Talking Points
- Australia's alleged war crimes in Afghanistan were laid bare
- Ethnic Armenians evacuated land ceded to Azerbaijan
- Ethiopian forces prepared to lay siege to the Tigray capital
- Central America counted its dead in the wake of Hurricane Iota
- Crisis-hit Peru choose its third president in a week
- Thai protesters rallied for curbs on the King's power
- The number of refugees resettled globally plummeted to new lows
- US regulators said Boeing's 737 Max can fly once more
- Carlos Ghosn's old automotive alliance drifted further apart
- Douglas Stewart's 'Shuggie Bain' won the 2020 Booker
Deep Dive
An oft-repeated line is that free and fair trade has a liberalising influence on its participants. But in the last two decades China has proven that you can open up for trade without having to accept political liberalisation. Now, the new super-power has signed the world's largest free-trade deal, without giving an inch in its political brawls.
A warm RCEPtion
China's President Xi Jinping replayed some of his greatest hits in a speech to the Asia-Pacific Economic Cooperation forum this week. The unchallenged authoritarian leader of one of the world's least liberal countries touted multilateralism and openness. He rhapsodised about China's "super-sized" economy and promised to resist any "decoupling" from America. Xi has good reason to be in high spirits: just days earlier, his negotiators had brought together 14 other Asian and Pacific countries in the world's largest free-trade deal. Eight years of negotiations on the Regional Comprehensive Economic Partnership (RCEP) have produced a sizeable diplomatic coup for Xi, and China. The success is magnified by the Trump administration's failure to see America's Trans-Pacific Partnership to completion.
This is a big deal, with a number of headline-grabbing metrics. The participants (Australia, Brunei, Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand, and Vietnam) speak for 2.2b people in the fastest-growing region of the planet. They have a combined GDP of $26.2tr and constitute 26% of global trade , and 30% of total economic output. That's $1tr more than the United States-Mexico-Canada Agreement, and $7tr more than the entire European Economic Area. As we said, a big deal. But once you dig into the text, it becomes apparent that the agreement is more of an incremental improvement than a revolution in regional trade. For instance, most of the RCEP's tariff reduction applies to industries that are already covered by bilateral trade deals. Additionally, each country can retain its barriers on key industries. Crucially, without the US or Europe in the mix, RCEP contains no protections against the intellectual property theft that has been a key stumbling block with China. India also did not come on board , and even though that was largely down to New Delhi's reliance on steep tariffs, any regional agreement without India seems conspicuously incomplete.
The political economy
It suits the interests of most countries to keep their trade and political relationships at arms length. Take Australia, for example, which has been caught trying to have its cake and eat it too. Its stupendous veins of iron ore and coal have firmed steel and fired power-stations in Asia for decades. China is Australia's largest trading partner – snapping up 32% (roughly US$90b) of its exports. However, Canberra has also remained steadfast, politically, with the United States for 70 years. In years past, it served Australia to maintain a firewall between its economic and political views on China. But in the last decade Australia's conservative government has taken a harder line on various policies, most recently calling for an investigation into its handling of the first coronavirus outbreak. Beijing's response was radio silence , and rather coincidental import bans on Australian goods. Australia has threatened to sue China at the World Trade Organisation. But in the meantime, it has signed the RCEP.
It's not just the middle powers that are being wedged. The Trump Administration gladly let its wires get crossed, so it could fight a domestic political war on international trade grounds. It will take years to disentangle the issues and undo the damage. And the incoming Biden team aren't likely to bring any olive branches with them.
What's become increasingly clear is that any policy that antagonises Beijing will result in economic self-harm. Even the mildest criticism can provoke a tight-fisted response from Beijing. Needless to say, its brute force in the South China Sea, early coronavirus mistakes, the political repression in Hong Kong, and the concentration camps in Xinjiang are all off limits. On one level, this is startling. But China is also laying bare a truth - that liberalisation is not a moral position. It's a tool, used by the strong on the weak. By cleaving the promise of political openness and cooperation from the free trade project, Beijing has brought forth a challenge: will countries act against their economic interests in order to press for a more liberal society. As it stands, the answer is a chilling no.
Worldlywise
The centibillionaire club
In the same week that SpaceX delivered four astronauts to the ISS, its founder and CEO launched himself into the stratospheric heights of the centibillionaire club. Elon Musk is now worth $103b – an increase of $95b since January 1. He accumulated several fortunes this week alone as Standard & Poors decided to include Tesla on the S&P 500 index, and Morgan Stanley opted to give the company an overweight rating. Good luck trying to beat him in a libel suit now.
The others at Musk's lofty altitude will be familiar to you. Jeff Bezos: $184b (up $68b in the year to date). Bill Gates: $128b (up $14b). And Mark Zuckerberg $103b (up $25b). These individuals, and their fortunes, exert their own gravitational pull on the very fabric of the society they hover above.
In fact, what's especially curious about America in 2020 is how few companies now wield overwhelming influence over the broader market. The US has a two-speed economy – tech, and everything else. And there are no prizes for guessing which side has contributed the lion's share of growth to the S&P 500 this year. As these corporations move beyond the reach of rivals and regulators alike, they are speeding up, not slowing down. This week, Amazon launched an online pharmacy to compete with CVS, Walgreens, and Rite Aid. Low prices and speedy delivery, in exchange for letting one of the world's most pervasive companies get access to your medical data. Considering how wrought the Amazon marketplace is (from accusations of harvesting data to undercutting third-party sellers with home-branded products), this foray into pharmacies should come with a warning label. How much is too much?
Another curiosity is the difference between the aforementioned American tycoons, and those in China - the length of their chains. Even a household name like Jack Ma (who happens to be worth $60b himself) can be dragged before the authorities, upbraided, and have a colossal IPO pulled (a la the mercilessly crushed Ant Group). All this, for the misdemeanour of criticising Beijing's banking regulators. It's inconceivable that the US government would make any intervention, let alone such a drastic one, over a personal slight. But the point here is not about standards, it's about potentiality. Beijing retains the ability to keep its business elite at heel, while Washington is hard pressed to even get theirs to consent to soft-ball congressional interviews via videolink.
The balance of power at America's core has shifted: Amazon and its kin are no longer simply too big to fail. They are too big to be failed.
An embarrassment of vaccines
The end of the year always looked promising, but this week has been joyous. On the back of Pfizer and BioNTech's flattering preliminary results of 90% effectiveness, Massachusetts-based biotechnology company Moderna revealed their own mRNA vaccine results: 94.5% effective. And while Pfizer piped in to say that actually , its final results showed a 95% success rate , the attention stayed firmly on Moderna. Theirs has a crucial distinction: it can be stored and transported in regular freezers , unlike the deep freeze needed to keep Pfizer's safe. The benefit cannot be understated: for low- and middle-income countries there was simply no path to deploying the Pfizer vaccine that wasn't both prohibitively expensive and time-consuming. For Moderna, the trucks that rattle around your streets with frozen produce will do just fine.
Later in the week, the Oxford/AstraZeneca team also revealed that its Phase II trial had produced a strong immune response in adults. We're marking this happy news by reinstating the Oxford comma in inkl's style guide. The candidate that just months ago seemed most likely to win the race, like the others mentioned above, is made of genetic material from the coronavirus protein spike grafted onto another virus that acts as a delivery mechanism. Now comes the logistical and bureaucratic scramble to produce as many doses of these front-runners as humanly possible. Both Pfizer and Moderna expect a regulatory thumbs up within weeks.
It's important to bear in mind that these are not the only vaccines out there. Both Russia and China are already jabbing away without disclosing much. And these are also not the only kind of vaccine out there. Over the coming months a whole suite of candidates will likely emerge - with completely different structures, risk-profiles, strengths, and shortcomings. As we mentioned back in February: we need as many scientists making as many attempts as possible, to beat Covid-19.
Lastly, some more good news: researchers at the La Jolla Institute for Immunology in California published a paper which suggests that multiple branches of the immune systems of coronavirus survivors recognised the virus more than 8 months after being infected. In other words, the protection could last years – if not decades.
The Best of Times
Sipping from the holy grail
For the first time ever, scientists have biologically reversed the ageing process . Volunteers breathed pure oxygen every day for 3 months, and their bodies were taken back to how they were 25 years ago (at least on the cellular level). Specifically, the trial targeted shortened telomeres and accumulated senescent cells — two key indicators of biological ageing.
Equity at the drive-thru chapel
After 18 years of it being banned, Nevada has voted to enshrine gay marriage in its constitution. The vote, which passed with a 62% approval rate, makes Nevada the first of any state to do so. The news comes as the fate of same-sex marriage goes under the gavel of the country’s conservative-majority Supreme Court.
The Worst of Times
Greenland is disappearing
Greenland’s three largest glaciers are melting at a rate just under the predicted worst-case scenario. Between 1880 and 2012, Jakobshavn Isbræ, Kangerlussuaq Glacier, and Helheim Glacier lost enough ice to add the equivalent of 8mm to sea levels. The worst-case scenario for the trio’s mass loss is 9-14.9mm by 2100 . With temperatures projected to rise at an ever higher rate than they did between 1880 and 2012, the melting could very well accelerate .
Unfastened fashion
Female factory workers have spoken out about their working conditions in factories supplying garments for Ralph Lauren, Sainsbury’s, Tesco, and Marks & Spencer’s. Workers revealed that they are not given toilet breaks, and are forced to work late into the night without notice, or face being fired. While India is the second-largest manufacturer of clothing, its weak labour laws and low wages mean workers are extremely vulnerable to exploitation. And so, individuals and companies alike must ask themselves: what is the true cost of fashion?
Weekend Reading
The image
The quote
Giuliani: In the plaintiffs' counties, they were denied the opportunity to have an unobstructed observation and ensure opacity. I'm not quite sure I know what opacity means. It probably means you can see, right?
Judge: It means you can't.
Giuliani: Big words, your honour.
– In Donald Trump's attempt to overturn election results across the country, his administration turned to the legal prowess of former New York mayor Rudy Giuliani . He'll be hoping District Court judges factor in comedic value when weighing arguments.
The numbers
1,638 police officers
- The long arm of German law closed on its prey almost a year to the day since jewel thieves spectacularly robbed Dresden's Green Vault Museum . The authorities raided dozens of locations and nabbed two people connected to the heist – though the jewels are still at large .
1,456 head of cattle
- Even less luck in the hunt for the culprits behind Australia's most impressive cattle rustling in modern history. $2m worth of cattle were stolen from the 447,500-hectare Murranji Station in the Northern Territory over the course of several months.
The headline
"Ponzi Scheme Suspect Uses Underwater Scooter to Flee FBI" – The New York Times . And he would've gotten away with it to were it not for the fact that he was in a lake, it only moved at a walking pace, and agents on the shore could track his trailing bubbles.
The special mention
Dolly Parton gets the gong this week. The country music doyenne revealed that she had partly funded the development of Moderna's coronavirus vaccine with a $1m donation to the Institute for Infection, Immunology, and Inflammation at Vanderbilt University in Tennessee. Some partisans have made the argument that Dolly deserves inkl's special mention in perpetuity, though our judging panel is committed to impartiality on such matters.
A few choice long-reads
- Prince Andrew. For those of you who require more than his name alone to read this article: Epstein's blue-blooded buddy was found to have been dealing in influence with more than just billionaire paedophiles. A cracking investigation from Bloomberg Businessweek.
- Staying in Britain, there are some imaginative ideas in the modern Tory party on how to strip power from the bureaucracies and hand it back to the executive. The Economist meets these well-heeled counter-revolutionaries.
- "I don't want you to lose your job, but why should you exist?". A question most of us have wanted to ask a political pollster recently. Rolling Stone did, and have published the responses.
Tom Wharton
