politics

Chile Cancels APEC In Another Example Of Global Fallout From Local Unrest. Trade Deal In Flux, Peso Falls To 15-Year Low

"A president needs to put its people above everything else".

Donald Trump and Xi Jinping will have to pick another venue for the ceremonial signing of the “Phase One” trade deal which is either ready to go or nowhere close to the finish line, depending on the day.

Chile on Wednesday canceled the APEC summit scheduled for next month, where Trump and Xi had long planned to convene face-to-face trade talks on the way to inking an interim agreement, the broad strokes of which are being hammered out ahead of time.

Chilean President Sebastian Piñera also nixed the COP25 environmental conference set for December amid protests, riots and the worst local unrest in decades. “We understand perfectly the importance of APEC and COP for Chile and the world, but we have based our decision on common sense”, Piñera said.

“A president needs to put its people above everything else”, he added.

The Chilean peso fell more than 1.5% on the news to around 739. That’s the weakest in more than a decade and a half.

This is bad news for a number of reasons, most of which go well beyond the fledgling Sino-US trade pact.

Simply put, this underscores the notion that unrest tied to a set of familiar grievances (e.g., subpar wages, rising prices, lackluster healthcare, income inequality and, in Chile’s case, the pension system) is undermining global governance and thereby the ability of world leaders to come together to tackle pressing issues from trade to climate change.

At a more general level, Chileans are concerned about corruption and the legitimacy of the country’s institutions. Again, a familiar refrain.

“We need a new social pact, a new constitution made by all of us”, one local business owner who employs more than two-dozen people said last week, as the protests gathered momentum. “I’m one of Chile’s privileged and we need to start thinking we’ll have to give something more to make this society a bit fairer”.

In a speech earlier this month, Piñera pledged to hike government-subsidized pensions by 20% immediately, implement new insurance programs, establish a guaranteed monthly income of nearly $500, shelve a 9.2% electricity price hike and put in place a new, 40% tax bracket for those earning $11,000 or more a month.

“As of now, it appears APEC will not occur in Chile, and it’s our understanding the organization does not currently have a secondary site prepared. We’re awaiting potential information regarding another location”, the White House said in statement. “We look forward to finalizing Phase One of the historic trade deal with China within the same time frame, and when we have an announcement, we’ll let you know”.


 

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