Americas Brief newsletter 27 February 2019 - 5 March 2019

The latest Americas Brief analyses the U.S.'s decision to remove India and Turkey from its GSP export programme, a dengue fever outbreak in Brazil, and the political crisis in Venezuela.

United States & Canada
  • United States - Tornadoes kill at least 23 in eastern Alabama
  • United States - India and Turkey face removal from GSP export programme
  • United States & South Korea - Over 500,000 vehicles recalled in U.S.
Mexico, Central America & Caribbean
  • Regional - Carnival celebrations heighten travel risk in major cities
  • Cuba & United States - Washington to allow lawsuits against Cuban entities
South America
  • Argentina - Teachers' strike increases risk to business operations and travel
  • Bolivia - Government declares national state of emergency due to floods
  • Brazil - Sharp increase in dengue cases heightens health risk
  • Peru - Heavy rainfall across country causes flooding, raises travel risk
  • Venezuela - Protests to continue today, following Guaid''s return

United States & Canada

Tornado 

  United States ' Tornadoes kill at least 23 in eastern Alabama UNITED STATES ' Natural hazard risk: Elevated 

3 March: At least 23 people were killed in tornadoes that struck Lee County, an eastern area of the south-eastern state of Alabama, located approximately 95km east of Montgomery, the state capital. The most destructive tornado, which had winds of up to 266 km/h, hit the Beauregard area at around 1400 local time, causing multiple fatalities, severe damage to infrastructure and houses, and disruption to power supplies. The National Weather Service, a government agency, has warned people to stay away from the area to allow first responders to attend the scene. No further tornadoes are forecast in the area this week, according to the Storm Prediction Centre, a government agency. 

  Why it matters: Firms with operations in eastern Alabama and proximate areas of neighbouring state Georgia, should ensure staff are accounted for. Managers should factor infrastructure damage and associated recovery efforts into operational planning. In light of infrastructure damage, business travellers should avoid non-essential travel to the area in the one-week outlook. Business travellers to south-eastern states during the ongoing tornado season, which finishes in June, should monitor local forecasts. 

  United States ' India and Turkey trade verdict heightens business risks UNITED STATES ' Political risk: Low 

4 March: President Donald Trump instructed the U.S. Trade Representative's (USTR) office to remove India and Turkey from the Generalized System of Preferences (GSP), which offers some of less developed countries' exports duty-free access to the U.S. market. Trump sent a letter to Congress explaining the decision, stating that India has not provided assurances on reasonable market access, while Turkey is sufficiently economically developed not to form part of the programme. The decision is likely to come into effect after 60 days. 

  Why it matters: The decision will particularly impact Indian and Turkish firms which currently qualify for duty-free export access under the GSP, including businesses in the agriculture, energy and manufacturing sectors. While symbolic, the move is likely to have a limited impact on overall bilateral trade ' according to an unnamed Indian trade official quoted by Reuters news agency. India's annual economic benefit from trade under the GSP is only around USD250 million, compared to India's annual trade surplus with the U.S. of USD27.3 billion. A2 Global advises Indian and Turkish firms which trade with the U.S. under GSP terms to factor the announcement into strategic and financial planning, and assess the impact on existing or future contracts. 

  United States & South Korea ' Over 500,000 vehicles recalled in U.S. UNITED STATES ' Security risk: Medium SOUTH KOREA ' Security risk: Minor 

28 February: Kia Motors Corp and its affiliate Hyundai Motor Co announced that they are recalling about 534,000 vehicles in the U.S., due to the risk of engine fires. This follows a recall of 168,000 Kia vehicles in January 2019. Kia is now recalling 2012-2016 Kia Soul vehicles, due to fire risks and engine damage. In a separate callback, 2011-2013 Hyundai Tucson vehicles and 2011-2012 Kia Sportage vehicles are also being recalled, due to potential oil pan leaks. 

  Why it matters: Since 2015, Kia and Hyundai have recalled over 2.3m vehicles due to fire risks. Furthermore, both the U.S. National Highway Traffic Safety Administration (NHTSA) and federal prosecutors have launched investigations into the companies' recalls. Hyundai and Kia remain under pressure to recall further vehicles in the U.S.; the Center for Auto Safety advocacy group on 27 February voiced concerns to the U.S. Congress, due to reports that 300 fires involving the companies' vehicles were not caused by collisions. A2 Global advises businesses using Kia and Hyundai vehicles to make contingency plans for these recalls and monitor developments for further ones. They should liaise with the automakers to ensure that their vehicles do not pose a safety risk to their staff.


Mexico, Central America & Caribbean

Carnival Brazil 

  Regional ' Carnival celebrations heighten travel risk in major cities REGIONAL 

4 March: Cities across the Western Hemisphere are currently hosting annual carnival celebrations, which are set to continue until approximately 9 March. The festivities, which are taking place in Bolivia, Brazil, Colombia, Trinidad and Tobago, and the U.S., among other countries, feature large-scale parades and street parties. The celebrations are an important part of the Western Christian and Greek Orthodox festive season, held before Lent. In Brazil, Rio de Janeiro's famous carnival will conclude on 9 March. In Trinidad and Tobago and the U.S. city of New Orleans, celebrations took place on 5 March. 

  Why it matters: The festivities will attract thousands of visitors to major urban areas where celebrations are being held. Business travellers should monitor local updates, anticipate a heightened security presence at parades, and allow additional time for travel. If attending celebrations, individuals should exercise heightened situational awareness and report any suspicious item or behaviour to the local authorities. 

  Cuba & United States ' Washington to allow lawsuits against Cuban entities CUBA ' Political risk: High UNITED STATES ' Political risk: Low 

4 March: The government of U.S. President Donald Trump announced that private U.S. citizens will be allowed to bring lawsuits against Cuban enterprises ' many of which have links to the Cuban military or intelligence services ' in U.S. courts from 19 March. The decision is the first time that a U.S. president has enacted the relevant Title III provision of the 1996 Helms-Burton Act on sanctions against Cuba. Separately, the administration also announced the continuation of a review of a ban on suing foreign firms operating in Cuba. Despite being under review, the ban will remain in place until at least 17 April. 

  Why it matters: The decision to allow U.S. citizens to sue Cuban enterprises in U.S. courts is significant as it is likely to lead to a number of legal challenges, particularly from Cuban-American exiles who have fled the island since the 1959 revolution, against Cuban entities. The review of the ban on suing foreign firms which operate in Cuba heightens the risk that these could face legal action in the U.S. for their commercial activity. The moves come as the U.S. seeks to increase financial and diplomatic pressure on Havana over its support for Venezuela's de facto president Nicol's Maduro. Despite yesterday's decision being focused on Cuban enterprises, compliance officers at international firms operating in Cuba should monitor statements from the U.S. Department of State, adjusting strategic planning to reflect the U.S. legal environment.


South America

Argentina protest 

Argentina ' Teachers' strike increases risk to business operations and travel ARGENTINA ' Travel risk: Medium 

4 March: Teachers from the powerful CTERA union will hold a nationwide, 72-hour strike from 6 March to call on the government to re-commence salary negotiations. The action will result in a large number of schools remaining closed from 6 to 8 March, affecting approximately 5 million students at all educational levels. The SADOP union, which represents teachers at private schools, will hold a 48-hour strike beginning on 6 March. As part of the strike action, union members and supportive student groups will participate in a march in the capital Buenos Aires on 6 March. Attendees will gather at the intersection of Avenida de Mayo and 9 de Julio streets at 1100 local time, before marching approximately 1km east to Plaza de Mayo, the capital's main square. 

Why it matters: The closure of schools will cause significant disruption to business operations, leading parents and carers to seek alternative childcare options. Managers should consider allowing staff to work remotely to mitigate the risk. The march, which is likely to be well-attended, will disrupt travel in central Buenos Aires. Individuals should monitor updates, avoid the march as a precaution, and allow additional time for travel. 

Bolivia ' Government declares nationwide state of emergency due to floods BOLIVIA ' Natural hazard risk: Medium 

27 February: The government declared a national state of emergency due to heavy rain, widespread flooding, and landslides which have left at least 25 people dead and 27 more missing. The poor weather conditions have mainly affected central and southern regions in particular, including the capital La Paz. 

Why it matters: The heavy rain has caused severe disruption to the national transport network, particularly highways. Business travellers to Bolivia in the one-week outlook should monitor forecasts and adjust travel accordingly. Where travel is necessary, journeys should be undertaken with 4x4 vehicles with trained and vetted drivers. They should only drive if the weather conditions are favourable. 

Brazil ' Sharp increase in dengue cases heightens health risk BRAZIL ' Health risk: Medium 

26 February: Data released by the health ministry showed that suspected cases of dengue fever, a mosquito-borne tropical disease, from 1 January to 2 February were 149 per cent higher than during the same period last year. A total of 54,777 cases were recorded nationwide, with approximately 60 per cent of these in the industrialised south-eastern region, which includes the cities of S'o Paulo and Rio de Janeiro. However, there were only five deaths nationwide from the disease during this period, compared with 18 last year. Data also revealed that cases of zika and chikungunya viruses, also spread by mosquitoes, fell 18 per cent and 51 per cent respectively. 

Why it matters: The increase is likely a result of a particularly high prevalence of the Aedes aegypti mosquito ' the most common transmitter of the disease ' during summer months. This is likely a result of high levels of rainfall, which leads to an increase in standing pools of water, where the insects breed. The symptoms of dengue include a sudden onset of fever, which can last for two to seven days, and is often accompanied by headaches, joint and muscle pain, skin rashes, vomiting, and bleeding from the nose or gums. The disease is rarely fatal, however, it poses a higher risk to the elderly, the very young, and those with underlying health conditions. A2 Global advises business travellers to Brazil to ensure they use DEET-based mosquito repellents and wear long-sleeved clothing. Pools of standing water should be removed from company premises. 

Peru ' Heavy rainfall across country causes flooding, raises travel risk PERU ' Travel risk: Elevated 

28 February: At least 50 people have died since the beginning of the rainy season in September, according to the country's Centre for National Emergency Operations. In the most recent incident, two people died in a landslide caused by heavy rain in the city of Huancavelica, the capital of the southern region of that name, where severe flooding has also blocked roads. Local authorities in the region have declared a 60-day state of emergency due to the heavy rainfall. In the coastal province of Huarmey, heavy rainfall led to the Culebras river overflowing, which flooded a number of homes. In the north-western port city of Paita ' which has experienced some of the worst floods ' the navy and the National Institute of Civil Defense have sent more than 723 tonnes of aid. 

Why it matters: The severe weather across the country is linked to El Ni'o, a weather phenomenon that usually brings heavy rain to Peru, as well as to other countries in South America. According to an official report by the National Study of the El Ni'o Phenomenon, the country could experience more heavy rainfall in March, which will compound an already high travel risk to flood-hit areas. Low-lying roads, tunnels, and local communities near rivers are most at risk. A2 Global advises business travellers planning long car journeys to use professional drivers with knowledge of local roads. If plans include travelling to areas that have been affected by rainfall, individuals should consider postponing travel. 

Venezuela ' Protests to continue today, following Guaid''s return VENEZUELA ' Travel risk: Extreme 

5 March: Supporters of self-declared interim president Juan Guaid' will hold rallies in major urban areas today (5 March). In spite of a travel ban issued by de facto president Nicol's Maduro's government, yesterday (4 March) Guaid' returned to Venezuela from a tour of South American capitals, and was not arrested. Guaid' has also announced that more anti-government rallies will take place in cities across the country on 9 March. In the capital Caracas today, Guaid's supporters are likely to rally in the eastern Las Mercedes district. Other protests are likely to be held in public squares and on main highways in other cities, including Barquisimeto, Maracaibo, Maracay and Valencia. 

Why it matters: The unrestricted return of Guaid' signals the government's reluctance to trigger more international retaliation and protests. Protests today are likely to be smaller than those yesterday due to less organisation, however, they are likely to disrupt travel. In light of the heightened risk of demonstrations, individuals in major urban areas should exercise extreme caution, minimise non-essential travel, and avoid all large gatherings as a precaution. Non-essential staff should consider their need to remain in Venezuela in light of the security and instability risks.