Tuesday, January 17
UK PM DELIVERS CRUCIAL BREXIT SPEECH
On Tuesday, UK PM Theresa May will deliver her much-anticipated speech addressing Brexit. While May has refused to reveal her negotiating strategy before the triggering of Article 50 in March, Tuesday’s speech is likely to indicate her preference for a “hard Brexit”.
A “hard Brexit” would involve the UK withdrawing from the EU single market and customs union. While the country could then trade with the bloc under WTO rules, London will need to negotiate a free trade agreement with the EU to regain preferential trade access. These negotiations will likely address whether the UK lowers its corporate tax rates to below EU levels. May is likely to use the threat of transforming the country into an international tax haven to gain leverage over her European counterparts.
While the long-term implications of Brexit remain unclear, the short-term ones are less so. If the prime minister signals a preference for a “hard Brexit” on Tuesday, the pound sterling – which has already hit a 31-year low – is likely to devalue further.
WORLD ECONOMIC FORUM GETS UNDER WAY IN DAVOS
The three-day World Economic Forum, known colloquially as Davos, kicks off on Tuesday. The summit is a veritable who’s who of the global elite, with the world’s top political and business leaders in attendance.
In an attempt to address the ‘frustration and discontent’ that shaped political developments in 2016, the focus of this year’s meeting will be ‘responsive and responsible leadership’. Global leaders will discuss how they can provide equal economic opportunities and workshop ways in which the Fourth Industrial Revolution – the disruption caused by technologies such as artificial intelligence, nanotechnology and the Internet of Things – can be effectively managed.
Coming just days before his inauguration, US President-elect Trump won’t attend – nor will he send a representative. To do so would undermine the very thing he railed against during his campaign: global elitism, of which Davos is perhaps the pinnacle.
Chinese President Xi Jinping is set to capitalise on the new US administration’s absence. Xi is the first Chinese leader to attend Davos and will deliver a high profile keynote speech. In it, he’ll highlight Beijing’s increasing global leadership: expect the One Belt One Road infrastructure development programme and Asian Infrastructure Investment Bank to feature prominently.
The trend of Chinese multilateral leadership is likely to continue and, if Mr Trump abides by his anti-globalisation campaign pledges, it may happen faster than anyone expected.
MOLDOVA’S NEW PRESIDENT VISITS MOSCOW
In his first foreign visit, newly elected Moldovan President Igor Dodon, a former air force commander, will hold talks with Vladimir Putin in Moscow on Tuesday. In 2016, Dodon – widely perceived to be a pro-Russian candidate – beat pro-EU Mala Sandu, securing 52% of the second round vote.
Unsurprisingly, the new president has pledged to hold a referendum on his country’s EU Association Agreement. Moscow reacted angrily to the 2014 deal, implementing import restrictions on Moldovan goods in response. Mr Dodon’s promise to hold a vote on the contentious agreement is a not-so-subtle attempt to improve relations with Russia – Moldova’s largest trade partner. A vote on the deal is expected later this year.
Tuesday’s meeting is also expected to focus on increasing Moldovan pharmaceutical exports to Russia. President Dodon may also seek to secure amnesty for Moldovans living in Russia illegally, of which there are tens of thousands.
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