US government shutdown risk is lower, for now

Headline UNITED STATES: Shutdown risk is lower, for now

Significance The Obama administration faces an uphill fight in Congress to secure enough votes for TPP ratification, given Democratic suspicions of free trade agreements, Republican animus for the White House and the frustrations of key industry groups in the United States. The United States can in effect veto the TPP's international implementation, while the White House's 'Asia pivot' policy relies partly on firmer trade ties with East and South-east Asia. Impacts The battle over TPP will likely divert political capital and US government resources from the TTIP negotiations. China may benefit diplomatically in the Asia-Pacific if the United States blocks TPP from coming into force. The trade debate may spill over to greater US legislative attention on currency manipulation issues ahead of 2017.


Subject Asylum-seekers and Canada. Significance After an uptick in asylum claims in recent months, including via the United States, asylum policy is likely to feature more heavily in Canadian state and federal politics. Impacts New migrant flows to Canada will likely be triggered as the US government reduces its grants of Temporary Protected Status. Quebec’s government will face off against the Ottawa federal government over responsibility for new migrant arrivals. Ottawa and Washington will likely eventually update the Safe Third Country Agreement, but this could require bargaining. Canada may invest more in border policing and associated technologies.


Subject Bloomberg report on Chinese supply chain attack. Significance Amazon and Supermicro on October 24 joined Apple in calling on Bloomberg Businessweek to retract its October 4 story about an alleged Chinese supply chain attack on 30 US companies, including Apple and Amazon. Based on evidence provided by 17 anonymous sources from the affected companies and the US government, the story alleged that Chinese agents planted malicious chips in server motherboards manufactured by Supermicro, a major hardware supplier in the United States and globally. Thus far, no one has been able to corroborate Bloomberg's claim, and Bloomberg has provided no further verification itself. Impacts Bloomberg will face pressure to review its reporting standards if it fails to deliver credible evidence for the story. The controversy could end in costly libel suits against Bloomberg if it fails to retract or verify its report. There are no global norms on cyber or supply chain attacks; no agreement is forthcoming.


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