of the executive privilege. Courts
take
seriously the responsibility to protect national security secrets;137 consequently, the state
secrets privilege must apply in Ralls where the President determines that release of the information could impact
diplomatic relations with China, a geopolitical rival. Furthermore, “communications made by presidential advisers in the course of
preparing advice for the President come under the presidential communications privilege.”138 As a result, courts should not be able
to release documents that informed (and therefore might suggest the content of) such presidential communication.
The immediate problem is that the President chose not to meaningfully take this route .139 Without
access to the documents that he released and those that he withheld, there is no standard by which to gauge the potential impact of
a more exacting executive privilege claim in the Ralls case. Nevertheless, the precedent that the President set by releasing such a
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vast amount of information is problematic because it represents a surrender to the judiciary’s interference in the CFIUS process. Had
the President made a broader executive privilege claim, the D.C. District Court might have resolved the case in favor of the
executive. Although that would have been the best option remaining to the President after losing on statutory bar and justiciability
grounds, this method of resolution presents broader issues.
First, closing
this matter by means of executive privilege creates the possibility for significant
public controversy. CFIUS will undoubtedly face a similar scenario in the future , and it is
inadvisable to create a constitutional showdown between the President and the courts each
time it does. This public spectacle could spiral into greater scandal if the President were to
disregard a court order to release documents so that a higher court could review that order. As
the Supreme Court recognized,
[t]o require a President of the United States to place himself in the posture of disobeying an order of a court merely to trigger the
procedural mechanism for review of the ruling would be unseemly, and would present an unnecessary occasion for constitutional
confrontation between two branches of the Government.140
A situation like this could shake public confidence in the American justice system and place the
executive’s decision-making process in jeopardy.
Additionally, resolution of this issue on executive privilege grounds would create a bureaucratic and
unnecessary system of litigation with no real chance of changing the ultimate result , because the
final decision that the President makes about a CFIUS-covered transaction is not reviewable.141 The case-bycase litigation,
which would largely avoid the more important justiciability questions, would improperly involve
the judiciary at the expense of judicial efficiency, executive time, and taxpayer money.
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T
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2ac
Restrict means a limiting condition- not just prohibition – only our interp is in the context of
trade
Espa 15 (Ilaria, Assistant Professor of International Economic Law at USI Lugano, Senior Research Fellow and Lecturer at the
World Trade Institute and at the University of Milan. Formerly awarded a Marie Curie fellowship from the European Commission for
her post-doctoral studies, Ilaria was a member of the NCCR Trade Regulation Programme from 2013 until 2017, in addition to acting
as Scientific Coordinator of the WTI Doctoral Programme. She holds a PhD in International Law and Economics from the Department
of Legal Studies of Bocconi University and was a visiting scholar at Columbia Law School in 2012. She also holds a BA in Political
Science and an MA in International Relations from Luiss University, Export Restrictions on Critical Minerals and Metals, pg. 170-171)
A consistent body of WTO case law has broadly interpreted the term 'restrictions' to cover a wide
range of measures not solely including measures that may be considered formal quantitative restrictions, such as quotas,
but also a whole variety of means that can have a limiting effect on trade, that is, the effect of reducing the Volume
of imports or exports. In India-Quantitative Restrictions, the Panel posited that 'the scope of the term "restriction" is
broad, as seen in its ordinary meaning, which is "a limitation on action, a limiting condition or
regulation'".' In India- Autos, the Panel endorsed this interpretation and further elaborated on the meaning of the term
'restrictions': On a plain reading, it is clear that a 'restriction' need not be a blanket prohibition or a
precise numerical limit. Indeed, the term 'restriction' cannot mean merely 'prohibition' on importation, since Article XI:l
expressly covers both 'prohibition and restriction'. Furthermore, the Panel considers that the expression 'limiting condition'
used in India- Quantitative Restrictions to define the term 'restriction' and which this Panel endorses, is helpful in identifying the
scope of the notion in the context of the facts before it. That phrase suggests the need to identify
not merely a
condition placed on importation, but a condition that is limiting, i.e. that has a limiting effect. In the context of Article
XI, that limiting effect must be on importation itself.' It inferred that 'any form of limitation imposed on, or in relation to importation
constitutes a restriction on importation within the meaning of Article XI:1'.3 In Col0mbz'a-Ports of Entry, the Panel further clarified
that the term 'restrictions' in the sense contemplated by Article XI:1 encompasses 'measures that create uncertainties and affect
investment plans, restrict market access for imports, or make importation prohibitively costly'.4 In China-Raw Materials, the
Panel further added that any measure having 'the very potential to limit trade constitute[s] a "restriction" within the meaning of
Art. XI:1 of the GATT 1994'.5
ESR
CFIUS reviews are statutorily mandated now---politicization means Congress has historically
responded to executive restrictions with harsher investigative requirements
Deeley 14 (Hunter Deeley, Senior Note and Comment Editor, American University Business Law Review, Volume 4; J.D.
Candidate May 2015, American University Washington College of Law; B.A. Foreign Affairs, May 2008, University of Virginia. “The
Expanding Reach Of The Executive In Foreign Direct Investment: How Ralls v. CFIUS Will Alter The FDI Landscape In The United
States.” American University Business Law Review Volume 4 | Issue 1 Article 2 2014.
https://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?
referer=https://www.google.com/&httpsredir=1&article=1060&context=aublr)
For much of its early life, the Committee embraced its limited role .33 The Treasury Department, prior to CFIUS's first
meeting, commissioned a study to look at policy implications of the growing level of FDI within U.S. borders. 34 Among the key issues addressed were whether recent OPEC
investments within the U.S. could impact U.S. foreign and domestic policy, and whether regulations in place at the time could address concerns over "undesirable behavior by
foreign investors or undesirable foreign investment."35 From the beginning, the Committee recognized the impact on public perception caused by reviews of specific
transactions. 36 The Committee also noted that it never intended to review transactions as a matter of course simply because the proposed deal involved a foreign government
or a company in the defense sector. 3 7 Accordingly, the Committee only met six times over the first four years of its existence.38 It was not until the late 1980s that a
growing concern among members of Congress pushed the Committee into uncharted territory .39
Prior to this point, the Committee continually touted the importance of the Executive's policy toward open investment in the United States and pointed to other regulatory tools
capable of addressing concerns related to controversial FDIs.4 o In the event a proposed transaction caused legitimate concerns, the Justice Department could block it on
antitrust grounds; the Department of Defense could sever sensitive contracts or withhold security clearances from the foreign acquirer; and the Department of Commerce could
provision to the Defense Production Act.42 Congress gave the President the authority, which it presumably wished the Executive had back when President Ford issued
Executive Order No. 11858 in 1975. The amendment granted the President the power to take "such action for such time as the President considers appropriate to suspend or
Reagan delegated
prohibit any covered transaction that threatens to impair the national security of the United States."43 That same year, President
administration of the authority vested in the President under Exon-Florio to CFIUS.44 After thirteen years,
CFIUS finally had statutory power to suspend or prohibit, by recommendation to the President, a deal which
threatened national security. 45 It was a power the Committee previously felt was unnecessary
and now felt should not expand.46 Congress disagreed. B. Unwanted Empowerment In May 1992, Senator Robert Byrd
criticized what he believed to be CFIUS inaction under Exon-Florio .47 He introduced S. 2704 "to prevent any foreign
person from purchasing or otherwise acquiring the LTV Aerospace and Defense Co." 48 He argued the proposed sale of the company's missile division to a French company
Byrd succeeded in
amounted to "the French Government nationaliz[ing]" the United States' defense industry. 49 While the proposed legislation failed, Senator
passing a later version requiring CFIUS to investigate proposed deals when "the acquirer is
controlled by or acting on behalf of a foreign government ; and the acquisition results in the control of a person engaged in
interstate commerce in the United States that could affect the national security of the United States ."5 o It was the
first time the Committee was required to investigate a proposed deal. C. Dubai and FINSA From 1992 until
December 2007, CFIUS investigated twenty-four potential deals out of 1,176 notifications filed with the Committee.5 ' Its decision not to investigate the
acquisition of the Peninsula and Oriental Steamship Navigation Company ("P&O") by Dubai Ports (" DP") World, however, drew harsh
Congressional criticism spurring further changes . 52 CFIUS took the 30-day review period to look into DP World's acquisition of U.K.
based P&O, a company operating many of the ports in the United States. 3 It ultimately decided not to investigate the deal, finding
that although DP World was a state-backed company, it posed no unresolved threat to national
security.54 President George W. Bush, in another attempt by the Executive to preempt legislative action, instituted a policy leaving open the opportunity for CFIUS to
review previously closed transactions for national security purposes. 5 However, Congress acted the following year to pass the Foreign
Investment and National Security Act of 2007, commonly known as FINSA.s' FINSA represented the latest legislative "fix" to CFIUS and ushered in the regulatory process
facing overseas investors today.57 FINSA left in place many of the past Congressional adjustments under the Exon-Florio amendment; however, it also
empowered the Committee by broadening definitions and extending the Committee's reach into
new industries. 8 FINSA widened the definition of "national security" to include homeland
security and inserted a new "trigger" for when the Committee must investigate: when a deal
will result in foreign "control of any critical infrastructure ." 59 Furthermore, Congress ordered the Director of
National Intelligence ("DNI") to conduct his own analysis of any potential threats to national security posed
by a covered transaction.60
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regulator and data-collector . The Congressional Research Service’s James Jackson reports, for example, that CFIUS met only 10 times
between 1975 and 1980, and “seemed unable to decide whether it should respond to the political or the economic aspects of foreign direct investment
in the United States.”7 In Congressional testimony, a CFIUS critic lectured that The Committee has been reduced over the last four years to a body that
only responds to the political aspects or the political questions that foreign investment in the United States poses and not with what we really want to
know about foreign investments in the United States, that is: Is it good for the economy?8 In reviewing legislative history of foreign investment
regulation, one would be mistaken to try to separate the economic from the political; the
history of CFIUS has always been a
series of political reactions to political and economic concerns . CFIUS has been tool for dealing
with the insecurities brought about by globalization , rather than merely a tool to enforce
domestic security through the regulation of the sale of sensitive technology to foreign investors.
Put in current context, CFIUS is a vehicle to express discontent with the flow of technology to China, but
perhaps just as much, what some Americans (not least, the one occupying the White House) perceive as the flow
of jobs, prestige and power to China. CFIUS is not just a shield against these forces, however; it also a sword that
can be used to pursue executive political prerogatives, and, in particular, can force other countries
into a defensive, political posture .
Only the aff can ensure a combination of due process protections and transparency to
investors
Josselyn 14 (Amy S. Josselyn, George Mason University School of Law, J.D. Candidate, May 2015; Editor-in-Chief, GEORGE
MASON LAW REVIEW, 2014-2015; Georgetown University, M.A., Security Studies, 2004; Florida State University, B.S./B.A., Political
Science/Spanish, 1998. “NATIONAL SECURITY AT ALL COSTS: WHY THE CFIUS REVIEW PROCESS MAY HAVE OVERREACHED ITS
PURPOSE.” GEO. MASON L. REV. [VOL. 21:5, 2014]. http://www.georgemasonlawreview.org/wp-
content/uploads/2014/11/Josselyn1.pdf)
The due process construct adopted by the D.C. Circuit Court of Appeals provides a much clearer
standard in terms of what process is due in the context of a CFIUS review. However, even if a court were to apply
the Mathews balancing test to future CFIUS challenges, there are opportunities to do so that would allow for a
more meaningful review of the government interests at stake, as well as whether providing
additional transparency to foreign investors would provide value while still protecting national
security concerns. This type of judicial review, which would likely involve the selective release of
classified information to judges, is not without precedent. The Foreign Intelligence Surveillance Court (“FISC”)
is comprised of federal district court judges who review warrants related to domestic
surveillance in national security investigations.277 The FISC is mandated by statute to review the
substance of these warrants to prevent executive branch abuses.278 A similar special court could
be established to review the considerations involved in CFIUS determinations, not in terms of whether
the president’s actions were valid, but for whether the parties involved should be notified of the rationale
used or afforded another type of procedural protection .
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Infra
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The Senate on Wednesday again rebuked President Trump for his continued defense of Saudi Arabia
after the killing of the dissident journalist Jamal Khashoggi, voting for a second time to end American military
assistance for the kingdom’s war in Yemen and to curtail presidential war powers.
The 54-to-46 vote, condemning a nearly four-year conflict in Yemen that has killed thousands of civilians
and inflicted a devastating famine, sets the foundation for what could become Mr. Trump’s first
presidential veto, with the House expected to overwhelmingly pass the measure , possibly this
month. The vote also might be the opening salvo in a week where Senate Republicans have the
opportunity to hit back at the president’s aggressive use of executive power . On Thursday,
the chamber will vote on a resolution that would overturn Mr. Trump’s declaration of a
national emergency to secure funding for his border wall.
“The United States Congress is going to reassert its constitutional responsibility over issues of war
that have been abdicated for presidents, Democrats and Republicans, for too many years,” said Senator Bernie
Sanders, independent of Vermont.
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White House aides on Tuesday did not discount the notion that vague demands and proposals from the president have
caused bipartisan confusion before. But they said there is agreement within the administration that this is
the best approach at this time.
With Democrats now controlling the House committees that would be a part of negotiations about an infrastructure overhaul bill,
White House officials must determine just what could pass those panels — and then a final vote on the floor.
“The president wants Congress to come together and craft a bipartisan infrastructure package that rebuilds crumbling infrastructure,
invests in the projects and industries of tomorrow, and promotes permitting efficiency. The president looks forward to working with
members of Congress in the weeks ahead to come to a solution for the American people,” White House Deputy Press Secretary Judd
Deere said in an email.
Senate Majority Leader Mitch McConnell used his floor remarks Tuesday as the chamber came into session to tout the budget
request for its “important goals like the continued rebuilding of our military, keeping up the fight against opioid abuse, and
addressing the ongoing security and humanitarian crisis at our southern border.” He did not mention the infrastructure plan.
A key House Democratic chairman also raised concerns about the details-free infrastructure
plan , saying it “falls short” of what’s needed. He also raised questions about whether the
White House is poised to negotiate in a manner that can lead to an actual deal.
“I think the significance of it is as we enter into negotiations on spending levels for 2020 and 2021, we are so far apart on
our priorities that it makes — we have to wonder whether the White House is going to be a
serious negotiator . That’s disturbing,” House Budget Chairman John Yarmuth of Kentucky said during a meeting with
reporters.
The White House did blast out a fact sheet during the Feb. 5 State of the Union address about Trump’s desire for a
bill. But it, too, was vague, listing no specific priority projects , relying on statements like “repairing and building
new infrastructure will reduce traffic congestion” and “mastering new technologies such as 5G wireless, advanced manufacturing,
quantum computing, artificial intelligence [and] rural broadband.”
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adds little to the models' predictive power . There is more spread in the predictions for the remaining two outcome
categories. Puzzlingly, the model without food production performs better in both cases—i.e., the
Receiver Operating Characteristics curves have higher 'Area Under the Curve' scores. We hesitate to put too much emphasis on the
ROC tests, given the rareness of the outcomes (notably Models 17 and 26) and the relatively small training samples (Models 20 and
23), but nonetheless the patterns observed in the out-of-sample simulations substantiate the regression results reported above;
fluctuations in agricultural output explain little of the observed variation in political violence in post-colonial Sub-Saharan Africa.
5. Concluding remarks
Emerging evidence suggests that food price shocks are associated with an increase in social unrest
(Smith 2014, Bellemare 2015, Hendrix and Haggard 2015, Weinberg and Bakker 2015). Yet, the robust 'non-finding' presented here
implies that so-called 'food riots' play out largely isolated from climate-sensitive production dynamics in the affected countries.
Likewise, claims that adverse weather and harvest failure drive contemporary violence in Africa (e.g., Hsiang et al
2013, IFPRI 2015) are not supported by our analysis . Instead , social protest and rebellion during
times of food price spikes may be better understood as reactions to poor and unjust
government policies , corruption, repression, and market failure (e.g., Bush 2010, Buhaug and Urdal 2013, Sneyd et al 2013,
Chenoweth and Ulfelder 2015).