POLITICO Global Translations: Corona spreads, Britain retreats as the planet heats

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Welcome to Global Translations: you’re in good company. As you read this right now, you’re joined by American tech CEOs, European Commissioners and UN officials, and voices that range from human rights defenders to TV producers to space industry executives spread across 61 countries.

Our mission is to connect you into a global conversation on some of the most important issues facing the planet. Forget domestic ding-dongs, this conversation stretches from Davos to classrooms in Bangladesh, and across five generations, and I’m excited to be in conversation with you. My promise is that I’ll help you think in new ways and share your good ideas — without wasting your time. Please send your feedback and your tips.

Breathe: If the world seems too much to handle: check out the highest-resolution photo ever taken of the sun. Those cells you see: they’re each the size of Texas.

This week, everyone’s talking about Corona — sadly the virus not the beer. IMF chief Kristalina Georgieva told me Thursday afternoon: “My top of mind this week: As trade tensions receded, we upgraded our growth projections for China for 2020: now coronavirus puts this at risk. More uncertainty seems to be the new normal and we all need to adjust to live with it.”

True or False: With this uncertainty, do today’s CEOs have it rougher than ever? Tim Ryan, U.S. Chairman of PwC, told me at Davos: “With all due respect to formers, the job today is harder than it's ever been. And it's fraught with multiple stakeholders. You've got every element of society. You've got 24/7, and social media and the world is so different today. What they're dealing with is just a very, very complex job these days.”

But do they have it as rough as Boris Johnson?

BREXIT

Welcome to Brexit day, or as we call it at Global Translations: The End of the Beginning. Britain is leaving with a whimper, as I report here. The U.K. finds itself grouped with Russia at the bottom of Edelman’s 2020 global trust barometer after Brexit drama that has spawned two elections and chewed through three prime ministers.

We’ll be dealing with the fallout for another decade yet. There’s nothing resembling an EU-U.K. trade deal yet (much less other U.K. trade deals), and history shows that when Britain retreats, the effects last for decades. The chaotic rush to leave India in 1947 sowed the seeds of today’s struggle over India’s citizenship law. When Britain refused to grant Hong Kongers full democracy and U.K. citizenship in the 1980s, it set the scene for today’s protests.

Ask yourself: What is Britain setting up by refusing to commit to EU rules, or to accommodate the concerns of Scotland and Ireland?

5 STRATEGIC QUESTIONS THE U.K. NEEDS TO ANSWER:

1. What is the U.K. willing to sacrifice to avoid crashing out of EU? There’s just 11 months to hash out a trade deal before the “real Brexit” day, December 31. Remember: it took 13 years to complete the recent EU-Canada deal. Who matters: David Frost, Boris Johnson’s chief Europe adviser.

2. Should the U.K. become greener than the EU? Becoming a green super-power is one of the U.K.’s only options for new global leadership. As host of the COP26 meeting this year, they have the platform, though trade talks with the anti-climate action Trump administration complicates this option. Who matters: Claire Perry, COP26 President.

3. Is the goal High-Tech, Low-Tax, Britain? How much does London want to be the world’s venture capital capital and alternative Silicon Valley, and what is it willing to disrupt to get there? Who matters: Sajid Javid, Chancellor.

4. Is the Atlantic narrower than the Channel? The EU’s 500 million-strong consumer market is appealing, but will the U.K. prioritize access to its American security blanket? America leases the U.K. its nuclear weapons and President Trump knows it. Also, see below for more on U.K.’s Huawei decision and what it means. Who matters: Dominic Raab, Foreign Secretary, and Ben Wallace, Defense Secretary

5. What is England willing to give to keep the United Kingdom united? Both Scotland and Northern Ireland are inching towards their own exits (from the U.K.), propelled by Brexit. Who matters: Nicola Sturgeon, Scottish First Minister. Leo Varadkar, Irish prime minister. Boris Johnson, U.K. prime minister.

WEALTH OF NATIONS

Each week we’ll look into noteworthy trade and investment trends.

U.S. AND KENYA LOOK TO NEGOTIATE: Kenyan President Uhuru Kenyatta is visiting Washington on Wednesday and Thursday, and the Trump administration’s goal is to agree that trade talks should start soon. U.S Congress would need to be notified before negotiations begin.

Global Translations Trivia: How many troops does the United States have stationed in Africa?
Send answers here. First correct answer gets a shout-out and the chance to write next week’s question.

MAINE LOBSTER ON EU’s MENU: The EU is cooking up ways to develop a broader trade truce with the U.S. Tariff-free lobsters from Maine are set to be part of peace offering. Sen. Susan Collins is facing a tough re-election battle, and she’s one of the few Republicans that EU officials could stomach helping electorally. According to a Global Translation’s EU source, the German-heavy leadership in Brussels is also keen to do what they can to save the German auto sector from a further Trump outburst.

GOING ROGUE: 16 members of the WTO, including the China, Brazil and the EU are setting up a parallel World Trade Organization court without the U.S. as a contingency measure after Washington tanked the WTO’s appeals body by refusing to appoint new judges.

ACRONYM WATCH — IPI: That’s EU-speak for International Procurement Instrument, which is expected to feature in a plan due March 4 out of Brussels. The point is to force other countries to open up their tenders under penalty of being blocked from EU tenders.

TRADE MOVE: Erland Herfindahl, is the new U.S. trade representative in Brussels, replacing Kate Kalutkiewicz, who is returning to Washington.

MIDDLE KINGDOM

WITH CORONAVIRUS, IT’S ALL ABOUT CONFIDENCE: This issue isn’t going away, especially now there are cases of human-to-human transmission in Beijing, Germany and the United States, and the U.N. finally got around to declaring a global emergency. Caixin reports the latest casualties in real-time and Nature is blogging interesting details. Here are some layers you might not have come across:

Weak currency, government stimulus: President Trump may be accidentally getting the weaker currency he wanted (China’s currency fell this week), but that’s a sign of economic troubles ahead that will likely require central government stimulus. Otherwise China’s growth — which was already expected to fall to its lowest levels in 30 years — may sink towards a nasty 5 percent tipping point. Wilbur Ross sees an opportunity, though smart money would prefer it to disappear.

Tech supply chains disruptions: We’ll only know the effects when most workers are back from the Chinese New Year holiday next week, but Apple is at risk of iPhone production issues. It won’t be alone.

Lack of transparency leads to over-reaction: While it’s impressive that the Chinese regime is racing to build two hospitals with a total of 2,300 beds in just 10 days (watch it live on CGTN), it would have been more impressive to simply stop people leaving Wuhan before the traditional Chinese New Year holiday. Now companies and governments are making expensive risk management choices. The calculation amounts to this: With China you never know what is lurking around the corner. Here’s Juliet Samuel on why it’s hard to trust a system that suppresses information.

Speaking of trust …

THE LOCALIZATION OF TRUST: The big trend out of this year’s Edelman Trust Barometer (their 20th) is that people are increasingly less willing to trust what is far from their daily lives and networks: “my employer” is the most trusted institution. It’s a pattern that extends all the way to the C-suite, as I learned talking to Tim Ryan, the U.S. chair of PwC in Davos, just before PwC’s annual CEO survey launched.

WHAT CEOs SAY: Few people talk to more CEOs of large and multinational businesses than Ryan. “I kind of hear one-to-one what's going on in their business and then I look at the CEO survey and it's not a surprise, but it is a conundrum.” The survey shows record decline, for the second year in a row, in CEO optimism around global growth. With Brexit, trade wars and worse dominating headlines, “it's not a surprise,” he said. “But here's the conundrum. When you look at our individual clients, and these are my one-on-one meetings over the course of a year, most feel good about their ability to grow revenues. Their own individual confidence is still (at) high levels. What it tells me is CEOs are adapting: they know they can't control the global economy, but they can control their business. The things that are under their control, talents, skills development, innovation, they're doing a pretty good job.”

TECH-TOCK, TECH-TOCK

U.K. AND EU ALIGN ON HUAWEI TO FEND OFF US AND CHINA BACKLASH: It’s Brexit day yet the U.K. is inspiring the EU to triangulate between the U.S. and China. Both Britain and the EU propose to limit the role of “high risk vendors” (a.k.a. Huawei) without banning them. Huawei’s U.S. chief security officer Andy Purdy visited POLITICO Thursday afternoon with the message: “There’s a lot of ignorance. There’s a lot of false information,” in particular from the U.S. administration, about how Huawei operates. What the U.K.’s decision really shows is the limits of both U.S. and U.K. power these days. Nancy Scola and I break it down.

New drone front in race to ban China: Huawei gets all the attention, but this week the U.S. also moved to bank Chinese-made drones and drone parts. Cyberscoop has details.

UPSKILLING THE TECH CZAR: Regulators are struggling to keep pace with the warp-speed tech revolution, so it’s interesting to see Europe’s digital czar, Margrethe Vestager, upskilling on the AI front. One big tech company involved in that process bragged to Global Translations about how they’d been giving Vestager private AI training via the economic think tank Bruegel. Vestager’s team says it was a “roundtable” for listening and “inspiration.”

Vestager told Global Translations her goal is “reliable, trustable and human-centric” AI, flagging to European parliamentarians this week that Europe’s AI strategy is scheduled to be released February 19. POLITICO obtained a copy of the draft strategy.

FACEBOOK’S $160 - $300 BILLION REGULATORY TAX HIT: Who needs antitrust? Facebook’s reputation problem may finally be getting a price tag. The Information has calculated Facebook “getting hit by a ‘regulatory tax’ of at least $160 billion — on its stock price.” Read their assessment. In plain English: Facebook shares are trading lower than their face value business performance suggests they should. Why might it be happening: here’s two data point from this week alone. Facebook was slammed by German courts over loose default privacy settings, and paid $550 million to settle an Illinois class-action lawsuit alleging data harvesting without users' permission.

PARIS SUMMIT RACES TO AVOID FLOOD OF NATIONAL DIGITAL TAXES: We’ve been hearing a lot about Washington battling against a French digital tax. The U.K. has promised one in April. That’s just the tip of the tax iceberg. If the OECD can’t broker a global deal by July, expect a flood of copycat national digital taxes to hit the market. Peter Lochliber, global director of public affairs at a Dutch accommodation service, said the company is proud to pay tax, and that it’s wrong to assume “all digital companies evade taxes.” Booking, which is subject to the French tax, fears more national schemes that “result in double taxation, fragmentation and an unlevel playing field.”

POWER PLAYS AND ELECTIONS

WHO WILL REPLACE PUTIN? POLITICO’s Alec Luhn has you covered. Read on for details on why Putin’s Middle East plays are really about getting a better hand of cards in Europe and Asia: “Since Russia has a weak economy, it needs to compensate in other spheres.”

JUSTIN TRUDEAU’S POWER NETWORK, MAPPED: POLITICO’s Canada team plotted in this interactive the national politicians, provincial leaders, activists, and global voices that have sway with Canada’s prime minister.

MADURO SACKED … BY HIS OWN LAW FIRM: American law and lobbying firm Foley & Lardner has scrapped a $12.5 million contract to represent the Venezuelan government of Nicolás Maduro. The contract was set to run until May 10.

ENDLESS ELECTION: The U.S. 2020 campaign has been going for a year and we’re only now getting to hear directly from voters. We’re looking at identical numbers to six months ago: Trump will survive impeachment, and Joe Biden leads Bernie Sanders in second and Elizabeth Warren in third in national Democratic primary polls. No one knows how Monday's Iowa caucus will turn out: ignore anyone claiming otherwise. One day after Iowa, the Trump team plans a non-impeachment State of the Union speech Tuesday night.

GREENS BECOME EU POST-BREXIT KINGMAKERS: With 73 British lawmakers out of the European Parliament, the pro-EU governing majority will now be constantly on the edge of defeat (the governing parties achieve only an 85 to 90 percent voting loyalty). The way back to a safe majority: convince 67 Green MEPs to join their side.

Green-friendly coalitions are becoming popular elsewhere across the continent, writes Paul Taylor.

INDICTED IN ISRAEL: Interesting how no one’s talking about President Trump’s Middle East peace plan just days after it was launched (The real point of it. And why it might matter by accident, by Nahal Toosi). What is inescapable is Benjamin Netanyahu indicted for bribery, breach of trust and fraud. Netanyahu will battle to stay out of court before a March 2 national election.

STRAIGHT-TALK SLOVENIA: Prime minister Marjan Šarec announced his resignation Monday.“There is nothing I can do with this government,” he said.

Sustainability

We're spending this quarter looking at sustainability issues, which are about much more than climate change. There are, after all, 17 UN Sustainable Development Goals working toward systems that last, deliver opportunity and tread lightly. We tackle climate change today but will go more broadly in future Global Translations.

DAVOS GAVE US PEAK SUSTAINABILITY: BUT WHAT’S NEXT? As governments fail, climate action expectations are shifting to brands and companies. Many are stepping up: witness all the attention given to investment plans by Blackrock and Goldman Sachs, and Microsoft’s promise to get “carbon negative.” But the real test is yet to come. Many of those companies still invest in fossil fuels and it’s not clear if Greta Thunberg’s student army and Prince Charles’ benevolent aristocracy can force hard choices out of them, or politicians.

We’re tracking the public and private conversations in our expanded Sustainability Spotlight.

Richard Mattison, CEO of Trucost (part of S&P Global) told me there’s little choice but to act. For CEOs and investors, the climate debate “got very real, very suddenly.” But there’s a big problem: a lack of “investment grade data and intelligence.” Read more in our full Sustainability Spotlight, which also includes interviews with Sanjeev Gupta, CEO of the GFG Alliance.

INSTITUTIONALIZED

This is Global Translation’s tour of the most important international organizations, this week we take a look at the United Nations.

THE CYBER-ATTACK THE UN TRIED TO HIDE: The New Humanitarian’s Ben Parker uncovered a “major meltdown” in U.N. systems starting in July 2019, that has exposed thousands of staff and triggered a rebuild of many U.N. systems. Under diplomatic immunity, the U.N. was under no obligation to report the attacks.

U.N. IMAGE REVAMP: Melissa Fleming, the new U.N. comms chief, plans to change how the 75-year-old body presents its news. More on the UN-Scripted podcast by Stephanie Fillion and Kacie Candela

FRENEMIES AT U.N. HUMAN RIGHTS COUNCIL: The EU and China were opposed on 31 out of 35 issues that went to a vote in 2019. Infographic from the Konrad Adenauer Foundation

GLOBAL MOVE OF THE MONTH: John Frank, currently Microsoft’s vice president of EU government affairs, will establish a new Microsoft United Nations representation office in New York. He will be replaced March 1 by Casper Klynge, the world’s first “tech ambassador”, from Denmark.

OWN GOAL: Facebook went to great efforts to schmooze NGOs and journalists in Davos on their efforts to manage speech on the platform. A pity then that they didn’t mention British human rights expert Thomas Hughes had just started as leader of Facebook’s new oversight board (dealing with contentious conent). Cue head-scratching in NGO offices this week when the appointment was announced.

VIRTUAL BOOK CLUB

Tech adviser Ryan Triplette recommends The Age of Surveillance Capitalism, for: “the most knowledgeable sense of both legislative and executive moves on these topics. Even if you just listen passively to the audio version, so much of the tech debate comes clearer.”
Send your book tips to globaltranslations@politico.com for inclusion in the next edition.

Keeping me up at night.
Book: Invisible Women: Data Bias in a World Designed for Men (Caroline Criado Perez)
Article: Closing the Gender Data Gap (Caroline Criado Perez, TIME)

Guilty pleasure
Globalists Gone Wild. Davos is just the start of a year-long circuit for the politically engaged private jet-set. John Harris invites you to Aspen and Cannes and …

THANKS to Global Translations editor John Yearwood and Luiza Ch. Savage, Nahal Toosi, Nancy Scola, Matt Daily, P.J. Joshi, Eline Schaart, Laura Kayali and Stefano Stefanini.