What We're Tracking
Riots rage on across France. In France, nationwide riots related to the fatal police shooting of a teenager are set to continue over the weekend and into next week. The violence has been ongoing since police killed Nahel M., a 17-year-old French-Algerian delivery driver, in the western Parisian suburb of Nanterre in an incident that was caught on video. Over the past three days since his death, rioting, acts of vandalism, looting and intense clashes with police forces have been reported in several cities across the country. The unrest in Paris has been particularly acute, leading to the arrest of over 600 people in the city and the injury of more than 200 officers. As tensions remain high, French authorities' appeals for calm and attempts at enforcement appear unlikely to restore order in the coming days, portending further riots.
Brazil assumes the Mercosur presidency. The rotating presidency of the South American trade bloc will be transferred from Argentina to Brazil during a July 3-4 meeting. Brazilian President Luiz Ignacio Lula da Silva will likely use his country's six-month leadership over Mercosur — which is comprised of Brazil, Argentina, Paraguay and Uruguay — to push for the finalization of the bloc's embattled EU trade deal. After 20 years of negotiations, the European Union and Mercosur reached a draft free trade agreement in 2019. But talks to ratify the deal have since stalled over EU concerns regarding the deforestation policies of Lula's predecessor, Jair Bolsonaro. Certain EU member states also remain hesitant to open their agricultural sectors to competitive South American food exports. To restart momentum on the agreement, Lula will highlight his more aggressive pro-environmental policies to Brussels, as well as also reach out to individual EU countries that remain key holdouts, such as France and Italy, to discuss agricultural exports pertaining to the deal. Lula will likely also be forced to reconcile any further attempts by Uruguay to unilaterally negotiate a free trade agreement with China, as Mercosur countries are required to negotiate any trade agreements through the bloc.
Thailand's new legislature takes office. Thailand's newly elected and certified 500-member House of Representatives and the military-appointed 250-member Senate will convene for their first bicameral legislative session on July 3. On July 4, the House will vote to elect a speaker, which will reveal fissures among the winning coalition, as the Move Forward Party (MFP) and the Pheu Thai Party (PTP) — which won the most and second-most votes in the country's May 14 election, respectively — vie for the post. The PTP has argued that its strong performance in last month's ballot earns it the right to the speakership under an MFP premiership. While each side has consistently vowed that they will not allow their dispute to break their alliance, there's still a chance the PTP and its 141 seats could leave the coalition if it deems it's being treated unfairly. If this happens, the MFP is almost certain to lack the number of seats needed to form a government when both chambers convene to elect a prime minister (which, per the constitution, must occur on or before July 13). The two parties will continue negotiating a power-sharing arrangement, likely up until the July 4 deadline, which could see cabinet positions traded for the speakership.
EU trade commissioner visits Washington. EU Trade Commissioner Valdis Dombrovskis will travel to Washington next week in a bid to accelerate EU-U.S. talks on a new carbon-based sectoral arrangement on steel and aluminum production. Brussels and the administration of U.S. President Joe Biden reached a preliminary agreement in 2021 to pause Trump-era tariffs on U.S. imports of European steel and aluminum, with the goal of finding a binding agreement by October 2023. However, the European Union reportedly rejected a U.S. proposal that would have created an international club to promote trade in metals produced with fewer carbon emissions, while imposing tariffs on steel and aluminum from third countries, due to concerns of violating World Trade Organization rules. The two sides are now pushing ahead to strike a compromise by the end of the truce period in October to prevent U.S. tariffs and EU retaliatory measures from automatically re-entering force.
Recommended Reading
2023 Third-Quarter Forecast
Low economic growth, pervasive financial risks, the stalemate in Ukraine and technological competition between the world’s largest economies will drive geopolitical risk during the third quarter.
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