Israel's 'sigh of relief' over sanctions pursuit

Massimo Calibrisi's long account of conflict and partial rapprochement between Obama and Netanyahu, this parting tidbit caught my eye:

On Iran, Obama's latest push for sanctions has Israelis breathing a sigh of relief that his promises to get tough on Tehran's nuclear program are not just for show.

To what extent does palliating Israel explain the Obama Administration's curt rebuff of the nuclear fuel swap deal with Iran brokered by Brazil and Turkey  --  whose presidents claim that Obama encouraged them to pursue the negotiation?

Trouble with China as Euro depreciates?

Michael Pettis sees trouble for the U.S. and a heightening of international tension in the depreciation of the Euro and China's corresponding likely reluctance to let the yuan appreciate as much as recently anticipated:

Most policymakers around the world – while publicly excoriating the US for its spendthrift habits – are intentionally or unintentionally putting into place polices that require even greater US trade deficits.

This cannot be expected to happen without a great deal of anger and resistance in the US.  The idea that suffering countries should regain growth by exporting more to the world, and that rapidly growing surplus countries should not absorb much of this burden, will only force the US into even greater deficits as US unemployment rises to reduce unemployment pressure in Europe, China, Japan and elsewhere.

I would be surprised if the US accepted this with equanimity.  On the contrary, I expect it will only exacerbate trade tensions and ensure that next year the dispute will become nastier than ever.

On the (implicit) plus side, Pettis notes (quoting Bloomberg, in italics below) that the U.S. has natural allies in the developing world vis-a-vis the trade surplus of China at least:

[India’s Finance Minister, Pranab] Mukherjee, who served as the foreign and defense minister in Prime Minister Manmohan Singh’s cabinet before being appointed as the finance minister, is under pressure from local exporters to use the Group of 20 platform to campaign against China’s currency policy.

As Mukherjee’s comments suggest, pressure continues growing from a number of countries, especially in Asia, for a Chinese revaluation, and for a while it seemed pretty obvious that China was going to begin revaluing very soon.

The Obama Administration has indicated a readiness to multilateralize its efforts to get the Chinese to take measures to reduce their trade surplus.  We're going to need all the allies we can get. On that front, perhaps the patronizing dismissal of Brazil and Turkey's brokerage of a fuel swap deal with Iran was not the most long-sighted of diplomatic maneuvers.

Parsi, Sick, and Cohen lament in concert as U.S. spurns fuel deal

As the drama of Iran's election and post-election resistance movement unfolded last year, I came to appreciate the blogs of Gary Sick and Scott Lucas - the latter, Enduring America. deploying an array of Iranian and Iranian-American voices and other analysts along with Lucas. * Both blogs did a good job mapping out the extent to which the Revolutionary Guard, in concert with (or in increasing control of) religious hardliners, had effected a militarist takeover of key ministries and industries during the Ahmadinejad era.   Both, at the same time, offered long-term perspective on the missed opportunities between the U.S. and Iranian governments, whose interests potentially converged on several fronts over the last two decades.  The New York Times' Roger Cohen, while perhaps somewhat too credulous about the benign intentions of the Iranian government prior to the stolen election of last June, basically shared these perspectives.

In the past week, as the Obama Administration spurned the fuel swap deal with Iran brokered by Turkey and Brazil -- with U.S. encouragement, they claim -- those who have seen potential in wide-angle negotiations between the U.S. and Iran have writhed in frustration. These include Cohen, Sick and National Iranian American Council president Trita Parsi, whose ABC news was reposted on Enduring America. Their arguments overlap, and mutually reinforce, e.g., that the new agreement preserved the essential features of the original deal (albeit at a point at which Iran has had another eight months to process fuel -- the 1200 kilograms to be removed from Iran now represents 55% rather than 70% of its stock, according to the U.S); that the Administration's chief grounds for rejecting the deal -- Iran's insistence that it would continue to enrich uranium -- was not a condition of the original agreement; and that spurning Brazil and Turkey sets back the new multilateralism that Obama seemed last year to embrace.  Behold their shared agony: