U.S. and South Korea, on different tracks. North Korea and South Korea will launch joint on-site surveys of two potential cross-border rail links, according to a statement made Wednesday by the government in Seoul. The surveys were made possible by a sanctions waiver issued by the U.N. Security Council. By itself, cross-border rail won’t do much to fundamentally alter the situation on the Korean Peninsula. For Seoul, it’s just one of several measures meant to mend ties with Pyongyang and a small step down a longer path toward reunification. South Korea understands that its current detente with the North may not last, so it’s hedging its bets. On Tuesday, for example, Seoul announced that it would reinforce its air defenses by buying two early warning radar systems from Israel. What’s notable is how strongly the U.S. is criticizing the rail lines. On Wednesday, a senior U.S. State Department official said that the proposal can’t move forward unless the North completely denuclearizes. Sanctions pressure is the only leverage the U.S. has right now, so it needs to oppose anything that weakens sanctions, however inconsequential it may seem. The U.S. is playing a weak hand, and that makes it easy for the North to stall for time.

Dispatches on the trade war. U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, will have dinner in Buenos Aires at the G-20 summit on Saturday. When asked about the prospects of reaching an agreement, Washington and Beijing have sent nothing but mixed signals. On Monday, for example, Trump said he is likely to move forward with plans to increase the last round of tariffs implemented in September, targeting some $200 billion in Chinese goods, from 10 percent to 25 percent on Jan. 1. He also said he’s ready to impose 10-25 percent tariffs on the remaining $267 billion in Chinese exports to the U.S. if a deal can’t be reached. However, senior Trump administration officials, including his top trade adviser, have been talking up the prospects of a deal this weekend, saying bilateral communications have increased substantially over the past month. This good cop-bad cop routine is standard behavior ahead of a contentious negotiation. But ignore the noise. The underlying reality is that China cannot concede on the biggest U.S. demands, and the U.S. isn’t facing much economic or political pressure to compromise. A fragile truce is possible, but nothing more. This would have important implications for China’s ability to grapple with its internal economic pressures, but it wouldn’t change the broader trajectory of U.S.-China relations.

Brexit is poised to pound the British economy. On Wednesday, the British government released its own estimates on the economic cost of Prime Minister Theresa May’s Brexit plan – and they’re not pretty. According to the report, components of the deal, particularly restrictions on migration and steeper trade barriers, would lead to a 3.9 percent reduction in gross domestic product over 15 years compared with a scenario in which the U.K. would remain in the EU. The paper also concluded that even if the U.K. could forge new free trade agreements after Brexit with outside powers such as the U.S. and China, the long-term effect on GDP would be a bump of less than 0.1 percent. Take the findings with a healthy pinch of salt; government researchers did not model the exact deal, which doesn’t yet exist in its final form. The report also excluded a scenario in which most of the U.K. remains in a skeleton customs union with the EU, while Northern Ireland stays in a closer customs arrangement with the bloc. And though it’s logical to assume disruptions to trade and reduced immigration would hurt economic growth, it’s generally unwise to put too much stock in precise estimates. Still, the report further dims hopes for the recent Brexit deal’s speedy approval in the British Parliament. May’s deputy admitted Tuesday that lawmakers would reject the agreement if a vote were held immediately. In addition, Bloomberg reports that the government has stopped trying to prevent members of Parliament from proposing amendments to the motion May intends to present. These changes could force her to return to negotiations with Brussels or, less likely, to consent to a second Brexit referendum.

Venezuelan opposition coming together? Members of Venezuela’s fragmented opposition have expressed interest in unification prior to Jan. 10, when President Nicolas Maduro’s next term begins. At meetings in Caracas between the Free Venezuela Broad Front and student and Chavista movements, the factions agreed to work with the National Assembly and civil society groups, including by launching coordinated peaceful protests against the government. The Venezuelan opposition and dozens of foreign governments do not recognize the results of the May 2018 presidential elections; the opposition contests Maduro’s second term and sees it as another opportunity for government transition. But divisions within the opposition prevented the groups from effectively challenging the government, and they continue to disagree on whether a negotiated solution for a Maduro exit is possible. Opposition figurehead Henrique Capriles has said that these divisions are “not as deep as people believe” and has pledged to work toward unity. A united opposition is key to any government transition and an end to the political crisis. That conversations on cooperation have turned more serious is a step in that direction – but divisions remain, and a healthy dose of skepticism surrounds these efforts, which have floundered for the past three years.

Honorable Mentions

  • An EU declaration on the Russia-Ukraine standoff in the Kerch Strait expected to be released today is unlikely to include concrete calls for new or tightened sanctions on Russia, according to Radio Free Europe. Die Welt reported that Germany and France oppose increasing sanctions pressure on Moscow. The U.S. called on Europe to more strongly enforce the sanctions in place.
  • The government in Moscow said Russian President Vladimir Putin and U.S. President Donald Trump are still expected to meet at the G-20.
  • Afghan President Ashraf Ghani said the implementation of any peace deal with the Taliban would take at least five years.
  • The lower house of Japan’s parliament approved legislation to sharply increase the number of foreign workers in the country.
  • India and the Maldives are reportedly negotiating a $1 billion loan package to help the Maldives pay off its debt to China in exchange for stronger security ties, including hosting a permanent Indian military deployment.
  • China is reportedly nearing a deal to build Argentina’s fourth nuclear power plant.
  • Chinese industrial profits growth slowed for the sixth consecutive month in October, from 4.1 percent to 3.6 percent.