French Resistance or French Surrender?

France is easily one of the coolest countries on the planet. 

Between its cultural vivacity and the independent intellectual esprit de coeur of its citizens, France arguably more so than any country  influences global culture on a per capita basis. 

France's empire may be long deceased however French culture today spans the globe. 

The country's great cultural industries and exports depend on free trade, cultural openness, and a willingness to engage the world.

And yet the dreary reality of politics, society and upcoming French Presidential elections threatens the country's outward looking successes.

French cool.... unfortunately can't fix French reality. The country's de-industrialization over the last quarter century has brought on a brutal world where youth unemployment exceeds 25%.

A long march towards the same old crazy story... Donald Trump... no Marine Le Pen.

The European Union is burning. America is retreating. Russia is gaining. Britain is bonkers. France needs to hold the line but will it? 

The upcoming French Presidential elections will determine the fate of Europe as a political body and with it a large part of the globalist project.

Pollsters predict a run-off between Marine Le Pen and another. It is unclear as to whether any mainstream political candidate has the capacity or popularity to deal with this menace.

Marine Le Pen is a bigot, a fraud and possibly (hopefully not) the next President of France.

Grabbing Mexico by the Pussy

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The Mexicans are the real losers of the US election.

Mexican companies and workers have been one of the greatest beneficiaries of the North American Free Trade Agreement and globalization. The country in nominal terms is the 15th largest economy ($1.1 trillion USD) and 11th ($2.3 trillion) when measured by purchasing power parity globally. It climbed out its nearly frozen economy and became a major exporter of consumer electronics, OEM manufacturing, and vehicle production.

Donald Trump's singling out of Mexico and globalization as the source of the collapse of US manufacturing seems inspired by Ross Perot's 1992 statement that trade agreements were sending jobs overseas and that an agreement with Mexico was a "giant sucking sound [of US jobs] going south".

As a good friend, the Canadian Government is already looking at throwing Mexico under the bus as part of preliminary discussions with the new US Government to set up a bilateral trading agreement to replace NAFTA. Prime Minister Trudeau is scheduled to meet Donald Trump's son-in-law Jared Kushner in Calgary on January 24th as part of efforts by the Trump administration to reach out to Ottawa.

Meanwhile, President Henrique Pena Nieto faces difficult questions at home on a projected slow down to the Mexican economy and very large uncertainty linked to its primary export market the US.

If indeed NAFTA collapses into a bilateral Canadian-US agreement the real question is what happens to Mexico? The country has sought to expand trade in recent years and signed free trade agreements with 44 countries such as the EU, Israel, EFTA, Japan and various other countries. This has not brought the necessary gains in export markets as still nearly 80 percent of exports went to the US in 2013.

In other words, Trump's got Mexico by the pussy.

2017 - The Year of the Trump Card on Trade

This week global decision makers are meeting for the 2017 World Economic Forum in Davos, Switzerland. The post-Cold War global institutional order arguably faces its most serious challenge with the election of Donald Trump, Brexit, looming elections in Italy and France, the European migrant crisis and worsening economic equality.

Donald Trump's pre-inauguration threat of imposing a 35 percent tax on the US import of luxury German cars just days before Davos epitomizes the fundamental discord between populist and globalist value systems.

However, the likelihood that Trump will successfully pass legislation that imposes new tariffs on European exports to the United States is unlikely given that the majority of Republicans in Congress are pro-free trade.

This institutional opposition to his populist and local mandate means that other more radical strategies could be pursued by the incoming administration.

President-elect Trump does have the constitutionally mandated power to withdraw from treaties without congressional input. There is recent precedence with President George W. Bush's unilateral withdraw from the Anti-Ballistic Missile Treaty in June 2002.

The post-WWII international framework in trade and politics was largely established by the international treaty system and there is very little to stop the incoming Presidential administration to simply pick-up and leave where it chooses to do so. Indeed, trade agreements such as NAFTA could very face a Trump chopping block. Alternatively, Trump could use this threat as a bargaining chip to force congress to impose modest tariffs against countries instead of an executive forced total withdraw.

It is going to be an interesting year. In particular, the future appointment of a new Justice to the US Supreme Court could be very influential in determining the future interpretation of the separation of legislative and executive powers.

A Trump appointment not surprisingly may be distinct in their support for the expansion of executive purview, something that contrasts deeply with Republican lawmakers' policy over the last 30 years.