It’s hard to find a major cyberattack over the last five years where identity — generally a compromised password — did not provide the vector of attack.

Target, Sony Pictures, the Democratic National Committee (DNC) and the U.S. Office of Personnel Management (OPM) each were breached because they relied on passwords alone for authentication. We are in an era where there is no such thing as a “secure” password; even the most complex password is still a “shared secret” that the application and the user both need to know, and store on servers, for authentication. This makes passwords inherently vulnerable to a myriad of attack methods, including phishing, brute force attacks and malware.

The increasing use of phishing by cybercriminals to trick users into divulging their password credentials is the most alarming — a recent report from the Anti-Phishing Working Group (APWG) found that 2016 was the worst year in history for phishing scams, with the number of attacks increasing 65% over 2015. Phishing was behind the DNC hack, as well as a breach of government email accounts in Norway, and was the method that state-sponsored hackers recently used in an attempt to steal the passwords of prominent U.S. journalists. Phishing is on the rise for a simple reason: it is a relatively cheap and effective form of attack, and one that puts the security onus on the end-user. And, given that many users tend to reuse passwords, once these passwords are compromised, they can be used to break into other systems and bypass traditional network security measures.

Click here to read the full article on Harvard Business Review. 

It's hard to overestimate the importance of France's presidential election. As many experts have noted, the winner will have an enormous impact on the very form, indeed the existence, of the European Union, the common currency, and the future of European politics.

Sunday's first round has given us clarity on the choices. The final on May 7 will give us a new French President.

Now it seems that Emmanuel Macron and Marine Le Pen have made it to the runoff. Already this is historic: for the first time since the founding of the Fifth Republic, the traditional left-right parties have been shut out of the final round. Most devastating is the collapse of the Socialists, who drew single digit support, continuing a trend in Europe among social-democratic parties that we've seen not only in Britain and the Netherlands, but indeed throughout the continent. It's not too much to claim that the choice now is not between left and right, but between open and closed: open societies and open markets and open borders versus more limits on civic freedoms, more protectionist economies, limits on immigration. Comfortable welfare-statism is on the outs.

Imagine, then, what has happened in France: working class voters have left the Mitterrand/Marchais bloc, many of them moving to the nationalist positions of Le Pen; conservative voters have splintered from the days of the Chirac coalition, many of them voting for Francois Fillon (who just missed passing Le Pen into second place), others moving further right; those on the hard left voted for Jean-Luc Melenchon (who was not far behind Fillon). Fillon and Socialist Benoit Hamon have already come out in support of Macron in the runoff, making a victory for this most moderate candidate more and more likely. But it's sobering that well over 40 percent of voters voted for the far right, and both Le Pen and Fillon make no secret of their admiration for the Russia of Putin.

And so, due to the structure of French electoral politics, the prohibitive favorite will be Macron, a man committed to the EU, to the common currency, to NATO, and the traditions of the west. And this only because of a few percentage points among voters. Still, we're entitled to ask whether, with the victory of Van der Bellen in Austria, of Rutte in the Netherlands, we've seen the cresting of the populist tide in the west. My answer is: not so fast.

First, we haven't seen the results of the second round yet. Even though the analogy of Le Pen to Brexit or Trump is hardly apt (polls showed Remain and Clinton ahead by 2-3 points, while initial polls show Macron with a 30-point lead over Le Pen in the May 7 final), one never knows.

Second, the underlying dissatisfaction that motivated so many voters to reject traditional candidates remains, and the underlying weaknesses of and challenges to the EU have not gone away.

So instead it may be that we've entered a mature phase of the new politics of the West that emerged last year. These politics challenge the verities of the post-1989 world, especially since Europeans now note that while one used to talk about how Europe would affect the world, one now talks about how the world might affect Europe. In such a situation, even someone like Macron, if he's elected, can't turn back the clock and govern like it's 1999. The new issues, and the new political landscape, will be with us for a long time. But at least in France, fears that these issues would spark an immediate and possible wrenching realignment in international politics and structures do not seem to have been borne out.

The two groups from Iran and Saudi Arabia were composed of former diplomats, senior analysts, security and environmental experts. In addition, a group of distinguished experts from think tanks, academia, and the UN contributed with their input and analysis.

Held under strict Chatham House Rule, the dialogue aimed at gaining insights on how Saudi Arabia and Iran view the environmental challenges they face in their respective countries and the region, how future cooperation in the fields of environment could look like, and what impediments to cooperation need to be overcome. 

The participants discussed the most pressing environmental issues facing West Asia, the Levant and the Arabian Peninsula, including the economic and political consequences of long term drought, water scarcity, air pollution, and sand and dust storms, and how to tackle those issues on a national, bilateral, and regional level. The participants also discussed the possible consequences of non-cooperation on those matters in the future, and what implications that might have on migration, radicalism, employment, and habitation in those two countries and the region. Beyond the conversation on the environmental challenges, the current geopolitical impediments to cooperation were also highlighted. 

A comprehensive policy brief of EWI and CARPO will follow in June.

Last month, President Trump made headlines for openly challenging the WTO in his administration’s annual trade policy report to congress, furthering his promise to counteract “China’s unfair advantage.” At the top of the list of accusations is dumping, particularly steel as well as aluminum and chemical products.

In March, only 70 days into the new administration, the U.S. Department of Commerce announced two antidumping countervailing duty investigations against China. Neither of these has been formally filed with the WTO yet, though they may be in the near future. Instead, dominating the newsfeed were rumors of border taxes and other measures outside the WTO framework the Trump administration is considering.

Long before Trump entered politics, the U.S. has engaged China in the WTO over dumping cases. The U.S. filed 16 anti-dumping cases against China during the Obama administration alone. But as of December 2016, China launched a case in the WTO to change anti-dumping investigation protocol. As we consider the possibility of further WTO clashes between the U.S. and China, this case sheds light on the stakes involved—where victory itself outweighs the fought over dollar value.

The pre-Trump Dispute

China’s accession to the WTO in 2001 came with a fifteen-year window with China deemed a non-market economy (NME) during anti-dumping investigations. Countries that maintain domestic price controls to protect and foster local companies are considered NMEs. WTO members are at liberty to apply or remove NME status as they choose to qualifying countries.

According to Section 15 of the Chinese Accession Protocol to the WTO, the application of non-market economy status towards China was set to expire on December 11, 2016 and in the interim, China would establish market economy conditions making NME status unnecessary.

The U.S. and EU argue that China has not sufficiently opened its economy. In turn, China argues that western regulators used China’s NME status to pick unrealistic benchmarks (if an NME is accused of dumping, investigators pick a similar country’s economy to calculate how much the product should fairly cost) and are ignoring Section 15, to which they have filed a formal complaint. Most WTO members have already removed China’s NME status.

The Trump Administration’s Approach

As of March 31, President Trump signed two executive orders characterized by commodities trade journal MetalMiner as “formaliz[ing] China’s unfavorable status in trade cases, [meaning] the country’s goods would be eligible for higher U.S. tariffs.” In other words, the U.S. will not stop classifying China as a NME.

Despite Trump’s Trade Representative’s office report emphasizing national sovereignty over trade policy, it appears this fight between the U.S. and China over China’s market status within the WTO is only going to get fiercer in the coming months, with rumors the former will try to use it as a bargaining chip in bilateral talks.

Behind the Sound and Fury: the Real Impact WTO Anti-dumping Penalty Has on U.S.-China Trade

The reality is that WTO anti-dumping countervailing measures currently have little effect on U.S. imports. The U.S. has a domestic Countervailing Duty Law (CVD) applied in parallel to antidumping duties. The CVD has been applied liberally to trade imports from China, to the degree that only two percent of U.S.-China trade would be affected were the U.S. to end all WTO anti-dumping duties.

While the ruckus at the WTO may grab headlines, the actual percentage at stake paints a contrary picture from the one popularly accepted, of a porous U.S. trade border where goods can easily enter.

Greater Implications

The difference between Trump and previous U.S. administrations is not the use of extra methods outside the WTO framework, but public rejection of the WTO framework itself. To some, this harkens back to the Reagan Era trade war between the U.S. and Japan, during which the WTO became an important impartial intermediary. Yet, others say that the WTO and Bretton Woods international framework will not survive with the world’s two largest economies testing its limits. Should the WTO rule in favor of China and the U.S. openly defy the ruling, it remains to be seen if the WTO will be able to effectively enforce punishments against the U.S., or if it will cause the institution to lose enough credibility that other countries openly ignore WTO rulings themselves.

The U.S. has long challenged or circumvented the WTO in the background (from continuing subsidies to U.S. cotton farmers to refusing to reduce regulations leveled at Mexican tuna), but the new administration is bringing matters into the spotlight, while looking for a “win” to bring to home. By unhappy coincidence, China is gearing for its own symbolic victory. China’s state run Economic Daily reported that in 2016, 27 countries and regions filed 91 dumping cases against China at the WTO, a historic high. This fits the long-running narrative of China wrongfully discriminated against by the so-called champions of free trade. Whether out of frustration or hegemonic aspirations, China’s challenge tests the WTO’s perceived bias toward Western countries. Not “winning” in the international governmental framework could create an opportunity for China to break from it.

Understanding the implications of China’s market classification reveals two major points: (1) The WTO based changes at stake are minimal compared with domestic barriers in place; and (2) the symbolic significance of WTO classification and the international legal framework are enormous, and draw much more attention and political leverage.

Symbols are important, but the pursuit of them can incur inordinate costs. President Trump’s interview with The Wall Street Journal on April 12 suggests there is hope for compromises with China on trade. But should the U.S. and China be unable to reach a bilateral understanding, this tug-of-war over WTO market status could reshape the international order for a tiny sliver of world commerce.

Ann Listerud holds a Masters from UC San Diego’s School of Global Policy and Strategy. She currently works in finance and is based in Tokyo. Follow her on twitter @lianlist.

The views expressed in this post reflect those of the author and not that of the EastWest Institute.

Finel-Honigman said the Paris attack, in which two people died including the gunman, had made a volatile situation even more volatile.

"The real concern is whether this will harden or even increase Marine Le Pen, the extreme right wing candidate's support," she said on Friday, April 21.

Listen here for the full interview, beginning around the 2:30 mark.

Executive summary of the brief:

Falling oil and gas prices and shrinking demand across global energy markets pose enormous challenges for energy exporting countries like Iran and Saudi Arabia and lead to decreasing revenues from this sector. Despite differences in the structures of their respective national economies, both countries share common challenges in adapting to this new situation. High youth unemployment rates, an underrepresentation of women in the workforce, a public sector unable to absorb the high numbers of university graduates as well as environmental degradation and pollution, all constitute major problems for both countries and their economies. But, while solving many of these issues would ideally demand bilateral cooperation, a political climate of mutual mistrust and enmity currently inhibits such a process.

CARPO and the EastWest Institute initiated a meeting of experts from Saudi Arabia and Iran as part of their ‘Iran-Saudi Track 2 Initiative.’ The stated aim was to shed light on the challenges and opportunities a ‘post-oil’ era might bring as well as to explore potential areas for cooperation between both countries. While participants agreed on the necessity of cooperation for creating strong and less oil-dependent economies, from which both countries as well as the whole region would benefit, their assessments varied on where this could begin.

The report can be downloaded here.

Related:

Know Your Enemy — Iranian and Saudi Perspectives on ISIL

Iranian and Saudi Perspectives on the Refugee Crisis

In March, Japan's Prime Minister Shinzo Abe toured France, Germany, Italy and Belgium with the primary aim of shoring up the prospects of a trade pact with the European Union that has been under negotiation since 2014. The overarching objective of Abe's visit was to underscore Japan's support for freer trade amid rising protectionist sentiment.

But while trade headlined the trip, Tokyo is also looking to the 28-country EU and its large member states for greater attention to Asia-Pacific security issues. This is especially true in the light of provocations by North Korea in recent months. Japan also continues to be concerned by Beijing's destabilizing activities in the East and South China seas.

Abe stressed the importance of bolstering security cooperation with EU officials in Brussels and with leaders of several European states. Abe and French President Francois Hollande agreed on the importance of freedom of navigation and open seas, and pledged to undertake joint naval drills in the future. Tokyo and Brussels confirmed broad agreement on the importance of international norms and laws in the maritime domain.

But Tokyo remains concerned about the level and prioritization of security relations within Japan's broader relationships with Europe, the lack of European engagement in dealing with the problems posed to Japan by China, and the approach from Brussels, as well as some individual EU states, to security flashpoints in East Asia.

An example of this was the EU's underwhelming response to a 2016 ruling by the Permanent Court of Arbitration in The Hague, which concluded that there is no legal basis for China's extensive territorial claims in the South China Sea. Brussels called for the ruling to be respected, but stopped short of urging its full implementation. European countries have also been less than attentive to destabilizing activities in the Korean peninsula and the East China Sea.

Why is this the case? Essentially, there is concern in Tokyo that Europe is unwilling to commit a meaningful presence—both in diplomatic and military terms—to the region to demonstrate a united approach in support of international rules and norms, such as the freedom of navigation.

Read the full commentary on Nikkei Asian Review here. 

President Donald Trump has pledged to create new, good-paying jobs for millions of blue-collar workers across the United States. Central to this pledge is President Trump’s still largely undefined plan to inject 1 trillion USD in both public and private funding into America’s infrastructure. The first U.S. president to refer to the word “infrastructure” in an inaugural address, Trump promised to “build new roads, and highways, and bridges, and airports, and tunnels, and railways all across our wonderful nation.” He went further, stating that the United States would “rebuild… our country with American hands and American labor,” while “follow[ing] two simple rules:  buy American and hire American.”

While this may be a laudable policy objective, there is a problem with it: there is not enough ready American capital to hire the all the American hands and American labor that would be required to realize Trump’s envisaged program of “national rebuilding.” Even with a major infusion of capital from the U.S. private sector—and even assuming the United States’ dysfunctional permitting system is greatly streamlined (and this is perhaps the more formidable impediment to revitalizing U.S. infrastructure)—it is unlikely that the nation would be able to marshal sufficient resources over the next several years to put a perceptible dent in the roughly 4.5 trillion USD investment need that presently exists within the U.S. infrastructure sector. Indeed, even if the president’s plan were enacted immediately and fully, and even if all the permitting issues were resolved magically and instantly, the plan would only address about one-fifth of the identified funding shortfall. What to do about the other four-fifths? The United States should look overseas to those countries where there is a massive surplus of investable capital—and specifically to China.

The notion of China helping the United States undertake its program of national rebuilding may seem to some counterintuitive and problematic at a number of levels. First, could such investment on the part of China in U.S. infrastructure clear the security vetting mandated by U.S. law? Second, is there a sufficiently compelling investment rationale for China to consider investing in U.S. infrastructure projects that generally spin off returns in just the low single digits? And third, what about the political optics involved:  politically and psychically, could U.S. political leaders and the American public accept this kind of overture from China?

With respect to the security considerations, that bar is easily cleared. The Committee on Foreign Investment in the United States (CFIUS), the principal U.S. government interagency body charged with vetting foreign investments in the United States for potential deleterious impact on U.S. national security, governs only those investments in which an ownership stake (and, specifically, a majority ownership stake) is sought by the foreign investor. By structuring Chinese investment in U.S. infrastructure as loans rather than equity ownership, CFIUS concerns are fully mitigated and the need for voluntary CFIUS review is obviated.  In short, the United States can “buy American and hire American” with Chinese capital (as well as other foreign capital) and not trigger federal security vetting.

Apart from the security issue, a more fundamental economic question remains: is there is a sufficiently compelling business case for Chinese to invest in, or lend to, U.S. infrastructure projects? The answer would appear to be: “yes.” While it is true that U.S. infrastructure projects tend to generate returns in the low single digits—often between 2 and 5 percent—there are reasons that such projects and returns might nonetheless seem very attractive to potential private investors from China.

First, the U.S. infrastructure market offers diversification relative to the existing portfolios of these potential investors. Second, the United States is seen as a stable, predictable, high-quality destination for capital.  And third, apart from the economic rationale for such investment, Chinese investors view this kind of investment as having a double bottom line. Recent meetings I have had with senior Chinese economic and financial policymakers make it clear that the Chinese, in the wake of Donald Trump’s inauguration as U.S. president, are keen to create a more (politically) sustainable economic partnership between China and the United States and stabilize the most consequential bilateral relationship in the world by making China an even greater stakeholder in U.S. economic success. After all, infrastructure investment generates about 42 cents in GDP growth for every dollar spent; and a more prosperous and confident America is good for a China that seeks to continue economic growth around the 6.5 per year level and whose trade with America remains an important contributor to growth at that level.

In sum, though there is an economic case for Chinese investment in U.S. infrastructure (just as there is an economic case for U.S. investment in U.S. infrastructure), there are also other good reasons, from the Chinese perspective, for China to align itself with a central policy priority of the sitting U.S. president: chief among them, to change the overall dynamics of U.S-China relations. Transforming China from “job killer” to “job creator” is good for China, even as it is good for blue-collar workers in the United States.

Finally, how would American political elites and the American public view Chinese investment in U.S. infrastructure? The majority of presidential candidate (including candidate Donald Trump’s) framing of China in 2016 was negative—and focused on China’s presumed role as a killer or stealer of U.S. jobs. The obvious political criticism of the type of initiative described here would be that those who advocate it are “selling (out) America to China.” The only problem with that criticism is that, under the vision laid out here, nothing is being sold. All that would happen under this plan would be for Chinese money—along with U.S. money and money from other foreign countries—to come into the United States and put “American hands and American labor” back to work rebuilding America’s roads, bridges, railways, ports and so on.  China would cease being a big (perceived) part of the problem and would instead become (and be perceived to be) part of the solution. Politically speaking, the president himself—and a bunch of governors, mayors, senators, and U.S. and state and local representatives—would have a positive story to tell in the course of campaign 2018: more workers employed at good wages, more roads and bridges built, more ports dredged, and so on. Everyone—including office-holders in the United States on both sides of the partisan aisle—can walk away from this type of arrangement a winner.

Earlier this month, the EastWest Institute (EWI) co-convened (with the China Institutes of Contemporary International Relations, a premier Chinese think tank) the first-ever conference on infrastructure cooperation in U.S.-China relations. The excitement about the possibilities for this arena of cooperation was palpable; there was a strong sense among those who took part in the conference and the officials who met with the U.S. delegation that U.S.-China cooperation in this area could generate needed positive momentum in the U.S.-China relationship—and, perhaps more importantly, help solve both U.S. and Chinese problems (e.g., the U.S. problem of how to finance national rebuilding and the Chinese problem of what to do with massive quantities—e.g., at least hundreds of billions of U.S. dollars’ worth—of surplus capital currently bottled up in China).

A joint statement, or even memorandum of understanding (MOU), between President Trump and President Xi at their upcoming summit would be a good place to start. Such a statement or MOU could flag this issue as a presidential priority in both countries and flesh out specific areas for cooperation and joint action. The two presidents could also bring together business leaders and investors and preside over the signing of major infrastructure financing deals. Perhaps even more ambitiously, the two presidents could endorse the construct of a U.S.-China “bilateral infrastructure investment treaty” (BIIT) that would codify a framework for joint action in this important area—and fast-track the infrastructure element of the much slower-going bilateral investment treat (BIT) negotiations that have been underway for some years.  Whatever the “deliverable(s),” it is clear that infrastructure investment should figure prominently on the summit agenda; both sides have much to gain from enhanced collaboration in this area. Indeed, infrastructure investment may be the best hope for a true “win-win” in U.S.-China relations for both the present moment and the foreseeable future; the two presidents and the two nations would be wise to seize the opportunity to leverage it fully as a means of building positive momentum in this vital bilateral relationship.

Welcoming Chinese investment in U.S. infrastructure would go a long way toward advancing a top U.S. presidential policy priority, putting millions of blue-collar workers back to work in good-paying jobs, “making American infrastructure great again,” and deepening and stabilizing U.S.-China relations in ways that are consistent with U.S. law and policy, in sync with the current Administration’s “America First” governing philosophy, and good for America (as well as China). The infrastructure jobs that this collaboration would create need to be American; the capital that funds those jobs doesn’t.

The commentary was originally written in Chinese and published in Dunjiaodu.com​ on April 5, 2017 prior to President Xi's visit.

Dr. William J. Parker says that the U.S. recent interaction with China has been “very positive” in curbing threats from North Korea as the reclusive nation attempted, and failed, to launch an unidentified missile in their latest weapons test.

"We are heading in the direction to say all options are on the table, and standby if you do not respond the way we expect you to," said the institute’s Chief Operating Officer in an interview with John Catsimatidis that aired on Sunday.

“Kicking the can down the road for the next generation or the next leader to deal with is rarely a good idea. Whether we are talking about the U.S. national debt, Russia's expanding influence in the Crimea, Assad's increased tyranny-to include use of chemical weapons, or North Korea's multi-decade efforts to develop long range nuclear weapon strike capability. These are issues that are usually better dealt with earlier than later. Making the hard decisions is what the president is elected to do. And while it may not always be popular, President Trump is stepping up and making those hard decisions.”

Parker added, “you could hear that just last Wednesday the Chinese went to the North Koreans formally and said, you need to take possible military action from the United States seriously.”

Beijing, Pyongyang’s biggest ally, has been pushed to exert a more serious pressure on its neighbor.

While recognizing North Korea as “a capable force,” the former chief of staff for U.S. Naval Forces believed the regime did not have the critical capability yet to inflict a large scale damage.

"(The U.S. and North Korea) have nuclear weapons, but the U.S. has thousands and the ability to miniaturize while North Korea has 10 to 20 and no ability to miniaturize right now. Nor does North Korea have strategic launch missile ballistic capability and they do not currently have intercontinental missile capability, but they’re getting there.”

Parker’s comments were picked up by various outlets, including The Hill click (here) and Vivere Milano (here).