The geopolitical events of the week brought to you by GC’s global macro team.
26 July 2021
US priorities in Southeast Asia
US defence secretary Lloyd Austin will visit Singapore, Vietnam, and the Philippines this week, marking the second visit to Southeast Asia by a senior Biden administration official. Austin’s visit is intended to demonstrate US support for ASEAN and Southeast Asia in general, and to quell criticisms and fears. President Biden’s regional emphasis on the Quadrilateral strategic dialogue forum (between the US, India, Australia and Japan) has raised concerns among ASEAN members that their influence is on the wane. The fact that the Secretary of Defense’s will centre on Vietnam and the Philippines is notable, given those countries’ challenges with China’s aggressive posture in the South China Sea. The visit will be anchored by a speech on Tuesday in Singapore at the International Institute for Strategic Studies. Austin is expected to use the opportunity to reaffirm the importance of the United States’ relationships in the region and to deliver a broader view of Biden’s security policy. ASEAN countries, in particular, will be wary of further US – China polarisation and remain keen to avoid being trapped between competing spheres of influence. Read more from Miranda Lutz
Iraqi prime minister in Washington
Iraq’s prime minister, Mustafa Al-Kadhimi, will meet US President Joe Biden in the White House to discuss the withdrawal of American troops from Iraq. Biden is expected to meet Al-Kadhimi’s demand for a concrete timetable of US troop withdrawal, whereas Al-Kadhimi will be urged to ensure the security of US troops until they have been withdrawn, and to reduce Tehran’s influence in Iraq while continuing to broker dialogue between Iran and Saudi Arabia. Read more from Thomas Gratowski
Central bank meetings in Nigeria, Ghana and Kenya
Key African central banks are expected to leave interest rates unchanged at meetings this week as a third wave of covid-19 weighs on recovery prospects. The recent surge of covid-19 infections coupled with an ongoing vaccine shortage will likely motivate a cautious approach to adjusting rates, but all three central banks will be keeping a close watch on inflation data. Read more from Isabelle Trick
WTO council meeting
At a two-day WTO General Council meeting, members will report that little progress has been made on the proposed intellectual property (IP) waiver for coronavirus medical products. Without consensus on the IP waiver or compulsory licencing, the TRIPS council will request more time for talks to continue, but consensus is more likely on improving trade facilitation and avoiding further export restrictions to combat the pandemic. Read more from Elly Darkin
US – Canada – Mexico (USMCA) trade agreement
The Senate Finance Committee will examine the implementation of the USMCA trade agreement at a hearing. The hearing is expected to shed light on how the private sector views the enforcement effort so far, while lawmakers will seek more detail on what would constitute a “worker centric” trade policy. Read more from Miranda Lutz
EU Recovery Plans
Economic and financial affairs (ECOFIN) ministers will meet to exchange views and may greenlight the second batch of member states’ recovery and resilience plans. Despite Hungary’s plan being delayed due to rule of law concerns, the remaining EU capitals’ recovery plans are expected to be approved, but frictions may emerge at a later stage when ministers will consider whether the milestones, targets and structural reforms set out in the plans have been met. Read more from Alessandro Gangarossa
Fed meeting on interest rates
The Federal Reserve will meet to discuss when to curtail its monthly asset purchases, which would precede any interest-rate increase. With higher-than-expected inflation numbers and increasing pressure on the US housing market, the pressure on the Fed to act continues to grow, with some officials suggesting concluding purchases by October 2022. Read more from Ben Bassett
Will the EU member states agree to each others' recovery fund plans? In his new blog, Maarten Lemstra discusses the political challenges ahead for the crucial disbursement phase, including Hungary, Poland, the 'frugals' and more.
In the latest episode of the GC podcast, enjoy an in-conversation with Fiona Hill, Senior Fellow at Brookings, former Deputy Assistant to the US President and Senior Director for European and Russian affairs on the National Security Council; and Denzil Davidson, GC adviser, discussing the last four years of US policy and what has changed in the US-EU relationship since the new administration took over in January; the outcomes of the Biden and Putin summit on June 16th and how the US and EU create policy towards competitors, like Russia and China.
Join us for a call led by GC expert Alex Dawson, with Matthew Swindells, former deputy CEO of NHS England, and Dr. Harpreet Sood, GC adviser. They will discuss the consequences of lifting restrictions in the UK, a new ‘acceptable’ threshold for the number of covid-19 deaths and hospitalisations, self-isolation rules for businesses and travelling, and the considerations for UK businesses.
Join us for an event organised by Aleph Farms, all about the inclusive transition of the meat sector. Speakers include Marc Buckley, Resilient Food Futurist, Didier Toubia, CEO of Aleph Farms, Cor Van Der Weele, Professor at Wageningen University, Sophie Egan, Director of Strategy, Food for Climate League, and Ruaraidh Petre, Executive Director, Global Roundtable for Sustainable Beef.
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