In this edition
The new US-Mexico trade war
Murders are down in Brazil while extrajudicial executions by police are up.
Venezuela update
The new US-Mexico trade war
Donald Trump threatened to place tariffs on Mexico over what he perceives to be the country’s lax efforts to stem migration from Central America. Some comments:
The tariffs undermine free trade in North America and the efforts to pass USMCA, the renegotiated NAFTA agreement. Neither the Democratic Party nor the mainstream Republicans who support free trade have much reason to push forward on ratifying USMCA if the president threatens to maneuver around it with national security tariffs. Mexico isn’t going to pass its side of the agreement if the US is launching separate tariffs outside of the framework.
The tariffs will hit the US and Mexican economies by increasing prices on US consumers and making it more difficult and expensive for cross-border manufacturing supply chains to function. This is bad news with the US stock market already jittery over the trade war and Mexico’s economy faltering in the opening months of the Lopez Obrador administration.
Trump’s threat benefits China. The increasing trade war with China should make Mexico a preferred destination for manufacturers. In threatening Mexico, Trump undermines his own trade war with China by making manufacturers in China who are considering nearshoring to Mexico rethink the benefits of being there. The threats against Mexico also harm US credibility with other US allies who it needs to successfully compete against China.
Trump’s threats ignore the fact Mexico has done a significant amount to stem Central American migration including deporting thousands of Central Americans from its territory and accepting Trump’s proposals that push migrants back into Mexican border cities.
Murders are down in Brazil while extrajudicial executions by police are up.
The Economist covers the rise of militias in Brazil with an editorial criticizing tendency of President Bolsonaro to support these groups, even when they are run illegally by off-duty police officers.
The NYT covers the growing number of killings by police in Brazil this year, leading with:
Shooting from helicopters, armored personnel carriers or at close range, police officers in Rio de Janeiro have gunned down 558 people during the first four months of the year — the highest number in this period since the state began keeping records more than two decades ago….
...The number of people killed by the police in Rio de Janeiro jumped in 2018 to a high of 1,538, according to state statistics. If killings continue this year at the current pace — nearly five a day — that record will be beat.
The article goes on to cite government officials claiming that the overall drop in homicides shows the approach is working, even if it amounts to police engaging in violent extrajudicial executions.
There is no doubt Bolsonaro’s attitude represents a significant human rights threat. There is a question over how it will impact his approval ratings. Lower homicide rates could very well convince the general population that the president’s security strategy is working, at least in the short term. However, there are indications within polling reports that many Brazilians understand the problems of increased police violence and feel threatened by the militias in some major neighborhoods of Brazil’s largest cities.
As the economy declines, Bolsonaro will be tempted to turn further towards his security agenda to try to regain some popularity. This will increase the polarization between Bolsonaro supporters who approve of his tough tactics and many innocent citizens who are threatened by those tactics as they are caught in the crossfire.
Venezuela update
Representatives of interim President Guaido held face to face talks in Norway with representatives of Nicolas Maduro about resolving the political crisis. Talks broke down on Maduro’s refusal to leave power, but there were a number of positive signs. Both sides appeared to agree that new elections with international monitors will be necessary. Both sides appeared open to negotiating again.
Guaido faces a new challenge in keeping his coalition together. Negotiations help Guaido maintain a strategy the pressures Maduro through multiple fronts and lead to an early transition. However, there are several key hardliners within Guaido’s coalition and numerous voices on social media insisting that negotiations are a trap.
Separate from events this week, it’s worth highlighting that aspects of the Venezuelan crisis continue and worsen on a weekly basis:
Caracas Chronicles reports “The Great March Blackout Never Really Ended,” discussing the electricity shortages that continue daily outside the capital.
Shortages of gasoline continue, leading to long lines around the country.
One big debate this week was over shortages in the healthcare system that led to the death of a child who needed a transplant.
Two weeks ago, the UN said that 3,000 to 5,000 Venezuelans continue to leave the country every day and called on Venezuelans who flee the country to be treated as refugees.
On the issue of sanctions, the WSJ reported that Raul Gorrin assisted Guaido in making contacts with Maduro insiders prior to the 30 April uprising. He did so in the hopes of having sanctions lifted. Reuters reported that while the US has lifted sanctions on General Manuel Cristopher after he defected from Maduro, several other individuals have not had their sanctions lifted. That raises the potential that the process of lifting sanctions may be more difficult for some than others, a fact that could discourage defections. As Laura Gamboa writes in Foreign Affairs, convincing regime insiders they will have a safe path after Maduro falls is a critical issue determining how long Maduro will hold power.
Corruption corner
Mexico - This week’s newsletter for paying subscribers focused on the arrest of Emilio Lozoya, the former CEO of Pemex, and how AMLO is moving against corruption just in time for state and local elections.
Key points:
The prosecution of Emilio Lozoya for corruption will lead to investigations of other energy projects signed while he was CEO at Pemex.
This is the first major anti-corruption action by the Lopez Obrador administration. It is not yet clear whether AMLO will target other Peña Nieto officials who served in positions outside of the energy sector.
The anti-corruption action taken days before state and local elections will help AMLO show progress in a key area and likely help his party at the polls.
At the same time, the timing raises questions about the long-term commitment to the anti-corruption agenda and threatens to politicize the issue.
Region - A new report from the Inter-American Dialogue and Atlantic Council highlights how technology can be used to combat corruption in the hemisphere.
Honduras - The MACCIH continues to investigate potential money laundering by former President Porfirio Lobo and his family. Documents in the Tony Hernandez case suggest the DEA has actively investigated President Juan Orlando Hernandez and Minister of Security Julian Pacheco for links to the Cachiros. While the two cases are separate, the combination of the two demonstrates a pattern of significant corruption within the National Party.
El Salvador - El Faro published an in-depth report on the corruption of former President Mauricio Funes.
Reading List
Carlos Chamorro, Confidencial - Las cuatro derrotas de la dictadura
Irene Estefenia Gonzalez and Ben Raderstorf, Americas Quarterly - Five Ways Spain Can Lead on Venezuela
Francisco Toro, Washington Post - Norway’s diplomatic push in Venezuela just might work. Here’s why.
David Smith, Wilson Center - Battle lines drawn in Argentina
AP - Brazil’s anti-graft crusader struggles in Bolsonaro gov’t
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