Latin America Could Turn to Russia, China in Wake of Trade Split With US

The governments of some Latin American countries have signaled that they are ready to “break their dependence” on the United States; Russia and China could play a key role in the region, Venezuelan political analyst Ernesto Wong told Sputnik Mundo.

Chinese President Xi Jinping
In an interview with Sputnik Mundo, Venezuelan political analyst Ernesto Wong said that in Latin America, there are several factors which have given rise to the hope that this year will see a number of key political changes in the region.

One of these factors is the willingness of some regional governments to “break their dependence” on the United States and allow Russia and China to play a key role in the region, according to Wong.

“Latin America is at odds with Washington but it is developing friendly ties with China and Russia, which is why in 2017 the region is expected to overcome the imperialist dependence on the US and to establish more favorable conditions for exchange… trade and investment with Russia and China,” Wong said.

As for China, Wong referred to the January 20 meeting between Beijing and the Community of Latin American and Caribbean States (CELAC), which he said opened up new prospects for the exchange of public and private capital.

“It’s important that none of the countries of the Pacific Alliance decided to break off relations with China, which means that they are  interested in continuing trade ties with Beijing,” he said. The Pacific Alliance is a Latin American trade bloc which currently includes Chile, Colombia, Mexico and Peru.

According to Wong, the most important affecting the Pacific Alliance is the existence of Trump’s so-called model of “neo-isolation.” The alliance had been seen as a close partner of the United States and Canada; its members (less Colombia) were among the countries set to co-establish the Trans-Pacific Partnership (TPP) this month.

This initiative was nullified when Trump abandoned TPP on January 23. Trump also raised the question of revising the terms of the North American Free Trade Agreement (NAFTA).

“As a consumer, the US is in a critical situation after it greatly reduced its imports, which were supported by the free trade agreement. Trump wants to get out of it because he intends to develop national industry,” Wong said, adding that this process will also be affected by the critical situation in Western Europe.

Aside from to China and Russia, Latin American countries may also invest in Africa, according to Wong.

“This is potentially a good opportunity because openness toward Africa would help promote Latin American products there and the African continent would benefit from receiving equal conditions for exchange,” he said.

He added that such transparency would also be attractive for those countries in the region which are not progressive because they seek to improve relations with other regions, which could give them the opportunity to obtain a larger income.Wong emphasized that it is Latin America distancing itself from the United States and rapprochement between Eurasia and Latin America that will pave the way for regional countries becoming more independent and sovereign.

Article originally published here

Uruguay and Chile, least corrupt countries in LAC region says Transparency International

uruguay-corrupcionIn Latin America, Uruguay leads with a ranking of 21, followed by The Bahamas and Chile both in 24th place, and Venezuela figures at the bottom.

Over two-thirds of the 176 countries and territories in this year’s Corruption Perceptions Index fall below the midpoint of a scale spanning 0 (highly corrupt) to 100 (very clean), said Transparency International (TI) upon the release of the non-profit’s 2016 report. No country reached above 90.

The global average score is a paltry 43, indicating endemic corruption in a country’s public sector. And top-scoring countries are far outnumbered by countries where citizens face the tangible impact of corruption on a daily basis.

Results can be viewed on a map at the TI website.

In Latin America, Uruguay leads with a ranking of 21, followed by The Bahamas and Chile both in 24th place, and Venezuela figures at the bottom.

This year’s results highlight the connection between corruption and inequality, which synergistically create a vicious circle of corruption, unequal distribution of power, and unequal distribution of wealth, said the index researchers.

“In too many countries, people are deprived of their most basic needs and go to bed hungry every night because of corruption, while the powerful and corrupt enjoy lavish lifestyles with impunity,” said José Ugaz, Chair of Transparency International

The interplay of corruption and inequality also feeds populism, said TI. When traditional politicians fail to tackle corruption, people grow cynical and are more include to elect populist leaders who promise to break the cycle of corruption and privilege. Yet this is likely to exacerbate – rather than resolve – the tensions that fed the populist surge in the first place.

Leading the index of countries examined in 2016 were Denmark and New Zealand with scores of 90/100. At the bottom of the ranking sit South Sudan with 11/100 and Somalia with 10/100, according to the index results.

India and China, Full Speed Ahead in Climate Change Mitigation

chinese-and-indian-leaders-meetingWhile the United States is wondering what will happen next on climate change mitigation in their country, both India and China have recently unveiled very ambitious plans to fight local air pollution and global climate change.

According to an article from the Guardian, India plans nearly 60% of electricity capacity from non-fossil fuels by 2027. This makes the Indian government believe that it will exceed its Paris Agreements targets by far, with :

” A draft 10-year energy blueprint published this week predicts that 57% of India’s total electricity capacity will come from non-fossil fuel sources by 2027. The Paris climate accord target was 40% by 2030.”

The Guardian goes on to list how India could become a renewable energy super power in the next decade or so, as investments in the area are booming. From bringing electricity to 400 million people with solar energy to going LED or investing massively in renewables, India has been showing strong leadership in this most important issue for a few years now. To the point that, according to newspapers, renewable energy investments in India to reach $250 billion over next five years, and over a trillion by 2030.

In neighbouring China, the government has announced a plan that it will spend $360 billion on clean energy sources by 2020. This will result in the creation of 13 million jobs and cut significantly the amount of air pollution in Beijing and other Chinese cities.

Meanwhile, Beijing has announced that it will be closing  and/or not building another 104 coal-fired plants that were either due to be constructed soon or were being constructed. This move is significant – 120 Gigawatts of capacity – as it is equal to a third of the amounts of coal-fired plants in the United States.

China installed over 34 Gigawatts of solar PV capacity in 2016 alone as Cleantechnica reported, with over 11 GW in one month alone. This is absolutely staggering as it brings the total solar PV capacity of the country to 77 GW. Yes, capacity almost doubled in one year.

All this can be explained by the fact that renewables are getting more and more competitive every day and that smart countries invest in cost effective and low carbon solutions. In early 1996, the global solar PV capacity was of 200 MW, now the world installs that capacity every single day… Let that sink in. And it probably will not stop anytime soon as to Bloomberg New Energy Finance, solar is now becoming even cheaper than wind.

Edited, original article written by Edouard Stenger

How Climate Change Impacts Our Water Supply

The water cycle, the process by which water circulates through the planet’s atmosphere and waterways, helps make life here on Earth possible.

Climate change, however, caused by excessive greenhouse gas emissions, is disrupting that process. It’s creating a vicious cycle in which higher temperatures, changes in rainfall and water contamination cause environmental consequences that make global warming worse and damage the health of the planet further.

How Climate Change Impacts Earth’s Water

Climate change causes various changes in our water supply, which sometimes leads to pollution and other problems.

Changes in rainfall

Increased temperatures caused by climate change raise the rate of evaporation from both land and oceans, as well as enable the atmosphere to hold more water by about 4 percent for every 1 degree Fahrenheit increase.

This added evaporation will dry out some areas and fall as excess precipitation in others. Generally, dry areas are expected to get drier while wet areas become wetter. This will lead to increasing instances of drought in some areas and more flooding in others.

Increased need for water

As temperatures rise and evaporation amplifies, so will the need for water for individuals, agriculture and industry. Rising population will add to this increased demand.

As certain areas experience more droughts, we’ll have to more frequently transport water where it is needed. Rising water levels in other areas may necessitate infrastructure changes. Both of these essential measures may result in more emissions and more used energy.

A rise in sea levels

Melting ice caps, ice sheets and glaciers, as well as expanding warming waters, will lead to rising sea levels. This could harm coastal communities and various ecosystems, as well as contaminate fresh water supplies.

Rising sea levels could push saltwater into freshwater aquifers, making the water unusable for drinking or irrigation unless it’s treated using an energy-intensive process.

Increased water pollution

High levels of rainfall could overwhelm and damage important infrastructure like sewer systems and water treatment plants and lead to polluted water, causing it to become brown or cloudy. Heavy precipitation could also lead to increased runoff of fertilizers, sediment, trash and other pollutants into water sources.

Impact of water pollution

Water pollution can have a multitude of negative effects on our environment, some of which can lead to even more problems and exacerbate climate change.

Stress on ecosystems

Increased levels of nutrients in water from things like fertilizer runoff can cause algae to grow at excessive rates. When this algae dies, bacteria can lower the level of oxygen in the water, creating dead zones where nothing can live.

Garbage that makes its way into ocean waters can also kill marine life that mistake it for food or get caught in it.

Chemical pollution can also harm or kill marine life. It can accumulate in sea creatures in increasing amounts as it moves up the food chain, eventually affecting humans.

Some scientists say ocean degradation could even cause a mass extinction event.

Worsened climate change

As water becomes a scarcer resource, we may need to treat this increasingly polluted water to make it useable. This process requires a lot of energy and could lead to more emissions.

Hope for the future

Climate change is having a negative impact on our water supply, ecosystems and quality. These problems in turn lead to more issues and the overall degradation of our environment.

The situation is clearly serious, but there are some things we can do.

Decreasing emissions by using less energy or switching to renewable energy helps to slow global warming. Turning lights off when not in use, driving less and insulating your home to make it more energy-efficient can all help reduce energy use.

Buying environmentally responsible products and eating a low-impact diet are other lifestyle changes that can have a positive impact.

Expressing your support for environmental protection can also help. You can make your voice heard by writing government officials, voting, posting about it online or simply talking with family and friends.

The effect that climate change has on our water is just one example of the impact it can have. It is becoming increasingly evident that we are at a critical point in time regarding our changing climate and the future of our planet.

By Scott Huntington

Renewable Energy, a Rising Tide

Leading the surge is China, which already has a huge advantage in its current position at the front of the pack.china-investments

China has not only vastly expanded its domestic investment in renewable energy, it is plowing record sums into renewables markets overseas. As our report noted, China put $32 billion into foreign renewables projects in 2016 alone, and last week it said it would increase its bets on renewables by tenfold around the world before the end of 2020. That increased bet is likely to expand China’s renewable-energy employment base beyond its current 3.5 million level. Of note on this point: employment growth in renewables is in sharp contrast to massive worldwide layoffs in the oil, gas and coal industries.

Its domestic renewables push has given China priceless experience ahead of other nations, allowed it to develop leading-edge technology, educated a large, supporting labor force and created financial mechanisms to pay for the expansion. Now China is exporting its renewables juggernaut, taking stakes in projects of note elsewhere in Asia and in Africa, Europe, India, North America and South America.

We think the global boom in renewables will last for decades, driven not just by Chinese investment but by other emerging economies—and by industrialized ones as well. Growth in solar, wind and energy-efficiency initiatives are steadily reducing the costs of production and making renewable energy cheaper than traditional sources. Public pressure to combat pollution and build collective action on global climate change is growing. These are huge combined market forces that as we speak are shaping how electricity production, especially, is being reimagined.

In the fast-moving renewables revolution, economies as diverse as those of Bangladesh, Brazil, Chile, Indonesia, Kosovo, Mexico, the Philippines, Puerto Rico, and South Africa now have the means to foster prosperity without imposing harsh consequences on public health and the environment.

Meantime in the U.S., national energy-policy discussions are drifting the other way as an evidently over-the-hill gang takes power in Washington with hopes of going back in time to when companies like Exxon mattered more than they do now and when economic growth was driven by fossil-fuel consumption.

Those days are done, though, and so are the days when solar- and wind-powered energy were dismissed by skeptics as sci-fi experiments or “alternative” sources to traditional fossil-fuel generation.

There’s no turning the clock back. Clean energy has gone mainstream.

Abridged, article originally published here

Cuba Sees Explosion in Internet Access

cubainternetTwo days before Christmas, Luis Gonzalez received a little Chinese modem from Cuba’s state-owned telecommunications company.

The 55-year-old theater producer connected the device to his phone and his laptop computer, which instantly lit up with a service unimaginable in the Cuba of just a few years ago — relatively fast home internet.

“It’s really easy to sit and find whatever you need,” Gonzalez said as he sat in his living room updating his Facebook account, listening to Uruguayan radio online and checking an arriving tourist’s landing time for a neighbor who rents rooms in their building in historic Old Havana. “Most Cubans aren’t used to this convenience.”

Home internet came to Cuba last month in a limited pilot program that’s part of the most dramatic change in daily life here since the declaration of detente with the United States on Dec. 17, 2014.

While Cuba remains one of the world’s least internet-connected societies, ordinary citizens’ access to the internet has exploded over the last two years. Since the summer of 2015, the Cuban government has opened 240 public Wi-Fi spots in parks and on street corners across the country. Cubans were previously restricted to decrepit state internet clubs and hotels that charged $6-$8 for an hour of slow internet.

In a country with an average monthly salary of around $25, the price of an hour online has dropped to $1.50, still steep but now well within the range of many Cubans with private income or financial help from relatives abroad.

The government estimates that 100,000 Cubans connect to the internet daily. A new feature of urban life in Cuba is the sight of people sitting at all hours on street corners or park benches, their faces illuminated by the screen of smartphones connected by applications such as Facebook Messenger to relatives in Miami, Ecuador or other outposts of the Cuban diaspora. Connections are made mostly through access cards sold by the state monopoly and often resold on street corners for higher prices.

The spread of connectivity has remotely reunited families separated for years, even decades. It’s fueled the spread of Airbnb and other booking services that have funneled millions in business to private bed-and-breakfasts owners. And it’s exposed Cubans to a faster flow of news and cultural developments from the outside world — supplementing the widespread availability of media spread on memory drivers.

Cuban ingenuity has spread internet far beyond those public places: thousands of people grab the public signals through commercially available repeaters, imported illegally into Cuba and often sold for about $100 — double the original price. Mounted on rooftops, the repeaters grab the public signals and create a form of home internet increasingly available in private rentals for tourists and cafes and restaurants for Cubans and visitors alike.

On the official front, Google and Cuba’s state-run telecoms monopoly Etecsa struck a deal last month to store Google content like YouTube video on servers inside Cuba, giving people on the island faster, smoother access.

While the explosion of internet in Cuba has taken place alongside the process of normalization started by Obama in 2014, it’s unclear how much better relations have speeded up Cuba’s move online.

What is clear is that Cuba began to dramatically increase access about six months later when the government began opening Wi-Fi spots around the country. For many Cubans, the start of home internet in December is potentially even more significant, breaking a longstanding barrier against private internet access in a country whose communist government remains deeply wary about information technology undermining its near-total control of media, political life and most of the economy.

Abridged, article originally published here

China Seizes Opportunities in Latin America

chinese-dragonChina has big plans for Latin America—plans that seem to reflect China itself: massive and ambitious.

There are plans for a $10 billion, 3,300-mile-long transcontinental railroad snaking through the jungles of the Amazon river basin and over the highest mountain range in Latin America, linking the Atlantic shore to the Pacific. There’s talk of a $50 billion supersized canal carving a 161-mile-long swath across Nicaragua, offering passage to the megatankers of tomorrow and overwhelming even the newly expanded Panama Canal to its south.

There are more. Many more. These gargantuan projects are aimed at fueling China’s needs for resources and feeding South America’s need for energy and infrastructure. But geopolitics also play a role as China strives to make Latin America an economic partner, if not a counterpoint to the United States.

In fact, China’s investments in Latin America, from mining to massive hydroelectric dams, nuclear reactors and railroads, grew by 500 percent between 2000 and 2010, totaling nearly $100 billion, with another $250 billion in spending promised over the next decade. And while the U.S. still accounts for more than three times as much in trade and investment in the region, some analysts see disturbing signs in the steadily shifting balance.

In 2000, the Chinese portion of Latin American trade was about 2 percent. The U.S. share was 53 percent. Ten years later, the Chinese share was up to 11 percent and the U.S. portion was down to 39 percent.

“Clearly we are still the dominant player vis-à-vis them,” says Francisco Cerezo, the U.S. head of DLA Piper’s Latin America corporate group. “But it does speak to the trend. And I would be more concerned about the trend and making sure you right the ship and you focus on it properly.”

The past two decades of forays into Latin America come as part of China’s “go global” plan. Its first priority: raw resources to fuel its economic growth. China is heavily, and increasingly, dependent on imported oil. Its energy needs led it to offer some $65 billion in loans to Venezuela’s government in the last decade, according to the Washington nonprofit Inter-American Dialogue, along with direct investments in oil production and infrastructure there.

China also single-handedly accounts for nearly a fourth of the world’s copper demand, along with significant demand for tin and iron ore. “That’s why you see them coming into Latin America’s mining sector, which is huge,” says Jerry Brodsky, a partner and director of the Latin American practice group at Peckar & Abramson. “It’s perhaps the largest economic driver in Latin America’s mining.”

China gets much of its copper from Chile, while the China-based Chinalco Mining Corp. International put $3.5 billion into the Toromocho mine in Central Peru, giving it control of “the world’s second largest preproduction copper project, as measured by proved and probable copper ore reserves,” according to the company’s website.

Now China is reaching beyond resources. Its latest wave of investments involves massive infrastructure and energy projects.

The China Three Gorges Corp. has been rapidly acquiring hydroelectric dams in Brazil since 2013, paying nearly $4 billion in June to take over operation of two of the country’s largest dams, with a combined capacity to produce 5 gigawatts of electricity. That came just three months after China Three Gorges announced a proposal to build a new 8-gigawatt dam on the Tapajos River.

China’s State Grid Corp. is developing two transmission lines to deliver power from the Belo Monte dam in the Amazon basin. Last year, state-owned China National Nuclear Corp. signed a $15 billion deal to build Argentina’s fourth and fifth nuclear power plants, roughly doubling the amount of electricity generated by the country’s nuclear plants. Construction of the first of the new reactors, in cooperation with Argentina’s state-owned Nucleoeléctrica, is due to begin early next year.

These projects come on top of the nearly $42 billion that China invested in infrastructure in Latin America in just 2013 through 2015 alone. China is finishing construction of a space tracking, telemetry and command facility in Patagonia, Argentina, complete with a pair of maneuverable parabolic antennas, engineering facilities, and a $10 million electric power plant.

China Harbour Engineering teamed up with local partners to win the contract for Autopista Mar 2, a 152-mile motorway connecting four towns north of Medellin, Colombia. And, in May, it landed a $465 million road contract in Costa Rica.

“They’re providing what the specific markets need,” says Brodsky. “They follow the path of least resistance. Latin American needs infrastructure. Brazil has an insufficient production of local energy. So does Argentina. The road projects in Colombia are booming right now because for 30 or 40 years they spent all their money fighting the guerrillas, and they didn’t pay attention to their road infrastructure. So now there is an accelerated program in Colombia for road building.”

The nature of the projects also plays to China’s strengths. Despite its recent economic slowdown, China remains flush with money from its boom years. Combined with the technical expertise that it has built with domestic projects and industries, those deep pockets allow China’s state-owned companies to compete at a scale that few challengers can match.

“When you get to that level of megaprojects, there are not that many qualified bidders out there­—people that have not only the technical capacity but the financial capacity,” Brodsky says, adding that Chinese companies “have the money to self-fund a lot of their projects, and that makes them very competitive when it comes to bidding for big, large projects in Latin America.”

Abridged, original article published here

Accelerating Growth to End Poverty without Damaging the Environment

img17001There is consensus that extreme poverty and hunger must be eradicated by 2030 through accelerated, inclusive and equitable economic growth without damaging the environment. This calls for sustainable and integrated, balanced and simultaneous implementation of economic, social and environmental dimensions without one dimension gaining at the expense of others, as agreed at the Rio+20 Conference and confirmed at the 68th session of the United Nations General Assembly, when world leaders met in New York City in September 2013.

This paradigm shift from economic growth and per capita income as a measure of development, and relying on a single-sector approach and trickle down mechanism, to an integrated, inclusive, equitable and labor-intensive multi-sector development agenda post-2015 will require a major shift in political will and in ways of doing business.

In agrarian societies where the majority of people live in extreme poverty and unemployment or under-employment, the acceleration of traditional methods of economic growth to create jobs and end hunger and poverty will mean enhancing agricultural methods of de-vegetating land and damaging the environment through biodiversity loss, soil erosion, dropping water tables, shrinking water bodies and adverse impact on thermal and hydrological regimes, resulting in intense and frequent droughts and floods.

On the other hand, introducing or speeding up intensive and mechanized agricultural methods using green revolution technologies of high-yielding seeds that require the application of high doses of fertilizers, pesticides and irrigation, including using underground salty water, will end up damaging the environment and reducing water supplies. This has already happened in some Asian countries.

In developed countries, continued or an acceleration of current patterns of consumption of meat and dairy products that rely on huge amounts of agricultural feed, and result in massive food waste, as well as increasing demand for non-food agricultural products like cut flowers, will mean that more land will be brought under cultivation by clearing vegetation or replacing food production in areas already under cultivation, as has happened in Uganda. Alternatively, more fertilizers, pesticides and irrigation will be used to increase land productivity, resulting in environmental pollution.

To overcome these trade-offs and successfully address unemployment, hunger and poverty, a new approach to production and consumption patterns is needed. The new approach should end food losses and waste, and apply labor-intensive methods rather than labor-saving machines. It should use a combination of organic and inorganic fertilizers and pesticides to boost productivity without damaging the environment.

In developing countries, much food, especially perishable produce like fruits and vegetables, is lost through pre-and post-harvest leakage. Controlling food-destroying birds, insects and wild animals before crop harvest and improving storage, including cold facilities and agro-processing after harvest, would go a long way in reducing food losses, thereby making more food available without applying environmentally destructive extensive or intensive agricultural methods. Degraded lands would be restored through labor-intensive re-forestation programs that would create jobs and raise incomes to pull people out of intergenerational extreme hunger and poverty.

Experiments by smallholder farmers in some African countries have shown that labor-intensive, environmentally and socially-friendly technologies such as crop rotation, terracing and contour farming, as in the Machakos district of Kenya, mixed cropping and mixed farming of crops and animals, zero grazing, small-scale irrigation and water harvesting schemes and fertilizer trees have boosted agricultural productivity and food availability and affordability, reducing hunger and poverty without damaging the environment.

Thus changing production methods, including mechanized agriculture, that are environmentally and socially-unfriendly and eliminating pre-and post-harvest food losses in developing countries and consumption patterns in developed countries, including massive food waste, would go a long way in creating needed jobs and making more food available and affordable, ending hunger and extreme poverty by 2030 without damaging the environment. However, this success will require changing political mind sets and ending business as usual in production and consumption patterns in the post-2015 development agenda.

Article originally published here

Mexico’s International Trade Agenda for 2017

mexico1International events such as “Brexit,” the United States’ potential withdrawal from the Trans Pacific Partnership Agreement (TPP) or the possibility of renegotiating the North American Free Trade Agreement (NAFTA) are all extremely relevant for Mexico’s economy – which has the fourth-largest gross domestic product (GDP) in the Americas and the 15th-largest GDP in the world. The Mexican economy rests heavily on its exports, making 2017 a particularly challenging year for Mexico’s international trade agenda during this last year of the current administration. In 2018, Mexico will hold federal elections to designate a new president and Congress.

The Mexican international trade agenda will be most likely occupied by existing negotiations – such as the modernization of the European Union (EU)-Mexico Global Agreement – as well as with current trade issues such as China’s steel overcapacity and the sugar export restrictions imposed on Mexican exports to the U.S., but there are certain likely events that deserve a close examination:

  • likely formalization of the United Kingdom’s exit from the EU – widely known as “Brexit” – a formal invocation of Article 50 of the Lisbon Treaty that may have an impact in the current free trade agreement (FTA) negotiations with the EU and also may require bilateral negotiations with the UK
  • renegotiation of NAFTA or a possible U.S. withdrawal
  • formal U.S. withdrawal from the TPP and/or possible revival of the initiative in a different format – with or without the U.S.
  • surge of trade protectionist measures, not only through the adoption of additional unilateral measures allowed under international trade agreements, either by Mexico or against Mexican exports, such as antidumping and countervailing duties, but also through more aggressive unilateral actions (customs duties increases, safeguards investigations, tax or export restrictions, etc.), all of which may result in additional dispute settlement proceedings under the World Trade Organization (WTO) or bilateral FTAs – such as NAFTA Chapter XIX­– and investment treaties
  • increase activism by Mexico to diversify its export destinations and foreign direct investment sources, particularly with China, Korea and Japan, to expand and increase trade flows. (Mexico already has an FTA with Japan, has explored the possibility of an FTA with Korea and has not formally expressed yet any interest to negotiate with China)
  • increased pressure by China to obtain recognition from Mexico as a market economy, which could have a serious impact on new antidumping investigations and on the 27 existing antidumping duty orders against Chinese products (out of the current 52 products that are subject to antidumping orders in Mexico); China recently filed for consultations with the EU and the U.S. under the WTO to address this matter

On its own, 2017 will be a busy, uncertain year for Mexico’s trade agenda. The uncertainty over Mexico’s relationship with the U.S. will add additional stress to the system. While the debate will continue to rage in the U.S. as to whether NAFTA was a good trade deal for the U.S., NAFTA brought benefits to Mexico that created a more stable neighbor for the U.S.

Article originally published here

Meet Canada’s new International Trade Minister

francois-phillippe-champagneFrançois-Phillippe Champagne, a lawyer who’s worked for a string of major multinationals, Champagne knows the world of global trade—but says Canadians must reap the benefits at home.

Arguably the biggest promotion in today’s federal cabinet shuffle goes to François-Philippe Champagne, who vaults from parliamentary secretary to Finance Minister Bill Morneau, a supporting role just outside cabinet, to succeeding Chrystia Freeland in the high-profile post of minister of international trade.

I say “arguably” because an obvious case could be made that Freeland is, in fact, the key moving part in the shuffle. In taking over from Stéphane Dion as foreign minister, she notches up noticeably in prestige and profile. But Champagne, previously known only to attentive Ottawa insiders, in a single stride becomes an unignorable front-bench player for anyone watching federal politics.

This doesn’t come entirely as a surprise. Before he jumped into politics, Champagne held down serious jobs in international business. A lawyer, he was senior counsel and vice-president at ABB Group, a Swiss engineering giant, and then had a string of titles, including strategic development director, at AMEC, a big London-based project-management company focused on the energy sector. But he never hid his political ambitions, and returned to Shawinigan, Que., where he grew up (yes, in Jean Chrétien’s hometown) to win the Saint-Maurice-Champlain riding in the 2015 election.

Last month, before rumours of an imminent cabinet shuffle were much in the wind, I interviewed him at his office just off Parliament Hill. An upbeat, diminutive, and youthful 46, he riffed confidently on the challenges facing the Canadian economy.

And now that he’s taking over the trade portfolio, Champagne’s perspective on Canada’s position in the world economy is even more relevant. He sees plenty of room for improvement. For instance, he cited Australia and Britain as countries that do a better job selling themselves to international investors. Canada’s profile abroad is too often, he suggested, a fragmented one.

“I have been in a room in London where provinces were pitching against each other,” he said, recalling his days in the private sector. “I didn’t think, as a Canadian ex-pat, this really was the best way.” Champagne touted Morneau’s plan to create something called the Invest in Canada Hub, announced in last fall’s economic statement, as a step toward a “one-stop shopping” solution to marketing the national brand.

He argued the time is right for Canada to present itself more assertively, checking off the country’s selling points in an unsettled world. “Stability, predictability? Yes, you can see ahead. Rule of law? You know, if you build a plant here, 50 years from now it’s still going to be yours; you’re not going to have a change of regime. And you talk natural resources, low cost of electricity, fairly low cost of doing business, favourable tax rates.”

After Champagne waxed on for a while about Canada’s advantages as an open, trading economy, and a beacon for foreign investment, I asked if that vision remains politically viable in the era of Donald Trump and Brexit. Isn’t it likely that many Canadians, deep down, share the anxieties of English and American voters who responded last year to more protectionist, defensive rhetoric?

Champagne said that’s not what he hears in his own rural and small-town Quebec riding. He claims voters there, from truck drivers to lumber industry workers, tend to grasp that trade is essential to their livelihoods. But it’s crucial, he argued, for governments to make sure most people can see the benefits of liberal economic policy flowing their way.

So he cited measures from last spring’s budget, including the new Canada Child Benefit and the boost to the Guaranteed Income Supplement for lowest-income seniors. “People get it,” he said. “They see that, from the growth that we’re aspiring to achieve for the country, there is a piece of that for them.”

And he contrasted that with the discontent he noticed, back when he was based for five years in London, over how globalized trade and investment seemed to benefit only “a very discrete group” of the highly educated Brits. He added cautiously: “It’s not for me to talk about other countries, but I’m just talking from personal experience. You could see at some stage there was this imbalance.”

For Canada to avoid a Brexit-like backlash, the economy must keep generating wealth and spreading it around. Champagne agrees with economists who say that will be hard to sustain, since our workforce just isn’t expanding like it used to. “A lot of the growth in our country came after World War Two, with the influx of population from Europe, mainly. Then in the 1970s, women came to the workforce,” he said. “Now what we’re facing is that population in Canada is aging more than the world population.”

He said the federal policy response to the demographic crunch of more retired and few working-age Canadians can’t be merely incremental. “In an era of slow growth we need to have big, bold ideas,” he said. “We need to be ambitious.”

Up to now, Champagne has worked in Morneau’s shadow, helping develop policy ideas like the finance minister’s infrastructure bank and investment hub. Freeland showed, when she was finalizing Canada’s trade deal with the European Union, how a trade minister can make a mark—and secure a cabinet promotion. Now, Trudeau is giving Champagne his chance, and Ottawa has a key new player to watch.

Article originally published here