Wednesday 15 February 2017
Former national security, foreign policy, and intelligence officials politely tell U.S. federal court that Trump is undermining national security
STATE OF WASHINGTON, et al. v DONALD J. TRUMP, President of the States, et al., Response to Emergency Motion Exhibit A:
We, Madeleine K. Albright, Avril D. Haines, Michael V. Hayden, John F. Kerry, John E. McLaughlin, Lisa O. Monaco, Michael J. Morell, Janet A. Napolitano, Leon E. Panetta, and Susan E. Rice declare as follows:
1. We are former national security, foreign policy, and intelligence officials in the United States Government:
a. Madeleine K. Albright served as Secretary of State from 1997 to 2001. A refugee and naturalized American citizen, she served as U.S. Permanent Representative to the United Nations from 1993 to 1997 and has been a member of the Central Intelligence Agency External Advisory Board since 2009 and the Defense Policy Board since 2011, in which capacities she has received assessments of threats facing the United States.
b. Avril D. Haines served as Deputy Director of the Central Intelligence Agency from 2013 to 2015, and as Deputy National Security Advisor from 2015 to January 20, 2017.
c. Michael V. Hayden served as Director of the National Security Agency from 1999 to 2005, and Director of the Central Intelligence Agency from 2006 to 2009.
d. John F. Kerry served as Secretary of State from 2013 to January 20, 2017.
2. We have collectively devoted decades to combatting the various terrorist threats that the United States faces in a dynamic and dangerous world. We have all held the highest security clearances. A number of us have worked at senior levels in administrations of both political parties. Four of us (Haines, Kerry, Monaco and Rice) were current on active intelligence regarding all credible terrorist threat streams directed against the U.S. as recently as one week before the issuance of the Jan. 27, 2017 Executive Order on “Protecting the Nation from Foreign Terrorist Entry into the United States” (“Order”).
3. We all agree that the United States faces real threats from terrorist networks and must take all prudent and effective steps to combat them, including the appropriate vetting of travelers to the United States. We all are nevertheless unaware of any specific threat that would justify the travel ban established by the Executive Order issued on January 27, 2017. We view the Order as one that ultimately undermines the national security of the United States, rather than making us safer. In our professional opinion, this Order cannot be justified on national security or foreign policy grounds. It does not perform its declared task of “protecting the nation from foreign terrorist entry into the United States.” To the contrary, the Order disrupts thousands of lives, including those of refugees and visa holders all previously vetted by standing procedures that the Administration has not shown to be inadequate. It could do long-term damage to our national security and foreign policy interests, endangering U.S. troops in the field and disrupting counterterrorism and national security partnerships. It will aid ISIL’s propaganda effort and serve its recruitment message by feeding into the narrative that the United States is at war with Islam. It will hinder relationships with the very communities that law enforcement professionals need to address the threat. It will have a damaging humanitarian and economic impact on the lives and jobs of American citizens and residents. And apart from all of these concerns, the Order offends our nation’s laws and values.
4. There is no national security purpose for a total bar on entry for aliens from the seven named countries. Since September 11, 2001, not a single terrorist attack in the United States has been perpetrated by aliens from the countries named in the Order. Very few attacks on U.S. soil since September 11, 2001 have been traced to foreign nationals at all. The overwhelming majority of attacks have been committed by U.S. citizens. The Administration has identified no information or basis for believing there is now a heightened or particularized future threat from the seven named countries. Nor is there any rational basis for exempting from the ban particular religious minorities (e.g., Christians), suggesting that the real target of the ban remains one religious group (Muslims). In short, the Administration offers no reason why it abruptly shifted to group-based bans when we have a tested individualized vetting system developed and implemented by national security professionals across the government to guard the homeland, which is continually re-evaluated to ensure that it is effective.
5. In our professional opinion, the Order will harm the interests of the United States in many respects:
a. The Order will endanger U.S. troops in the field. Every day, American soldiers work and fight alongside allies in some of the named countries who put their lives on the line to protect Americans. For example, allies who would be barred by the Order work alongside our men and women in Iraq fighting against ISIL. To the extent that the Order bans travel by individuals cooperating against ISIL, we risk placing our military efforts at risk by sending an insulting message to those citizens and all Muslims.
b. The Order will disrupt key counterterrorism, foreign policy, and national security partnerships that are critical to our obtaining the necessary information sharing and collaboration in intelligence, law enforcement, military, and diplomatic channels to address the threat posed by terrorist groups such as ISIL. The international criticism of the Order has been intense, and it has alienated U.S. allies. It will strain our relationships with partner countries in Europe and the Middle East, on whom we rely for vital counterterrorism cooperation, undermining years of effort to bring them closer. By alienating these partners, we could lose access to the intelligence and resources necessary to fight the root causes of terror or disrupt attacks launched from abroad, before an attack occurs within our borders.
c. The Order will endanger intelligence sources in the field. For current information, our intelligence officers may rely on human sources in some of the countries listed. The Order breaches faith with those very sources, who have risked much or all to keep Americans safe – and whom our officers had promised always to protect with the full might of our government and our people.
d. Left in place, the Executive Order will likely feed the recruitment narrative of ISIL and other extremists that portray the United States as at war with Islam. As government officials, we took every step we could to counter violent extremism. Because of the Order’s disparate impact against Muslim travelers and immigrants, it feeds ISIL’s narrative and sends the wrong message to the Muslim community here at home and all over the world: the U.S. government is at war with them based on their religion. The Order may even endanger Christian communities, by handing ISIL a recruiting tool and propaganda victory that spreads their message that the United States is engaged in a religious war. e. The Order will disrupt ongoing law enforcement efforts. By alienating Muslim-American communities in the United States, it will harm our efforts to enlist their aid in identifying radicalized individuals who might launch attacks of the kind recently seen in San Bernardino and Orlando.
f. The Order will have a devastating humanitarian impact. When the Order issued, those disrupted included women and children who had been victimized by actual terrorists. Tens of thousands of travelers today face deep uncertainty about whether they may travel to or from the United States: for medical treatment, study or scholarly exchange, funerals or other pressing family reasons. While the Order allows for the Secretaries of State and Homeland Security to agree to admit travelers from these countries on a case-by-case basis, in our experience it would be unrealistic for these overburdened agencies to apply such procedures to every one of the thousands of affected individuals with urgent and compelling needs to travel.
g. The Order will cause economic damage to American citizens and residents. The Order will affect many foreign travelers, particularly students, who annually inject hundreds of billions into the U.S. economy, supporting well over a million U.S. jobs. Since the Order issued, affected companies have noted its adverse impacts on many strategic economic sectors, including defense, technology, medicine, culture and others…….
Labels:
Donald Trump,
immigration,
law,
US politics,
USA
File this official U.S. presidential proclamation under WTF! for future reference
Executive Office of the President, Document Number: 2017-01798**:
Proclamation 9570 of January 20, 2017
National Day of Patriotic Devotion
A Proclamation
A new national pride stirs the American soul and inspires the American heart. We are one people, united by a common destiny and a shared purpose.
Freedom is the birthright of all Americans, and to preserve that freedom we must maintain faith in our sacred values and heritage.
Our Constitution is written on parchment, but it lives in the hearts of the American people. There is no freedom where the people do not believe in it; no law where the people do not follow it; and no peace where the people do not pray for it.
There are no greater people than the American citizenry, and as long as we believe in ourselves, and our country, there is nothing we cannot accomplish.
NOW, THEREFORE, I, DONALD J. TRUMP, President of the United States of America, by virtue of the authority vested in me by the Constitution and the laws of the United States, do hereby proclaim January 20, 2017, as National Day of Patriotic Devotion, in order to strengthen our bonds to each other and to our country—and to renew the duties of Government to the people.
IN WITNESS WHEREOF, I have hereunto set my hand this twentieth day of January, in the year of our Lord two thousand seventeen, and of the Independence of the United States of America the two hundred and forty-first.
Filed 1-23-17; 2:00 pm]
[FR Doc. 2017-01798
Billing code 3295-F7-P
As CNBC News pointed out; by the time this proclamation was announced on 21 January the national day had passed because it referred to one specific day, Donald Trump's inauguration day of 20 January 2017 and therefore was a one-off national day.
As CNBC News pointed out; by the time this proclamation was announced on 21 January the national day had passed because it referred to one specific day, Donald Trump's inauguration day of 20 January 2017 and therefore was a one-off national day.
** This proclamation is not found to date on the Proclamations webpage at www.whitehouse.gov, although it continues to be displayed at the U.S. Office of the Federal Register.
Labels:
Donald Trump,
right wing rat bags,
USA
Tuesday 14 February 2017
Wildlife becoming stressed in sustained heat
Kookaburra, Animals Australia, December 2016
The Daily Examiner, 6 February 2017, p.12:
VOICES FOR THE EARTH
EARTH Charter, Principle 2: "Care for the Community of Life with understanding, compassion and love."
Early January 2017 was for many people a joyous holiday period with family reunions and New Year resolutions but for all of us it was a time of temperatures of 40 degrees or more. Most of NSW experienced an oppressive heat wave and the people of the Clarence Valley sweltered.
Even night temperatures became difficult to bear and people needed to be careful to avoid dehydration. Some newspaper reports suggested the heat wave posed a threat to human health, especially to older people and the very young.
But in the midst of our discomfort did we consider the impact that the heatwave was having on our biodiversity?
Mid-afternoon on January 14 a king parrot suffering from the extreme temperature sought some relief in a shady porch behind our house. Even here the temperature was close to 40.
Her beak was repeatedly opening and closing and her wings were drooping. We were careful not to disturb her and she stayed in that position for at least two hours.
At the front of the house two more king parrots were perched in similar shady positions, again with beak and wings conveying distress.
Do such images have an important communique for our human community?
If we fail to limit our greenhouse gases urgently, if we go ahead with the massive Adani coal project, if the Donald Trump presidency ignores climate change, if... the list goes on.
Will this image of a king parrot suffering from heat wave conditions become a symbol for all life on our planet?
Big questions are looming and the future of our Earth Community - our biodiversity and our grandchildren - will be greatly influenced by our answers.
-- Stan Mussared, Clarence Valley Conservation Coalition
W.I.R.E.S. 2 December 2016:
While most native animals are well adapted to changes in climatic conditions they can still suffer during heatwaves. Animals can cope with extremes in temperatures they are used to, but if these extremes are unusual for a particular area the animals there will struggle.
If you can, please put fresh, cool water out for wildlife. Make sure you have a few sticks or stones in bowls or containers so that if small creatures fall in they can make it back out. Where possible refresh the water frequently throughout the day.
Flying-foxes are particularly susceptible to several days with low humidity and very high temperatures. This year with severe food shortages already a factor many populations up and down the coast are already suffering fatalities. If you see flying-foxes, young or old, on the ground or low to the ground in trees please call WIRES 1300 094 737 or use our report a rescue form to report. If you see flying-foxes moving to lower branches or to the ground below their roost trees please call WIRES. It is important that only trained and vaccinated carers rescue distressed and injured flying-foxes or bats.
If you are on a rural property and are concerned about water bowls attracting snakes near the house then you can choose to place shallow bowls around the perimeter fences. This can also assist in providing a water source to deter reptiles from seeking water from dripping taps closer to the house.
Animals with health issues, or are very young or old, will find it harder to cope - just like in people. The increasing loss of suitable habitat including the loss of leafy vegetation and older growth trees with hollows for shelter means more animals are at risk in the heat.
Tree hollows are particularly essential for our native parrots and many of our marsupials and as less and less are available for shelter it means more creatures may suffer from exposure and more animals may seek refuge in unusual places e.g. garages, sheds or houses.
Please keep an eye out for animals exposed to the elements, but remember DO NOT approach snakes, monitors, flying-foxes, microbats, large macropods or raptors. These animals require specialist handling and MUST be rescued by trained wildlife rescuers.
Please keep an eye out for animals exposed to the elements, but remember DO NOT approach snakes, monitors, flying-foxes, microbats, large macropods or raptors. These animals require specialist handling and MUST be rescued by trained wildlife rescuers.
Labels:
climate change,
flora and fauna,
native animals,
weather
The American Resistance has many faces - this is one of them (3)
Labels:
human rights,
society,
USA
Monday 13 February 2017
The shocking truth about historic institutional child sexual abuse in Australia
A Child’s Morning Prayer
Lord, I awake and see your light,
For You have kept me through the night,
To You I lift my hands and pray,
Keep me from sin throughout this day,
And if I die before it's done,
Save me through Jesus Christ, Your Son.
For You have kept me through the night,
To You I lift my hands and pray,
Keep me from sin throughout this day,
And if I die before it's done,
Save me through Jesus Christ, Your Son.
Amen.
A Child’s
Night Prayer
Angel
of God, my Guardian dear,
to whom
His love commits me here,
ever
this night be at my side,
to
light and guard,
to rule
and guide.
Amen
Origin unknown
The Commonwealth
of Australia Royal Commission into Institutional Responses to Child
Sexual Abuse held its first public hearing in Sydney from Monday 16 to Thursday 19
September 2013. The Royal Commission's first
public hearing into the Catholic Church in Australia and child sexual abuse
began on Monday, 9 December 2013 and multiple hearings relating to Catholic institutions and specific clergy followed over the next four years.
1. This is the Royal Commission’s 50th
public hearing…..
7. It was plain that hearings were
needed to examine the responses of faith-based institutions, given that, as at
the end of 2016, 60% of survivors attending a private session reported abuse in
those institutions. Of those survivors, nearly two thirds reported abuse in
Catholic institutions. While the percentage has varied over time, at present
over 37% of all private session attendees reported sexual abuse in a Catholic
institution. Consequently Catholic institutions were a key part of the Royal
Commission’s public hearings. …….
26. Between January 1980 and February
2015, 4,444 people alleged incidents of child sexual abuse made to 93 Catholic
Church authorities. These claims related to over 1000 separate institutions.
27. The claims survey sought
information about the people who made claims of child sexual abuse. Where the
gender of people making a claim was reported, 78% were male and 22% were
female. Of those people who made claims of child sexual abuse received by
religious orders with only religious brother members, 97% were male.
28. The average age of people who made
claims of child sexual abuse, at the time of the alleged abuse, was 10.5 for
girls and 11.6 for boys. The average time between the alleged abuse and the
date a claim was made was 33 years.
29. The claims survey sought
information about alleged perpetrators of child sexual abuse. A total of 1,880
alleged perpetrators were identified in claims of child sexual abuse. Over 500
unknown people were identified as alleged perpetrators. It cannot be determined
whether any of those people whose identities are unknown were identified by
another claimant in a separate claim.
30. Of the 1,880 identified alleged
perpetrators:
a. 597 or 32% were religious brothers
b. 572 or 30% were priests
c. 543 or 29% were lay people
d. 96 or 5% were religious sisters.
31. Of all alleged perpetrators, 90%
were male and 10% were female.
32. The Royal Commission surveyed 75
Catholic Church authorities with priest members, including archdioceses,
dioceses and religious orders about the number of their members who ministered
in Australia between 1 January 1950 and 31 December 2010. Ten Catholic
religious orders with religious brother or sister members provided the same
information about their members.
33. This information, when analysed in
conjunction with the claims data, enabled calculation of the proportion of
priests and religious brother and sister members of these Catholic Church
authorities who ministered in this period and who were alleged perpetrators.
34. Of priests from the 75 Catholic
Church authorities with priest members surveyed, who ministered in Australia
between 1950 and 2010, 7.9% of diocesan priests were alleged perpetrators and
5.7% of religious priests were alleged perpetrators. Overall, 7% of priests
were alleged perpetrators.
35. The Archdiocese of Adelaide and
the Dominican Friars had the lowest overall proportion of priests who
ministered in the period 1950 to 2010 and were alleged perpetrators, at 2.4%
and 2.1% respectively.
36. The following five archdioceses or
dioceses with priest members which had the highest overall proportion of
priests who ministered in the period 1950 to 2010 and who were alleged perpetrators:
a. 11.7% of priests from the Diocese
of Wollongong were alleged perpetrators
b. 13.9% of priests from the Diocese
of Lismore were alleged perpetrators
c. 14.1% of priests from the Diocese
of Port Pirie were alleged perpetrators
d. 14.7% of priests from the Diocese
of Sandhurst were alleged perpetrators
e. 15.1% of priests from the Diocese
of Sale were alleged perpetrators.
37. The following five religious
orders with priest members had the highest overall proportion of priests who
ministered in the period 1950 to 2010 and who were alleged perpetrators:
a. 8.0% of priests from the
Vincentians – The Congregation of the Mission were alleged perpetrators
b. 13.7% of priests from the
Pallottines – Society of the Catholic Apostolate were alleged perpetrators
d. 17.2% of priests from the Salesians
of Don Bosco were alleged perpetrators
e. 21.5% of priests from the
Benedictine Community of New Norcia were alleged perpetrators.
38. In relation to religious orders
with religious brother and sister members, the Sisters of St Joseph of the
Sacred Heart and the Sisters of Mercy (Brisbane) had the lowest overall
proportions of members who were alleged perpetrators, at 0.6% and 0.3%
respectively.
39. The following five religious
orders with only religious brother members had the highest overall proportion
of religious brothers who ministered in the period 1950 to 2010 and who were
alleged perpetrators:
a. 13.8% of De La Salle Brothers were
alleged perpetrators
b. 20.4% of Marist Brothers were
alleged perpetrators
c. 21.9% of Salesians of Don Bosco
brothers were alleged perpetrators
d. 22.0% of Christian Brothers were
alleged perpetrators
e. 40.4% of St John of God Brothers
were alleged perpetrators.
c.
13.9% of priests from the Marist Fathers – Society of Mary were alleged
perpetrators, as distinct from the Marist Brothers.
NOTE:
The St. John of God Brothers were
established in Australia in the 1940s by eight men,
six of whom were believed to be paedophiles. Brothers
Kilian Herbert and Laurence Hartley arrived in Sydney from Ireland on 11 August
1947 to head this small group.
Previous North Coast Voices posts on child sexual abuse can be found here.
News.com.au, 6 February 2017:
A brief of evidence concerning historical claims of sexual abuse at the hands of Cardinal George Pell has been delivered to prosecutors for consideration.
Victoria Police confirmed with AAP on Monday night that investigators had delivered the brief to the Office of Public Prosecutions.
It's a significant development in the case since three police travelled to Rome in October to speak with the former Ballarat priest and Melbourne archbishop.
Cardinal Pell now resides full-time at the Vatican. He cited ill-health as a reason he could not travel back to Australia to give evidence in last year's royal commission into institutional responses to child sexual abuse, appearing instead via video link.
Allegations emerged in 2015 from two men who said they were groped as children by Cardinal Pell when he was a priest in Ballarat during the 1970s.
Another man claimed he saw the priest expose himself to young boys in the late 1980s.
Cardinal Pell previously released a statement rejecting "all and every allegation of sexual abuse" and would continue co-operating with Victoria Police until the investigation was finalised.
The
Northern Star, 7
February 2017:
WEDNESDAY 4.30pm: NEARLY
14% of Lismore's most experienced Catholic priests were accused of sexually
abusing children by 2010 but the diocese's spokesman, the Most Reverend
Geoffrey Jarrett, has reserved comment.
Between 52 and 64
priests have served in the Diocese of Lismore in each decade since 1950, with
129 priests having served in the area by 2010, detailed data presented to the
Royal Commission into Institutional Responses to Child Sexual Abuse has shown.
Some 18 of those
priests, or 13.9%, have been accused of sexually abusing children throughout
their careers, marking Lismore as one of the nation's top five worst dioceses
for child sex accusations against the Church.
Too soon to comment:
Diocese of Lismore
But Apostolic
Administrator of the Diocese Bishop Jarrett, standing in while Bishop-elect
Father Gregory Homeming prepares for his ordination, said it was too early to
comment publicly on findings.
"My response is
that we are in the early days of the Royal Commission's present three week
hearing, and until it completes its investigation, it would be premature to
comment on the first release of statistics," Bishop Jarrett said via email
to The Northern Star.
"We would expect to
have a fuller picture and a wider range of issues as time goes on and I will be
available for comment at the end of the hearing."
Labels:
Australian society,
child sexual abuse,
crime,
law,
religion,
royal commission
Make no mistake - Trump is placing all national economies in jeopardy once more
In the midst of The Great Depression (a decade long severe global economic downturn triggered by the 1929 Wall Street stock market crash) the U.S. Government enacted the 1933 Glass-Steagall Act which tightened banking and financial sector regulations.
At the urging of the same financial and banking sector in 1999 a bipartisan agreement saw the introduction of the Financial Services Modernization Act which repealed large parts of the Glass-Stegall Act and the Bank Holding Company Act.
In the wake of another crisis generated by the American sub-prime mortgage melt-down, aptly titled The Global Financial Crisis, the U.S. Government in July 2010 enacted the Dodd–Frank Wall Street Reform and Consumer Protection Act to reimpose stricter regulations.
Now we hear that Donald Trump is moving to roll back the Dodd-Frank reforms. In particular the Volker Rule against banks using depositor funds for speculative bets on their own account and from
acquiring or retaining ownership interests in, sponsoring, or having certain
relationships with a hedge fund or private equity fund - practices thought to have exacerbated The Global Financial Crisis.
The Sydney Morning Herald, 4 February 2017:
US President Donald Trump moved to chisel away at the Obama administration's legacy on financial reform, announcing a series of steps to revisit the rules enacted after the 2008 financial crisis and setting the stage for a showdown with Democrats over the future of Wall Street regulation.
After a White House meeting with the executives, Mr Trump signed a directive calling for his administration to identify potential changes to provisions of the Dodd-Frank Act, crafted by the Obama administration and passed by Congress in response to the 2008 meltdown….
Trump states we expect to be cutting a lot from Dodd-Frank because I have so many people, friends of mine, that have nice businesses, and they can't borrow money. They can't get money from the banks — they just can't get any money because the banks won't let them borrow because of rules and regulations in Dodd-Frank despite evidence that the banking sector is making a considerable number of commercial and industrial loans.
Most Australian families have memories of The Great Depression which hit this country hard and all will be able to recall the ripple effects from The Global Financial Crisis, so it is not unreasonable to fear that what this erratic and ignorant American president does in relation to U.S. banking and financial sector legislation has the potential to send the world spinning into yet another American-generated global economic crisis.
Sunday 12 February 2017
Fitch Ratings Inc: The Trump Administration Poses Risks to Global Sovereigns
According to the Australian Dept. Foreign Affairs and Trade (DFAT) the United States ranks as Number 1 in the Top 20 countries with direct investment in Australia [ABS catalogue 5352.0, May 2016 & UNCTADstat database, October 2016].
In 2015 Australia direct investment in the U.S. was led by manufacturing, and the finance/insurance sectors and U.S. direct investment in Australia is led by the nonbank holding, mining, finance/ insurance companies, and manufacturing sectors. [Office of the United States Trade Representative: Executive Office of the President, 2017]
So international credit rating agency, Fitch Ratings Inc’s media release of 10 February 2017 may raise some concerns:
Fitch Ratings-London-10 February 2017: The Trump Administration represents a risk to international economic conditions and global sovereign credit fundamentals, Fitch Ratings says. US policy predictability has diminished, with established international communication channels and relationship norms being set aside and raising the prospect of sudden, unanticipated changes in US policies with potential global implications.
The primary risks to sovereign credits include the possibility of disruptive changes to trade relations, diminished international capital flows, limits on migration that affect remittances and confrontational exchanges between policymakers that contribute to heightened or prolonged currency and other financial market volatility. The materialisation of these risks would provide an unfavourable backdrop for economic growth, putting pressure on public finances that may have rating implications for some sovereigns. Increases in the cost or reductions in the availability of external financing, particularly if accompanied by currency depreciation, could also affect ratings.
In assessing the global sovereign credit implications of policies enacted by the new US Administration, Fitch will focus on changes in growth trajectories, public finance positions and balance of payments performances, with particular emphasis on medium-term export prospects and possible pressures on external liquidity and sustainable funding. US positions on some countries may change quickly, at least initially, but any potential rating adjustments will depend on consequent changes to sovereign credit fundamentals, which will almost certainly be slower to materialise.
Elements of President Trump's economic agenda would be positive for growth, including the long-overdue boost to US infrastructure investment, the focus on reducing the regulatory burden and the possibility of tax cuts and reforms, assuming cuts don't lead to proportionate increases in the government deficit and debt. One interpretation of current events is that, after an early flurry of disruptive change to establish a fundamental reorientation of policy direction and intent, the Administration will settle in, embracing a consistent business- and trade-friendly framework that leverages these aspects of its economic programme, with favourable international spill-overs.
In Fitch's view, the present balance of risks points toward a less benign global outcome. The Administration has abandoned the Trans-Pacific Partnership, confirmed a pending renegotiation of the North American Free Trade Agreement, rebuked US companies that invest abroad, while threatening financial penalties for companies that do so, and accused a number of countries of manipulating exchange rates to the US's disadvantage. The full impact of these initiatives will not be known for some time, and will depend on iterative exchanges among multiple parties and unforeseen additional developments. In short, a lot can change, but the aggressive tone of some Administration rhetoric does not portend an easy period of negotiation ahead, nor does it suggest there is much scope for compromise.
Sovereigns most at risk from adverse changes to their credit fundamentals are those with close economic and financial ties with the US that come under scrutiny due to either existing financial imbalances or perceptions of unfair frameworks or practices that govern their bilateral relations. Canada, China, Germany, Japan and Mexico have been identified explicitly by the Administration as having trade arrangements or exchange rate policies that warrant attention, but the list is unlikely to end there. Our revision of the Outlook on Mexico's 'BBB+' sovereign rating to Negative in December partly reflected increased economic uncertainty and asset price volatility following the US election.
The integrative aspects of global supply chains, particularly in manufactured goods, means actions taken by the US that limit trade flows with one country will have cascading effects on others. Regional value chains are especially well developed in East Asia, focused on China, and Central Europe, focused on Germany.
Tighter immigration controls and possible deportations could have meaningful effects on remittance flows, as the US has the world's largest immigrant population. World Bank data confirm that the US and Mexico share the world's top migration corridor and have the largest bilateral remittance flows. Relative to GDP, remittances are even larger for Honduras, El Salvador, Guatemala and Nicaragua, all of which receive most inflows from the US.
Countries hosting US direct investment, at least part of which has financed export industries focused back on the US, are at risk of being singled out for punitive trade measures. The list of these countries is potentially long, since US-based entities account for nearly one-quarter of the stock of global foreign direct investment. Countries with the highest stock of US investment in manufacturing are Canada, the UK, Netherlands, Mexico, Germany, China and Brazil.
The primary risks to sovereign credits include the possibility of disruptive changes to trade relations, diminished international capital flows, limits on migration that affect remittances and confrontational exchanges between policymakers that contribute to heightened or prolonged currency and other financial market volatility. The materialisation of these risks would provide an unfavourable backdrop for economic growth, putting pressure on public finances that may have rating implications for some sovereigns. Increases in the cost or reductions in the availability of external financing, particularly if accompanied by currency depreciation, could also affect ratings.
In assessing the global sovereign credit implications of policies enacted by the new US Administration, Fitch will focus on changes in growth trajectories, public finance positions and balance of payments performances, with particular emphasis on medium-term export prospects and possible pressures on external liquidity and sustainable funding. US positions on some countries may change quickly, at least initially, but any potential rating adjustments will depend on consequent changes to sovereign credit fundamentals, which will almost certainly be slower to materialise.
Elements of President Trump's economic agenda would be positive for growth, including the long-overdue boost to US infrastructure investment, the focus on reducing the regulatory burden and the possibility of tax cuts and reforms, assuming cuts don't lead to proportionate increases in the government deficit and debt. One interpretation of current events is that, after an early flurry of disruptive change to establish a fundamental reorientation of policy direction and intent, the Administration will settle in, embracing a consistent business- and trade-friendly framework that leverages these aspects of its economic programme, with favourable international spill-overs.
In Fitch's view, the present balance of risks points toward a less benign global outcome. The Administration has abandoned the Trans-Pacific Partnership, confirmed a pending renegotiation of the North American Free Trade Agreement, rebuked US companies that invest abroad, while threatening financial penalties for companies that do so, and accused a number of countries of manipulating exchange rates to the US's disadvantage. The full impact of these initiatives will not be known for some time, and will depend on iterative exchanges among multiple parties and unforeseen additional developments. In short, a lot can change, but the aggressive tone of some Administration rhetoric does not portend an easy period of negotiation ahead, nor does it suggest there is much scope for compromise.
Sovereigns most at risk from adverse changes to their credit fundamentals are those with close economic and financial ties with the US that come under scrutiny due to either existing financial imbalances or perceptions of unfair frameworks or practices that govern their bilateral relations. Canada, China, Germany, Japan and Mexico have been identified explicitly by the Administration as having trade arrangements or exchange rate policies that warrant attention, but the list is unlikely to end there. Our revision of the Outlook on Mexico's 'BBB+' sovereign rating to Negative in December partly reflected increased economic uncertainty and asset price volatility following the US election.
The integrative aspects of global supply chains, particularly in manufactured goods, means actions taken by the US that limit trade flows with one country will have cascading effects on others. Regional value chains are especially well developed in East Asia, focused on China, and Central Europe, focused on Germany.
Tighter immigration controls and possible deportations could have meaningful effects on remittance flows, as the US has the world's largest immigrant population. World Bank data confirm that the US and Mexico share the world's top migration corridor and have the largest bilateral remittance flows. Relative to GDP, remittances are even larger for Honduras, El Salvador, Guatemala and Nicaragua, all of which receive most inflows from the US.
Countries hosting US direct investment, at least part of which has financed export industries focused back on the US, are at risk of being singled out for punitive trade measures. The list of these countries is potentially long, since US-based entities account for nearly one-quarter of the stock of global foreign direct investment. Countries with the highest stock of US investment in manufacturing are Canada, the UK, Netherlands, Mexico, Germany, China and Brazil.
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