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Will Trudeau’s digital services tax lead to trade dispute?
After all, US Ambassador David Cohen warned in July that if Canada introduces such a tax, his country would have “no choice but to take retaliatory measures in the trade context, potentially in the digital trade context.” Canadian Finance Minister Chrystia Freeland, no stranger to trade disputes with her American friends, appears determined to proceed.
"It's really a matter of fairness," she said. "There are other countries, our partners, who are today collecting DST. That DST is helping make essential investments in their countries, and it's just not fair for Canadians to be deprived of that revenue."
The Canadian argument is that tech companies collecting billions of dollars of revenue in Canada — like Netflix and Amazon — are able to shelter their profits in low-tax jurisdictions and are not contributing meaningfully to the economy. The Americans, unpersuaded by these arguments, don’t want to see Canada break from an OECD consensus, which is to wait until there is an international tax agreement. Business groups in both countries have asked Canada to hold off to avoid the uncertainty and disruption of a trade dispute.
The new legislation introducing the tax did not include a date, which means the government could implement it when it sees fit. Freeland may be hoping that it gives her leverage in trying to convince her American counterparts to accept the tax without imposing countervailing duties.
Hard Numbers: Russia arrests another American journalist, Turkish company cuts Guinea Bissau’s power, Amazon drought is getting desperate, sex workers fight to preserve Amsterdam's red light district
5: Russia has arrested another US journalist, Alsu Kurmasheva of the Radio Free Europe/Radio Liberty in Prague for failing to register as a foreign agent. Kurmasheva, who has dual US-Russian citizenship, faces up to five years in jail and joins Evan Gershkovich of the Wall Street Journal as the second US journalist arrested in Russia this year.
36: Turkish power giant Karpowership – one of the world’s largest operators of floating power plants – turned off power in Guinea Bissau’s capital for 36 hours after the government failed to pay $17 million of debt to the company. Karpowership also switched off electricity to Sierra Leone in September after it failed to pay the nearly $40 million it owed the company.
121: The water levels in the port of Manaus, Brazil’s most populous Amazon rainforest city, have reached their lowest levels in 121 years as a historic drought upends a region where rivers are the main source of transportation for people, food, and water. Many areas have not had rain in three months, leaving boats stranded and remote areas without food and other critical supplies.
20,000: Sex workers in Amsterdam are protesting the proposed relocation of the red light district to an out-of-town "erotic center," challenging the mayor's plan to change the city's image and reduce tourism and crime. The mayor faces opposition from sex workers who feel unfairly blamed for the district's issues with petty crime. More than 20,000 people have signed a petition against the transfer.The FTC takes on Amazon, Canadian investigation ongoing
The FTC says the online mega-retailer has engaged in a “pattern of illegal conduct” that includes blocking competitors, inflating prices, crushing innovation, and reducing market quality.
In essence, the FTC claims that Amazon traps consumers and sellers in its orbit, dominating market share and exploiting its position to undermine independent sellers and reduce choice for consumers while also using its position to drive up prices. It also alleges that Amazon games its search results to push its own products.
Amazon denies the allegations and says the lawsuit would hurt businesses and consumers alike, sending prices higher and slowing delivery speeds. It’s ready to fight back, and as a company valued at roughly $1 trillion, it has the resources to do so.
Anyone looking for a quick resolution is going to be disappointed. Canada launched an antitrust investigation into Amazon in August 2020. That probe is ongoing, and the Competition Bureau has not said when it expects to complete its work, which would precede any further action.
In 2022, the Canadian government amended its Competition Act to introduce stiffer fines and penalties for businesses that violated the law. Under the new rules, businesses like Amazon could be on the hook for as much as 3% of their annual gross revenues worldwide if found to be abusing their dominant market position, which is a lot more than the previous cap of CA$10 million.
We’re keeping an eye on how the FTC and Competition Bureau lawsuits and investigations proceed, and whether Amazon adjusts any of its practices in the meantime. It’s doubtful they will. In 2022, in Canada, the company threatened to shutter Marketplace if the government strengthened competition regulations, though it didn’t go through with the plans.
Hard Numbers: Trump liable for fraud, Kenya signs a big defense pact, Thailand jails king’s critic, Mexican exports get stranded, Nigeria rescues students
2.2 billion: Donald Trump was found liable for fraud Tuesday by a New York judge for lying about his wealth on financial statements to banks and insurers, inflating his net worth by approximately $2.2 billion dollars. Justice Arthur Engoron stripped the former president of control over some of his properties and sanctioned his lawyers for their behavior. Despite extensive legal troubles, Trump remains the frontrunner – and by a wide margin – for the GOP 2024 presidential nomination.
5: The US and Kenya have signed a 5-year defense agreement under which Washington will support the East African country’s security operations. Kenya has been battling al-Shabab jihadists in neighboring Somalia for years and is now poised — with $100 million in new US support — to lead an anti-gang mission to Haiti. Read more about why Kenya wants the Haiti assignment here.
4: A prominent Thai lawyer and activist who has called for reform of the country’s monarchy was sentenced to 4 years in prison under Thailand’s strict lese-majeste laws. Arnon Nampa was one of the leaders of the mass youth-led protests against the junta-dominated government in 2020. Thai politics were recently upended by the return of exiled former PM Thaksin Shinawatra. Read more here.
125: At least 125 people were killed in an unexplained explosion at a crowded fuel depot in the Nagorno-Karabakh region of Azerbaijan on Tuesday. The victims were among thousands of ethnic Armenians fleeing Karabakh after Azerbaijan retook control over the Armenian-majority region last week for the first time in more than 30 years. Read more background here.
4: Nigerian security forces rescued 14 university students who had been abducted by gunmen in northwestern Nigeria. Half a dozen students remain unaccounted for. Kidnappings for ransom have grown common in the region in recent years, as part of a broader clash between nomadic and pastoral ethnic groups. It is the first major kidnapping of its kind since President Bola Tinubu took office earlier this year with promises to improve security.What is a technopolar world?
Who runs the world? In a series of videos about artificial intelligence, Ian Bremmer, founder and president of GZERO Media and Eurasia Group introduces the concept of a technopolar world––one where technology companies wield unprecedented influence on the global stage, where sovereignty and influence is determined not by physical territory or military might, but control over data, servers, and, crucially, algorithms.
We aren’t yet in a fully technopolar world, but we do exist in a digital order where major tech companies hold sway over standards, operations, interactions, security and economics in the virtual realm. And Bremmer says this is just the beginning. He highlights two key advantages that technology companies have: their dominance over the digital space, which profoundly impacts the lives of billions of people every day, as well as their role in providing critical digital infrastructure required to run a modern economy and society.
As artificial intelligence and other transformative technologies advance, and more and more of our daily life shifts online, Bremmer predicts a shift in power dynamics, where tech companies extend their reach beyond the digital sphere into economics, politics, and even national security. This will almost certainly challenge traditional ideas about global power, which may be determined as much by competition between nation states and tech companies as it is, say, between the US and China. Incorporating tech firms into governance models may be necessary to effectively navigate the complexity of a technopolar world, Bremmer argues. Ultimately, how these companies choose to wield power and their interactions with governments will shape the trajectory of our economic, social, and political futures.
See more of GZERO Media's coverage on artificial intelligence and geopolitics,
Prime ways to evade sanctions
Iran's Supreme Leader has figured out a great way to get around sanctions, until he realizes someone has been stealing his packages...
Watch more of GZERO's award-winning comedy series PUPPET REGIME!
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Hard Numbers: Global chips glut, DRC border jam, Amazon deforestation
35: Remember last year's big semiconductor shortage? It's over. High inflation, China's zero-COVID policy, and Russia's war in Ukraine have slashed global demand for chips, with the benchmark Philadelphia Semiconductor Index dropping 35% in 2022.
60: The Democratic Republic of Congo will expand its main border post with Zambia to ease congestion. Trucks loaded with precious minerals like copper are often stuck in lines up to 60 km (37.3 miles) long.
Hard Numbers: Amazon arrests, UK and EU tussle (again), Russian spy found at ICC, COVID vaccines … for babies
2: Two brothers have been arrested in connection with the murder of British journalist Dom Phillips and Brazilian indigenous expert Bruno Pereira in the Amazon rainforest. Authorities believe one of the suspects ambushed the victims prior to the attack. Phillips and Pereira worked to expose and prevent illegal fishing and mining in the rainforest.
24: The British government is deciding whether to ditch a European human rights pact it passed into law 24 years ago after the European Court of Human Rights forced London to freeze a controversial immigration policy mandating the transfer of asylum seekers to Rwanda. This latest row comes as the UK and EU are already at loggerheads over the Northern Ireland Protocol.
20: Dutch authorities say they caught a Russian spy trying to infiltrate the International Criminal Court at the Hague, which is investigating alleged war crimes by Russian forces in Ukraine. The suspect, who was posing as a Brazilian intern, will face legal proceedings in Brazil. This breach isn’t new: the Dutch say they’ve expelled some 20 Russian spies in recent years.
20 million: The US Food and Drug Administration has authorized the use of Moderna and Pfizer/BioNtech vaccines for children as young as six months. Around 20 million American kids under the age of 5 will now be eligible for the shot.This comes to you from the Signal newsletter team of GZERO Media. Subscribe for your free daily Signal today.