The Whitewater Midstream case is advancing in the US, where the Mexican state electricity utility, the Federal Electricity Commission (CFE), has made new requests for evidence from two companies — JG Energy and Arbor Glen — related to the case. Federal court documents in Texas, obtained by EL PAÍS, reveal findings from a private investigator working on behalf of the CFE in the case against Guillermo Turrent and Javier Gutiérrez, ex-directors from the Enrique Peña Nieto administration accused of awarding multimillion dollar contracts to Whitewater Midstream in violation of the Mexican constitution.
To date, the CFE has opened three cases in the US in hopes that federal courts will order the companies in question to disclose information, including correspondence and transactions, that will assist the criminal investigations open against Turrent and Gutiérrez in Mexico. CFE expects that the information will confirm suspicions that the ex-directors conducted a false bidding process, misled the CFE Board of Directors to award costly and unnecessary contracts, and hid their long-standing personal relationships with Whitewater executives. The value of the contracts in question are estimated to be worth hundreds of millions of dollars.
In Mexico, Turrent and Gutiérrez are facing open criminal processes before the Special Anti-Corruption Prosecutor of the Attorney General’s Office (FGR). Gutiérrez is scheduled to appear in public hearings about the Whitewater case on August 17 and findings by a private investigator in the US suggest that he played a central role in the negotiations between the CFE and Whitewater.
Three months before becoming the deputy director of Modernization at the CFE in 2014, Gutiérrez founded a company in Houston called JG Energy Consulting, according to documents filed in the US federal case open in Houston. The address of the company is the same one as the home address of one of the Whitewater founders, Matthew Calhoun. According to public registration documentation, the address is the same one that Turrent and Gutiérrez used in 2012 to register a company called Mexico Energy Advisors, which later closed.
“CFE International seeks to use the subpoenas requested in this application to investigate whether JG Energy served as a conduit for improper payments to Gutiérrez,” reads the documentation the CFE subsidiary filed at the US federal court in Texas. Evidence presented includes tax statements in the US made by Gutiérrez that reveal JG Energy received more than $250,000 in income between 2015 and 2016, while he worked at the Mexican state utility.
“While Gutiérrez was working at the CFE and negotiating the Waha Connector Agreements and the precursors to those agreements, he received substantial income through JG Energy. This raises the possibility that JG Energy may have played a role as a conduit for payments to Gutiérrez associated with the improper award of the Waha Connector Agreements to Whitewater Midstream,” the court filing reads.
The Waha Connector pipeline was the first project negotiated between Whitewater Midstream and CFE International. The Precedent Agreement between the two companies for the pipeline was made on August 12, 2016, days before Gutiérrez requested bids for the same project from two of the biggest companies in the global energy industry, Energy Transfer Partners and Kinder Morgan. The private investigator that offered testimony in the US court says that Gutiérrez created “a misleading impression as to the competitiveness of the bid process,” given that he sent request for bids only after the contract had been awarded to Whitewater. The private investigator gave testimony after reviewing and having access to internal emails, public documents and private sources.
“The Waha Connecter pipeline appears to serve no apparent benefit to CFE or CFEi,” the private investigator said in his testimony.
An investigation by EL PAÍS published last year exposed links between Turrent, ex-director of the subsidiary CFE International, and two executives of Whitewater, Matthew Calhoun and Arlin Travis. The three worked together in 2000 and 2001 in the San Diego offices of Royal Dutch Shell. Their relationship and behavior was documented in a case of alleged electricity price inflation filed at the Federal Energy Regulatory Commission, FERC, which remains open.
A second contract signed between CFE International commits the state electricity company to buy a massive volume of natural gas from Whitewater, a quantity equal to 15 to 20 percent of Mexico’s daily import demand, for 15 years. In documents submitted to the US federal court, CFE claims to have evidence that Turrent and Gutiérrez made “misleading representations about projected Mexican natural gas demand” and “appear to have steered the procurement process” to ensure that the contract would be awarded to Whitewater, despite having submitted one of the more expensive bids for the project. The contract required approval from the boards of both CFE and CFE International.
“The gas Whitewater Midstream supplies under the South Texas Supply Agreement is often unnecessary excess gas that CFE International must resell. Gutiérrez and Turrent justified this excessive contract to the boards of directors of CFE International and CFE by making misleading representations about projected Mexican natural gas demand,” the court documents read. CFE claims that the contracts awarded to Whitewater included terms that were more expensive than offers made by other companies with more experience in the industry.
Last month, the Mexican Energy Ministry sent a legal document to Cenagas, the National Natural Gas Control Center, instructing the agency to require private companies operating in the country to buy natural gas solely from state companies CFE or Pemex. The document explained that, as a result of the contracts signed during the administration of Peña Nieto, the country is buying far more gas than it can store, transport or convert into electricity. This excess of natural gas, which CFE is obligated to purchase, costs the country an equivalent of 10 billion pesos, or around $500 million, per year, according to the document.
In April, EL PAÍS reported that the CFE opened a federal case in the US to request evidence from the company Antaeus Group, owned by Whitewater founder Calhoun. Since then, the CFE has opened two similar cases against JG Energy and Arbor Glen, owned by Whitewater executive Arlin Travis. In documents submitted to a US federal court in Austin, the CFE alleges that Travis worked simultaneously as a consultant for CFE International and Whitewater Midstream and coordinated contractual negotiations between the two parties.
“Evidence indicates that Travis, in his Arbor Glen role, drafted both CFE International’s request for offers for the Waha Supply Agreement and Whitewater Midstream’s final, and ultimately winning bid,” the court documents reads. “Through Arbor Glen, Travis simultaneously worked on both sides of the CFE International-Whitewater relationship.”
Internal emails submitted as evidence in the case reveal that, according to the terms of the consulting services agreement signed in 2016, the CFE agreed to pay Travis a monthly retainer of $6,000 for the first 20 hours of services provided each month. Additionally, according to the same contract, Travis would receive a “success fee” for no “less than $400,000 or more than $500,000″ for any completed deal, a rate he negotiated directly with Turrent.
Greece finally aids refugees stranded on scorpion and snake-infested islet | Global development
A group of adults and children who spent a month stuck on a scorpion- and snake-infested spit of land between Greece and Turkey – and denied help by both nations – were finally taken to temporary accommodation by Greek police this week.
Among the group of nearly 40 Syrian refugees forced to seek refuge on the islet in the Evros river was a five-year-old girl, Maria, reported to have died from a scorpion sting. Her nine-year-old sister remains gravely ill.
Migration minister Notis Mitarachi said on Tuesday that Greece would try to retrieve the body of the dead girl.
The ordeal is the latest incident to highlight what Niamh Nic Carthaigh, EU policy director at the International Rescue Committee, calls a “political game of gross irresponsibility” between the two countries that is costing lives.
One of the group, Baida Al-Saleh, 27, said the Syrians arrived on the islet on 14 July. Lawyers acting on their behalf obtained an interim measure from the European court of human rights on 20 July to allow them to remain, yet days later they were forcibly pushed back to Turkey and taken into custody.
In early August they were sent back to the islet. They survived by drinking river water and eating corn and leaves, while insects bit their skin in the heat. “They are treating us like animals,” said Al-Saleh in a voice note from the islet last week.
Civil society groups have put pressure on Turkey and Greece to rescue the group. Ankara made no comment but Athens claimed it was unable to help as the islet, charted as Greek on maps, was in Turkey.
Both sides claimed to have searched for the group but found no one. The NGO Uluslararası Mülteci Hakları Derneği – which has ties to the Turkish government – said in a statement that security officers from the nearby city of Edirne came within 75 metres of the coordinates supplied by the migrants on 10 August and used a megaphone, but received no response.
The claims are disputed by lawyers and journalists, such as Giorgos Christides, who closely documented the group’s plight for the German news website Der Spiegel. They say they have collected evidence to support the group, including live locations and verified photo metadata.
In the end, the group crossed to Greece in a boat left by other migrants, fearful of a violent pushback but driven to seek help for nine-months pregnant Nor, who was in pain and bleeding.
A Greek police statement said 22 men, nine women and seven children were found, and that government services “rushed to their aid” with “food and water, and transported them to a place of temporary accommodation”.
Al-Saleh said the group were given medical care and they believe they will now be registered for asylum.
In recent months thousands have attempted to cross the Evros, dividing Turkey and Greece, taking advantage of shallow summer waters. The UN refugee agency, UNHCR, reported 3,225 recorded arrivals in Greece through the land border at Evros this year.
While the Syrians’ plight is not unique, it captured the sympathy of Greeks, in part due to the children in the group.
It is feared that an increasing number of Syrians could attempt the dangerous journey to Europe as Turkey starts to implement plans, announced in May, to return a million migrants to areas of Syria under Turkish military control.
Turkey is home to the world’s largest refugee population, with 3.6 million Syrians registered there alone, and the strain of this has led to anti-immigrant sentiment. Greece has long faced accusations of carrying out violent migrant pushbacks that continue, despite an EU warning in June that Athens risks losing funding.
Louise Donovan, UNHCR spokesperson in Greece, said the agency is deeply saddened by the child’s death, and urged both countries to observe international law. “While states have the legitimate right to control their borders, this must be done in accordance with national, European and international law, with full respect for human rights, most importantly the right to life.
“The urgent humanitarian imperative to protect human life must always be prioritised,” she said.
Rwanda Gov’t Accused of Using Torture, Killings as ‘Accepted Methods’ of Control: Report
Rwanda Gov’t Accused of Using Torture, Killings as ‘Accepted Methods’ of Control: Report
Rwanda Gov’t Accused of Using Torture, Killings as ‘Accepted Methods’ of Control: Report
In April, the UK clinched a deal with Rwanda that stipulates illegal migrants arriving in Britain via the English Channel will be sent to the East African… 17.08.2022, Sputnik International
An unnamed Foreign Office official has accused Rwanda’s government of resorting to “arbitrary detention, torture and even killings” as “accepted methods of enforcing control,” in light of Britain’s upcoming High Court review of the legality of the London-Kigali deal to send some asylum seekers to the East African nation.The official also claimed that “There are state control, security, surveillance structures from the national level down to [households]” in Rwanda, according to The Guardian.This comes as the UK government is seeking to keep parts of the documents secret for fear the contents could damage international relations and threaten national security. In particular, No 10’s application for a public interest immunity (PII) certificate calls for keeping “10 short passages confidential.”The Guardian, along with the BBC and The Times, urges the disclosure of all 10 passages, insisting that it is in the public interest, a view supported by the PCS union, as well as the charities Care4Calais and Detention Action.A draft ruling from Lord Justice Lewis on the PII application is expected tomorrow, while a full High Court hearing into the London-Kigali deal on asylum seekers is scheduled for September 5.Rwanda DealThe London-Kigali asylum pact, which was inked by Home Secretary Priti Patel and Rwandan Minister of Foreign Affairs and International Cooperation Vincent Biruta on April 14, 2022, stipulates that adult migrants who illegally arrived in the UK seeking sanctuary since January would be given a one-way ticket for the 4,000-mile (6,400-km) trip to the East African nation for processing and resettlement.Under the deal, those relocated to Rwanda will receive “support, including up to five years of education, vocational and skills training, as well as integration, accommodation, and healthcare, so that they can resettle and thrive.”The outgoing UK prime minister’s government described the Rwanda scheme as a legitimate way to protect lives and thwart the criminal gangs that send migrants on risky journeys across the English Channel.The implementation of the deal is currently on standby after a last-ditch order by the European Court of Human Rights (ECHR) led to the cancellation of the UK’s first flight to take asylum seekers to Rwanda in mid-June. Home Secretary Priti Patel made it clear that the ECHR’s move would not prevent London from going ahead with its plans to send some illegal migrants to the East African nation.
uk, rwanda, migrants, deal, torture, government
uk, rwanda, migrants, deal, torture, government
In April, the UK clinched a deal with Rwanda that stipulates illegal migrants arriving in Britain via the English Channel will be sent to the East African nation, where their asylum claims will be processed.
An unnamed Foreign Office official has accused Rwanda’s government of resorting to “arbitrary detention, torture and even killings” as “accepted methods of enforcing control,” in light of Britain’s upcoming High Court review of the legality of the London-Kigali deal to send some asylum seekers to the East African nation.
The official also claimed that “There are state control, security, surveillance structures from the national level down to [households]” in Rwanda, according to The Guardian.
This comes as the UK government is seeking to keep parts of the documents secret for fear the contents could damage international relations and threaten national security. In particular, No 10’s application for a public interest immunity (PII) certificate calls for keeping “10 short passages confidential.”
The Guardian, along with the BBC and The Times, urges the disclosure of all 10 passages, insisting that it is in the public interest, a view supported by the PCS union, as well as the charities Care4Calais and Detention Action.
A government spokesperson, in turn, praised Rwanda as “a safe and secure country with a track record of supporting asylum seekers.” They underscored that the government remains “committed to delivering this policy to break the business model of criminal gangs and save lives.”
A draft ruling from Lord Justice Lewis on the PII application is expected tomorrow, while a full High Court hearing into the London-Kigali deal on asylum seekers is scheduled for September 5.
The London-Kigali asylum pact, which was inked by Home Secretary Priti Patel and Rwandan Minister of Foreign Affairs and International Cooperation Vincent Biruta on April 14, 2022, stipulates that adult migrants who illegally arrived in the UK seeking sanctuary since January would be given a one-way ticket for the 4,000-mile (6,400-km) trip to the East African nation for processing and resettlement.
Under the deal, those relocated to Rwanda will receive “support, including up to five years of education, vocational and skills training, as well as integration, accommodation, and healthcare, so that they can resettle and thrive.”
The outgoing UK prime minister’s government described the Rwanda scheme as a legitimate way to protect lives and thwart the criminal gangs that send migrants on risky journeys across the English Channel.
The implementation of the deal is currently on standby after a last-ditch order by the European Court of Human Rights (ECHR) led to the cancellation of the UK’s first flight to take asylum seekers to Rwanda in mid-June. Home Secretary Priti Patel made it clear that the ECHR’s move would not prevent London from going ahead with its plans to send some illegal migrants to the East African nation.
Global instability: Global plagues bring to its knees a world unable to face them together | International
A brutal pandemic; frightening climate change; a devastating war that drives widespread rearmament; severe trade disruptions; gigantic multinationals that take advantage of loopholes to avoid paying much-needed taxes. The world faces colossal global challenges that shake it intensely and whose solutions necessarily pass through close international cooperation. As the Secretary General of the United Nations, António Guterres, stated at the end of July, with respect to global warming, the dilemma is clear: collective action or collective suicide. However, signs of growing polarization and rift abound, between the West and the authoritarian giants of the East, or between the North and the South of the planet. Against the backdrop of the great geopolitical fracture caused by the Russian invasion of Ukraine, the current situation throws up an unequivocal sequence of alarm signals of different kinds.
The meeting on climate change held in Bonn in mid-June to prepare the COP27 in November in Egypt ended without progress and with acrimony; The Organization for Economic Cooperation and Development (OECD) reported in mid-July that the negotiation it leads to implement a global tax framework for multinationals is delayed and it will not be possible to apply it before 2024 in the best of cases; at the end of July Russia announced that it is withdrawing from the international space station project; the review conference of the Nuclear Non-Proliferation Treaty (NPT) that has begun in New York takes place in the midst of strong geopolitical turmoil that does not induce the greatest optimism; In early August, China announced the breaking off of dialogue with the United States on key issues such as the environment or high-level military meetings in response to House Speaker Nancy Pelosi’s visit to Taiwan.
Not all are disasters. The ministerial meeting of the World Trade Organization (WTO) held in July achieved a consensus statement that, although minimal, represents an important sign of vitality for a badly wounded international institution. A recent deal to allow Ukraine to export grain has begun to bear fruit. The US has approved an important piece of legislation that contemplates investments of more than 300,000 million euros over a decade to facilitate the green transition, a national episode but with great global repercussion. There are inspiring episodes of transnational cooperation, such as the EU anti-pandemic crisis funds.
But the achievements seem insufficient given the magnitude of the crises, and the underlying currents are not at all promising for the near future in the fundamental field of truly global cooperation, apart from national, bilateral or regional initiatives. The stark rivalry between powers hinders the essential constructive attitudes; the economic slowdown encourages selfish instincts; The specter of a new rise of nationalist and protectionist recipes is serious, whether it materializes in the extreme form of a seizure of power —as is likely to happen in September in Italy— or in the inhibiting effect that this strength has on the rulers of another country. political inspiration.
Below is a review of the state of the art in some of the key areas in which global responses to global problems would be necessary – and where, however, more friction than solution is in sight.
The war launched by Russia in Ukraine has highlighted, in addition to the impotence of the UN system in cases like this, the seriousness of the collapse of the security architecture that had been built during the Cold War, an important framework of treaties of gun control that set limits, increased transparency, decreased the risk of dangerous misunderstandings. The collapse began two decades ago. In 2002, the United States withdrew from the Anti-Ballistic Missile Treaty and more recently withdrew from the Intermediate-Range Nuclear Forces Treaty and the Open Skies Treaty for a wide range of reasons, while Russia took the lead in withdrawing from the Armed Forces Treaty. conventional in Europe.
This gap is especially serious in a context like the current one, with a clear arms race. World military spending is increasing and, for the first time in decades, according to SIPRI (Stockholm International Peace Research Institute), nuclear arsenals are on the way to not only a qualitative improvement, but also a quantitative one. “We have to be aware that the lack of dialogue on nuclear risks and arms control between powers is in itself dangerous, because it makes it easier to misunderstand and miscalculate in a crisis,” says Daryl G. Kimball, executive director of the Washington-based Gun Control Association.
This dangerous trend has been seriously accentuated by the recent breakdown in dialogue between Beijing and Washington. If the conflictive relationship between the West and Russia is worrying given the high military potential at the Kremlin’s disposal, the deterioration with China is even more so. The Asian giant will most likely be a 21st century hyperpower. He is determined to develop war-fighting capabilities commensurate with that status and is traditionally reluctant to engage in arms-control deals in the style of those that helped keep the Cold War from turning hot.
“Unlimited spending on increasingly sophisticated military equipment only fuels an arms race that no one can ultimately win. We need to get back to a point where the major powers are engaged in a constant and fruitful dialogue,” Kimball continues. “With Russia the relationship is broken, and as for China, Washington should recognize that its actions can have a negative influence and Beijing should understand that the US has concerns about its behavior.”
The current NPT review conference in New York is a perfect compendium of the difficulties that complicate the road in this sector. The nuclear powers recognized by the Treaty are in the midst of massive efforts to modernize their arsenals. Russia and North Korea make thinly veiled threats to use it. Iran is leaps and bounds closer to having the capabilities to have a nuclear weapon if it wanted to. Dozens of countries, meanwhile, have ratified the Treaty for the Prohibition of Nuclear Weapons. But both the dialogue between nuclear powers and that between them and the abolitionists seem very complex. A final consensus statement from the conference looms as virtually impossible. The hope is that at least a declaration backed by a “supermajority,” as Kimball defines it, will come about. This, however, is “possible, but not likely,” acknowledges the expert.
Nor does it seem likely that the world will make coordinated and consistent progress in the fight against climate change in the near future. While the brutal heat waves that hit Europe ―with terrible droughts and fires that devastate the territory― remind us of the urgency of speeding up the task of reducing greenhouse gas emissions, multiple dark elements accumulate on the table .
Political action in the US to facilitate the green transition is extremely important and will increase the pace of US emission reductions. However, as important as it is, the package is not even enough, according to expert calculations, to meet the 2030 emission reduction goals assumed by the Joe Biden Administration. Meanwhile, disruptions in the energy market linked to Russia’s war in Ukraine have precipitated a return to coal in several European countries. China, for its part, has increased the pace of permitting the construction of new coal plants very consistently, according to a Greenpeace report. In the first quarter of 2022, plants for a power of 8.6 gigawatts were authorized, almost half of the capacity approved throughout 2021, when Xi Jinping gave a boost to strongly advance decarbonization. The breakdown of cooperation between Washington and Beijing in this section is a huge blow, as they are the two main emitters.
“We live in a very complex context, of concatenated crises that interact. In this context, energy security is emerging as the preponderant variable over the others. Short-term signals are undesirable. And, in the general picture, the commitments made to reduce emissions are clearly insufficient. Even so, we are much better off than a decade ago thanks to the legislative and executive framework that has been built to tackle the energy transition”, observes Lara Lázaro, principal investigator at the Elcano Royal Institute and an expert in the field.
The difficulties in international cooperation in this sector and at this time were exposed at the meeting held in Bonn in mid-June to prepare the COP27 scheduled for November in Egypt, which ended without tangible progress. If, on the one hand, the need for energy security drives polluting bets in the short term, and the economic slowdown stirs up East-West competition, the Bonn meeting illustrated, on the other hand, the validity of the pulse between the North and the South , with the latter accusing the former of not fully assuming its responsibility for the damage caused to all as a great historical polluter. The issue of mobilizing aid to developing countries to deal with this impact is an open wound.
The decision of the G-7 held in Germany at the end of June to accept exceptions to the commitment to avoid public investment in the fossil fuel sector caused much concern among the supporters of a decisive acceleration in the fight against climate change. The taxonomy recently approved by the EU, according to which gas is cataloged in a green label that favors investments, also caused controversy.
“At COP26 in Glasgow, among other things, it was proposed to reach COP27 with revised objectives. But I see it unlikely that Europe will get there with greater goals. Perhaps more closed implementation plans. Nor do I see the US or China arrive with increased objectives. Egypt will hold the presidency in a devilish context”, comments Lázaro.
Contributing to the devilish context is a pandemic that has prostrated the planet for two and a half years. The situation is clearly better than in the previous summer thanks to the deployment of the vaccines, but the emergency cannot be considered resolved nor, above all, the way of dealing with it shows the desirable signs of an effective international cooperative attitude.
The WHO (World Health Organization) continues to record around 15,000 weekly deaths from covid this summer, and the disruptions to the economy due to confinements, as China shows, are consistent. At this point, Africa still has a proportion of citizens with full guideline of only 20%. The north-south gap and west-east distrust mark this scenario.
“The international reports that have been prepared – such as that of the Monti commission, to which I was linked – coincide in indicating that the north-south international response has been clearly insufficient and not very supportive”, comments Rafa Bengoa, former Minister of Health of the Government Vasco, former director of the WHO health systems area and currently co-director of the Institute of Health and Strategy.
“Many countries, including Spain, are trying to provide both vaccines and medicines and infrastructure to the countries of the south, but this has been slow, it is not going at the speed at which the virus is going. We are playing more to the security of the north than to the solidarity that we should have, “says the expert.
The most visible combat scenario has been that of the release of intellectual property from vaccine patents. India and South Africa have spearheaded the claim. After a time of uncertainty, the Biden Administration backed the idea. But the issue remains stalled, opposed by several major European producing countries. The recent WTO ministerial conference has addressed the issue in its final consensus statement. However, the result has been considered practically irrelevant by supporters of liberalization and by independent experts. “It doesn’t change things much,” says Uri Dadush, an analyst at the Bruegel think tank, and a former World Bank executive and president of The Economist Intelligence Unit.
In this context, hopes for better international cooperation are pinned on a process launched within the framework of the WHO to outline a new legal framework. “The idea is to have a legal and binding mechanism that goes much further than the international health regulations of 2005, which were established after SARS-1, and which have proven to be insufficient due to lack of teeth,” observes Bengoa.
The expert points out how the WHO faced serious problems in investigating what happened in Wuhan, China, the likely epicenter of the pandemic, because it does not have the power to act without authorization from member countries. “The framework agreement is going to have to say things about these issues.” Once again, the growing mistrust between powers embodied in a traumatic way by the breakdown of the dialogue between Washington and Beijing is emerging as a potential obstacle to endow an international institution with penetrating powers. It should be remembered that Donald Trump, a possible candidate for the next US presidential elections, promoted the withdrawal of his country from the WHO.
Trade is another area subject to strong tensions for geopolitical reasons or because of the disruptions linked to the pandemic. Precisely under the Trump presidency, the conflict between the US and China fully broke out, in which the arrival of Biden has meant a certain containment, but not a solution. The highest arbitration panel of the WTO for disputes between States is inoperative as the necessary judges have not been appointed, with the United States convinced that the court exceeded its powers in the past. The relationship between the other great world trade giant, the EU, and China is not serene either. The sinking of the investment agreement between the two, once heavily sponsored by Germany, is a symbol of growing suspicion in Europe about Chinese attitudes and excessive interweaving with that market. The Russian war in Ukraine has, of course, been shaken up again, with a wide range of retaliatory sanctions against Russia by some 40 democratic countries.
Still, the recent WTO ministerial conference concluded with a consensus agreement. “This is positive. The WTO is a fundamental institution, and many other ministerial ones ended up without it,” says Dadush, who, however, points out that the agreements found are of a “minimalist” nature, and that the declared intention to reactivate the arbitration panel by 2024 “It doesn’t really commit anyone.”
Dadush points out that the current turmoil — tariff conflict between the US and China, sanctions on Russia or the UK’s exit from the EU — while significant, nevertheless represents “a small part of global trade.” The expert believes that the most likely future scenario is that of “free trade that will go ahead, a globalization that will continue, with many difficulties and tensions, but without a global trade war.”
The hypothesis of an open war between China and the United States is the only circumstance that can profoundly alter this central perspective, Dadush observes. “But I think that everyone is aware that we cannot afford an open war between Washington and Beijing, that it is necessary to find a modus vivendi, and that is why that is not the most likely scenario,” Dadush continues.
“I also believe that”, he continues, “even if nationalist and protectionist options come to power in Western countries, they will also be limited, in the transition from campaign rhetoric to government action, by the reality that trade is essential. for economic development and pressure from business environments that are often close to right-wing political families. Therefore, I believe that the most realistic scenario is that of free trade that, although with difficulties, will go ahead”. In this sense, it should be noted that the right-wing coalition dominated by protectionist parties that is the favorite to win the elections in Italy issued this week supposedly reassuring signals in the face of the European integration process, in which free trade is a central issue. It will be necessary to see, in case of victory, how much the facts will correspond to the words of now.
Another blow to the hopes of finding global solutions to global problems came this July when it was confirmed that the negotiations to implement a global corporate tax system are facing many difficulties and will not be able to conclude this year as many expected. Last year, 140 countries agreed to establish a framework that allows taxes to be collected more fairly from large multinationals that take advantage of their size, the characteristics of their business and jurisdictions with negligible tax levels to avoid paying taxes on their profits. The agreement provides for a minimum corporate tax of 15% and that at least part of the profits of multinationals be registered in the jurisdictions where their clients are, and not where their headquarters are, conveniently located.
But the application in the real world is complex, and the OECD, which is leading the negotiation, has reported that at least one more year will be necessary and the implementation would not be possible before 2024. The legislative package approved this Friday in the US contemplates various tax measures but, as recognized by the Treasury Department itself, promoter of the global agreement, they do not serve to place the country in line with the framework agreed upon in the OECD.
As if the obstacles to global cooperation in all these sections were not already notable, others are on the way, such as the US legislative elections in November, which could break Democratic control of Congress. It is to be hoped that, with the Republicans in control of one or both Houses, Washington’s willingness to cooperate internationally will be diminished, giving yet another turn to a spiral that goes in the opposite direction to the direction required by the plagues that afflict the world.
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