Week of 23 November 2020
CANADA: Last weekend, Canadian PM Justin Trudeau and UK PM Boris Johnson announced that the two countries had agreed on a ‘rollover’ trade deal to come into force on 1 January, after the end of the UK’s post-Brexit transition period. Following London’s withdrawal from the EU (31 January 2020), the UK has still enjoyed fixed-term access to the EU’s own numerous trade deals with third countries – but that will come to an end on New Year’s Eve. Therefore, Britain has had to negotiate its own bilateral ‘rollover’ deals in order to continue trading with certain non-EU countries on existing terms. Rollover deals have already been signed between the UK and more than 50 countries, but many of these deals are dwarfed by the importance of a yet-unsigned UK–EU trade deal (in 2019, 52% of all UK imports and 43% of all UK exports were from/to the EU). However, the UK–Canada deal has been welcomed as a step in the right direction, and arguably represents – together with the UK–Japan rollover deal agreed in September – Liz Truss’s biggest achievement to date as Secretary of State for International Trade.
HUNGARY AND POLAND: The governments of Poland and Hungary have reiterated their intention to veto an EU proposal linking the distribution of EU funds with the respect of the rule of law and the independence of the judiciary. Both countries, led by populist governments widely accused of illiberal tendencies, have argued that the concept of ‘rule of law’ and its connection to the allocation of funds has no place in EU treaties. They also argue that the ‘rule of law’ as a concept is ‘arbitrary’ and could pave the way for ‘politically motivated decisions’. Although Poland and Hungary’s opposition is quite a headache for the EU authorities scrambling to pass a colossal budget (€1.8tn), there have been some suggestions as to how to circumvent their veto – such as negotiating a deal between 25 member states rather than all 27.
NORTH KOREA: South Korea’s spy agency has reported that the North executed a currency trader amid leader Kim Jong-un’s renewed attempts to strengthen his control over his country’s foreign exchange market. According to Seoul-based North Korea expert Andrei Lankov, the execution may aim to dissuade the North Korean public from trading in foreign currencies, which have gradually become more widely used in North Korea since 2009; the crackdown may be a symptom of economic and financial difficulties.
SUDAN: Russia is going to build its first naval base in Africa on Sudan’s Red Sea coast. The Kremlin’s statement authorises the creation of a base for 300 personnel and four warships. Several commentators have seen this project as a new step in a long process of consolidation of Russia’s presence in Africa; in recent years, China has also been acquiring a growing influence in the continent and geopolitical competition has been getting more and more fierce.
