Black Sea Grain Blockade, Spain’s Snap Elections, Hollywood Strikes’ Broader Impact, and More

MCMAHON:
In the coming week, the expired Black Sea grain deal alarms global food supply chains, Spain holds snap parliamentary elections, and the annual Comic-Con event feels the heat of Hollywood strikes. It's July 20th, 2023, and time for The World Next Week. I'm Bob McMahon.

ROBBINS:
And I'm Carla Anne Robbins.

MCMAHON:
Carla, we're going to begin with Ukraine and Russia for all sorts of reasons, but particularly because of the way the week started, which is Russia exiting the Black Sea grain deal. As we've discussed before, the deal created a safe corridor for Ukrainian grain to be exported, and this is grain that plays a vital role in global food security. But how should we understand Vladimir Putin's motives in taking this step? And we've already seen the subsequent heavy shelling of the ports from which that grain was delivered.

ROBBINS:
Bob, we've talked about this before. Putin has played chicken with the deadlines on this initiative since it was signed a year ago, and we don't know. Is he having a brief hissy fit, or is he seriously walking away this time? It's really hard to tell. But the people I've been talking to say that he's been rebuffing any attempt even to discuss his demands. Both Turkey's Erdogan and UN Secretary General Guterres, who brokered the agreement, reached out last weekend as the clock was ticking down, and Putin, I understand, refused to even take their calls. And right now, Moscow is sounding especially belligerent. The Russian defense ministry is warning that any ship sailing to Ukrainian Black Sea ports will be considered to be involved in the Ukrainian conflict on this side of the Kyiv regime, and Russian missile strikes this week have targeted the ports, Odesa, Chornomorsk, destroying grain stocks and port infrastructure.

The Russians say these are retaliatory strikes after their Kerch Bridge. Remember that bridge that Putin inaugurated? It's the one that connects Russia to Crimea, and they said, "This is in retaliation." But the impact, as you said, is enormous on the grain shipments and on the supplies itself. The wheat market, which had pretty much stabilized over the last months, has spiked in the last two days because of this. Wheat futures were up 8.5 percent on Wednesday, and this morning before we were recording, I checked, and they were up another one and a half percent on the Chicago Exchange.

What do the Russians say they want? Their complaints are things we've heard before. They claim that their own agricultural exports are suffering because shippers, insurers, bankers don't want to deal with them even though legally they can. U.S. and UN officials say that Russia like Ukraine is almost certainly paying a war premium for its shipping. I mean, insurers not surprisingly don't want to insure ships that are going into the Black Sea, but they also say that the value of Russia's agricultural exports last year were 10 percent higher than any record before. So they believe that the Russians are actually taking advantage and getting more market share because they've been squeezing the Ukrainians.

So the U.S., UN, and EU have also been working very hard to address Putin's main demand that this Russian Agricultural Bank, which is really well-connected politically, be allowed back onto the SWIFT interbank messaging system, which makes payments a lot easier. The EU came up with a workaround to re-SWIFT the bank. I love that term. And they would create a Europe based subsidiary that would be part of SWIFT, but I'm told even on that Moscow has yet to respond to a proposed solution. So Putin isn't talking. So what does Putin really want? Nobody knows. Like so many other things since the beginning of this, it's really hard to get inside this man's head.

So one suggestion is that this was in part a response to this apparent Ukrainian drone attack on this bridge, but I think the simplest explanation is that Russia is using the blockade like all its other attacks on civilian infrastructure. This is an attempt to squeeze Ukraine. Ukraine is hugely dependent on agricultural exports for more than half of its hard currency earnings, and that's why U.S. officials and European officials are vowing that they're going to do everything they can to ensure that the grain makes its way out by rail if necessary.

MCMAHON:
Carla, a few things to follow up on. One, in addition to the Kerch Bridge attack, which I do think I agree that I think that probably played some role given both it's symbolic as well as real importance for Russia, was it also the proximity of the still fairly recent NATO summit in which Russia really seemed to take a black eye, and there was a lot of rallying around Ukraine from the alliance, and that even if there wasn't an explicit timetable, there was still a lot of sort of encouraging comments that it was only a matter of time before Ukraine would be joining the alliance, that kind of thing. Is that Russia sort of showing it's got cards to play, and it's going to enact some punishment?

ROBBINS:
It doesn't have an enormous number of cards to play. At one point, it thought oil would be the thing that it could squeeze the world with, and the world seems to be getting by reasonably well, and this is another way to squeeze the world. And I wonder, and I don't think none of us really has an explanation, but Turkey was one of the key players in this, and Erdogan dropped his objection to Sweden joining the alliance in the last minute before the NATO summit.

MCMAHON:
Well, he did a couple of things. He did that, and he also released some Ukrainians that were held, Ukrainians from the Azov Brigade or some such, I believe, that were being held, and that really miffed the Russians apparently too.

ROBBINS:
And so perhaps this is another way of him telling people, "You think you can take me for granted here. You can't take me for granted here." The number one explanation that U.S. officials has is that this really more than anything else is like taking down a dam and bombarding civilian infrastructure of all sorts. It's really a way to try to squeeze Ukraine, but yes, the proximate cause is there are lots of other things going on. One other thing that's so interesting about these bombings of these ports right now because they're destroying grain supplies, destroying port infrastructure, but they also in Odesa took out the Chinese consulate. Well, they didn't take it out. They damaged a building in the Chinese consulate in Odesa at a period of time when the Ukrainian economics minister was visiting China, which is a further sense of how isolated the Russians really are. So they feel perhaps that if they can squeeze the global food supply chain, that can remind everyone that they're still a player.

Interestingly, some of the countries that are actually going to suffer from this is, you know, China buys, India buys. These are countries it likes to have good relationships with, and also by squeezing the World Food Program, and Ukraine used to be a major supplier but is still a supplier to the World Food Program, that's aid for Africa among other countries. And there's a lot of countries that were sitting on the fence and that will certainly suffer for it. On Tuesday, Kenya's principal secretary for foreign affairs tweeted that Russia's decision to leave the deal was, "a stab on the back," and one that disproportionately impacts countries in the Horn of Africa already impacted by drought. So if Putin can say, "I have a lot of power here," he seems to be alienating his friends as well.

MCMAHON:
That's an interesting point and something we should really watch closely in the weeks ahead. We ran an updated graphic on our site this week showing the countries that rely especially heavily on Ukrainian grain, and as you say, it's sub-Saharan Africa, especially East Africa, which is just dealing with a series of awful occurrences, war, and famine, and climate among other things, but also in the Middle East and countries like Lebanon rely more than 70 percent of their wheat comes from Ukraine, so it's going to be a real impact. I'm wondering that you mentioned efforts to look for alternatives to the Black Sea. Have they made any inroads, or should I say any progress on other routes like we saw with energy, for example?

ROBBINS:
Well, two things. One is they're really determined to get Ukrainian grain out, because Ukraine needs the money, and they did make progress last year on getting things out through rail, and you also remember the protests amongst some European farmers, Polish farmers and others, because stuff was falling off the bag of a truck into those local markets. So they're going to have to work hard about that, but they are determined to get that out anyway they can, which isn't easy in the midst of a war as well as the political. 

And we're also in a different situation, so let's see. Right now, the markets are really, really unhappy about it, but we are in a different situation than at the start of the war. There's a lot more grain out there. We've got Argentina. We've got Brazil. We've got Australia. There's crops out there, other countries that can fill in. There's an expectation that the market could stabilize. When Russia originally pulled out of the deal in the beginning of the week, the markets didn't flip out. It really is only with this warning and the bombing that it started to spike. So we'll see whether things calm down in the next week, but Putin is going to be under a good deal of political pressure from his friends, and the U.S. and Europe are going to work their best. They're absolutely committed to try to get that grain out any way they can.

So Bob, let's move west to Spain. This Sunday, Spaniards will head to the polls, and after Socialists did pretty disastrously in regional local elections in May, Prime Minister Pedro Sánchez decided to suddenly move up the general elections from December. And right now, that doesn't look like he made the best bet. Polls suggests that the conservative popular party is likely to get the most votes with a very strong showing by the far-right Vox party, leading to the creation of a right, far-right government, and that would really be the first since the Franco dictatorship ended. If this happens, what changes in Spain? Sanchez has been an activist leader on a host of social and economic fronts as well as playing a really big role in Brussels.

MCMAHON:
Yeah, and Spain holds the rotating presidency of the European Union and will to the end of the year. So you could have a sea change from center-left government to a coalition that could be farther right than we've seen, as you say, in Spain in a very long time, and what impact could that have on a whole host of European policies from climate to Ukraine even? We'll have to see. The rotating EU president doesn't have a stranglehold on policy per se, but sets agendas and can use the bully pulpit in certain ways, so it could be significant. 

And it is interesting to see why they're voting for change, because if you look on the surface, as a number of reports have pointed out, Spanish economy is growing at a healthy level. It's got unemployment and inflation seemingly under control, though inflation was an issue like it was in a lot of countries recently. There has been an establishment of a minimum vital income. A number of Spaniards have been seemingly happy with this sort of shift in cultural policies as well, whether it's women's rights, among other things.

ROBBINS:
And a majority female cabinet.

MCMAHON:
And a majority female cabinet, and yet you have this real whipping that they took at the regional elections where the populist party did very well, and the Vox party also, in some instances, doubled their share of local counselors to 7.2 percent, and so people are wondering like, "What's going on in Spain exactly?" And there's a few things. Some reports have pointed to the unpopularity of Pedro Sanchez, that polls have shown some people just don't like him or a growing number or just kind of not happy with his sort of personal handling of policies, not that he's been wrapped up in any sort of scandals per se, but more like they just seemingly don't like him. So that's one thing. And then you have as the head of the popular party, kind of a technocrat, Alberto Feijóo, who seemingly is not rankling anyone. And so Spain has had this tradition of kind of shifting from center-left to center-right over the years, and it looks like it could be going in that direction again.

But again, with Europe's stew of populous parties on mainly the right, we're looking at Vox playing this outsized role. And so what's that a response to? Well, it could be a number of things, including apathy of voters who typically vote for center-left or left candidates. It wasn't that long ago, by the way, that the left populist party, Podemos, was on the ascent in Spain, but they've fallen quite a bit. And there is a concern about immigration. Spain is one of these frontline southern European countries that fields immigrants. There's also problems with the way some Spaniards perceive the current left-center coalition's reliance on the pro-independence movements in the Catalan and Basque regions, and Vox has spoken out against that.

And so there's this appeal that we've seen in other populist parties in Europe towards sort of the what is it to be, in this case, a true Spanish country? What is Spanish patrimony all about? And so that seemed to resonate with the type of people who might be motivated to vote in the middle of the summer. And so we'll have to see how much that center-right coalition that seems to be in the cards will really be lurching far-right or will be more influenced by some rightist voices. What we've seen in Italy so far when there were similar concerns has been not so alarming, at least up to now. There was concern about Italy going the way of fascists that we hadn't seen since the World War II era. Italy has actually turned out to be a little bit more moderate on a number of issues, but it doesn't mean that we could see a different kind of Spain emerging, and again, Spain at the helm of the European Union at least till the end of the year.

ROBBINS:
So Vox has taken a very strong anti-immigrant position. What else is driving the far-right there, and has the center-right said, "We'll keep them under control," or has that not even come up? Because if I were fed up with the government, I would think twice about voting for conservative government thinking that I'd let those guys into the tent.

MCMAHON:
Yeah. I mean from the reporting I've seen, that the center-right has been trying to... or the party known as the PP, the popular party, has been trying to say, "Look, we've got this. We can handle this move to the right," and Feijóo has even sort of branded himself as a "dull technocrat," someone who gets things done.

ROBBINS:
I'm a proudly dull technocrat. Yeah.

MCMAHON:
Proudly dull tech technocrat, will get things done, not a rabble-rousing populist. Now you have the head of the Vox party, Santiago Abascal, who's out there with stronger positions, and again, as we've said, anti-immigration, what is seen as anti-feminist, denies climate change, and has been forceful in rejecting government efforts to combat gender violence, which has become a very big issue in Spain. And the PP was the big winner in the May regional elections, so if we see that trend holding true, maybe it's less of a concern that Vox rises, but again, we'll have to take stock next week, Carla, to see what has emerged in Spain, because the polls are showing more energy on the right, and especially as you get farther right, and people who are upset with the status quo and a bit of apathy with the current leadership. And again, it's one of these situations where the calling of election seems to be a really big mistake, because they didn't have to do that, but we see it again and again, and Spain could be moving in another direction that we did not anticipate.

ROBBINS:
Yeah, I suppose that if you want moderates to turn out to vote, you don't call it in the midst of one of the hottest summers on record, because it's going to be the true believers who turn out to vote, and that rarely bodes well for centrist governments.

MCMAHON:
No, we've seen it time and time again. Again, Spain is also dealing with another hot summer, not getting cooked quite as intensely as Italy from the latest reports, but still temperatures are well up there. Last year, we talked about Spain being the scene of really terrible forest fires, but still climate is on their agenda. They were supposed to be driving a set of climate related talks in the EU related to diversifying energy sources, among other things. Water scarcity is a big issue, especially in Spain, which has issues with the water availability, and so these are really important issues that also affect the living standards of people as well as the pocketbook issues that seem to be driving voters' interest in moving the country to the right.

Carla, I'm going to take us to the Golden State. By that I mean California, and by that I mean southern California. This is the venue of the ever popular San Diego Comic-Con. Hundreds of thousands are expected to attend, many in costume. They tend to arrive depicting their favorite comic book or video game characters. At previous Comic-Cons, major networks like Disney and Warner Brothers have unveiled projects and important new innovations they want to roll out. But with the ongoing strikes of the WGA and SAG-AFTRA, to use some acronyms that are reported frequently, will this year mark a more subdued Comic-Con?

ROBBINS:
So Bob, before we get into that, I have a really pressing question for you. If you had managed to snag a ticket, if you weren't online trying to get a Taylor Swift ticket with all of your time, what costume would you have packed in your carry-on?

MCMAHON:
Wow. You're asking a question that it's a generational one, because I hearken back to the era of Star Trek and Star Wars, so it would probably be from one of those eras.

ROBBINS:
So you would've been Chewie? You would've been-

MCMAHON:
Or a Klingon or something. Yeah.

ROBBINS:
Okay. There are no backsies on tickets. They sold out the day they went on sale in November, and it sounds like the fans, and they're talking about more than 135,000, are planning on turning out despite the fact that the artist panels that are the biggest draws aren't going to happen since the striking actors are barred from, "Making promotional appearances about their work." It's premier season. Today is Barbenheimer Day, so we're not going to have any more premieres as well about that. So Comic-Con is going to miss what has been the source of the greatest buzz there. I mean, the biggest buzz, and it really made the San Diego Comic-Con, came in 2010 when Robert Downey Jr. Introduced the cast of the Avengers two years before the movie opened in theaters.

MCMAHON:
And by the way, that's a movie franchise that has earned multiple billions globally. It's very well known, and this is a big deal that is by no means just a phenomenon for southern California.

ROBBINS:
So you would've maybe considered going as Ironman?

MCMAHON:
I would have. I would have, yeah.

ROBBINS:
Okay. So without those panels, major studios including Marvel, Sony, Lucasfilm, Universal, Netflix, and HBO have pulled out all together, and reportedly more than two dozen panels, these are the actor panels, have been canceled. So I was looking at the current list of panels, and if you are a film and TV devotee like I am, they could still prove to be pretty interesting. There's a panel with composers on the musical anatomy of a superhero, a panel with the executive producers—Bob, you and I are going to love this one—for the many Star Trek TV series talking about the future of the franchise, a panel about FX's What We Do in the Shadows. I don't know, Bob, if you've seen this. This is a mockumentary-

MCMAHON:
I have. It's incredible. It's an incredible show. I can't even describe it.

ROBBINS:
Well, it's four of vampire roommates living on Staten Island. It's a spinoff of the Taika Waititi movies, and that promises the screening of a brand new episode and other surprises. And of course there's going to be cosplay, and there's going to be really cool merch, and there's going to be interactive booths. And if you are a person who likes American Horror Story, something called AHS Wicked Wellness Shots. So there's going to be lots to be doing there, just no actors. So it'll be Comic-Con, but not the Comic-Con of yore.

MCMAHON:
So Carla, we're talking about the world next week as well as the world in Comic-Con cosplay. What are we seeing as the global impact of the strikes going on in Hollywood? It seemed like they're really dug in. Are we looking at a sort of a gloomy period for global sort of content generation?

ROBBINS:
Well, for some foreign film industries, this strike could really prove to be a boon. Netflix has invested hugely in Korean production after the success of Squid Game, and it's already telling its investors that it's going to be able to fill in the gaps with its strong international content. But a lot of companies and industries rely on U.S. film and TV production for their business, and that work is going to disappear as long as the strike goes on. Because of the strike, Apple TV has canceled the remake of a series they were doing based on Fritz Lang's Metropolis. That was supposed to start filming in Melbourne, Australia this fall, and that's just been canceled because can't produce the actors. What We Do in the Shadows, I was dismayed to find out, is actually shot in... Do you know which city, Bob? It's not Staten Island.

MCMAHON:
It's a Canadian city? Toronto.

ROBBINS:
It's Toronto. I can't imagine a place further from Staten Island than Toronto, but... these industries benefit hugely from high paying American productions, and they're going to be in trouble as long as the strike goes on.

MCMAHON:
And it really is a global business. I mean, as you say, when I was living in Czech Republic, the amount of crews that were coming over there to film all sorts of adventure, and crime dramas, and other things was extraordinary.

ROBBINS:
But the other thing is the demands that are being voiced by the U.S. actors and writers, they want better residual payments. Streaming series are usually shorter than traditional TV series, and the accounting they say is a lot less transparent, so they end up with much lower returns, and they're not even sure they're getting paid fairly for that, and they want protections for the use of their content and images by AI, and those are global concerns. In South Korea and Australia, these issues are already being publicly raised, though no sign yet of labor action there. So this is a global strike and global concerns.

The AI thing is really interesting. I suppose as writers, we should be worried about this, and maybe there'll be AI podcasters at some point, but under the current rules in the U.S., that they pay once for using your image as an actor with AI, and then they don't have to pay you. And I don't know if you've seen the new Indiana Jones, but in the beginning, there's this long sequence with Harrison Ford, and it used to be really creepy when you saw CGI actors. It didn't look real, but this looks incredibly real.

MCMAHON:
I have seen it, and it is pretty amazing.

ROBBINS:
And so it's not surprising that actors in the U.S. and writers in the U.S. are demanding, "We need to understand how AI is going to affect our work. We want to have control of our own intellectual property and our own images." And actors all around the world and writers all around the world are going to be watching the strike, and I suspect raising the same questions.

MCMAHON:
One of the interesting things about this impasse also is that it used to be sort of either actors themselves or writers themselves involved in not making common cause, but also pitted against movie studios, a very sort of linear line between the two, but you already referenced it. You have Apple involved. You have Amazon involved. You have Netflix. You have various companies that have all sorts of revenue lines and are not just focused on creating streaming content, but have different products they're generating and might not necessarily rely on this line, and maybe they just sort of fold it up. So it's not clear how this is going to turn out.

ROBBINS:
Well, I think it's a beginning for lots of labor actions focused on these questions about the future of work with AI and intellectual property content. But it means, unfortunately, that there's going to be a lot of reality shows on TV: Celebrity Wheel of Fortune, Dancing With the Stars, Judge Steve Harvey repeats coming. I actually don't watch traditional television, but... The Masked Singer. So that's what they're going to be relying on until this gets resolved. And on foreign content, international content, which is pretty fabulous, but there's only so much of that. This strike is going to have to be resolved, but the last strikes went on for a very, very long time. There was a screenwriters strike in 2007 that lasted a hundred days, and the actors' last major strike was in 1980, and that lasted more than three months as well. And, Bob, do you know when the last time was when both of these unions went on strike at the same time?

MCMAHON:
I do not know.

ROBBINS:
So it was I think sometime in the 1960s, and do you know who was the head of the actors union?

MCMAHON:
Was it Ronald Reagan?

ROBBINS:
You betcha. Well, Bob, I think it's time to pivot and discuss our audience figure of the week, which listeners can vote on every Tuesday and Wednesday at cfr_org's Instagram story. And this week, Bob, our audience selected, "U.S. Soldier Detained Crossing into North Korea." Is this just a story about one misguided person or the start of a new crisis in U.S.-North Korean relations?

MCMAHON:
I fear the latter, Carla, and the figure is Private Travis T. King. He's a twenty-three year old service member who was actually being escorted out of the country. He had been held two months in South Korea for assault charges for punching a civilian, and he was going to face possible disciplinary action when he somehow slipped away from Incheon Airport and joined a tour group that were visiting the DMZ in Panmunjom. How that was allowed to happen is unclear. It seems sort of incredible that it could, but that's a separate story, Carla. What we're talking about here is anytime you deal with North Korea, things get very bizarre, and strange, and sometimes tense, and I think that all the ingredients are there for that to happen this time. The last time we had had such high drama involving an American in North Korean custody was Otto Warmbier, the student who was detained for, according to North Koreans, lifting something from a wall in a North Korean hotel, I believe, and he ended up severely mistreated, and he ended up dying after returning to the U.S. after being held in North Korea.

And there are all sorts of other cases, all of them very different involving Americans detained in North Korea that involved sometimes extremely high level diplomacy, sometimes former U.S. presidents getting involved, and this is leverage for North Korea at a time when it has zero real contacts with the United States, and lots of grievances, and is in the midst of testing its capabilities on ballistic missiles. It is extremely upset about the U.S. expanding its support for South Korea's military and for conducting tests, its regular routine test in South Korea, and bringing nuclear submarines into the area, and so forth. It is a very tense time, and this is looming as a potential crisis moment.

ROBBINS:
I think you really sort of captured it there. It seems like the North Koreans, everything they do is focused on getting attention. But they don't... I'm not exactly sure. The leverage that they have is limited. They don't sell anything, and all they have is scary weapons and troublemaking capacity. And the Biden administration has said, "We'll talk to you anytime, anywhere," but they haven't been the focus of U.S. policy because there's lots of other scary things going on in the world to focus on, this war, and the more immediate concern about nuclear programs is on Iran. So this is one more opportunity, I suppose, to grab attention, and the Biden administration has been trying to play this down as much as they possibly can, because I think that they would rather not have another crisis on their hand right now, and certainly not one because... they don't have a North Korea policy, because no one has a North Korea policy, because it's really hard to deal with this one, because I don't think the North Koreans are ever giving up those weapons.

MCMAHON:
Yeah, and in terms of contacts, the reporting I've seen is that the U.S. has tried to create some messaging through both South Korea and the Swedish Embassy, which represents the U.S. Sweden has contact, diplomatic contact with North Korea. The U.S. does not. And we don't know what Private King is saying or doing as well, whether or not, for example, he would make himself into some sort of propaganda tool for the North Koreans, for example, or whether he is being held and already undergoing harsh treatment. We just don't know. So it's one of these bizarro cases. I think we're going to hear a lot more of this.

ROBBINS:
It's a scary story, but also a sad one. And at the very least, let's hope he gets out safely soon.

MCMAHON:
Indeed. And that's our look at the world next week. Here's some other stories to keep an eye on. Cambodia holds parliamentary elections, Australia hosts the Talisman Sabre joint military exercise with eleven other countries, and said North and South Korea marked the seventieth anniversary of the Korean War armistice.

ROBBINS:
A war that is not formally over.

MCMAHON:
That is correct.

ROBBINS:
So please subscribe to The World Next Week on Apple Podcast, Google Podcast, Spotify, or wherever you get your podcasts, and leave us a review while you're at it. We appreciate the feedback. The publications mentioned in this episode as well as a transcript of our conversation are listed on the podcast page for The World Next Week on CFR.org. Please note that opinions expressed on The World Next Week as well as our attitudes toward cosplay are solely those of the hosts, not of CFR, which takes no institutional positions on matters of policy.

Today's program was produced by Ester Fang with Director of Podcasting Gabrielle Sierra. Special thanks to Sinet Adous and Jiwon Lim for their research assistance. Our theme music is provided by Miguel Herrero and licensed under Creative Commons. This is Carla Robbins saying so long, and can I say, "May the force be with you," again because of Comic-Con?

MCMAHON:
And this is Bob McMahon saying goodbye, and yes, you may, Carla.