Episode 87 – Ending 2021 and Looking Forward to 2022

This podcast audio has been transcribed by an automatic transcriber.

Fred Rocafort  00:07

Global Law and global business go hand in hand, but never seem to keep pace with each other. The importance on the global stage of developing and developed nations waxes and wanes, while consumption and interconnectedness steadily increase all the while laws and regulations change incessantly requiring businesses to stay nimble. But how do we make sense of it all? Welcome to Global Law and Business hosted by Harris Sliwoski International Business attorneys. I’m Fred Rocafort.

 

Jonathan Bench  00:37

And I’m Jonathan Bench. Every week, we take a targeted look at legal and economic developments in locales around the world as we try to decipher global trends in law and business with the help of international experts. We cover continents, countries, regimes, governance, finance, legal developments, and whatever is trending on Twitter, we covered the important, the seemingly unimportant, the relatively simple and the complex.

 

Fred Rocafort  01:01

We hope you enjoyed today’s podcast, please connect with us on social media to comment and suggest future topics and guests.

 

Jonathan Bench  01:21

Today’s episode is a special episode where Fred and I get to welcome our friends to 2020 to talk on some of the highlights and the lowlights of things we’ve seen in 2021. And what we’re looking ahead to in 2022. We want to start out by thanking all of our listeners who have been with us since the beginning. And we’re looking forward to many more episodes and more great conversations. If you have any suggestions for future guests. We can interview we are all ears. please connect with us on social media. We’d love to hear your thoughts. Fred, welcome to 2022.

 

Fred Rocafort  01:51

Jonathan, same to you.

 

Jonathan Bench  01:53

Now I want to start out by asking you questions, because I always appreciate learning more than I like pontificating. So let me ask you, what are some of the things that you thought were important? 2021 some things that are probably carrying over to 2022 was top of mind for you right now.

 

Fred Rocafort  02:08

When we started off 2021, we were wondering what was going to happen with COVID? And obviously by now we we have our answer. I think if I had to summarize my feelings about that, I think it’s still a bigger deal than we would like it to be. I think that there were certainly those who were cautioning of a possible scenario like the one we we are facing right now. But I think there were many others who, who thought well, maybe maybe we’ll be coming out of this. So it still remains a thing, if you will, and it looks like it will continue to be at least for for for a significant part of 2022. I guess now the question becomes, where will we be with COVID at the end of this year, and as we get ready to to ring in 2023? Right.

 

Jonathan Bench  03:04

I agree. I think that our understanding back in 2019, when this all started rolling out was if we can only get vaccines to address this, that we would be out of the weeds. And of course, we have different technological levels in within different countries around the world. Countries abilities to develop their own vaccine, their financial limitations, deployment before vaccines spoil, I mean, all kinds of issues that were probably much more theoretical, pre 2019 than than they are now after almost two years of experience with this around the world. I think that we still see. And we’ll continue to see a split between developed and developing nations, which is good if you’re in a developing or if you’re in a developed nation, or if you’re in a developing nation that has great allies in in developed countries. But I think that it’s going to continue to be a complex thing in 2022, and travel restrictions where we get other variants that pop up. I think a lot of the world at least in my part of the world, a lot of people are very much over COVID Right mentally, and they don’t want to think about it or deal with it. And they’re going on with life as usual. And that’s a luxury that a lot of developed nations can can do, right? I mean, in the United States and Western United States, especially it’s very laissez faire, right? You just go about your business and don’t bother me. And that works for a while. But there are certainly implications that are going to continue even in developed nations.

 

Fred Rocafort  04:31

Yeah, following up on that. I think we’ve already seen this at least a start. And obviously it depends on where you are. But I think we’re we’re seeing some movement in terms of getting back to normal when it comes to things such as professional events. I was up in New York last month for a conference for many of the participants there it was really their their coming out party, if you will after the stricter basis of COVID and There were many participants from overseas. So in many cases, there were people coming from these were people coming from places where they really had strict lock downs and where and where things are still very limited. And I think we can definitely look forward to more of that in even in early 2022. However, sort of echoing what you what you were saying about these disparities between developing and developed countries, there’s also disparities in Well, I think anything international still remains one way, especially when it comes to travel, I think there’s still a heightened level of, of control. And also, that also relates to the different attitudes that you’re seeing in different parts of the world. So on the one hand, I, I anticipate that the next few months, we’ll continue to see an increase in the number of activities more more traveled domestically, but when it comes to the outside world, you know, it feels like we still have a ways ways to go right. And for example, Asia, you know, remains quite closed. So even though when it comes to some other activities, we’re beginning to get back more or less to where we were, I think when it comes to Asia, for example, it’s gonna be a while, right. So I It saddens me to say this, but I think there’s a very real likelihood that we may not get to go to Asia this year, and go there and visit, visit clients and participate in business development activities, or just simply enjoy personal travel. I think that’s not going to happen. I think Europe is still patchy when it comes to that. I mean, there’s been more openness as opposed to Asia, but there’s always that concern hanging over you whether there’s going to be something that happens while you’re there. And you have to scramble to get on a plane and come back. So personal travel might be an option. I know, I know, way too many people that are enjoying their trips to Spain. And I’d like to, I’d like to be one of them. But I think as far as as business travel, right, I think organizers of events are just just going to continue to be concerned about possible disruptions to what they’re doing. So yeah, I think it’ll be a very mixed picture going forward.

 

Jonathan Bench  07:26

So there’s never any bad time to bring up China because we follow China so closely. What do you think is? How do you think China’s been doing lately? I mean, let’s take 2021 2022 How do you think Xi Jinping continues to exert his influence everywhere? And there’s always the internal political machinations, right. It’s such a fascinating and such a big case study to write because there’s so many people there and in the economy, and everything that happens in China is very important to the outside world. So what in your mind has been prominent in China? And what do you expect to continue to be issued in China in the coming year?

 

Fred Rocafort  08:03

Well, I swear this is not a pre planned setup on Jonathan’s part, I actually wrote a blog article recently on more or less this this general topic, and that was a result of a presentation I gave at Florida State University in Tallahassee a couple of weeks ago, where it was actually titled, China update. And in many ways, it was a an updated version of a presentation I gave a few years ago when things were very different than many in many regards. I think, again, with China, we see something of a mixed picture, right? It feels that when it comes to China, so much changes as you move to the side and shift perspective. There’s one angle from which the the Chinese story continues to be a one of growth, one of continuing innovation, one of China continuing its this inexorable march toward becoming the the world’s largest economy, the world’s preeminent nation, or at least a co superpower. But at the same time, if you look from a slightly different angle, if you if you if you adjust your focus, then you begin to see some, some some issues of real real concern. And this is not a new thing. I can go back 15 years ago when I first worked in China and see some some echoes of this where every presentation on China had this same dichotomy built into it. But things that I’m looking at in particular, one one thing that is very interesting is as we continue to hear talk of things like decoupling here in the United States, and as we continue to see this growth in consumption CERN over over China is coming to terms with what China’s rise actually means for for us here in the United States, and for our allies, and places like Europe and North Asia, at the same time, we are, we are seeing something of a different dynamic in other parts of the world. If you look at things from an African prism, or Middle Eastern or Latin American prism, then things might look different, doesn’t mean that everything is hunky dory, from the perspective of people in in Africa, and then the Middle East, etc. But but they’re definitely looking at it differently. And it will be interesting to see how that continues to to develop. Another thing is, when it comes to the economy and China, we see certain areas of concern, and this year with Evergrande. De and the other property developers who’ve had a complicated year, to put it, to put it mildly. We we see hints of possible cracks in the economy, that might actually be a lot more serious than then then they appear to be just because of the lack of transparency, that that still exists. So that’s always something in my mind, you know, the possibility of some surprise development. So it’s one thing to look at all the available data and try to come up with a prognosis of how things are going to develop. But at the same time, I think you always have to account for some surprise that might actually have an outsized impact on on the Chinese economy and China more broadly. COVID was an example of that, although that, of course, was was different in the sense that that was a true black swan, you know that that was just something that no one no one could have really foreseen. But I think that there might be other such events that that could take place, maybe not at the same scale, but but still, events that could that could really help shape the way China goes that we might just not know about at the moment. So what about you? What are your What are your thoughts on China?

 

Jonathan Bench  12:18

I think that it would be hard to find another black swan event like COVID, as it affects China. I think a lot of conversations I have with business owners, business leaders who follow China are really not surprised with the things that have been happening this year right with with 2021, and probably will continue to happen in 2022. Right, we’ve got the continued crackdown on technology companies on any kind of social media. It basically I’ve explained it this way. If you’re a demigod in China, or an aspiring demigod, you are going to get whacked sooner or later. Right? Whether that means you’re a technology leader, whether you’re a social media leader, it’s inevitable there is unless you are part of the party and you’re doing party sanctioned activities. And even if you’re doing party sanctioned activities, and you step out of line, you may get whacked just for political reasons, right there. That is one of the givens in China’s that no person no organization, no entity, no anything is above the party. And so that’s always fascinating to me. And I, I find myself having to remind people of that when they’re surprised at how China has treated some of its darling tech companies and how it’s brought the screws down on Jack Maas companies and others. So it’s really interesting to think about what other people see as black swan events in China, right, not willing to open up financial statements. We see the delisting of Chinese companies, from US stock exchanges for that reason, because they can’t comply with contradictory US laws and Chinese laws. And because they’re Chinese companies, there’s no sense in trying to pretend that they can obey us laws at the same time. So really interesting dynamics. It’s, it makes me think about my mutual funds I’m invested in in my 401k, you know, how exposed Am I to all these China risks that are wrapped into these hedge fund hedge fund trades? I don’t know, to what extent I’m exposed. But I know that if I’m just looking at China as a risk pool, that a lot of those risks don’t change that much. And so I expect that as as China continues, I mean, I think for a while Fred didn’t we see that China was opening up and started to, you know, its its negative list was getting smaller and smaller, and then all of a sudden, we see. And we saw a lot of privatization as well, right? So he’s giving up and people were saying, Let the SOS die, right. We don’t need state owned enterprises, we can let the private sector do this. And then what we’ve seen, especially in the last year or two, is a retrenchment now where those those tech darlings those other companies that have significant growth opportunities, once they have proven their concept, then the party’s bringing them back in and converting them from private entities back into state owned enterprises. So it’s really interesting to see this From a, let’s say, a political, political science standpoint, but from a business standpoint, it’s, it’s awful, right. And so I expect that that will continue. And we shouldn’t be surprised people shouldn’t be surprised when that continues to happen this year 2022.

 

Fred Rocafort  15:14

It’s interesting that you, you bring that up that that those last points as a longtime China, watcher and afficionado, I’m sure you’ve experienced some of this, you have different views, of course, about China, and not just different views, but different ways of thinking about China. And there’s always been a crowd, that, that looks at things in a very fundamental way, if you will, people who will will always bring it back to look, it is a one party state. And once you go back to that way of looking at things, everything will make sense. And there have always been people who say now, you know, that’s just not quite right. You know, there’s there’s a lot of things that have changed. But at the same time, it does seem that they’re certainly more there to support their way of looking at it, right, this sort of very essentialist view of China, where everything you see on the surface is just a manifestation of deeper truths. I’d love to hear your thoughts on this. Looking at it from a more practical perspective, looking at it from a more optimistic perspective, one thing that I’m noticing an increase in the number of clients that are taking China very seriously, from a legal perspective, right, more people interested in getting their China contracts, right, more people interested in getting their China IP registrations, right. And whatever else is happening in China, I find that to be to be encouraging. And it’s certainly one of the things I look forward to this year, just seeing that grow. And part of that, and this is particularly encouraging is I’m seeing more engagement of that sword coming from places like Latin America, where people are beginning to pay more attention to their contracts, and just making sure that they are doing things in China in a way that is that is legally sound. So So that’s definitely a bright spot there that I’m I’m hoping will continue to get brighter.

 

Jonathan Bench  17:15

Kind of collective consciousness is rising. We’re seeing that in EU as well. I mean, it was Lithuania, right, who finally took a stand against China the way China was treating Taiwan. And it is interesting to see that and you know, we think well, is the Europe, European Union is not always lockstep with the US in its policies. And that’s not surprising. I’m not saying it should be. But at the same time, it’s been interesting to see, especially the EU, other Asian countries, in the last, let’s say, three years, and certainly in the last 12 months really start to take a serious stance with China to the point that China is losing its political capital. And not that it’s not garnering political capital, other ways. But I think it’s been very interesting to see how the other countries have been reacting. And I think about Africa. I mean, you’re very up to speed with Latin America, I think about Africa quite a bit. And about the splits between the haves and have nots in Africa, in terms of countries that can afford to do business with China countries that can’t afford to do business with China because of ramifications down the road. It’s a very interesting split. And I think that no one that I’m aware of is is currently unaware of China’s of China’s capabilities and of its intentions, right. I think we’ve done a good job of, of alerting people to that we in the firm, but also in the US generally. Right. I guess we can’t take credit for everything that the US is, seems to be doing well on the global stage.

 

Fred Rocafort  18:38

Now, we certainly can’t although, you know, hopefully, we are making our contribution. Definitely China will continue to loom large. For us and and for others, moving away from China. You know, it’s just to some of the other things that we do. I’m also very excited to see what happens in terms of cannabis legalization worldwide. We recently saw Malta become the first country in the European Union to to legalize adult use cannabis. And there’s a couple of countries that are almost there. So it’s very likely that by the end of this year, we’ll have at least two more countries that have legalized recreational cannabis. So definitely a lot of exciting things happen happening in that sense. Also interesting things happening when it comes to that in Latin America. And here in the US, we continue to see a lot of new developments when it comes to States joining the world of legal cannabis are now exploring a new frontier. This is obviously different from cannabis but somewhat related the world of psychedelics so I’m very excited to see what happens. What happens there. You have any thoughts on that?

 

Jonathan Bench  19:52

It’s been really interesting. I’ve been involved in a couple of projects with European companies coming to the US and and really a lot of US companies looking to Europe, especially the Netherlands has been very progressive in its viewpoint on dealing with psychedelic substances, and how those dovetail nicely in with, especially mental health treatment. And I think the fact that we have an office in Portland, we have attorneys there who have been specializing cannabis for a long time, and who have also kept up on this wave. And we’ve had some new hires of some key folks, I didn’t realize until a conversation I had just a couple of days ago with some very smart international CPAs. And with Vince, the Watsky, in our Portland office, where we had gotten because I’ve been focusing on cannabis and other international things. And meanwhile, we have a great group within the firm who have been pushing very hard to stay at the forefront of the psychedelics, emerging industry. And so it’s very interesting to see how it fits with some things like substances like kratom, marijuana, a lot of schedule one substances, how those have been treated, and how really the tide has changed. And it is interesting that Netherlands has been at the forefront. And so I’ve been I’ve been in conversations with companies in the US looking at the model that Netherlands has set up not just in the terms of the business, but in the terms of the underlying corporate structure, to make it much more of a democratic type organization, but really kind of like a benefit corporation, but without underlying shareholders as well. So it’s almost like a nonprofit model, which to me speaks volumes about how early stage entrepreneurs and investors are thinking about the psychedelics industry, not as a mere profit center, but as really something that can be used for a lot of social good.

 

Fred Rocafort  21:32

I was down in Miami last month, four or two months ago for for a conference on psychedelics. And it was really interesting to see the strong focus on mental health. And I’ve told anyone who will listen that some of the testimonies that I found most compelling at that at that conference came from athletes who had had turned to psychedelics as a way of dealing with some of the the trauma that has resulted from their activities, especially athletes who, because of the sports that they that they practiced, or the specific positions, you know, their bodies would just take an incredible punishment, and it was actually quite compelling. And because we do hear a lot about mental health treatment for her for veterans and people who, you know, other people who suffer from from PTSD, but it made it very relatable, right, and many of these professional athletes, if not, most of them are realizing their lifelong dreams, right by by being able to, to compete at the highest levels. And yet, even in those cases, right, they can, they can come out of that with, with with serious issues. So that’s been a real eye opener. And and I think that that’s going to be a key factor in making the psychedelics story, a different one to the cannabis story, for example, because I think that that element is is really capturing the attention of people, folks who don’t feel that enthusiastic about cannabis reform, that aspect of of psychedelics does does seem to resonate. So speaking of new things for 2022, please be on the lookout for our new blog, the psychedelic slob blog, you can begin to follow our activities related to psychedelics on Twitter, and Facebook, continuing our focus on thematic issues. I know that you’re looking closely at the world of crypto and decentralized finance and web three. I mean, that’s one of the most exciting things I think that we’re going to be seeing in this year. What are your perspectives on that?

 

Jonathan Bench  23:41

You know, it’s been great. I went to a conference just a few weeks ago, with really what I consider really hardcore crypto folks, right there. They know blockchain they’ve been they purchased Bitcoin in the late 2010s. So 2009 2010, around there. When it was very early, I heard a story of a guy who lost I don’t know how many bitcoins he lost in that first Bitcoin hack. Just fascinating. And it was interesting. And the thing that hit me and we could talk about maybe we should do a whole episode on this later, because it certainly is going to continue to rise. But the idea, you know, I had to go from understanding what web 3.0 meant, what decentralized meant in terms of the Internet as we know it now. You know, what blockchain being into how you validate transactions, how and really how the currency that we hear about underlies all of the other things, right? It’s not just currency transactions, there’s a lot of other kinds of things and certainly as lawyers, and business people, there are lots of opportunities and certainly many pitfalls as well. But it’s been very interesting for me. One thing an entrepreneur told me at this conference or heard him tell the whole whole group it resonated with me quite well was. My goal is to take the world of finance and democratize it right? No longer will people be limited by how little money they make, right? It won’t be, Are you an accredited investor or not? It will be. Here’s an opportunity. You do your research do you want to invest or not. And of course, for securities attorneys like me, that makes me a little nervous, but at the same time, it also makes sense, because there are a lot of people who should be able to make these decisions for themselves. And so I guess I’m drinking the Kool Aid a bit. Now, at least I understand the perspective. And I think that’s really the right way to do it. Right. If you want to understand something, you go to the meetings, you sit on the inside, you hear you hear what’s being evangelized, about whatever you’re learning about learning from the inside, and then make your decisions about how you feel about it. And this, to me, this has been a real turning point. And something I’m really looking forward to learning more networking, more writing more about in 2022. What about you, Fred?

 

Fred Rocafort  25:43

The more that I that I learned about this entire field, the more that it draws me in, again, the just the speed at which things are changing. And you might have had a similar experience. But I remember the first few events that I attended, where were folks discussed topics related to crypto and other associated topics at times you could be forgiven for, for wondering, okay, yeah, this all sounds interesting. But But what’s the point? I think now we’re beginning to everything is beginning to crystallize now, and we have a much clearer idea of what this is all about. And of course, that’s only going to provide impetus for for the for new developments. And I certainly look forward to, to being a part of that, Jonathan, before we sign off any other topics, areas of the world or anything else.

 

Jonathan Bench  26:35

I suppose I gotta go back to the human element in everything I do. I’m very transactional in a lot of my relationships. And, and so I feel like, you know, with a new year thinking about what kind of changes you make, or what do you want to re emphasize in your life for me, it will be trying to slow down a little bit, and trying to focus on people that are closest to me, and developing worthwhile relationships with others who I can help or they can help me. I think at the end of the day, the way we make changes in the world is in our own homes first, you know, in our ourselves, our own homes, our neighborhoods, and in to help it move outward from there, right. I can’t change what’s going on in Afghanistan right now in a in a major way. But if I have Afghanistan, refugees in my hometown, which they relocated quite a few Salt Lake City recently, for part of that resettlement, I can do something right, I can impact someone, I can help in some way. And so for me, you know, making money is great. Being a thought leader in the world is great. But being a good human being for me is really at the top of my to do list. What about you, Fred?

 

Fred Rocafort  27:40

Yeah, you and you bring up an excellent point change begins at home change begins in the workplace, change begins in our communities, looking back to the Christmas season, and to being visited by the by the neighborhood Christmas carolers. It was just a reminder that we we ultimately need to look at those closest to us. And like you said, there’s there’s just nothing we can do about what’s happening, or very little that we can do about what’s happening far away. But there’s a lot we can do closer to home. And I think that those initial shocks, brought on by the pandemics up ended our lives and then sort of forced us into a very reactive mode. And that’s understandable. But I think now as we begin to get a handle on things, I think it’s time to start rebuilding and and once again, strengthening some of those some of those links, I certainly look forward to catching up with some of the colleagues that have not been able to see as we move, hopefully away from the pandemic. I can’t wait to see what this year brings in terms of guests. And in terms of conversations, and it’s just a very exciting prospect to know that. Perhaps in a few months, we might be talking to someone about a topic that right now we don’t know about. The unexpected and surprising always, always keeps me going. So Jonathan, here’s to 2022 and I’d like to take this opportunity to thank our producer Madeline Williams, none of this would be possible without her.

 

Jonathan Bench  29:21

Global Law and Business is a production of Harris Sliwoski. The team includes Madeline Williams and Makayla Moore. The music is composed by Steven Schmidt. If you liked the show, subscribe on iTunes and leave us a review there. We’d like to hear what you think of the show and it helps new listeners find us. Tune in next week for another episode. We’ll see you then.