The Week Ahead: 22 – 28 July 2018

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by Global Risk Insights , July 23, 2018

Brexit negotiations to continue as parliament fails to coalesce around any option. Trump Russia scandals heat up in Washington. Pakistan elections could see rise of Imran Khan as power maker. All in The Week Ahead. 

UNITED KINGDOM: Brexit negotiations to continue as parliament fails to coalesce around any option

• Last week, Prime Minister Theresa May released a 90-page proposal to square the circle on Brexit negotiations. The adoption of this proposal led to the resignation of both the Brexit minister and the foreign minister, as well as a rebellion in the House of Commons. The resignation of Boris Johnson and Danny Davis led to the introduction of 4 amendments to the Chequers proposal that seriously undermined the bill: one indicated it would not be legal for the UK to collect customs duties from the EU; another said new legislation would be required if the UK wanted to be in a customs union with the UK; one that the UK couldn’t maintain its position in the EU VAT regime; and finally one indicated that there can be no customs border between Northern Ireland and the rest of the UK.
• These proposals would make an already very difficult deal for the EU to accept even more difficult for them to work with. Additionally, an amendment by remain Conservatives that would have kept the UK in a customs union in the event of no deal was barely defeated 307-301, indicating that at this point there does not appear to be a majority in favor of anything. The EU has indicated there are numerous problems with the proposal anyway, and that at best this will be a starting point for negotiation.

GRI Take: While EU officials were heartened by perceived movement on the UK side to acknowledge some fundamental components of what Brexit would look like, the subsequent chaos in Downing Street and Westminster has led the EU and Irish governments to more seriously consider the possibility of a crash out of the UK from the EU.

UNITED STATES: Scandals heat up in Washington as more questions are asked about Trump Russia connections

• Following news of the expansion of Robert Mueller’s investigation of Russia’s interference in the 2016 presidential election on the heels of a damaging face-to-face with President Putin, President Trump is likely to face continuing scrutiny over connections between his campaign advisers and Russian officials.
• Last week also saw the arrest of Maria Butina, an accused Russian spy with deep connections to the National Rifle Association (NRA) as well as connections to other right-wing groups. The continuing investigation, coupled with Trump’s own comments in Helsinki as well as in the UK, are likely to lead to further investigative and journalist scrutiny of the Russian connections to American politics. The revelation that Trump’s former attorney Michael Cohen had secretly recorded conversations between himself and Trump on payouts to at least one woman who alleged she had an affair with Trump one month prior to the 2016 election has further added fuel to the fire.

GRI Take: As congressional campaigns on both the left and right begin gearing up for the November elections, these scandals area likely to enflame passions on both sides: fueling support on the left to provide a balance to the White House, and on the right to protect the incumbent Republican president in Congress.

PAKISTAN: Elections could see rise of Imran Khan as power maker or PM

• On Wednesday, voters in Pakistan will head to the polls to vote for the 342 seats in the nation’s National Assembly, and thus prime minister. The electoral, highly charged environment in Pakistan changed dramatically after prime minister, and leader of the PML-N, Nawaz Sharif, was imprisoned for 10 years in a corruption scandal involving several luxury flats in London. As a result, the PML-N has struggled to gain the traction it had secured in previous elections, in spite of reduced blackouts and improvements in infrastructure.
• This has provided a huge opportunity for Imran Khan, one of Pakistan’s most famous cricket stars and leader of the Tehreek-e-Insaf (PTI) party. Riding on a wave of anti-corruption campaigning, Khan has positioned himself as leader of a party likely to secure the highest number of seats.

GRI Take: This anti-corruption campaigning against an incumbent party bears parallels to the campaigns of insurgent political parties across both developing and developed nations, with the rise of political parties on a platform of anti-corruption gaining power or the fall of governments over corruption recently in countries as diverse as Italy, Spain, Guatemala, Peru, and Brazil. Should Khan emerge victorious, he will face a country with challenges including the Taliban in northern Pakistan, infrastructure issues, the power of the military, and tensions with India.