The World in a Flash
The RoundUp this week covers Trump’s action towards NAFTA, the unrest in Venezuela, the credit ratings of Caribbean countries, tensions surrounding North Korea and the Front National in France.
Trump Wants to Roll the Dice on NAFTA
After taking jabs at Canada’s dairy industry and imposing tariffs on Canadian lumber, President Donald Trump – still trying to demonstrate the ‘art of the deal’ – is seeking to renegotiate NAFTA. The trade agreement between the US, Mexico, and Canada is worth approximately $1.2 trillion USD a year with the US exporting $584 billion USD a year. However, Trump continues to stick to his guns that NAFTA is the worst deal ever. Thankfully, in the most liberal use of the word, Trump has decided not to kill NAFTA—a move that Prime Minister Trudeau is taking credit for—and is rather seeking broad renegotiations. Trudeau and President Nieto have been preparing for this, but renegotiating NAFTA will likely be a rocky road and have some serious side effects as well established connections between the three countries become volatile. Trump is taking a huge (read: yuge) risk, with all three countries vulnerable to the consequences of his actions.
Venezuela Enveloped in Downward Spiral as Unrest Continues
The death toll in Venezuela has climbed to 28 as serious political unrest goes into the fourth straight week. In the broadest possible terms, the conflict is between the ruling Socialist Party that says the violence is an attempted coup against Maduro at the hands of the American government while opposition says it is the actions of a dictator repressing peaceful protest. Maduro has been losing his grip on power as the country has seriously struggled with low oil prices with extreme food and supply shortages. As stability seems further out of reach, Venezuela has announced it is withdrawing from the Organization of American States as it perceives the unrest as being at the hands of meddling foreign governments.
Caribbean Ratings Rollercoaster
Trinidad & Tobago has been hit with two Moody’s downgrades in recent days, from Baa3 to Ba1: “junk” status. The double-island nation in the Lesser Antilles has been experiencing severe economic stress as low oil prices, declining production, and limited investment opportunities created the perfect storm. Efforts by the Rowley administration to rein it in have included dipping into the Heritage and Stabilisation Fund (a sovereign wealth fund designed to support and sustain public expenditure during periods of petroleum revenue decline), alongside ordering major ministries to reduce their operating expenses. Debt to GDP is expected to reach 70% this year. Standard and Poor’s rating for T&T also dropped last week from ‘A-’ to ‘BBB+’. Maybe they should ask Bermuda for a loan; the island of triangle fame got confirmation of economic stability from S&P who maintained their rating at ‘A+’ and projecting that Bermy’s economic contraction has come to an end.
The Good, the Bad, & the Nuclear
In what might be a quasi-success China seems to be getting fully on-board the US-North Korea Diplomacy train. Trump supporters are crowing about the apparent effect the POTUS has had on Xi Jinping, and while China would like to maintain a good trade relationship with the US and avoid nukes exploding anywhere near it, the recently installed the Terminal High Altitude Area Defense (THAAD) system might aggravate them enough to destroy any softening sentiment; they have already announced new weapons tests and military drills in response. Rex Tillerson will be making the case for increased sanctions on the DPRK at the United Nations on Friday.
Controversy and France’s Front National
For the second round of the French Election, Marine Le Pen has stepped aside as the leader of the Front National to potentially gain wider appeal. This has left the party looking to nominate a new leader, but this has gained some controversy. The interim leader, Jean-François Jalkh, has made on-the-record comments denying that the Nazis used Zyklon B in the extermination of Jews. Jalkh has denied that he made these comments in April 2000, and will be pursuing action to that effect. However, this shows that the party is having trouble shaking its anti-semitic past, most famously represented by Le Pen’s father while he was party leader. The extent to which this will hurt Le Pen’s campaign is still unknown.