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Quid Pro Quo, Vietnam and Covid-19, Japan’s New Prime Minister, ¿Un Nuevo Plan Marshall?, and The Week In Review

Blog / Weekly Review

Quid Pro Quo, Vietnam and Covid-19, Japan’s New Prime Minister, ¿Un Nuevo Plan Marshall?, and The Week In Review

Our latest podcast is out, featuring Dr. Carolyn Holmes of Mississippi State University on all things South Africa. (HAIL STATE!). Give it a lesson or find the transcript if you prefer by clicking on this sentence. 

Quid pro quo. Meng Wanzhou, Huawei’s CFO, who is under house arrest in Canada since 2018, agreed to a deferred prosecution agreement. The U.S. Justice Department will withdraw its extradition request and Meng will be allowed to return to China as a result. China released Michael Kovrig and Michael Spavor from prison, and both are back in Canada after almost three years spent in Chinese prison cells.

What it means: Since 2018, both the U.S. and Canada insisted that Meng’s arrest was not political but a matter of the rule of law. The two Michaels and Meng (to a much lesser degree) suffered for this point, only for it to be discarded seemingly on a whim.

By doing so, Canada and the U.S. all but proved China’s accusation, namely, that Meng’s arrest was explicitly political. The charitable interpretation, of course, is that Canada and the U.S. realized the Meng issue was realizing diminishing returns and it was unfair to let the two Michaels remain behind bars in China, but if that is indeed the realization they came to, it is remarkable it took three years to reach it. The less charitable interpretation is that China’s accusation was true: Meng’s arrest was explicitly political and always was.

At least part of this story can be explained by the fact that Meng was arrested while Donald Trump was serving as president. Trump famously declared Canada a national security threat to the U.S. so the U.S. could impose tariffs on Canadian steel and aluminum. His government also declined to use U.S. government influence to aid Canada in its various trade disputes with China at the time, especially over Canadian exports of canola. Chinese strategy is to sow seeds of doubt within the U.S. alliance network, and plenty was sown during this debacle. 

That is likely why the Biden administration decided the PR hit on the rule of law was worth taking. If there has been one constant in Biden’s approach to foreign policy, it has been to try and restore U.S. relationships with its allies (which is part of what made the snafu with France over the submarines such a glaring mistake). Canada never wanted to arrest Meng but it did so because Washington said she had committed a crime, and Ottawa was understandably confused when, after dutifully complying with the Justice Department, it was met with outright derision and bombast from a U.S. president.

We are glad the Michaels and Meng get to go home – but are disturbed by the precedent that has been set.

Vietnam succumbs to COVID-19. Vietnamese Prime Minister Pham Minh Chinh said Vietnam would ease COVID-19 restrictions this week. Vietnam’s GDP shrunk by a reported 6.17 percent in Q3 due to extensive pandemic lockdowns and has led to significant supply chain disruptions for everything from apparel to coffee.

What it means: Vietnam was widely (and rightly) praised for its initial response to the COVID-19 pandemic. Vietnam was able to implement an elimination strategy (as opposed to a suppression strategy) due to swift and strict lockdowns. Unfortunately for Vietnam, the Delta variant is much more contagious than the initial COVID-19 strain and Vietnam was not nearly as swift or effective in proactively vaccinating its population or recognizing the different sort of threat posed by Delta. If media reports are true that Vietnamese statistics are severely undercounting reported cases, we fear that things may get worse before they get better, especially as the Vietnamese government can no longer afford to implement a failing elimination strategy due to the economic ramifications for the country.

Japan’s new Prime Minister. ​​Fumio Kishida was elected the leader of Japan’s ruling Liberal Democratic Party and will become Japan’s next prime minister, defeating Taro Kono in a second-round run-off. 

What it means: Kishida is a former foreign minister who was considered the most likely potential heir to Abe before Japanese Prime Minister Yoshihide Suga emerged as the consensus compromise candidate. Kishida is much more “dovish” than his rivals, which is to say he is more focused on domestic issues like income inequality and increasing social spending. He has repeatedly spoken of the need for a fiscal stimulus package worth “tens of trillions of yen” to respond to the COVID-19 pandemic. Like Suga, Kishida lacks charisma, but unlike Suga, Kishida is a more experienced executive with a more holistic view of government policy.

¿Un nuevo plan Marshall? The U.S. will reportedly send a major delegation of officials to Colombia, Ecuador, and Panama to scout potential infrastructure projects for its Build Back Better World initiative, which is being touted as an alternative to China’s Belt and Road Initiative.

What it means:  China’s BRI has been a brilliant media campaign but, as an actual infrastructure strategy, has been so amorphous as to be largely inconsequential. If the U.S. comes back from these “listening tours” with concrete plans – a big if, to be sure – it could be the most important geopolitical development in the Western Hemisphere this decade. It’s this sort of thing that is the reason we are putting so much energy into our Latin America-themed newsletter, LatamPolitik, which we would love for you to sign up for if you haven’t already (shameless plug!). It only costs Cerveza a month!

Honorable mention 

General elections in Haiti set for November 7th have been postponed after Prime Minister Ariel Henry dismissed the country’s electoral council.

India’s state-run Coal India promised to increase supplies to utility companies across the country to make up for a coal shortage that is leaving power plants with stockpiles at four-year lows.

The governor of Jilin province in China, one of the hardest hit by the energy shortages afflicting the country, urged efforts to guarantee coal supplies from “multiple channels,” including Russia, Indonesia, and Mongolia.

German election results are in. The Social Democrats (SPD) took 25.7 percent of the vote – the first time since 2002 when they took a larger share than the CSU-CDU bloc, which received 24.1 percent of votes. The Greens and the FDP rounded out the top four, with 14.8 percent and 11.5 percent of the vote respectively.

The United Kingdom will only allow 12 small (less than 12 meters in length) boats from the EU to fish in English and Welsh coastal waters.

The Polish government has generated a list of potential EU projects it could block unless the European Commission agrees to unfreeze its post-pandemic recovery package.

Peruvian Prime Minister Guido Bellido, went to Twitter to offer a stark warning to the Camisea gas project, a $2.7 billion natural gas development run by a consortium of foreign companies, including Pluspetrol, Hunt Oil, Repsol, and SK Group, among others.

The European Union annulled a 2019 trade agreement and separate fisheries agreement with Morocco.