IMF foresees globalism’s fragmentation into regional blocs with own regulatory standards, reserve currencies
“A serious risk to the medium-term outlook is that the war in Ukraine will contribute to fragmentation of the world economy into geopolitical blocs with distinct technology standards, cross-border payment systems, and reserve currencies.”
In a lamenting tone, the International Monetary Fund presents this as a possible scenario, masking the fact that such a period of conflict between regional blocs has always been declared by globalists as their alternative, incremental option to develop each region toward their objective of a world-order federation of regional blocs.
Open and download the IMF’s full report (PDF) here: World Economic Outlook Update, July 2022
‘REGIONALIZATION’ AND THE NEW REGIONAL ORDER:
‘REGIONALIZATION, NOT GLOBALIZATION, WILL SET THE CORPORATE AGENDA’
By Shannon K. O’Neil, Foreign Affairs, July-Aug 2022
(Foreign Affairs is published by the Council on Foreign Relations)
….During the COVID-19 pandemic, border closures and rising transportation costs have prompted companies to consider bringing production closer to home…. The most probable scenario is that multinationals will turn away from globalized supply chains in favor of shorter, more duplicative regional ones. Regionalization, not globalization, will set the corporate agenda in the coming decades….
To enhance North America’s regionalization, the continent needs to improve its linking infrastructure…. As parts and components move between the three countries, workers must be able to follow.
Shannon K. O’Neil is the Nelson and David Rockefeller Senior Fellow for Latin America at the Council on Foreign Relations. She is the author of the book The Globalization Myth: Why Regions Matter, from which this essay is adapted.
From its very outset within the title, this essay by Shannon K. O’Neil embarks on a mission of false choices and unsupported assertions. For instance:
If, as O’Neil maintains, natural disasters from “climate change” can jeopardize overextended, global supply chains more than shorter, faster regional supply chains, then shorter, faster national supply chains would be an even more favorable option. But this “reshoring” option is not offered, except only to be dismissed with this strange, hasty generalization: “as costs rise and innovation falls.”
O’Neil recognizes that advances in production require a labor pool with greater skills and less workers. For what benefit, then, does she advocate that “tens of millions of people could be energized” when a massive EU-style labor pool could move freely across North America’s national borders?
O’Neil presents a “regionally focused world” as the reality, citing the European Union’s common labor pool, passport and currency as its model. But O’Neil sidesteps the fact that this “reality” has been created. This “reality” is based upon a series of multilateral/bilateral agreements favoring a utopian globalist mindset that gave us open-border chaos and the global supply chain debacle.
Calling globalism a “myth” is O’Neil’s attempt to distance globalists from the very real global mess that they created, while also attempting to walk back the same erroneous, delusional mindset into a more “sustainable” regional context.
As a mouthpiece for the globalist Council on Foreign Relations, O’Neil also parrots Klaus Schwab, founder of the World Economic Forum. Schwab promotes “regionalization” as globalism’s post-Covid compromise with nationalism. Regional blocs and regional supply chains are his “in-between solution….a new watered-down version” of globalization.
INVEST IN ‘NORTH AMERICA’ SUPPLY CHAIN:
US taxpayers fund automotive EV supply chain’s transition to ‘North America’ under Biden’s ‘Inflation Reduction Act’ tax credit rules:
SUPPLY CHAINS MADE VISIBLE AS PART OF US TAX CREDIT LEGISLATION ON EVs
Automotive Logistics, August 2, 2022 – ….From 2027, these rules of origin would rise to 80% [from ‘North America‘] for raw materials.
For battery components, there is a similar timeline. From 2024, at least 50% of the battery components must be manufactured in North America, which progressively rises by 10% a year to 2029. when 100% of battery components must be sourced from North America as part of the US-Mexico-Canada free trade agreement (USCMA)….
This provision for rules of origin within the Climate Bill is intended to send a strong signal to mining companies to invest in the North America and incentivise OEMs to source raw materials more locally within the USMCA area or from countries with FTAs….
THE MULTIPLIER EFFECT’ OF BRICS+
Restarting Globalization: ‘Predicated on the cooperative network of regional alliances’
Modern Diplomacy, July 4, 2022 – ….Potentially this sequential approach to building alliances across the Global South on the basis of the BRICS+ “integration of integrations” could become a basis for re-starting the globalization process in the world economy bottom-up (from the level of countries and regional blocs) rather than top-down (solely from the level of global organizations)….
The global institutions would receive the additional mandate of coordinating the regional networks and development institutions:
● IMF: coordination of regional financing arrangements (RFAs)
● World Bank: coordination of regional development banks
● WTO: coordination of regional integration arrangements
The basket currency would rival a US-dominated IMF alternative and let Russia widen its influence, an analyst said.
Markets Insider, June 24, 2022
BRICS: GALVANISED IN THE KILN OF UKRAINE WAR?
Trade within the group increased by 38% in the first quarter of 2022
‘Just as how the European community was created … we have to do that in America’
Breitbart, June 7, 2022 – “I will go in July to visit [President Joe Biden] at the White House and I want to discuss with him the issue of the integration of all America,” President Andrés Manuel López Obrador said at a press conference in Mexico’s presidential palace….
He blamed the GOP — and its anti-migration wing — for the political barriers to greater unification between the United States and southern and central America.
REGIONALISM AND THE EUROPEAN UNION
EU blueprint for other areas of regional integration
E-International Relations (UK), May 21, 2022 – The path adopted by the European Union has also provided a blueprint for the African Union. The organisation has embedded several of the political elements of integration adopted within Europe. There are also signs that economic integration within the region is gathering pace. Although such institutions have not yet been established, there are moves to establish a single currency….
Of all the regional organisations to consider, the most significant remains that of the European Union. It has for instance provided a blueprint for other areas of regional integration (notably in Africa).
MADE IN NORTH AMERICA:
US MANUFACTURERS BRING JOBS CLOSER TO HOME
‘Nearshoring is the answer to a lot of industrial woes, from to the dearth of product to supply chain issues and labor shortages’
GlobeSt, June 8, 2022 – Barbi Reuter, CEO and principal at Cushman & Wakefield affiliate PICOR and currently serving as 2022 CREW Network global board president, says that bringing jobs back to North America, typically in Mexico, increases predictability and reliability of the supply chain while retaining favorable labor access and costs compared to the US.
“Nearshoring” is a classic bait-and-switch: Manufacturers are not “bringing jobs back” to the original thesis of “Made in USA,” from the current antithesis, “Made in China,” but are forming a new synthesis, “Made in North America,” setting up a scenario patterned after the European Union. The “woes” cited were caused by the very globalists who are now using them as a pretext for even more open-border multilaterism within global regions, by using “regional cooperation mechanisms” (i.e., EU-style regional regulatory systems. See below).
WHAT AMERICAN COMPANIES SHOULD CONSIDER BEFORE NEARSHORING TO MEXICO
Forbes, June 7, 2022 – Not only is moving goods between the U.S. and Mexico easier, but goods can also be moved at more competitive prices. Yes, fuel prices have led to increases in transportation costs, but the increase in over-the-road transportation is currently hovering at about 30%, versus roughly 500% for some air or ocean cargo transport. And over-the-road transport is much faster than ocean (which just last year was taking up to 75 days, factoring in port delays, which are currently longer than average).
This is false-choice deception: If over-the-road transportation from Mexico is cheaper than ocean or air transport from China, then seamless, over-the-road transport within the U.S. itself would be cheaper than throughout the expanse of the continent, particularly if U.S. venture capitalists poured more startup investment into their own country instead of into multilateralist pipe dreams.
‘REGIONAL COOPERATION MECHANISMS’:
US, LATIN AMERICA DEVELOPING MIGRATION PACT TO ADDRESS SURGE
Regina Leader-Post, June 6, 2022 – Bloomberg News reported last month that the Biden administration is working on an economic framework that will address subjects including so-called nearshoring and supply-chain vulnerabilities revealed by the pandemic, seeking to set a new course for integration with the region.
The proposed pledges also include improving access to public and private services for migrants, refugees, and stateless persons to promote their full social and economic inclusion in host communities, according to the document….
To confront the challenges, summit participants would convene multilateral development banks,…. improve regional cooperation mechanisms for law enforcement, information sharing and border management, visa regimes and regularization processes, it said.
See: Illegal Immigration, ‘Free Trade’ and the ‘Free Flow of People’
Also: DACA: Real ‘dreamers’ are ‘free trade’ utopians using children as pawns
WHY LATIN AMERICA NEEDS A NEW WORLD ORDER
NewsClick (India), May 10, 2022 – Should Gustavo Petro win the Colombian presidential election in May 2022, and Lula win his campaign for re-election to Brazil’s presidency in October 2022, for the first time in decades, the four largest economies in Latin America (Brazil, Mexico, Argentina, and Colombia) would be governed by the centre-left, notably supporters of Latin American and Caribbean integration. Lula has said that if he wins the presidency, Brazil will return to CELAC and will resume an active stance in BRICS.
INTRA-EURASIAN ECONOMIC UNION TRADE UP TO 20% IN Q1 2022
Kazakhstan announces significant trade jumps with China, is negotiating a free trade services agreement with Turkey
Russia Briefing, May 15, 2022 – “Sanctions didn’t affect the country’s exports, as mutual trade between the EAEU member states went up (over 20 percent) in the first quarter of 2022.
‘NEW REGIONAL ORDER’:
FOUR SHADES OF DEGLOBALIZAION
Contributing Factors reversing the course of globalization
Phys.org, May 13, 2022 – One can read the current moment as a shift from true globalization to a situation in which trade is reorganized into regional clusters, with the United States, Europe, China and others at the center of smaller, more cohesive networks.
GCC HAS THE POTENTIAL TO BECOME A GLOBAL POWERHOUSE
‘United States of the Arabian Peninsula’ is not hard to envisage in the future
Khaleej Times, May 10, 2022 – The Gulf Cooperation Council (GCC) has grown into a robust inter-governmental union between the six Gulf nations – the UAE, Saudi Arabia, Qatar, Kuwait, Bahrain, and Oman….Just as the European Union (EU) is one of the main political and economic unions of the western world, the GCC has the potential to become an economic and strategic powerhouse in the Middle East and globally.
Regional bloc network by ‘integration of integrations’
Modern Diplomacy, April 18, 2022 – A platform for interactions between regional integration blocs involving BRICS states could become another track of interaction within BRICS+. Such a platform could include priority projects of regional integration involving BRICS states, such as MERCOSUR, SACU, BIMSTEC, the EAEU, as well as the RCEP or the ASEAN-China Free Trade Area. All these regional blocs could cooperate in coordination, moving toward aligning their standards and creating a more open economic space for trade and investment by BRICS states and their regional partners. It is important to notice that most BRICS states currently choose to shape their foreign policies in the form of regional integration blocs (Russia – the EAEU, Brazil – MERCOSUR, South Africa – the SACU), and, consequently, BRICS+ based on “integration of integrations” is the only possible format for economic integration and for opening markets between BRICS states.
INTEGRATION WITH THE UNITED STATES OR LATIN AMERICAN INDEPENDENCE?
Mexico’s president proposed contradicting relationships with North America
NACLA, April 13, 2022 – The president continued, expressing a willingness to consider an eventual economic integration of Latin America with the United States that “could be similar to the European Union.” In this regard, we cannot forget that at the beginning of the 21st century, the Bush administration promoted the Latin American Free Trade Area, in order to guarantee investment rules aimed at subordinating the region, as part of the United States’ geoeconomic competition with the European Union.
Middle East Institute, April 13, 2022 – …Israel Defense Forces’ (IDF) Chief of Staff Aviv Kochavi announced preparations for a potential upcoming military operation, foreshadowing a possible move against Iran. Kochavi’s announcement came shortly after Israel and the foreign ministers of four Arab nations — Morocco, Egypt, the UAE, and Bahrain — along with U.S. Secretary of State Antony Blinken, met at the Negev Summit…. The Times of Israel reported that Israel is cooperating with Middle East allies to build a “joint defense system” to counter Iranian missiles and drones. Like the Middle East Strategic Alliance (MESA) proposed by the Trump administration, the alliance will be modeled after the North Atlantic Treaty Organization (NATO)….
ASIA-PACIFIC WILL PROTECT ITSELF WITH RCEP
Daily Sabah, April 9, 2022 – The regionalization of global trade (intra-regional trade) and supply from close geographies (nearshoring) have been on the agenda of the World Trade Organization (WTO) since last year due to global supply chain problems caused by the coronavirus pandemic…. With the full activation of the RCEP, it is aimed to gradually introduce zero tariffs in more than 90% of the trade in the region, which will mean a “regionalized trade” even greater than the EU Customs Union.
ArmenPress, April 6, 2022 – According to the Ambassador, Russia understands quite well that the sanctions against it will cause a serious blow to the allied states of the Eurasian space, and the isolation policy against Russia will also be carried out towards other member states of the Eurasian Economic Union. But Russia hopes that the commonality of interests of Eurasian partners, their economic connectivity will dictate the perception that it is necessary to stay together and develop together.
THE WEAPONIZATION OF INTERDEPENDENCE – AND OTHER CONSEQUENCES OF THE WAR IN UKRAINE
Regionalization of globalization
The Hill, April 4, 2022 – We’re seeing how fragile the international system is, as it fragments into regional blocs, as digital currencies are accelerating efforts to reduce the global role of the dollar. But all told, it appears more a scaling back and regionalization of globalization than its demise.
THE RESTRUCTURING OF INTERNATIONAL CAPITAL MARKETS UNDER DEGLOBALIZAION
‘Paradigm shift’ from globalization to regionalization
Modern Diplomacy, April 1, 2022 – Tony Pasqsuariello, global head of hedge fund coverage at Goldman Sachs, has said that the world is now undergoing a “paradigm shift” from globalization to regionalization.
‘SLOW-BALIZATION’: HOW WAR AND THE PANDEMIC ARE RESHAPING GLOBAL TRADE
World economy moving towards regionalization
Japan Times, April 1, 2022 – The Ukraine-Russia conflict has highlighted the risks of globalization and accelerated a trend of deglobalization.
MANCHIN: THE UNITED STATES MUST LEAD A NORTH AMERICAN ENERGY ALLIANCE
‘To strengthen our collective supply chains’
Energy.Senate.gov, March 31, 2022 – U.S. Senator Joe Manchin (D-WV), Chairman of the Committee, raised concerns about the free world’s reliance on adversarial nations like Russia and China for their energy and critical minerals supply chains. The Chairman also highlighted the importance of collaborating with our continental neighbors in a North American energy alliance to strengthen our collective supply chains and minimize vulnerabilities to those nations that might use supply chain dependencies against us.
MIDDLE EAST MINISTERS HOLD TALKS IN ISRAEL ON ‘COMMON ENEMIES’
Daily UK News, March 28, 2022 – [Israel’s Yair Lapid] on Monday said that the purpose of the Negev summit was to build a “new regional architecture” whose shared capabilities “intimidates and deters our common enemies — first and foremost Iran and its proxies”.
PHL SUPPORTS INDIA INCLUSION IN RCEP BLOC
Business World, March 22, 2022 – The Philippines is supporting the admission of India into the Regional Comprehensive Economic Partnership (RCEP) trade bloc….
“With the size of India, contributing around 1.3 billion people, then that would really make RCEP unquestionably as the world’s largest trading bloc. ‘
IS AN EU ARMY COMING?
Russia’s war in Ukraine is turning the European Union into a serious military player
Foreign Policy, March 20, 2022
ASEAN MEMBER STATES TO EXPLORE FURTHER WAYS TO STRENGTHEN SUPPLY CHAINS AMID COVID-19 RECOVERY
To position itself as ‘progressive and dynamic regional bloc’
CNA, March 16, 2022
‘MADE IN NORTH AMERICA’ AND THE NEW NORTH AMERICAN SUPPLY CHAIN:
In Accordance with Klaus Schwab’s Global Network of Regional Supply Chains:
Automotive World, March 7, 2022 – The Quebec site will process CAM, a key battery material consisting of components like processed nickel, lithium and other materials representing about 40% of the cost of a battery cell…. By the end of 2025, GM plans to have capacity to build 1 million electric vehicles in North America, and the company targets the majority of components by value to be sustainably sourced, processed or manufactured in North America.
CEOWorld Magazine, March 10, 2022 ….And although Made in America is the safest and most reliable way to control cost, product quality and supply chain logistics it may also be time to skip past re-shoring, and go for the next best thing: “Near-shoring.”Near-shoring is the act of transferring your business operations from far away to closer to home, closer to your customer channel, but not in the U.S….
Moreover, the average manufacturing wage in Mexico is just $5/hour compared to $30/hour in the U.S. and $17/hour in Canada. And despite Mexico’s evolving political scene, the labor pool there is young and robust and eager….
InvestCanada.ca says it’s the only country in the western hemisphere that can produce electric batteries and electric vehicles entirely from top to bottom.
WAR WILL CAUSE UPHEAVAL IN GLOBAL AND NORTH AMERICAN SUPPLY CHAINS
FreightWaves, March 8, 2022 – With global supply chains subject to disruptions due to global geopolitical tensions, companies will look for production sources closer to home…. Anything that is manufactured in North America will certainly benefit the American freight market, as transportation services will be involved in all stages of supply chain sourcing, production, assembly and distribution. When companies source and manufacturer products in China, much of the freight spend would remain in that region, far away from American logistics companies.
ALL-RISK COVERAGE, VISIBILITY TECH TURNING HEADS IN MEXICO
FreightWaves, March 3, 2022 – ….Luna believes that even greater things are on the horizon for Mexico’s freight industry, as a vast array of industries are moving into the country. He describes Saltillo as the “Mexican Detroit” because of the city’s automotive manufacturing facilities from the likes of General Motors, Chrysler and Daimler. In addition, industries such as furniture manufacturing have opened up shop, with Ikea and La-Z-Boy entering the region in the past five years.
Geopolitics.com, March 5, 2022 – The economic arm of the CIS is the Eurasian Economic Union, EAEU. It is subdivided into a Customs Union and Single Economic Space, which provides the free movement of persons, goods, services, and capital within the EAEU. Though Ukraine was offered to join the EAEU, following increased tensions with Russia, it has drifted closer to aligning itself with the European Union instead. Like the CSTO, a Russian-backed government in Ukraine would most likely be pressured to join the EAEU binding the Ukrainian and Russian economies further together.
EUROPEAN UNION ‘AUTONOMY’:
EU CHIPS ACT: THE EU’s PUSH FOR SEMICONDUCTOR AUTONOMY
The recent semiconductor shortage, COVID-related supply chain disruptions, and trade tensions have exposed the European Union’s (“EU”) dependency on chips made in other continents.
The European Commission (“EC”) has proposed legislation—the EU Chips Act—focused on developing a domestic EU semiconductor industry and reducing dependency on foreign imports. The proposal is part of the EC’s strategy to incentivize manufacturing in the EU and achieve “strategic autonomy” in the technology sector in particular.
‘NORTH AMERICAN’ INFRASTRUCTURE:
WHITE HOUSE MOVES TO AID STRUGGLING SUPPLY CHAINS
Argus Media, Feb 25, 2022 – The US, Mexico and Canada will also meet this summer to explore opportunities to improve the North American supply chain.
FEDS ANNOUNCE MAJOR LAND PORT IMPROVEMENTS
The Trucker, Feb 25, 2022 – The law includes $3.4 billion for GSA to build and modernize land ports of entry on the country’s northern and southern borders.
NORTH DAKOTA LAND PORT AWARDED FUNDING FROM BIPARTISAN INFRASTRUCTURE LAW
Cramer.senate.gov, Feb 25, 2022
‘MADE IN NORTH AMERICA’ & DRUGS FROM MEXICO:
MEXICAN MANUFACTURING: SO FAR FROM EU, SO CLOSE TO US
Pharmaceutical Technology, Feb 21, 2022 ….US manufacturing executives perceive nearshoring to Mexico or Canada as even more advantageous than reshoring to the US. The index also noted that US manufacturers will specifically strive to reduce dependence on China for manufacturing, another positive sign for nearshoring operations to Mexico. Since 2020, Covid-19 related supply chain disruptions have caused many US companies to take steps to bring some of their manufacturing closer to home…. Many of the world’s largest pharma companies already operate facilities in Mexico, and nearshoring could increase international investment further.
ISRAELI-ARAB REGIONAL BLOC?
ISRAEL SEEKS NEW REGIONAL BLOC WITH ARAB PARTNERS, BENNETT SAYS IN BAHRAIN
Reuters, Feb 15, 2022 – “We are trying to form a new regional architecture of moderate countries (to) provide stability, economic prosperity and to be able to stand strong against enemies who are fomenting chaos and terror,” [Israel’s Prime Minister Naftali Bennett] told reporters during the first visit to Bahrain by an Israeli leader since the two states normalised ties in 2020.
‘MADE IN NORTH AMERICA’ AND THE NEW NORTH AMERICAN SUPPLY CHAIN:
In Accordance with Klaus Schwab’s Global Network of Regional Supply Chains
Rio Grande Guardian, Feb 18, 2022 – “The study basically indicates that because of the supply chain fallout, there are going to be some big winners. And the winners are going to be Mexico, Canada and their sea port of entries. Because they have the ability to take on more cargo,” Gutierrez said….
So, we expect South Texas, the Rio Grande Valley to really benefit from the fall out, through the land port of entries.”
…. “The infrastructure is already in place and we can pass products through here much faster. The products, coming in through Mexico, can go up to the central United States and the eastern coast of the United States much faster.”
Gutierrez added: “The study indicates they (Mexico’s West Coast ports) are all ready to take on extra cargo and ready to operate. It is already happening as we speak. The numbers are showing it.”
Al Jazeera, Feb 18, 2022 – Washington has also slapped restrictions on some goods from China over concerns that they contribute to human rights abuses. Rising costs for fuel and shipping stemming from the pandemic have also made Chinese goods less attractive to US companies.
And as China’s outsourced manufacturing star fades, Mexico’s shines brighter. The country is part of a free trade agreement with the US and Canada that allows for duty-free imports and easier transactions. It also has a cultural affinity with its northern neighbour, a strong manufacturing base and a growing talent pool of skilled tech workers.
‘Recruiting Mexico as an alternative to the ports in California’
Freight Waves, Feb 17, 2022 – “Mexico has been very aggressive in its economic development recruitment efforts in East Asia. Economic development teams have been to China, Korea, Indonesia and Thailand, you name it, in recruiting Mexico as an alternative to the ports in California.”
A PPP FOR SUPPLY CHAIN WOES
Railway Age, Feb 9, 2022 – Consider, instead, a public-private partnership (PPP) working through former Maryland Ports Commission Chairman John D. Porcari, who heads the Biden Administration’s Supply Chain Disruptions Task Force. Meetings should be open to public attendance. The PPP might include the Secretary of Transportation, the Federal Railroad Administration (FRA), Maritime Administration (MarAd), Association of American Railroads, American Short Line and Regional Railroad Association, trucker organizations, ports authorities, shipper groups, and rail and maritime labor unions.They should coordinate tapping into the $1.2 trillion Infrastructure Investment and Jobs Act…. Supply chain-friendly projects include expansion of port capacity; extension of rail lines into ports…and construction of inland ports in lower-cost non-urban locations to which containers are moved by rail directly from dockside.
Today’s PPP “public-private partnership” concept is simply yesterday’s big-government/big-business fascism. Big corporations like railroads love it, because it allows “tapping into” government money and exclusive, monopolistic contracts with power-broker politicians.
Beyond this, a PPP tied to Biden’s infrastructure act would accelerate globalists’ stated objective of a North American supply-chain infrastructure. Biden’s bill diverts US taxpayer money to build “inland ports” along the Southern border and North Central U.S., capable of accommodating direct shipment of freight non-stop across borders from Mexican and Canadian seaports. Look for the infrastructure agenda to be augmented with “foreign aid” to both Mexico and Canada to “shore up” construction of those seaports and transportation networks to establish a “North American” import-export economy (i.e., a “common market”), and eventual North American Union, following the path of the European Union.
SUPPLY CHAIN DISRUPTION AT HISTORIC HIGHS
EPS News, Jan 27, 2022 – From raw materials to finished goods, the Covid pandemic has wreaked havoc on global electronics supply chains….
One option gaining traction is to align with regional supply chain partners. For example, the relevance of the North American USMCA, formerly known as NAFTA, as a regional supply chain center has been amplified by the Covid-19 pandemic and the growing geopolitical competition with China.
HOW (NOT) TO MAKE A NORTH AMERICAN CAR
The Monitor (Canada), Jan 24, 2022 – If the U.S. wins, the new interpretation significantly tightens up the math in “Made in North America.” In extreme cases, supply chains will need to be rejigged to ensure compliance. Depending on the costs associated with compliance, that may trigger other indirect effects on the continental industry of concern to Mexico and Canada.
For example, automakers may determine that the cost of complying with CUSMA [USMCA] rules of origin is higher for them than paying the tariff (a mere 2.5% for cars exported into the U.S.). In that case, the entire North American auto trade architecture falls apart.
EUROPEAN UNION, EURASIAN UNION, AND THE ‘NEW COLD WAR’:
European Union ambassador says Russia-Ukraine crisis has unified the EU and NATO: “For us, this is existential”
CBS News, Feb 16, 2022 – [European Union Ambassador to the U.S. Stavros Lambrinidis] said Russia’s actions have brought European Union member nations closer together, and that they are united in planning massive, coordinated sanctions against the Russian economy and certain individuals. And the ambassador said that should Russia cut them off from its energy supplies, the European Union would be able to make it through the winter without Russia’s resources.
….As an example, Lambrinidis said that Russia sent a letter to each member of the European Union, and in response, it got one letter from the European Union and one from NATO.
“I think Russia thought it could divide and conquer us, and it has actually united the European Union and NATO more than we have arguably been ever before,” he said.
‘Just-in-time to just-in-case’: EU’s $49bn chip plan shows tectonic shift in global economy
Pandemic has exposed supply vulnerabilities
The Guardian (UK), Feb 9, 2022 – The European Union has announced a €43bn ($48bn) plan to overcome its dependency on Asian computer chip makers as governments and businesses around the world battle with a global supply chain crisis that experts believe could persist for much of the year.
EUROPEAN ‘DIGITAL SOVEREIGNTY’:
EU plans multi-billion euro boost for chip production to ease supply disruptions
CNBC, Feb 8, 2022 – The term digital sovereignty describes the idea that the bloc needs to foster its own innovation and become less reliant on foreign technology and foreign companies. This concept has gained more attention and support in European circles in recent years amid geopolitical tensions between China and the U.S….
“If Europe wants to control its own destiny, it has to be involved in the design of next-generation AI [artificial intelligence] systems. This requires local R&D, chip design and manufacturing,” analysts at ING said in a note on Tuesday.
Digital sovereignty: Commission proposes Chips Act to confront semiconductor shortages and strengthen Europe’s technological leadership
European Commission, Feb 8, 2022
EURASIAN ECONOMIC UNION:
Iran membership in Eurasian Economic Union would be ‘win-win for both Moscow and Tehran’
Armenian Weekly, Feb 2, 2022 – ….Yet the greater resonance of Raisi’s visit to Moscow is the planned joint naval exercises between Russia, China and Iran in the Indian Ocean, as well as Iran’s relations with the Eurasian Economic Union (EAEU) alongside the materialization of the International North-South Transport Corridor.
Iran’s membership in the EAEU is a win-win situation for both Moscow and Tehran. Russia would have consolidated its geo-economic and geopolitical position in the Middle East, and Iran would have a railway connection to Russia and Europe thus further expanding Moscow’s influence in the region. However, the realization of this objective still may need time and will face challenges from the US and its allies in the region…. By joining the EAEU and integrating into Eurasian regional organizations, Iran would consolidate its geo-economic position into a regional transport hub and open the Middle Eastern gate for Moscow to have railway access to the East Mediterranean.
Belarus’ Lukashenko Says Armenia ‘Can’t Escape’ Union State With Russia
– PanARMENIAN, Feb 8, 2022 – ….He added that Belarus is already in the common “security space”, and Kazakhstan has learnt a “good lesson”. Ukraine, he maintained, may end up there within 15 years “if no mistakes are made”.
“And Turkmenistan, Uzbekistan and Tajikistan, I think, will also join due to economic necessity,” Lukashenko noted.
The Union State is a supranational organization consisting of Russia and Belarus, “with the stated aim of deepening the relationship between the two states through integration in economic and defense policy.”
Arab News, Jan 24, 2022 – Saudi Arabia’s Minister of Finance Mohammed Al-Jadaan called on Gulf countries to complete the establishment of a customs union, and implement the Gulf common market, to achieve economic unity by 2025.
Strengthening ties: China and the GCC
Atlantic Council, Jan 31, 2022 – US withdrawal from Afghanistan and its pivot to the Indo-pacific signaled to Gulf states that US priorities increasingly lie outside the Middle East. As their ties with the United States weaken, GCC members feel a more urgent need to boost and consolidate their ties with China
China and the return of the Left in Latin America
Global Times, Jan 27, 2022 – After a hiatus of right-wing governments, the Left is also back in power in Peru and Bolivia, and, according to current polls, may elect Gustavo Petro to the presidency in Colombia in May, and Luiz Inacio Lula da Silva in Brazil in October. This represents a major change and opens new possibilities for the region’s role in world affairs, as well as opportunities for its relations with China.
REGIONAL SUPPLY CHAINS AND
‘THE NEW COLD WAR’:
EURASIAN UNION, EUROPEAN UNION
Moscow has already diversified its supply chains away from the EU
Russia Briefing, Jan 17, 2022 – Since the 2014 Crimea influenced sanctions, Russia’s Eurasian Economic Union (EAEU), a free trade bloc including Armenia, Belarus, Kazakhstan and Kyrgyzstan – a geographic area that fits in between China and the European Union – has signed off additional free trade agreements with Vietnam, Iran, Singapore and Serbia, and has pending FTA to be concluded with Bangladesh, Cambodia, China, India, Pakistan, Indonesia, Mongolia, South Korea, Thailand, Bosnia, Israel, Moldova, Egypt, UAE, Uzbekistan, and is beginning to make steps in South America. The entire ASEAN bloc is also considering an EAEU FTA, while Russia is also targeting the African continent.
In short, the Crimea sanctions have had the effect of motivating Russia to diversify its supply chains, reduce dependence upon Europe, and to develop new markets, especially in Asia.
MYASNIKOVICH: YEAR 2021 WAS QUITE GOOD FOR EAEU
BelTA (Belarus), Dec 30, 2021 – …2021 marked important decisions related to Eurasian integration. An agreement on the use of navigation seals for tracking shipments was signed. Equal access to public procurement in the EAEU was guaranteed. The Work Without Borders project was launched to facilitate employment and hiring in the EAEU labor market. The agreement on pension benefits for people working in the EAEU states came into force.
UKRAINE CRISIS: A GEOPOLITICAL CHANCE FOR THE EU?
DW (Germany), Jan 13, 2022 – “There now seems to be a consensus that we Europeans have to take back control over our external borders if the union is to persist — otherwise, nationalism will rise further,” he concluded.
“In that sense, the EU could indeed form a more unified block in the future.”
EU rejects merger of SKorean shipbuilders Daewoo, Hyundai
AP News, Jan 13, 2022 – “We prohibited the merger,” Vestager said, arguing the new company would have eliminated a major player and grabbed a global market share exceeding 60%….
Under EU rules, the European Commission can reject mergers even outside its borders because they would affect markets in the 27-nation bloc if the companies do business there.
EU takes legal action against Poland over rule-of-law dispute
Al Jazeera, Dec 22, 2021 – Poland’s Deputy Justice Minister Sebastian Kaleta hit back by calling the EU announcement “an attack on the Polish constitution and our sovereignty”.
….In this connection, the RCEP pact took effect in Australia, Brunei, Cambodia, China, Japan, Laos, New Zealand, Thailand, Singapore and Vietnam on January 1, 2022. Interestingly, South Korea will follow on February 1, but Malaysia, Indonesia, Myanmar and the Philippines have yet to ratify the deal. However, seven ASEAN members and five other partners, China, Japan, South Korea, Australia and New Zealand which account for 30% of the world’s economy have ratified the RCEP. The RCEP eliminates tariffs on about 90% of traded goods and standardizes many customs, investment, IP and e-commerce regulations.
It is hoped that by forming a single set of trade rules and simplifying complex issues such as rules of origin (CoO), the RCEP will further enhance the development of Regional Value Chain Systems (RVCS).
RCEP: Asia readies world’s largest trade deal
DW (Germany), Dec 30, 2021 – The Regional Comprehensive Economic Partnership (RCEP) is a trade deal between the 10-member Association of Southeast Asian Nations (ASEAN) and China, Japan, South Korea, Australia and New Zealand.
RCEP will cover about 30% of global gross domestic product (GDP), worth $26.2 trillion (€23.17 trillion), and nearly a third of the world’s population, some 2.2 billion people.
By comparison, the United States-Mexico-Canada trade agreement (USMCA) covers 28% of world trade, while the European Union’s Single Market is a distant third at nearly 18%.
China Is Chipping Away At America’s Influence In The Middle East
Business Insider, Jan 17, 2022 – Last week saw a series of meetings in Beijing between senior officials from the Chinese government and foreign ministers from Saudi Arabia, Kuwait, Oman, Bahrain, and the secretary-general of the Gulf Cooperation Council (GCC).
At these meetings, the principal topics of conversation were to finally seal a China-GCC Free Trade Agreement and “deeper strategic cooperation in a region where U.S. dominance is showing signs of retreat,” according to local news reports.
Voices from the Arab press: The path toward a unified Gulf currency
Al-Ittihad, UAE, December 24. Published in Jerusalem Post, Dec 30. 2021 – …What has still not been achieved is the single most important endeavor: adopting a unified currency for all Gulf states. Of course, currency unification is one of the most difficult stages of economic unity. In the European Union, the single currency was adopted only after years and years of groundwork…. The most pressing issue is the need to set up a Gulf central bank, which would enjoy full autonomy and would be protected from any political interference of a single member state.
USMCA – DEVELOPING A ‘NORTH AMERICAN SUPPLY CHAIN’:
The Latest on the USMCA for the EV Supply Chain
JDSupra, Jan 13, 2022 – Under the USMCA [US-Mexico-Canada Agreement], automotive goods are subject to stricter rules of origin, which affect the EV supply chain by requiring up to 75% North American content for vehicles and parts (including advanced batteries). The USMCA also imposes new high-wage requirements under a Labor Value Content (LVC) requirement, as well as North American steel and aluminum purchasing thresholds on automakers.
African countries are stuck on the free movement of people. How to break the logjam
The Conversation, Jan 16, 2022 – Most African countries signed onto the Free Movement of Persons protocol in Addis Ababa in January 2018. Its rationale was set out clearly: the free movement of people – as well as capital goods and services – would promote integration and herald in a host of other benefits….
The protocol was the codification of the commitment to free movement made by African countries in declaring the establishment of the African Economic Community in Abuja in 1991. Free movement is also one of the key goals for Africa’s Agenda 2063.
And yet, four years after its ratification, only a handful of relatively small African states have fully ratified the Free Persons protocol.
AU, Afreximbank, AfCFTA inaugurate Pan-African payment, settlement systems
Vanguard (Nigeria), Jan 15, 2022 – The commercial launch of PAPSS, which took place in Accra, Ghana, virtually and physically, would ensures instant or near-instant transfers of funds between originators in one African country and beneficiaries in another….
According to [Mike Ogbalu, CEO of PAPSS], at a continental level, establishing an efficient payment infrastructure will go a long way to eliminate the artificial borders that have divided the continent and robbed us of our shared prosperity.
EAC official urges to fast-track adoption of EACPass to boost cross-border trade
Xinhuanet.com, Jan 8, 2022 – A senior official on Friday urged member states of the East African Community (EAC) to fast-track the adoption of EACPass, a harmonized system to facilitate cross-border movement aimed at ending persistent border traffic snarl-ups that disrupt intra-EAC trade.
Peter Mathuki, the EAC secretary general, said in a statement that there is need for EAC member states to adopt the EACPass, a system that integrates all EAC member states negative test results for COVID-19 and those vaccinated, easing turnaround time at border points.
‘COMPETING REGIONAL UNITS’: KISSINGER’S ‘NEW MERCANTILISM’ OF EMERGING REGIONAL BLOCS
“And at the same time the consciousness of being at war, and therefore in danger, makes the handing-over of all power to a small caste seem the natural, unavoidable condition of survival.”
George Orwell’s 1984, Part 2, Chapter 9 (Goldstein manifesto, “The Theory and Practice of Oligarchical Collectivism”)
The war in Ukraine signals the beginning of globalist Henry Kissinger’s “new mercantilism” of “competing regional units.”
As was typical of historic mercantilism, media reports within both sides of today’s Ukraine crisis acknowledge that military/economic threats from the other region are useful in the deeper integration/consolidation of power within their own regional bloc. Here are some examples:
● THE GREAT EURASIAN ECONOMIC REALIGNMENT
Sanctions may accelerate Russia’s economic integration with Asia
City Journal, March 17, 2022 – What has not been widely considered, however, is the possibility that Russia welcomes this outcome. If Russia is betting on economic divorce from Europe, including in energy, then sanctions and boycotts counterintuitively support, rather than frustrate, Russian strategy.
● EUROPEAN UNION AMBASSADOR SAYS RUSSIA-UKRAINE CRISIS HAS UNIFIED THE EU AND NATO: ‘FOR US, THIS IS EXISTENTIAL’
CBS News, Feb 16, 2022 – “I think Russia thought it could divide and conquer us, and it has actually united the European Union and NATO more than we have arguably been ever before,” he said.
● HOW WILL RUSSIAN AND ASIAN TRADE DEVELOP IF THE US & EU PUT MORE SANCTIONS IN PLACE?
Moscow has already diversified its supply chains away from the EU
Russia Briefing, Jan 17, 2022 – In short, the Crimea sanctions have had the effect of motivating Russia to diversify its supply chains, reduce dependence upon Europe, and to develop new markets, especially in Asia.
● WESTERN SANCTIONS AGAINST RUSSIA MAY BOOST EURASIAN ECONOMIC UNION – RT (Russia Today), March 20, 2014 – “What would then happen is that the Eurasian Economic Union would accelerate in scale very rapidly.”
● ‘THANK YOU, MR PUTIN’ – DW (Deutsche Welle, Germany), March 21, 2014 – “With your annexation of the Crimea you have thrown a much-needed lifeline to…European integration…”
● VLADIMIR PUTIN: HERO OF THE EUROPEAN UNION – Breitbart, March 14, 2014 – “Vladimir Putin’s adventurism in the Ukraine has had a strange side effect: it may well have prolonged the life of his chief rival and antagonist – the European Union…”
‘you’re going to see regional orders spring up’
“I think you’re going to see the evolution of regional organizations, and that regional – because it’s so hard to create a world order – I think you’re going to see regional orders spring up. And then you would have links between regional orders. But they will be very much guided by economic interests, social interests and also security interests….”
Frederick Kempe, President and CEO of the Atlantic Council
Comments at the World Government Summit, March 29, 2022 (Video excerpt starts at 17:11)