Americas Brief newsletter: 24-30 April 2019

This edition analyses the business implications of new US trade measures against China, the cancellation of thousands of flights in Argentina, and continued civil unrest in Honduras and Haiti.

United States & Canada
  • Canada - Airlines cancel flights until July due to Boeing 737 MAX grounding
  • United States - DoJ accuses two Chinese nationals of economic espionage
  • United States - Washington blacklists Chinese online retailer over fake goods
Mexico, Central America & Caribbean
  • Honduras - Protests and associated travel disruption in capital set to continue
  • Haiti - Anti-corruption protest increases travel risk in capital
South America
  • Argentina - Another airline cancels flights due to general strike
  • Brazil - Avianca Brasil cancels over 2,000 flights until 8 May

United States & Canada

 

Canada � Airlines cancel flights through to July due to Boeing 737 MAX grounding CANADA � Travel risk:�Minor 

29 April:�Air Canada, the country�s flag carrier, and WestJet, another Canadian airline, have cancelled and suspended some flights through July. This is due to users and regulators worldwide grounding Boeing 737 MAX fleets in March, following fatal crashes of an Ethiopian Airlines Boeing 737 MAX 8 jet on 10 March 2019 and an Indonesian Lion Air flight in October 2018. 

Why it matters:�There is no imminent likelihood of the ban being lifted. A2 Global advises business travellers with bookings at the affected airlines to re-confirm their flight status prior to departure. Individuals impacted by cancellations should consider alternative carriers, routes, or methods of transport, and ensure flight cancellations and other related disruptions are covered by insurance. 

United States � Washington blacklists major online retailer over fake good UNITED STATES � Political risk: Medium

29 April:The Office of the United States Trade Representative (USTR) added Pinduoduo Inc., a major Chinese e-commerce platform, to its annual Out-of-Cycle Review of Notorious Markets � a report that includes a blacklist of intellectual property rights violators � published on 25 April. The report also retained Alibaba Group Holding Limited�s Taobao, another major Chinese ecommerce marketplace, on the list for failing to curb the sale of counterfeit goods, stating that the company continues 'to enhance cooperation with all stakeholders, especially SMEs, to address ongoing complaints� and repeating its previously recommended measures. These include improving the effectiveness of its repeat-infringer policy, improving tools preventing illegitimate use of product images, an expansion of a reported ban of airbags, seeking input from SMEs, and enforcement of policies relating to automotive parts.

Why it matters:�China also remains on the USTR�s priority watchlist of countries with intellectual property rights enforcement issues in its annual Special 301 Report. A2 Global advises e-commerce companies to ensure they are complying with intellectual property rights regulations and implementing safeguards to mitigate the expansion of counterfeit goods on their platforms. Failure to do so can result in addition to the USTR�s blacklist, potentially causing reputational damage and heightened scrutiny. 

United States � DoJ accuses two Chinese nationals of economic espionage UNITED STATES � Political risk: Medium 

24 April:�A Chinese businessman and a former engineer have been charged with conspiring to steal trade secrets from Boston-headquartered engineering group General Electric Company (GE) and economic espionage, according to an indictment released by the US Department of Justice. It is the first time the US government has officially pronounced that the alleged theft had Chinese �financial and other support� and was intended to benefit China. In August 2018, former GE employee Zheng Xiaoqing, a naturalised American originally from China, was arrested in New York City on charges of corporate espionage on behalf of the Chinese state. He is alleged to have emailed files containing corporate secrets to Zhang Zhaoxi, a China-based businessman.

Why it matters:�The charges represent the latest case in a growing crackdown on alleged Chinese spying by the administration of US President Donald Trump. In October 2018, Chinese national Xu Yanjun�was extradited�from Belgium to face espionage charges in the US for allegedly attempting to steal trade secrets from American companies, including GE Aviation, a subsidiary of GE and one of the world�s leading jet engine suppliers. A2 Global warns companies with links to China to be aware of the risk of insider threats. Firms operating in sensitive areas such as aerospace should implement strict access-and-egress procedures and conduct thorough due diligence on all employees.



Mexico, Central America & Caribbean
 

Honduras � Protests and associated travel disruption in capital set to continue
HONDURAS � Travel risk: Extreme 

29 April:Protests in the country�s capital Tegucigalpa saw violent confrontations between demonstrators and anti-riot police, who deployed tear gas. Protesters threw fire bombs at buildings, setting at least four on fire, including the mayor�s office.

Why it matters:�The protests, which are over government health and education reforms, are likely to continue over the next few weeks and months. A2 Global advises business travellers to avoid protests as a precaution, and allow additional time for journeys in the capital, due to likely travel disruption. Security and facilities managers, especially with assets in close proximity to government buildings, should assess the vulnerability of their sites towards the threat of property damage, and implement measures to mitigate this risk. Businesses should also factor the protests into their operational planning and adjust service availability accordingly.

Haiti � Anti-corruption protest increases travel risk in capital
HAITI � Travel risk: High

26 April:�Civil society groups from across Haiti � also referred as Petrochallengers � will hold sit-in protest at the High Court of Auditors and Administrative Disputes (CSC/CA) in the capital Port-au-Prince. This is in protest against a delay in issuing the annual accounts of PetroCaribe, an oil alliance that sets preferential oil prices between many Caribbean states and Venezuela. Protesters claim this delay underscores corruption and a lack of transparency in the programme. Opposition figures accuse the government of embezzling USD3.8 billion of funds from the programme.

Why it matters:�This demonstration follows a series of anti-corruption protests in recent months in which protesters erected roadblocks, burnt tyres, and clashed with security forces. A heightened security presence and localised travel disruption will be expected in the vicinity of the CSC/CA, on Reunion street. Travellers should avoid the protest as a precaution and allow for additional time for journeys in Haiti�s capital throughout the day. Further demonstrations are likely to take place in Port-au-Prince over the coming days. Security managers should also review their evacuation procedures, as per A2 Global�s Haiti evacuation planner, should an escalation in civil unrest forces staff evacuations.

South America

Argentina � Another airline cancels flights due to general strike
ARGENTINA � Travel risk: Medium

30 April:�Chile-based LATAM Airlines has cancelled all flights to, from and within Argentina due to a planned general strike in the country. This follows�flight cancellations�by flag carrier Aerol�neas Argentinas announced the day before. Cabin crew and ground staff from both airlines will join a one-day nationwide general strike in opposition to the government�s austerity measures. The strike is due to end at midnight.

Why it matters:�Although the strike will end today, there is a possible risk of further disruption to flights tomorrow (1 May) due to the International Labour Day public holiday. Business travellers due to fly to or from Argentina today and tomorrow should re-confirm their flight status before departing to the airport. Individuals impacted by cancellations should consider alternative carriers, routes, or methods of transport. Travellers using Argentinian airports today and tomorrow should expect delays and possible further cancellations. 

Brazil � Avianca Brasil cancels over 2,000 flights until 8 May
BRAZIL � Travel risk:�Elevated

29 April:Oceanair Linhas A�reas S/A, also known as Avianca Brasil, has cancelled over 2,000 domestic flights until 8 May. Operations remain only in four airports, including Rio de Janeiro�s Santos Dumont Airport (SDU), S�o Paulo/Congonhas Airport (CGH), Salvador-Deputado Lu�s Eduardo Magalh�es International Airport (SSA), and Bras�lia�Presidente Juscelino Kubitschek International Airport (BSB). Previously, the airline, which has faced financial difficulties, announced that 1,045 flights would be cancelled.

Why it matters:�Avianca Brasil was filed for bankruptcy in December 2018, following its failure to pay leases for its aircraft. further cancellations are likely over the next few weeks and months. A2 Global advises business travellers with bookings with the airline to re-confirm their flight status prior to departure. Individuals impacted by cancellations should consider alternative carriers, routes, or methods of transport, and ensure flight cancellations and other related disruptions are covered by insurance.