Foreign Policy Update – USA Gov Policy

FOREIGN POLICY UPDATE

June 21, 2019

INTERNATIONAL RELIGIOUS FREEDOM

The State Department released its 2018 Report on International Religious Freedom on June 21, 2019. According to Ambassador at Large for International Religious Freedom, Sam Brownback, 80% of the world still lives in areas where religious freedom is under attack. He pointed out that: “Iran has one of the worst records on religious freedom in the world and continues to show a blatant disregard for protecting individuals’ religious freedom.”

“Countless members of Iranian religious minorities, including Baha’is, Christians, Jews, Zoroastrians, and Sunni and Sufi Muslims, face discrimination, harassment, and unjust imprisonment because of their beliefs. Their religious books are banned. They are denied access to education. Their cemeteries are desecrated. Blasphemy and proselytization of Muslims is punishable by death.”

Last year, he said, the Iranian regime violently cracked down on the peaceful protest of Gonabadi Sufi dervishes in what Human Rights Watch called “one of the largest crackdowns against a religious minority in Iran in a decade.” He reaffirmed the United States always will stand up for religious freedom.

INDIA

Secretary of State Michael Pompeo is traveling to India to meet with Prime Minister Modi and his new counterpart, Minister of External Affairs Jaishankar to accelerate the relationship and to set additional goals. A senior State Department official briefing the media noted that Jaishankar is “really one of the visionaries behind the expansion of the U.S.-India Strategic Partnership.”

According to the senior official, India has stopped its importation of Iranian oil, with an exception for humanitarian relief supplies to Afghanistan. The United States has worked to increase its crude oil production to ensure its partners have a staple supply in recent months.

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The Trump Administration views India as a critical component to its Indo-Pacific strategy. Washington is encouraging India, and other US allies, with respect to the S-400, to forego transactions with Russia, according to the senior official. He also pointed out that the “administration has taken great steps to enhance our military interoperability with India, to finalize groundbreaking enabling agreements that allow us to do more together militarily, and has also taken steps to enhance the quality and quantity of our defense technology relations.”

The Trump Administration also has taken the unprecedented step of offering the armed UAV Sea Guardian to India, the first non-treaty partner to be offered that high technology. The US eased the process and granted India Strategic Trade Authorization Tier-1 status that gives them the same license-free access to defense articles as Washington’s NATO allies, Japan, South Korea, and Australia.

TRAFFICKING IN PERSONS

Secretary of State Pompeo released a new Trafficking in Persons Report this week commending those countries that have taken action to stop the abuse of human traffickers. He noted that nations like Senegal, as well as Mongolia, the Philippines, Tajikistan, and others have improved conditions but also called out those nations that aren’t doing enough.

Tier 3 designations – the lowest possible designation – were given once again to China, Iran, North Korea, Russia, Syria, and Venezuela, among others. The Secretary noted that a few countries, including Cuba, were added to the Tier 3 list. In some case, the governments allow human traffickers to run free or are human traffickers themselves. In North Korea, the government subjects its own citizens to forced labor both at home and abroad and then uses proceeds to fund nefarious activities. According to the report, in China, authorities have detained more than a million members of ethnically Muslim minority groups in internment camps. Many, it states, are forced to produce garments, carpets, cleaning supplies, and other goods for domestic sale.

DARIA NOVAK served in the United States State Department during the Reagan Administration, and currently is on the Board of the American Analysis of News and Media Inc., which publishes usagovpolicy.com and the New York Analysis of Policy and Government. Each Saturday, she presents key updates on U.S. foreign policy from the State Department.

Illustration: Pixabay

Quick Analysis

Federal Reserve Report on the Economy

The Beige Book is a Federal Reserve System publication about current economic conditions across the 12 Federal Reserve Districts. It characterizes regional economic conditions and prospects based on a variety of mostly qualitative information, gathered directly from each District’s sources. The latest edition has just been released. We present key portions of the summary here. Overall Economic Activity Overall economic activity expanded slightly, on balance, since late February. Ten out of twelve Districts experienced either slight or modest economic growth—up from eight in the previous report, while the other two reported no changes in activity. Consumer spending barely increased overall, but reports were quite mixed across Districts and spending categories. Several reports mentioned weakness in discretionary spending, as consumers’ price sensitivity remained elevated. Auto spending was buoyed notably in some Districts by improved inventories and dealer incentives, but sales remained sluggish in other Districts. Tourism activity increased modestly, on average, but reports varied widely. Manufacturing activity declined slightly, as only three Districts reported growth in that sector. Contacts reported slight increases in nonfinancial services activity, on average, and bank lending was roughly flat overall. Residential construction increased a little, on average, and home sales strengthened in most Districts. In contrast, nonresidential construction was flat, and commercial real estate leasing fell slightly. The economic outlook among contacts was cautiously optimistic, on balance. Labor Markets Employment rose at a slight pace overall, with nine Districts reporting very slow to modest increases, and the remaining three Districts reporting no changes in employment. Most Districts noted increases in labor supply and in the quality of job applicants. Several Districts reported improved retention of employees, and others pointed to staff reductions at some firms. Despite the improvements in labor supply, many Districts described persistent shortages of qualified applicants for certain positions, including machinists, trades workers, and hospitality workers. Wages grew at a moderate pace in eight Districts, with the remaining four noting only slight to modest wage increases. Multiple Districts said that annual wage growth rates had recently returned to their historical averages. On balance, contacts expected that labor demand and supply would remain relatively stable, with modest further job gains and continued moderation of wage growth back to pre-pandemic levels. Prices Price increases were modest, on average, running at about the same pace as in the last report. Disruptions in the Red Sea and the collapse of Baltimore’s Key Bridge caused some shipping delays but so far did not lead to widespread price increases. Movements in raw materials prices were mixed, but six Districts noted moderate increases in energy prices. Contacts in several Districts reported sharp increases in insurance rates, for both businesses and homeowners. Another frequent comment was that firms’ ability to pass cost increases on to consumers had weakened considerably in recent months, resulting in smaller profit margins. Inflation also caused strain at nonprofit entities, resulting in service reductions in some cases. On balance, contacts expected that inflation would hold steady at a slow pace moving forward. At the same time, contacts in a few Districts—mostly manufacturers—perceived upside risks to near-term inflation in both input prices and output prices. Highlights by Federal Reserve District Boston Business activity expanded at a modest pace in recent weeks, and prices rose slightly. Employment was flat overall, but one retailer reported significant layoffs. Convention and tourism activity grew at a robust pace. Home sales increased on a year-over-year basis, marking a turnaround. The outlook ranged from cautiously optimistic to bullish. New York On balance, regional economic activity remained flat. Labor market conditions were solid and continued to normalize as labor supply and labor demand came into better balance. Consumer spending was unchanged after a weak first quarter. Housing markets strengthened, with the spring selling season picking up beyond the seasonal norm. The pace of selling price increases remained modest. Philadelphia On balance, business activity was flat in the current Beige Book period—after declining slightly last period. Employment edged up, despite staffing and recruitment efforts slowing to a crawl. Wage and price inflation continue to moderate; however, housing affordability continues to be a concern. Overall, the outlook is positive, as firms remained optimistic about expectations for future growth. Cleveland District business activity increased modestly, as did employment. Firms anticipated greater ease filling open positions, including those that have been particularly challenging, because of increased labor availability. Wage pressures continued to normalize, and some contacts reduced starting wages for new roles. Cost and price pressures changed little. Richmond The regional economy grew at slight pace since our previous report. Consumer spending on retail goods was mixed but spending on travel and tourism was up slightly. Fifth District port activity slowed and was impacted by the collapse of the Francis Scott Key Bridge. Employment growth slowed from a moderate to a modest rate in recent weeks, but wages continued to grow moderately. Price growth also remained moderate. Atlanta The Sixth District economy grew modestly. Labor markets continued to stabilize; wage pressures eased. Many nonlabor costs moderated. Retail sales were steady, but consumers remained price conscious. Tourism remained robust. Commercial real estate conditions slowed. Transportation activity was mixed. Manufacturing grew slightly. Loan demand was flat. Energy activity improved. Chicago Economic activity increased slightly. Employment increased modestly; business and consumer spending rose slightly; nonbusiness contacts saw no change in activity; and manufacturing and construction and real estate activity were flat. Prices and wages rose moderately, while financial conditions were stable. Prospects for 2024 farm income were unchanged. St. Louis Economic activity has continued to increase slightly since our previous report. Prices have increased modestly, as contacts are broadly feeling the pressures of increases in both labor and non-labor costs. The outlook was neutral to slightly optimistic, which is generally unchanged from our previous report, but better than one year ago. Minneapolis District economic activity grew slightly. Employment grew some, but labor demand was softer. Wage pressures were present but continued to ease, while price pressures ticked up. Consumer spending was mostly flat, and manufacturing slowed modestly. Commercial and residential construction improved […]