November 13, 2020

The International Atomic Energy Agency (IAEA) has reported that Iran now has more than 12 times the amount of enriched uranium allowed under the multilateral nuclear deal signed with China, France, Germany, Russia, the UK, and the US in 2015. The global nuclear watchdog has also found that Iran has been enriching uranium to 4.5% purity, above the 3.67% limit agreed in the accord. Iran began flagrantly violating the terms of the deal when the US, under the Trump administration, withdrew from it in 2018. The election of Joe Biden – who was vice president when the US signed on to the deal – has led to speculation that the US could again seek some sort of rapprochement with Iran on its nuclear program. Progress on this issue is likely to be among the Biden administration’s priorities for reengagement in multilateral accords and institutions, such as the Paris Agreement and the World Health Organization. However, efforts to reestablish productive ties with Iran will encounter obstacles and domestic resistance that would not figure into re-signing a multilateral climate agreement. Iran’s very public violations of the nuclear deal complicate the argument that it will be a cooperative partner in any future agreement the two sides are likely to reach. And even getting to a deal will be an uphill battle – Iran is notorious for driving a hard bargain and will push for any and all advantages it can extract from talks. Biden’s history on this issue suggests that at the very least he may make a good faith effort to cool tensions between the two countries, but under the circumstances, chances are slim that these efforts will succeed.

President Trump has signed an executive order prohibiting U.S. firms or individuals from investing, either via direct share ownership or through funds (including emerging markets and mutual funds), in 31 companies the U.S. has labeled as providing support to modernization of China’s People’s Liberation Army (PLA). The goal of the order is to prevent the channeling of U.S. capital into the buildup and modernization of the Chinese military. The prohibition on new investments in these companies goes into effect on January 11, and investors and funds have until November 2021 to divest existing assets that fall under the newly prohibited category. The firms on the list include state-run providers of aerospace, shipbuilding, and construction equipment and services, as well as those that develop and sell advanced technological products with military applications. Two of the companies on the list, China Mobile Communications and China Telecommunications Corp., have units listed in the U.S., and others are listed on the Hong Kong stock exchange. China watchers have warned that some of the Trump administration’s recent moves to ratchet up pressure on Beijing may push U.S.-China relations to a level of tension that a Biden administration would have difficulty walking back. However, China is known for its long view in foreign policy and other facets of geopolitics – Beijing is unlikely to overreact, and more likely to seek a proportional response that saves face but still gives it latitude to establish a new (and less contentious) normal with the incoming administration.

Political turmoil hit Peru this week when the Peruvian congress ousted President Martín Vizcarra on corruption allegations and installed speaker Manuel Merino as president. Merino was sworn in as Peru’s president on Tuesday after Vizcarra was impeached by Congress on Monday in an act that the Peruvian people saw as a legislative coup on a popular president. Merino, who was the speaker of Congress and instigated impeachment proceedings, has been accused of trying to protect his own political interests and those of his allies, who have also been accused of corruption. Not surprisingly, Peruvians took to the streets after Vizcarra’s ousting. Vizcarra has been popular in Peru, with 50% approval ratings even through the challenging period of coronavirus lockdowns that have pushed the Peruvian economy into a downturn and a projected contraction of 14% in 2020, according to the International Monetary Fund (IMF). Polling data indicates that three quarters of Peruvians believe Vizcarra should not have been removed from the presidency, despite allegations that he took bribes from construction companies. Now, it appears there are no real checks and balances in place on Merino and an elevated concern that he could put off presidential elections currently scheduled for April 11, 2021. Unfortunately, this is another example of how corruption and corruption allegations continue to undermine democratic institutions and the will of the people in Latin America. With many countries in the region mired in their own domestic political and economic issues, it is unlikely that the situation in Peru will be met with much resistance or even reaction from the international community.