NEWS RELEASE March 2022
Air, Water, Energy (AWE) Markets with a Transworld Partnership
A surprising consequence of the Russian invasion is the potential for a Transworld Partnership.
The Russian invasion of Ukraine takes on growing importance day by day. Last week we discussed the impact as ranging from the Grey-Blue Two Step to Tactical Nukes. On one hand the market would grow due to substitutions for Russian oil and gas. On the other hand Russia could use its tactical nukes and greatly reduce the European market for many decades.
This week began with overwhelming support for the Ukrainians but predictions that the move toward globalization has suffered a huge set back. The week is ending with the potential creation of a Transworld Partnership which would actively resist the attempts by any nation to occupy another while at the same time promote free trade.
Finland, Switzerland, and Germany have changed non-intervention polices. No one would have predicted just a few weeks ago. Billions of dollars in humanitarian and defense aid is being supplied by EU countries. Only four countries opposed the U.N condemnation of Russia.
There is serious planning of a 21st century Marshall Plan for Ukraine. The goal would be to build back the demolished cities. There are also a number of economic efforts which will be needed. The Russian nuclear power plants need to be restored and even made safer. The Ukrainian grain crisis will need to be addressed immediately. The production of rare metals needs to be resumed.
The AWE markets will benefit from this Ukrainian renovation. But the potential is for increased trade and tariff reduction for every free country.
President Zelenskyy yesterday proposed a new international security organization and asked President Biden to be the leader not only of the US, but also of the world. If aggressors know that they will be punished in the way that Russia is now it will discourage events such as the occupation of Taiwan by China.
In a phone call this morning between President Biden and President Xi Jinping, the Chinese president stated, “Peace and security are the most cherished treasures of the international community.” The realization that Switzerland, and every free country is willing to maximize sanctions on an aggressor will discourage China from invading Taiwan.
For the AWE industry just the alleviation of the Taiwanese takeover threat will have major implications. Its role in supplying most the world’s advanced computer chips makes its fate of the highest importance to the AWE industry.
Due to COVID and Chinese posturing over Taiwan we have started to veer away from the free trade policies which have made the world increasingly prosperous and peaceful. U.S. Chinese activities are so intertwined that both countries would suffer greatly from a suspension of trade.
The Biden Administration policy to become more self-reliant is inconsistent with maximizing prosperity. Seventy years ago U.S. valve manufacturers success depended on their iron foundries. Today no major U.S valve manufacturer operates an iron foundry in the U.S. Many major markets for U.S. AWE suppliers are offshore. Thermo Fisher has its main air pollution research center in China.
The new international security organization envisioned by President Zelenskyy may only need to be as active as the support Ukraine is now receiving. In the short term the military aid is proving effective. In the long term the embargo of advanced chips from Taiwan to Russia will seriously impair its military capability.
The Ukrainian invasion has proven that free nations are willing to band together when liberty is at stake. The threats of a nuclear holocaust are just as real now as at any time since World War II. We are only as far away as one madman with the nuclear button.
In 2014 President Obama negotiated the Trans-Pacific Partnership. The TPP was a trade agreement with 11 other countries in the Asia-Pacific region, including Canada and Mexico. It did not pass congress. We need to now think bigger and include the entire free world and other countries which will agree to abide by the national sovereignty rules. China should be included but with the proviso that it would lose its membership with rules violations.
The AWE markets are very international. Suppliers and the world will benefit from a Transworld Partnership.