Plus: Auction of the day
IN TODAY’S EDITION
1️⃣ Why Japan and the Philippines just signed a major treaty |
2️⃣ Zuck cruises Italy |
3️⃣ Auction of the day |
Hi Intriguer. Governments are absolutely fire-hosing cash at AI right now to seize that early-mover advantage (plus avert the vulnerability that comes with getting left behind).
So I was intrigued to see Goldman recently drop a 31-page report on the subject, asking a juicy question: is the hype around AI justified?
And interestingly, the report’s answer is kinda mixed: some of the gurus see only limited upside, arguing the tech just can’t solve the kinds of problems that might justify the massive costs. But others are more optimistic, even if AI’s “killer application” hasn’t yet appeared.
As for today’s briefing? We’ll get you up to speed on why Japan and the Philippines just signed a historic treaty.
NATO summit kicks off.
NATO leaders are in Washington today (Tuesday) to kick off a three-day summit marking the alliance’s 75th anniversary. Word is there’ll be further announcements to support Ukraine, including establishing a unified command post in Germany to manage international support. Ukrainian President Zelensky himself is also set to attend, hoping to secure more air defences after Russia’s daytime missile attack on a children’s hospital in Kyiv yesterday.
Australia accuses China of hacking (again).
The statement by Australia’s signals intelligence agency describes “malicious cyber operations” conducted by China-based hacker group Advanced Persistent Threat 40 (APT40) for China’s Ministry of State Security. Australia’s fellow members of the Five Eyes intelligence pact (US, UK, Canada, and New Zealand) – plus Germany, Japan, and South Korea – all backed Canberra’s claim.
Macron asks prime minister to remain as caretaker.
French President Emmanuel Macron has refused to accept the resignation of Prime Minister Gabriel Attal, asking him instead to remain until the post-election picture settles (which could take a while…). Sunday’s results delivered a deadlock for French politics, with neither the left, right, nor centre coming close to a majority (though a leftist coalition won the biggest share of seats).
When Modi met Putin.
Indian Prime Minister Narendra Modi and Russian President Vladimir Putin have really packed on the PDA during their meeting in Moscow, with the Indian leader hoping their talks will “go a long way in further cementing the bonds of friendship” between the two countries. This is Modi’s first visit to Russia since Russia’s full-scale invasion of Ukraine.
TOP STORY
Japan and the Philippines sign historic defence deal in response to China
While many of us perhaps kicked off our week with a nice little trip down to Home Depot or a surprisingly productive sync with Barry from sales, ministers from Japan and the Philippines used their Monday to sign a major defence treaty in Manila’s Malacañan Palace: it’s called a ‘Reciprocal Access Agreement’.
And we’ve dug through the 31-page document so you don’t have to. The treaty:
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Allows Philippine troops to deploy to Japan (and vice versa) for “cooperative activities”
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Signs both countries up for joint combat exercises, and
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Lets them wear each other’s uniforms.
The two kicked off formal negotiations last November in Tokyo, dropped hints of progress at this year’s Shangri-La Dialogue in Singapore, then did a formal line-by-line reading on June 11th (virtually, of course, because it’s 2024).
And that’s remarkably quick for these types of negotiations. Why the rush?
Both countries are worried about China:
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Beijing claims 90% of the South China Sea, shrugging off an international ruling against it, not to mention rival claims by several more proximate countries like the Philippines (which brought the suit).
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Japan also has its own territorial dispute with China (the Senkakus), plus broader jitters both about China’s assertiveness, and its designs over waterways that carry (for example) 80% of Tokyo’s energy imports.
As for China, it bases its claims on “historic rights” (a concept rejected by the above court), but President Xi’s interests are likely broader. He sees value in:
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Controlling maritime trade routes that are vital to China’s economy
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Managing the area’s vast fishing and energy resources
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Expanding China’s sense of security by pacifying its periphery, and
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Testing US commitment to its allies like the Philippines.
So against that backdrop, this Japan-Philippines treaty is a BFD.
For Manila, it comes amid what President Marcos Jr called China's “illegal, coercive, aggressive and deceptive actions”, which culminated in last month’s footage of sailors ramming and threatening Philippine resupply ships with axes.
So Marcos will be hoping that the presence – of even possibility – of Japanese troops nearby will add to existing efforts at encouraging China to back off.
As for Tokyo, the benefits are similar: the deal further stitches Japan into the US-led ‘latticework’ of countries seeking to balance China.
It probably also helps Japan manage its own grim legacy in the region, including its WWII occupation of the Philippines. So this pact is a bit of a friendship bracelet, eight decades later.
But China, which has its own history of occupation by Japan, is still only too happy to refresh everyone’s memories. Responding to yesterday’s treaty signing, Beijing’s foreign ministry said “Japan bears serious historical responsibilities for its aggression and colonial rule over the Philippines and other Southeast Asian countries during WWII.”
The ministry went on to add that “the Asia-Pacific region does not need any military bloc, still less groupings that incite bloc confrontation or a new Cold War.”
INTRIGUE’S TAKE
That last line gets to the heart of it: what the US describes as a “latticework” of countries responding to China’s behaviour, Beijing prefers to label as “blocs” or “cliques” seeking to “instigate a new cold war”.
Diplomats love their jargon, but the idea behind a ‘latticework’ is that it goes beyond the region’s traditional ‘hub and spokes’ model, which long saw individual countries forge defence ties with the US (not with each other).
Rather, this emerging ‘latticework‘ means more US partners are now forging ties among themselves: the Quad, AUKUS, the first-ever Japan-Korea-US and Japan-Philippines-US summits, and various reciprocal access agreements with Japan, the Philippines, and others.
That’s all just in the last few years (!), and often involves doing the once unthinkable: whether that’s the US sharing its nuclear propulsion secrets (AUKUS), India joining a US-aligned security dialogue (the Quad), or Korea and the Philippines finding a way to trust their former occupiers again (Japan).
The result, in theory at least, is a more diversified, more integrated, and more resilient “latticework” of countries, better able to withstand the sense of inevitability and asymmetry they get when facing China one-on-one.
The result is also, of course, Beijing’s displeasure at each new addition.
Also worth noting:
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The Philippines is in defence talks with France and Canada too.
MEANWHILE, ELSEWHERE…
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🇰🇷 South Korea: Samsung’s biggest trade union has begun a three-day strike action to demand better pay and conditions. The firm, now the world’s second-largest chip-maker (after Taiwan’s TSMC), says this strike will have no impact on “business”, though the union itself says the strike has disrupted production.
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🇧🇾 Belarus: Chinese troops landed in Belarus over the weekend to participate in joint military exercises with the Russian ally until 19 July. The drills, only miles from Ukraine and the EU/NATO border, are kicking off just as NATO leaders mark the alliance’s 75th anniversary in the US.
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🇮🇩 Indonesia: At least 11 people have died after heavy rains triggered a landslide on the Indonesian island of Sulawesi. The casualties occurred in and around an unlicensed gold mine, which are relatively common across the mineral-rich country.
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🇪🇨 Ecuador: A court has ruled that pollution is violating the fundamental rights of the Machángara River, which passes through the capital, Quito. The ruling is based on an unusual article in Ecuador’s constitution that grants some rights to natural features.
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🇸🇾 Syria: After years of international isolation over his regime’s killing of hundreds of thousands of his own people, President Bashar al-Assad has now scored an invite to meet Turkish President Tayyip Erdogan “any time”. Erdogan’s recent warmer rhetoric towards the Syrian autocrat has worried many of the three million Syrian refugees now living in Turkey.
EXTRA INTRIGUE
Here’s what people googled yesterday
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🇮🇹 Italians searched for ‘Mark Zuckerberg’ after the tech billionaire’s $300M mega yacht was seen sailing along the Italian coast.
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Folks in the 🇺🇸 US googled ‘Houston weather’ as Hurricane Beryl hit the southern US yesterday (Monday), triggering a record 110+ US tornado warnings and leaving at least seven dead.
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🇳🇿 New Zealanders looked for ‘Lulu Sun’ after she made history as the first Kiwi woman to reach the Wimbledon singles quarterfinal (shortly after she switched her affiliation to NZ from Switzerland).
AUCTION OF THE DAY
Credits: Geoffroy Van Der Hasselt/AFP.
While most folks in France spent their Sunday delivering a consequential (if confusing) parliamentary election result, one mystery shopper instead headed south of Paris to an auction house in Fontainebleau. And once they got there, they splashed a cool $1.8M on a stunning pair of pistols that once belonged to Napoleon Bonaparte.
Legend has it that Napoleon tried to turn these very pistols upon himself in 1814, after foreign forces defeated his army and occupied Paris. But his squire had already removed the gunpowder, thus earning himself the artefacts as a gift for his loyalty.
Sunday’s sale not only comes with a ritzy case, but also a unique caveat: just a day before the pistols went under the hammer, the French government formally declared them national treasures, meaning a) Paris now has 30 months to make an offer to the new owner and, b) the pistols can only leave France temporarily.
DAILY POLL
Do you think this Japan-Philippines treaty will make any difference? |
Yesterday’s poll: Which of the following do you think is the key for a successful government?
🟨⬜️⬜️⬜️⬜️⬜️ 🧭 Vision (9%)
🟨⬜️⬜️⬜️⬜️⬜️ 🕊️ Unity (12%)
🟨🟨🟨🟨🟨⬜️ 🎯 Execution (35%)
🟩🟩🟩🟩🟩🟩 🤝 Ability to collaborate with other parties (41%)
⬜️⬜️⬜️⬜️⬜️⬜️ ✍️ Other (write in!) (3%)
Your two cents:
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🤝 M.K.G: “At least in a democracy, you can have a vision, but not be able to execute it unless there is some sort of collaboration. Collaboration breeds unity to some degree.”
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🎯 G.K: “Nothing happens if the party in power can't execute any of their programs.”
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🧭 J: “We have problems with our government because they only seem to care for the immediate elections, not thinking in the medium or long term.”
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✍️ G.A: “If your country uses a first-past-the-post system, then you should focus on unity, as is the case for US politics. However, in countries that have a proportional representation system, they'd be wiser to maintain balanced positions so as to form coalitions.”
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