Patching Things Up, Japanese Elections, Pleading Their Case, Castillo’s Constraints, and The Week In Review

Blog / Weekly Review

Patching Things Up, Japanese Elections, Pleading Their Case, Castillo’s Constraints, and The Week In Review

Patching things up. The U.S. and Mexico opened negotiations to replace the Mérida Initiative with a new security agreement. According to The Washington Post, Mexican President Andrés Manuel López Obrador (AMLO) believes the Biden administration’s position on drug violence provides “political space for a reset.”

What it means: U.S.-Mexico security ties nosedived last October, when the U.S. arrested Mexico’s former Secretary of National Defense, General Salvador Cienfuegos Zepeda, in Los Angeles on drug and money laundering charges. The Mérida Initiative, which began in 2008 as part of a U.S. attempt to support Mexico’s war against its drug cartels, has funneled billions to Mexico but has not resulted in any decrease in violence. This is a positive step forward in U.S.-Mexico relations. It is also a clear reversal of the previous geopolitical trend of hostility and suspicion.

Japanese elections. The election platform for Japan’s ruling Liberal Democratic Party seems to be at odds with Prime Minister Fumio Kishida’s commitments. Missing from the LDP platform are crucial Kishida priorities like modernizing the Income Doubling Plan, a tax hike for wealth distribution, and increased financial support for families with children.

What it means: Kishida appears to have moderated some of his initial plans in order to secure buy-in from the LDP and improve business confidence in his new administration ahead of general elections later this month.

Pleading their case. Poland and Hungary officials presented arguments in front of the CJEU against the so-called “rule of law conditionality mechanism,” which aims to give the European Commission the authority to withhold EU budget funds from Warsaw and Budapest if the latter does not satisfy CJEU concerns over the rule of law.

What it means: A verdict is not expected until early next year, but considering Poland’s Constitutional Tribunal’s bombshell ruling last week, which challenges the primacy of EU law in Poland, we do not expect the CJEU or the European Commission to pull any punches. Quite the contrary, the EU will respond forcefully to Poland’s challenge.

Castillo’s constraints. Peruvian President Pedro Castillo revamped his cabinet. Most notably, Guido Bellido – who threatened to nationalize Peru’s natural gas industry on Twitter a few weeks ago – is out, replaced by Mirtha Vásquez, who served as interim President of Congress after Francisco Sagasti was elevated to the presidency after last year’s political turmoil. All in all, Castillo made changes to 7 out of 18 cabinet ministers. The positions that remained untouched are largely staffed by moderates like Economy Minister Pedro Francke and Foreign Minister Oscar Maurtua.

What it means: It took all of six weeks for Castillo to purge his more radical ministers in favor of more centrist, pragmatic voices. As we’ve said here before: there are limits to how far Castillo can push his agenda. For more, check out our analysis at

Honorable mention

China authorized coal-fired power plants to charge customers market-driven prices.

Indian Prime Minister Narendra Modi met with Danish Prime Minister Mette Frederiksen.

Russian President Vladimir Putin said he and U.S. President Joe Biden had “stable working relations.”

Austrian Chancellor Sebastian Kurz resigned after Kurz came under suspicion for bribery and embezzlement in a corruption probe.

The Argentine government, fearful that there will not be enough corn for domestic demand, said it would not approve any more corn exports for next season’s crop until last season’s corn is sold.

Iran and Saudi Arabia are reportedly discussing reopening official diplomatic relations.