Mercosur, China Crackdown, Semiconductors, Iran, Ethiopian Blockchain and the Week in Review

Blog / Weekly Review

Mercosur, China Crackdown, Semiconductors, Iran, Ethiopian Blockchain and the Week in Review

More Mercosur. Foreign ministers from Mercosur’s four member-states met virtually on Monday. Uruguay and Brazil proposed measures that would allow exactly what was asked for at the March summit: greater flexibility in negotiating free trade agreements and reducing the common external tariff. Argentina seemed to be open to a potential reduction in the tariff but remains broadly opposed to the other (and was notably joined by Paraguay in opposition).

What it means: If you are interested in Latin America and haven’t signed up for Latampolitik yet…why not! As we’ve been writing about for over a year, Mercosur is in trouble, and these negotiations might determine Mercosur’s future.

China cracks down. Sort of. China will reportedly fine Tencent $1.54 billion for not reporting past acquisitions and over anti-trust concerns. Meanwhile, China’s State Administration for Market Regulation investigated Meituan over allegations that it forced merchants to pick Meiutan’s platform as their exclusive distributor.

What it means: We continue to have a contrarian take on these Chinese government “crackdowns” on the country’s tech giants. A little regulation is a good thing. China is clearly sending a message about its redlines to these companies, not kneecapping them.

Semiconductors for everyone! The European Union is reportedly considering forming a semiconductor alliance that includes STMicroelectronics, NXP, Infineon, and ASML. The EU is looking at invoking its important projects of common European interest (IPCEI) provision, which eases state aid rules and allows direct government funding of projects deemed critical to EU sovereignty.

What it means: Remember, one of our key macro-forecasts for the decade ahead is the emergence of rival spheres of geopolitical influence. That includes trade, economics, politics, and yes, technology. If the EU wants to compete on the global stage in the future, it needs a lot more of this type of policy, and fast – it is already starting from behind.

The battle for Iran’s soul. Leaked audio of Iranian Foreign Minister Mohammad Javad Zarif contained a recording of Zarif accusing the Islamic Revolutionary Guard Corps (IRGC) of controlling aspects of Iran’s foreign policy and that assassinated Quds Force commander Qassem Soleimani was working with Russia behind the Iranian government’s back to undermine the Iran nuclear deal.

What it means: It is highly doubtful this leak was unintentional, as Zarif tried to play it off after the fact. If anything, it indicates Zarif might be contemplating a run at the presidency in what is shaping up to be a crucial June 18 election. Either way, a battle between the IRGC and the pragmatists is shaping up to be the most important election in Iran’s post-1979 history.

ADA. Cardano Developer IOHK announced a partnership with the Ethiopian government to build a blockchain-based national student and teacher identification system. The initial project will involve more than 5 million Ethiopian students.

What it means: This is a fascinating story on multiple levels. Cardano is famous for the ADA cryptocurrency, but here is a story of Cardano providing blockchain technology to Ethiopia, whose government is hoping to use that technology to increase the power of Ethiopia’s federal government. Keep an eye on this story.

Honorable mention

We were so disappointed when the viral story about the largest duck in all the land (named Long Boi) at a whopping 1 meter tall turned out to be mostly fake news. As always, be careful what you read on the interwebs, children.  

Sudan reportedly suspended an agreement with Russia to build a naval base on the Red Sea.

A conflict between residents at the Tajikistan and Kyrgyzstan border at the Golovnoy water intake facility escalated into violence on Wednesday.

The Mexican government improved a bill that will increase state oil company Pemex’s dominance in the energy market.

U.S. Vice President Kamala Harris met with Guatemalan President Alejandro Giammattei on Monday and pledged $310 million in aid to Central America. According to the Guatemalan side, the U.S. also agreed “to establish a new joint border protection task force.”

Fighting continues in Myanmar, with particularly fierce clashes between Myanmar soldiers and Karen insurgents near the Thai border.

China reported its first population decline in 60 years according to a yet-to-be-released census.

Taiwan’s Minister of Economic Affairs Wang Mei-hua said that Taiwan’s (read: TSMC) most advanced technologies will remain in Taiwan, regardless of TSMC agreements to build production facilities in the U.S. or Europe.