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The largest free trade region in the world

Under the leadership of Beijing, 15 countries concluded last Monday the negotiations to create the largest free trade zone in the world. The so-called Regional Integral Economic Association is made up of China, Japan, South Korea, Australia, New Zealand, Indonesia, Thailand, Singapore, Malaysia, the Philippines, Vietnam, Myanmar, Cambodia, Laos and Brunei. These countries represent 47% of the population and 32.2% of world GDP.

Thus, with this negotiation and with the strategy called New Silk Road, China not only expands its influence worldwide, but also positions itself as a decisive player in multilateralism and free trade. Thus, Beijing is filling power gaps left by the United States when it decided to turn its economic policies and its foreign policy of international free trade systems and international regimes to protect Human Rights to protectionist and isolationist policies. For this reason, the international concert needs a player large and stable enough to protect trade regimes from protectionism. China is taking the lead in opening markets and not closing the international free trade system.

As in most economic agreements in which China participates, issues related to the protection of Human Rights, such as labor and environmental rights, are left out of the treaty, and full attention is given to the reduction of tariffs. This is precisely the characteristic that makes many countries that do not commit to the protection of Human Rights seek commercial alliances with China and not with Europeans or North America. China does not condition its treaties to the observance of Human Rights.

Without a doubt, this new commercial alliance will generate noise to Mexico. It is very likely that when this AEIR enters into force, supply chains in Southeast Asia will expand and lower production costs. In addition, today, the economies that form this alliance are more stable than Mexico, who has a high probability of falling into recession and where the current administration has undermined economic certainty by making erratic decisions.

Thus, Mexico’s comparative advantage over Asian economies is its proximity to the United States. Therefore, beyond the ratification of the T-MEC, Mexico must continue to improve export channels to the US market, reducing travel times and waiting times in customs ports. That Mexico is more efficient in exporting to the US. UU. It can make all the difference between continuing to attract investment or that capitals move to Southeast Asia.

Ricardo Solano Olivera, MSc.

 

Column originally published at https://laopinion.de/2019/11/05/la-mayor-zona-de-libre-comercio-en-el-mundo/

Photo by Sam Albury on Unsplash

The second wave of the indignant voter

The phenomenon of the indignant electorate, which was a decisive factor in elections throughout the world since the middle of this decade, is still in the fight, now in the form of demonstrations – some violent – the same in Baghdad, Port-au-Prince and in Santiago. And although the origin of each one of the mobilizations in the world today is different, their common denominator is that they have evolved towards asking for deep economic transformations. We can see in a very marked way in Chile – for example – demonstrations against neoliberalism. But it is not only against the neoliberal policies implemented in these countries, this has to do with the fact that these policies have not narrowed the inequality gaps. Thus, protesters feel oblivious to the benefits achieved by free trade and globalization.

And of course, these manifestations have the potential to, on the one hand, expand to other countries and, on the other, to continue generating regime changes and surprising governments. Just as at the time populist parties emerged that gathered the concerns of the first wave of this outraged electorate, this second wave of mobilizations could result in not only the fall of governments, but the emergence of parties both from the extreme right and from left in countries that had traditionally been oblivious to these political positions; As happened in Brazil.

Undoubtedly, in Mexico, this indignant electorate was a decisive factor for the triumph of Andrés Manuel López Obrador in the last elections. Although in Mexico there have been no manifestations of the size and proportions that in the rest of the world, Morena was the party that managed to rise with the flag of change in a country with great inequalities and with a long history of corrupt governments and – well – capitalize on this indignant electorate.

What we see, however, is that the electorate is not willing to wait for changes. After the disastrous Kirchner administrations in Argentina, the electorate voted for a change with Mauricio Macri. However, the slow changes of the Macri government to rebuild the country caused the electorate to give Kirchnerism the victory again.

This is a great lesson for Morena. The electorate is not willing to wait for the changes that shorten the inequality gaps. The same supports new political expressions that return to traditional parties, as happened in Spain. Nor will the electorate in Mexico expect the lopezobradorist government to generate profound changes, which was the reason they favored it in the voting. Today we see clearly that not fulfilling campaign promises is the main powder store to detonate mass demonstrations throughout the world. If the López Obrador government does not generate results in reducing inequality in Mexico, we could see manifestations of this draft before the end of its six-year term in our country.

Ricardo Solano Olivera, MSc.

 

Column originally published at https://laopinion.de/2019/10/29/la-segunda-ola-del-electorado-indignado/

What is happening in Syria?

In early October, the US government announced the withdrawal of its armed forces from northern Syria. This movement, said President Donald Trump, was aimed at the direct protagonists of the conflict taking on the task of resolving the situation in the region. However, this maneuver left American allies in the war against Daesh, the Kurds of northern Syria (YPG).

Turkey considers the YPG Kurdish militia as a terrorist group as it links them with the Kurdish separatists in their own country grouped in the PKK. Thus, the US withdrawal from the area left the way open for Turkey to initiate a military operation against the Kurds. Thus, on October 9, Turkish President Recep Tayyip Erdogan initiated Operation Peace Source against the Kurds in Syria. Turkey seeks to create a safe zone on the 440 km border with Syria, currently controlled by the YPG.

Given the international claims against the actions of both the US and Turkey, and the voices that were raised within the US Congress, on Thursday, October 17, Vice President Mike Pence agreed with President Erdogan to cease fire for 120 hours.

To this is added that under the pretext of patrolling the areas left by both the US and the YPG, Russia has been occupying positions, filling power gaps left by the US armed forces and the Kurds. With this, Russia is increasingly playing a more prominent role in the Syrian conflict. Recall that Moscow is an ally of Syrian President Bashar al-Assad and that these actions are framed in the agreements between both countries to recover territory in favor of the Syrian government.

Given this, Presidents Erdogan and Putin will meet in Sochi since the actions of Ankara and Moscow have the risk of generating disagreements between the two countries in northern Syria. In addition, it remains to be seen if the ceasefire agreed between Turkey and Washington continues or if Ankara decides to resume military operations against the YPG. This depends on whether the YPG completely leaves the Syrian-Turkish border, that is, they must move at least 30 kilometers from the border.

However, this game of realpolitik in Syria shows that the US has intentionally lost influence in the region, giving it to Moscow. For his part, Putin has the opportunity to bring Ankara closer to his area of ​​influence. Take into account that Turkey is part of NATO but that, in the face of its actions against the Kurds, countries such as Spain and Germany stopped the sale of weapons. This can cause Erdogan to end up aligned with Russian interests and even reach agreements that overlook the interests of the other countries involved: Iran, Saudi Arabia and the EU. Meanwhile, the fate of the Kurds who helped defeat Daesh remains in the air.

Ricardo Solano Olivera, MSc.

 

Column originally published at https://laopinion.de/2019/10/23/que-esta-pasando-en-siria/

Impeachment?

Once again, American spy services, those in the so-called deep state, are the headache of President Donald Trump. At the end of last week, an agent of these intelligence services announced that, during a call made last July, President Trump pressed his Ukrainian counterpart, Volodimir Zelenski, to investigate Hunt Biden, son of Joe Biden , for alleged corruption practices when he worked for a Ukrainian gas company. Recall that Joe Biden is one of the pointers in the Democratic race for the presidential candidacy for the 2020 elections.

If these statements were true, Trump would have used the US presidency to coerce a foreign government to take domestic policy actions, with a clear political purpose, to diminish Joe Biden’s chances of competing for the presidency. This would be enough reason to start a political trial against Donald Turmp. However, the president of the House of Representatives, Democrat Nancy Pelosi, has consistently refused to initiate this process in the face of accusations of collusion between Trump and the Russian government during the 2016 elections.

Pelosi fears that starting a political trial process at this time, in the face of next year’s presidential elections, may further divide the Democrats and the electorate. What could cause, in the first place, that a political trial did not end with Trump’s impeachment; and, secondly, the failure of the Democrats in the 2020 elections.

Even so, several candidates for the Democratic presidential candidacy have already expressed their support for bringing Trump to political trial. Among them, Elizabeth Warren who, according to polls published on Saturday, is already in the lead in Iowa, and Julian Castro, whose brother is a Representative for Texas. Joe Biden, meanwhile, has requested that the transcript of the call be made public; to which Trump responded that this option is being considered despite the fact that, he said, all world leaders should feel free to speak with the President of the United States without fear of having their talks public.

While it is true that the political moment might not be the right one to initiate a political trial against Donald Trump, it is also true that congressmen cannot allow the presidency to continue to be used to commit crimes. It is known, for example, that after that phone call, the processes to free up resources for military aid to Ukraine by 250 MDD were accelerated.

Thus, we could face more evident evidence of crimes committed by President Trump from the Oval Office. If a process of political judgment begins, we could see an even greater polarization in the US electorate, which would be reflected in Congress, making it even more inefficient. Recall, finally, that the US Senate still does not approve the T-MEC and this situation could delay it further, negatively impacting our country.

Ricardo Solano Olivera, MSc.

Column originally published at https://laopinion.de/2019/09/24/juicio-contra-donald-trump/

Photo by Samantha Sophia on Unsplash

Should we worry about the attack against Aramco?

Last Saturday, facilities of Saudi oil company Aramco, in Abqaiq, and in the Khurais oil field were attacked with drones, using very sophisticated technology. In principle, the Yemeni Houthis rebels claimed the attack; This group has been fought by the Saudi Kingdom for the past four years. Iran, on the other hand, supports Yemeni rebels. In this regard, reports suggest that the technology used to carry out the attacks came from Iran.

The attack caused the interruption of 5% of the world oil supply, a situation never seen, neither during the Iraqi invasion of Yemen, nor because of the oil embargo on Iran. In principle, Saudi reserves will try to maintain the flow of oil without interruption, however, specialists in the field estimate that repairs to normalize production at both the Abqaiq plant and the Khurais field will take months.

Oil prices worldwide have already started to rise. Most worrying, however, is that countries dependent on Saudi crude will have to look for alternatives for their supply. It is here that we will begin to see the geopolitical game of the powers, since this interruption occurs just at the moment when the world witnesses a trade war between China and the United States, and tensions of the Western powers with Iran and with Russia.

The United States, for practical purposes, is self-sufficient in energy thanks to fracking and the little that matters in Saudi Arabia can easily be remedied by increasing the extraction of crude oil by this route, although at higher costs. On the other hand, the Saudis are the second oil exporter for the Chinese market, only after Russia. Without Saudi oil, the Chinese economy could be affected in the short term, further decreasing its economic growth and affecting the world economy. Likewise, South Koreans and Japanese rely heavily on Saudi oil.

The United States does not want the price of oil to return to three digits, because it would diminish its economic growth through the increase in the prices of its industrial production. Russia, on the other hand, since it is an oil-exporting country, it is convenient for prices to rise. Thus, both China and Europeans would be affected by an increase in Russian oil and energy prices. The way you could turn around and keep prices low until the Saudis repair their facilities, is by buying from Iran.

However, today the United States maintains sanctions against the Iranians. Thus, the fact that Chinese and Europeans replace Saudi oil with Iran would generate greater diplomatic conflicts between the United States and these powers. This attack could have very serious consequences for the world economy. Mexico will not be oblivious to the problems that develop from here, especially if this means a slowdown in world growth much more pronounced than expected.

Ricardo Solano Olivera, MSc.

 

Column originally published at https://laopinion.de/2019/09/17/debemos-preocuparnos-por-el-ataque-contra-la-petrolera-aramco/