U.S. prosecutors are looking into the development of Boeing’s 737 Max jets, a person briefed on the matter revealed Monday, the same day French aviation investigators concluded there were “clear similarities” in the crash of an Ethiopian Airlines Max 8 last week and a Lion Air jet in October.

 

The Justice Department probe will examine the way Boeing was regulated by the Federal Aviation Administration, said the person, who asked not to be identified because the inquiry is not public.

 

A federal grand jury in Washington sent a subpoena to someone involved in the plane’s development seeking emails, messages and other communications, the person told The Associated Press.

 

The Transportation Department’s inspector general is also looking into the FAA’s approval of the Boeing 737 Max, a U.S. official told AP. The official wasn’t authorized to discuss the matter publicly and spoke on condition of anonymity. The Wall Street Journal reported on the probe Sunday said the inspector general was looking into the plane’s anti-stall system. It quotes unidentified people familiar with both cases.

 

The anti-stall system may have been involved in the Oct. 29 crash of a Lion Air jet off of Indonesia that killed 189 people. It’s also under scrutiny in the March 10 crash of an Ethiopian Airlines jet that killed 157.

 

The Transportation Department’s FAA regulates Chicago-based Boeing and is responsible for certifying that planes can fly safely.

 

The grand jury issued its subpoena on March 11, one day after the Ethiopian Airlines crash, according to the person who spoke to The Associated Press.

 

Spokesmen for the Justice Department and the inspector general said Monday they could neither confirm nor deny the existence of any inquiries. The FAA would not comment.

 

“Boeing does not respond to or comment on questions concerning legal matters, whether internal, litigation, or governmental inquiries,” Boeing spokesman Charles Bickers said in an email.

 

The company late Monday issued an open letter from its CEO, Dennis Muilenburg, addressed to airlines, passengers and the aviation community. Muilenburg did not refer to the reports of the Justice Department probe, but stressed his company is taking actions to ensure its 737 Max jets are safe.

 

Those include an upcoming release of a software update and related pilot training for the 737 Max to “address concerns” that arose in the aftermath of October’s Lion Air crash, Muilenburg said. The planes’ new flight-control software is suspected of playing a role in the crashes.

The French civil aviation investigation bureau BEA said Monday that black box data from the Ethiopian Airlines flight showed the links with the Lion Air crash and will be used for further study.

 

Ethiopian authorities asked BEA for help in extracting and interpreting the crashed plane’s black boxes because Ethiopia does not have the necessary expertise and technology.

The Ethiopian Accident Investigation Bureau intends to release a preliminary report within 30 days.

The United States and many other countries have grounded the Max 8s and larger Max 9s as Boeing faces the challenge of proving the jets are safe to fly amid suspicions that faulty sensors and software contributed to the two crashes in less than five months.

 

Both planes flew with erratic altitude changes that could indicate the pilots struggled to control the aircraft. Shortly after their takeoffs, both crews tried to return to the airports but crashed.

 

Boeing has said it has “full confidence” in the planes’ safety. Engineers are making changes to the system designed to prevent an aerodynamic stall if sensors detect that the jet’s nose is pointed too high and its speed is too slow.

 

Investigators looking into the Indonesian crash are examining whether the software automatically pushed the plane’s nose down repeatedly, and whether the Lion Air pilots knew how to solve that problem. Ethiopian Airlines says its pilots received special training on the software.

Dennis Tajer, an American Airlines pilot and a spokesman for their union, said Boeing held a discussion with airlines last Thursday but did not invite pilots at American or Southwest, the two U.S. carriers that use the same version of the Max that crashed in Indonesia and Ethiopia.

 

Tajer said airline officials told the unions that Boeing intends to offer pilots about a 15-minute iPad course to train them on the new flight-control software on Max jets that is suspected of playing a role in the crashes. He called that amount of training unacceptable.

 

“Our sense is it’s a rush to comply — ‘let’s go, let’s go, let’s go,'” Tajer said. “I’m in a rush to protect my passengers.”

 

A spokesman for the pilots’ union at Southwest Airlines also said Boeing representatives told that union they expected the upgrade to be ready the end of January.

 

The spokesman, Mike Trevino, said Boeing never followed up to explain why that deadline passed without an upgrade. Boeing was expected to submit a proposed fix to the FAA in early January.

 

 

 
…

A Brazilian court has ordered Vale SA, the world’s largest iron ore miner, to suspend operations at two more dams, demanding that it prove the structures are stable.

The court decision dated Friday is the latest in a series of orders forcing Vale to halt operations at various dams that contain the muddy detritus of mining operations after one such barrier collapsed in January, killing some 300 people.

Vale has faced growing pressure to prove that its remaining dams are safe. The fatal disaster in the town of Brumadinho was the second of its kind in four years.

The company’s iron ore production is expected to be 82.8 million tons, or 21 percent, lower than was planned for the year due to the restrictions on its Brazil operations, including the planned decommissioning of all its upstream dams, according to data compiled by Reuters.

Karel Luketic, analyst for steel, iron ore and pulp at XP Investimentos, said on Monday he does not expect the impact on Vale’s earnings to be as large because iron ore prices are rising, which could compensate for lower volumes.

The miner said in a statement that the latest suspension, impacting its Minervino and Cordao Nova Vista dams, will not have a significant impact on its operations. It said that mining waste was already being shipped to “other structures,” which it did not identify.

Vale said on Friday it had received a court order to suspend activities at Ouro Preto dam.

Vale shares closed slightly lower in Sao Paulo, losing 0.18 percent to 50.46 reais, in contrast to a rally in rival miners Rio Tinto and BHP.

The company’s shares fell on the same day the Sao Paulo exchange’s main index reached 100,000 for the first time.

The restrictions to Vale operations in Brazil seem to have impacted shipments, something that was not clear in the first weeks after the disaster in Brumadinho.

According to trade ministry data released on Monday, Brazil’s iron ore shipments for the first two weeks of March were 1.29 million tonnes per day on average.

Shipments in February averaged 1.44 million tons per day while in March 2018 they averaged 1.42 million tons.
…

VOA’s Xu Ning contributed to this report.

Over the past several weeks, the U.S. government has launched a seemingly unprecedented campaign to block the Chinese telecom giant Huawei Technologies from competing in the global rollout of next-generation 5G mobile networking technology, claiming that the company is effectively an arm of the Chinese intelligence services.

In an effort that has included top-level officials from the departments of State, Justice, Defense, Homeland Security, and Commerce, as well as the president himself, the Trump administration has taken steps to curtail Huawei’s ability to operate within the U.S. It has also mounted an extraordinary effort to convince U.S. allies to bar the firm from operating on their soil.

Huawei has long been viewed with suspicion and distrust in many corners of the global economy. The company has a documented history of industrial espionage, and its competitiveness on the global stage has been boosted by massive subsidies from the government in Beijing. Still, the scope of the U.S. government’s current offensive against the company is remarkable.

“Huawei has been accused of many things for a very long time. This is nothing new. What is unique is the extent of the pressure campaign,” said Michael Murphree, assistant professor of International Business at the University of South Carolina’s Darla Moore School of Business. “In the grand scheme of international technology competition, this is certainly a very strong effort against a specific firm.”

The push to keep Huawei from playing a major role in the rollout of 5G comes at a time when the U.S. and China are in talks to end a costly trade war that the U.S. launched last year with the imposition of tariffs against hundreds of billions of dollars’ worth of Chinese exports. In another unprecedented move, President Donald Trump has even tied at least one of the government’s actions against Huawei — a federal indictment in which the company’s chief financial officer has been named — as a potential bargaining chip in trade discussions.

A corporate spokesman for Huawei declined to comment on the Trump Administration’s aggressive tactics.

The case against Huawei

U.S. officials cite a number of reasons to treat Huawei with extreme suspicion, some of them well-documented, others less so.

Top of the list is a National Intelligence law passed in China in 2017 that gives government intelligence services broad and open-ended powers to demand the cooperation of businesses operating in China in intelligence gathering efforts. U.S. policymakers argue that this presents an unambiguous threat to national security.

“In America we can’t even get Apple to crack open an iPhone for the FBI,” Florida Senator Marco Rubio said in a March 13 appearance on Fox Business Network. “In China, Huawei has to give the Chinese anything they ask for.” He added, “They should not be in business in America.”

And while Huawei has strongly denied that it operates as an arm of the Chinese intelligence services, at least two recent international espionage cases have come uncomfortably close to the firm.

 In January, the Polish government arrested a Huawei executive on charges of spying for China. The company itself has not been charged in the case, and Huawei announced that the employee, a sales manager, had been fired.

Early last year, the French newspaper Le Monde Afrique reported that over the course of several years, the computer systems in the Chinese-financed headquarters of the African Union in Addis Ababa were secretly transmitting data toservers in Shanghai every night, and that listening devices had been discovered implanted in the building. It was later revealed that the primary supplier of information and communications technology to the project had been Huawei.

No proof has ever been put forward that Huawei was involved in the data theft, and African Union officials have declined to go on the record confirming that the information transfers ever occurred.

One of the most frequent concerns expressed by U.S. officials about Huawei is the least substantiated: the idea that the company could install secret “backdoor” access to communications equipment that would give the Chinese government ready access to sensitive communications, or even enable Beijing to shut down communications in another country at will.

It’s a claim that Ren Zhengfei, Huawei’s 74-year-old founder and president, has personally ridiculed. The government would never make that request, and Huawei would never comply, he told the BBC recently. “Our sales revenues are now hundreds of billions of dollars. We are not going to risk the disgust of our country and our customers all over the world because of something like that. We will lose all our business. I’m not going to take that risk.”

The public battle over Huawei’s image

The sheer number of fronts on which the U.S. federal government is currently engaging with Huawei, sometimes very aggressively, is notable.

The most high-profile of these is a federal indictment of the company naming its Chief Financial Officer, Meng Wanzhou, in an alleged scheme to deceive U.S. officials in order to bypass U.S. sanctions on Iran. Meng was arrested in Canada at the request of U.S. prosecutors, and the Justice Department is seeking her extradition in order to have her face trial in New York. At the same time, a second federal indictment accusing the company of stealing trade secrets, was unsealed in the state of Washington.

It is the Meng case that President Trump has suggested he might use as leverage in ongoing trade talks. Speaking to reporters at the White House last month, he said, “We’re going to be discussing all of that during the course of the next couple of weeks. We’ll be talking to the U.S. attorneys. We’ll be talking to the attorney general. We’ll be making that decision. Right now, it’s not something we’ve discussed.”

There have also been active efforts to dissuade other countries from doing business with Huawei.

Last month, Secretary of State Mike Pompeo warned U.S. allies that if they use Huawei telecommunications equipment in their critical infrastructure, they will lose access to some intelligence collected by the United States “If a country adopts this and puts it in some of their critical information systems, we won’t be able to share information with them, we won’t be able to work alongside them,” Pompeo said in an interview with Fox Business Network.

On March 8, the U.S. Ambassador to Germany sent a letter to the German minister for economic affairs, reiterating the U.S. government’s concern about the potential for backdoors in Huawei systems and the threat of tampering during complex software updates. He said that U.S. intelligence sharing would be significantly scaled back if Germany uses Huawei products in its new telecommunications systems.

In February, the U.S. government sent a large delegation to MWC Barcelona, the telecommunications industry’s biggest trade show, where they publicly excoriated the company as “duplicitous and deceitful.” The U.S. delegation included officials from the departments of State, Commerce, and Defense, as well as Federal Communications Commission Chairman Ajit Pai. Also there were officials from the U.S. Agency for International Development, who made it clear that foreign aid dollars from the U.S. will not be available to help fund purchases from Chinese telecom firms.

In addition, a law signed by President Trump last year bars the federal government from buying equipment from Huawei and smaller Chinese telecom company ZTE. Trump has additionally floated the possibility of an executive order that would block Huawei from any participation at all in U.S 5G networks.

Huawei is fighting back, filing a lawsuit this month that claims it was unfairly banned from U.S. government computer networks. Deng Cheng, a senior research fellow at The Heritage Foundation in Washington, said the lawsuit may be aimed at determining what information the U.S. government is using to make its case.

 “There is information that the intelligence community may have that isn’t necessarily going to be made public,” he said. “What is admissible in court is not always the same as the information that is actually available. So I’m not really sure how this court case will even be adjudicated.”

Huawei’s lawsuit is likely also partly aimed at improving the firm’s reputation at a time when it is under siege by American officials.

The risk of pushback from China

At a time when the United States relations with even its closest traditional allies is under strain, Washington’s seemingly unilateral demand that a major global supplier be effectively shut out of an enormous marketplace is an audacious request.

For one thing, it is complicated by the fact that for countries and companies anxious to take advantage of 5G wireless technology, there may not be a ready substitute for the Chinese firm.

This seems to be reflected in recent reports that U.S. allies, in Europe, India, the United Arab Emirates and elsewhere, are showing real resistance to U.S, demands. A report in the New York Times late Sunday said that in Europe, the general sense is that any risk posed by Huawei is manageable through monitoring and selective use of the company’s products. The story noted that German Chancellor Angela Merkel’s response to the U.S. was a terse message that Germans would be “defining our standards for ourselves.”

And of course, there is always the possibility — even the likelihood — of Chinese retaliation against countries that accede to the United States’ requests. And in China, where the media is largely controlled by the Communist Party, and access to international news services is sharply limited, that retaliation would likely have widespread public support.

“The very strong perception is that Huawei is a great Chinese company that has done extraordinary things to move to the global frontier, in some respects to the head of the pack, and it is being unfairly treated and held back by the United States for specious reasons,” said Lester Ross, the partner-in-charge of the Beijing office of U.S. law firm Wilmer Hale.

 
…

U.S. President Donald Trump is attacking General Motors, the country’s biggest automaker, for costing 5,400 factory workers their jobs when it closed a manufacturing plant where it built a compact model car that Americans were increasingly not interested in buying.

Trump said on Twitter he talked with Mary Barra, GM’s chief executive, on Sunday, telling her he was “not happy” that the automaker closed the manufacturing plant in the industrial heartland of the country in Lordstown, Ohio, where GM manufactured the Chevrolet Cruze, a smaller car the company says is still popular overseas but not in the U.S.

He said he was miffed that the Lordstown plant was closed earlier this month “when everything else in our Country is BOOMING. I asked her to sell it or do something quickly.”

The plant closure was an indication that prosperity is uneven geographically across the U.S., the world’s largest economy.

But with Trump facing several investigations surrounding his 2016 presidential campaign and his actions during the first 26 months of his presidency, he is counting on the country’s mostly robust economy as a key talking point to voters that he should be re-elected to another four-year term in the November 2020 election.

He wrote on Twitter that he is not happy about the closure.

Trump on Monday tweeted that GM, the fourth biggest automaker in the world, and the UAW are opening negotiations on a new contract in September and October.

But he demanded, “Why wait, start them now! I want jobs to stay in the U.S.A. and want Lordstown (Ohio), in one of the best economies in our history, opened or sold to a company who will open it up fast!”

About 4,500 workers at the Lordstown plant lost their jobs over the last two years as sales of the Cruze model declined sharply, along with another 900 at nearby car parts suppliers.

A small portion of the laid-off workers have found jobs at other GM plants far from the Ohio plant that was closed.

Some of the unemployed workers have sought retraining for new jobs, but often found their years of work on a manufacturing assembly line do not readily translate into the ability to handle jobs where newer technology-related skills are needed.

Annual sales of the Cruze in North America peaked at 273,000 in 2014, but last year totaled just 142,000, as Americans are buying fewer passenger cars and instead opting to purchase bigger sport utility vehicles or pickup trucks.

Even as it closed the Lordstown plant, GM is continuing to manufacture the Cruze model in Mexico, Argentina and China, where the wages it pays workers are substantially less than the wages it was paying the Lordstown employees.

GM says Cruze sales in foreign countries have remained stable, fallen less sharply than in the U.S.. or even increased, as is the case in South America.
…

After wrapping up thousands of town hall meetings, France starts a new chapter of its “great debate,” aimed to address longstanding public grievances and offer solutions to the yellow vest protest movement.

But the broader crisis lingers, seen with upsurge of violence in Paris Saturday, where about 10,000 yellow vests marked their 18th straight week of protests.

Demonstrators smashed and looted businesses on the iconic Champs Elysees and hurled cobble stones at police, who responded with tear gas and water cannons. Others participated in a peaceful climate march that brought together tens of thousand of people—underscoring the diffuse, unorganized complexity of the leaderless protest movement.

Eight weeks of citizen debates, launched in January by an embattled President Emmanuel Macron, have received mixed reviews. Some consider them a groundbreaking experiment in participative democracy. Others dismiss them as a public relations stunt.

The bigger question is whether and how Macron’s centrist government plans to transform the public feedback into tangible policy change that can address pent-up resentments and find an exit to the unrest.

“The problems start now” said analyst Jean Petaux of Sciences-Po Bordeaux University. “To totally finish with the yellow vests, the government has to address at least part of their demands, which are very disparate. And give the sense it is offering credible solutions.”

For Macron, the immediate takeaways have been largely positive. Up to half-a-million French participated in 10,000 town-hall-style meetings nationwide that tackled pre-set topics, ranging from taxes and pubic services, to democracy and the environment. Organizers also received more than 1.4 million online comments outlining other issues of public concern, including jobs and immigration.

“People are learning that politics and how to change a system is a very difficult process,” said Bernard Reber, an expert on participative citizenship at the Paris-based National Center for Scientific Research, citing one early achievement.

A mixed review

The debates have also given the president and his government some breathing room — time that will last through the current “phase two,” which ends in April. Citizens are being randomly selected to participate in regional meetings aimed to prioritize the myriad demands.

Surveys show the majority of French have broadly given the national debates a thumbs up. More than eight in 10 respondents said the meetings gave citizens an opportunity to express themselves, while smaller majorities said they addressed their personal problems and those aired by the yellow vests, according to a Harris Interactive-Agence Epoka poll published this week, echoing others.

But many appear skeptical that all the talking will amount to much. Another survey found roughly two-thirds doubt the government will ultimately take the public feedback into account.

France’s leading Le Monde newspaper, however, gave the effort a careful, initial thumbs up. Critics who dismissed the debates as a diversion “were misguided,” it wrote in an editorial, while the yellow vests “were eclipsed and marginalize by this exercise in democracy.”

“Macron has not yet won,” it added, “he needs to show he hasn’t just listened but heard the country.”

Government members insist that will happen.

“The idea we have to do things differently is obvious,” Territorial Collectives Minister Sebastien Lecornu, who helped to organizing the debates, told the weekly Le Journal du Dimanche. “We may beef up certain themes, accelerate or correct others.”

But Prime Minister Edouard Philippe offered a more cautionary note, those expecting a flurry of government measures emerging from the debates were misguided.

The months of yellow vest protests have slowed Macron’s reformist agenda. The protest movement, named after the fluorescent jackets French keep in their cars, has morphed well beyond its initial opposition to a planned fuel tax hike, to embrace a hodgepodge of grievances of a largely rural and working class France left behind.

The French president took an initial step back by repealing the fuel tax increase. Then in December, he went further, announcing billions of dollars of aid for the most vulnerable and laying out plans the debates. Yellow vests dismissed the announcements as insufficient, the most extreme calling for Macron’s resignation.

“Emmanuel Macron now has to show that his statements — that there is a before and and after the yellow vests — are translated into acts,” says analyst Petaux. “Otherwise, it’s just talk.”

The next step?

So far, there are at least stylistic changes. Often dismissed as arrogant and aloof, Macron has rolled up his sleeves — literally — and participated in roughly a dozen public debates, in a style reminiscent of his presidential campaign.

Political opponents grumble the French leader has hogged media coverage ahead of May European Parliament elections. And indeed, polls show Macron’s approval rating jumped eight points by early March, to reach 28 percent, and his Republic on the March party inching up to overtake the far-right opposition National Rally.

Still, some observers note the debates ultimately involved only a small slice of the population — including many elderly, with time on their hands. “The great majority of French stayed home,” said analyst Petaux. “It’s not that they were sidelined. It’s that they don’t care. They have other things to do.”

But analyst Reber, who attended roughly 30 of the town hall meetings, believes the debates should not be underestimated. “They’ve been unprecedented in every sense,” he said.

A few months ago, he said, many would have dismissed the idea that French would show up and hash out often deeply divisive issues. “But that’s not been the case,” Reber added. “People mobilized — and stayed for a long time. I don’t know many countries in the world that allow citizens to participate in hours-long debates.”

Macron is expected to announce the after-debate roadmap next month. So far, the French president has given little indication of his long-term exit strategy. Some believe he doesn’t yet have one.

 “I’m not sure the government has a clear idea of what it’s going to do with this mass of information” Reber said. “But it has all kinds of options.

A referendum may be the most obvious path, many analysts say. But it carries risks — not only in terms timing, notably whether to schedule such a vote during May European Parliament elections — but also the chance French may vote against it.

The next steps for the yellow vests are also unclear. A number of analysts believe the movement will slowly die out.

Some diehards will likely continue and harden the protests, Petaux believes, while another group will be absorbed into existing politics parties — mostly on the far right and far left.

A third “will relive the nostalgia of the Republic of roundabouts,” he said, remembering the solidarity and friendships struck during the protests.
…

British Prime Minister Theresa May warned Sunday that it would be “a potent symbol of Parliament’s collective political failure” if a Brexit delay meant that the U.K. has to take part in May’s European elections — almost three years after Britons voted to leave the bloc.

Writing in the Sunday Telegraph, May also cautioned that if lawmakers failed to back her deal before Thursday’s European Council summit, “we will not leave the EU for many months, if ever.”

 

“If the proposal were to go back to square one and negotiate a new deal, that would mean a much longer extension… The idea of the British people going to the polls to elect MEPs [Members of the European Parliament] three years after voting to leave the EU hardly bears thinking about,” she wrote.

 

May is expected to try to win Parliament’s approval of her withdrawal agreement for the third time this week. After months of political deadlock, lawmakers voted on Thursday to seek to postpone Brexit.

 

That will likely avert a chaotic withdrawal on the scheduled exit date of March 29 — though power to approve or reject an extension lies with the EU. The European Commission has said the bloc would consider any request, “taking into account the reasons for and duration of a possible extension.”

 

By law, Britain is due to leave the EU on March 29, with or without a deal, unless it cancels Brexit or secures a delay.

 

May is trying to persuade opponents in her Conservative Party and its parliamentary allies to support the withdrawal agreement, which Parliament has already resoundingly defeated twice.

 

Opposition Labour leader Jeremy Corbyn said Sunday his party is against May’s deal — but indicated that it would back an amendment that supports the deal on condition it is put to a new referendum.

 

Corbyn has written to lawmakers across the political spectrum inviting them for talks to find a cross-party compromise.

 

He also told Sky News that he may propose another no-confidence vote in the government if May’s deal is voted down again.
…

British Prime Minister Theresa May warned Sunday that it would be “a potent symbol of Parliament’s collective political failure” if a Brexit delay meant that the U.K. has to take part in May’s European elections — almost three years after Britons voted to leave the bloc.

Writing in the Sunday Telegraph, May also cautioned that if lawmakers failed to back her deal before Thursday’s European Council summit, “we will not leave the EU for many months, if ever.”

 

“If the proposal were to go back to square one and negotiate a new deal, that would mean a much longer extension… The idea of the British people going to the polls to elect MEPs [Members of the European Parliament] three years after voting to leave the EU hardly bears thinking about,” she wrote.

 

May is expected to try to win Parliament’s approval of her withdrawal agreement for the third time this week. After months of political deadlock, lawmakers voted on Thursday to seek to postpone Brexit.

 

That will likely avert a chaotic withdrawal on the scheduled exit date of March 29 — though power to approve or reject an extension lies with the EU. The European Commission has said the bloc would consider any request, “taking into account the reasons for and duration of a possible extension.”

 

By law, Britain is due to leave the EU on March 29, with or without a deal, unless it cancels Brexit or secures a delay.

 

May is trying to persuade opponents in her Conservative Party and its parliamentary allies to support the withdrawal agreement, which Parliament has already resoundingly defeated twice.

 

Opposition Labour leader Jeremy Corbyn said Sunday his party is against May’s deal — but indicated that it would back an amendment that supports the deal on condition it is put to a new referendum.

 

Corbyn has written to lawmakers across the political spectrum inviting them for talks to find a cross-party compromise.

 

He also told Sky News that he may propose another no-confidence vote in the government if May’s deal is voted down again.
…

Brazil is considering granting an import quota of 750,000 metric tons of U.S. wheat per year without tariffs in exchange for other trade concessions, according to a Brazilian official with knowledge of the negotiations ahead of President Jair Bolsonaro’s visit to Washington. 

That is about 10 percent of Brazilian annual wheat imports and is part of a two-decade-old commitment to import 750,000 metric tons of wheat a year free of tariffs that Brazil made — but never kept — during the World Trade Organization’s Uruguay Round of talks on agriculture. 

Bolsonaro is scheduled to arrive in Washington on Sunday and meet with U.S. President Donald Trump at the White House on Tuesday.

Farm state senators have asked that wheat sales be on the agenda, in a letter to Trump seen by Reuters. They estimate such a quota would increase U.S. wheat sales by between $75 million and $120 million a year. 

Brazil buys most of its imported wheat from Argentina, and some from Uruguay and Paraguay, without paying tariffs because they are all members of the Mercosur South American customs union. Imports from other countries pay a 10 percent tariff. 

The Brazilian official, who asked not to be named so he could speak freely, said the wheat quota could be sealed during a meeting between Brazil’s Agriculture Minister Teresa Cristina Dias and U.S. Secretary of Agriculture Sonny Perdue on Tuesday. 

In return, the Brazilian government is hoping to see movement toward the reopening of the U.S. market to fresh beef imports from Brazil that was shut down after a meatpacking industry scandal involving bribed inspectors. 

Brazil is also seeking U.S. market access for its exports of limes that are facing phytosanitary certification hurdles. 

The world’s largest sugar producer also wants tariff-free access to the U.S. market. But Washington is not expected to budge on that issue until Brazil lifts a tariff it slapped on ethanol imports when they exceed 150 million liters in a quarter. 

That is a major demand by U.S. biofuels producers, who are the main suppliers of ethanol imported by Brazil. 
…

Iranian Oil Minister Bijan Zanganeh said on Saturday that frequent U.S. comments about oil prices had created market tensions, the ministry’s news website SHANA reported. 

U.S. President Donald Trump, who has made the U.S. economy one of his top issues, has repeatedly tweeted about oil prices and the Organization of the Petroleum Producing Countries. He has expressed concern about higher prices, including last month and ahead of OPEC’s meeting in December.

“Americans talk a lot and I advise them to talk less. They [have] caused tensions in the oil market for over a year now, and they are responsible for it, and if this trend continues, the market will be more tense,” SHANA quoted Zanganeh as saying. 

U.S. crude futures briefly hit a 2019 high on Friday but later retreated along with benchmark Brent oil as worries about the global economy and robust U.S. production put a brake on prices. 

OPEC and its allies including Russia, an alliance known as OPEC+, agreed last year to cut production, partly in response to increased U.S. shale output.

Washington granted waivers to eight major buyers of Iranian oil after the U.S. reimposed sanctions on Iran’s oil sector in November, after withdrawing from the 2015 Iran nuclear deal. 

“We do not know whether U.S. waivers would be extended or not. We will do our job but they [the U.S.] say something new every single day,” Zanganeh said. 

South Pars

Zanganeh was speaking at a news conference ahead of the planned inauguration on Sunday of four development phases at South Pars, the world’s largest gas field, by President Hassan Rouhani. 

He said Iran had invested $11 billion to complete the phases 13 and 22-24 of the giant field, which Tehran shares with Qatar, and expected to operate 27 phases by next March, SHANA reported. 

France’s Total and China National Petroleum Corp suspended investment in phase 11 of South Pars last year after the United States threatened to impose sanctions on companies that do business in Iran. 

But Zanganeh said talks with CNPC were continuing. 

“Negotiations are ongoing. A senior delegation from China is due to come to Iran for talks. They have promised to come to Iran soon,” said Zanganeh, according to the semiofficial news agency ISNA. 
…

Veteran Conservative lawmaker Nigel Evans has been in Britain’s House of Commons for more than a quarter-of-a-century and, like most of his parliamentary colleagues, is stunned at the turn of Brexit events.

“I got elected in 1992 and I don’t know if I have known any time more uncertain than now,” he told VOA.

He’s flummoxed at what the next move should be for a Conservative government that has lost control of the Brexit process.

As a committed Brexiter, he fears Britain will end up staying in the European Union because of an impasse in the Commons that has seen the ruling Conservative government repeatedly rebuffed by lawmakers, including by a third of its own MPs, in a series of historic votes without precedent for the storied House of Commons.

Parliament is not alone in being hopelessly divided: Theresa May’s Cabinet is, too, with the British prime minister lurching between pro-EU rebel ministers and their pro-Brexit counterparts, trying to resuscitate a government that appears to be in terminal decline.

Divorce delayed

More than 20 ministers have resigned in the past two years — and at least another half-dozen are on the cusp of quitting. Midweek another minister resigned and four declined to vote with their own government — an unprecedented defiance left unpunished.

Britain’s newspaper headline writers are running out of superlatives and metaphors to describe the political havoc. “We’re becoming the laughing stock of the World,” fumes Andrew Pierce, the Daily Mail’s associate editor, in College Green, the patch of grass outside parliament which has become a media encampment of tents, wires and cameras besieged by chanting, dueling placard-waving protesters.

Britain was due to exit the EU in 16 days’ time, on March 29.

On Wednesday, the House of Commons voted against Britain exiting the EU without a deal — in effect delaying Brexit until further notice. That followed Tuesday’s crushing parliamentary defeat of Theresa May’s Brexit withdrawal agreement — the second time pro-EU and hardline pro-Brexit lawmakers have combined to reject it. Lawmakers Thursday are expected to pass a measure seeking formally to delay Brexit, at least to June 30. EU leaders are divided about accepting a request for delay.

Donald Tusk, the president of the EU Council, tweeted Thursday: “I will appeal to the EU27 to be open to a long extension if the UK finds it necessary to rethink its #Brexit strategy and build consensus around it.”

The Remainers hope to either block Brexit altogether or at least steer it in a gentler direction with Britain still closely aligned although not a member of its political institutions. Hardline Brexiters want a no-nonsense sharp break with the EU, ready to accept the economic damage to Britain that will wreak, at least in the medium term.

That Evans feels unable to predict what happens next is instructive. He is no junior lawmaker, but a so-called “Tory grandee”, and he helps to direct the 1922 Committee, of which all backbench Conservative lawmakers are members.

When the bosses of the 1922 Committee tell a Conservative leader to quit, their word has the force of the Lord High Executioner. The last time the 22, as its nicknamed, deposed a party leader was in 2003, ousting one of Theresa May’s predecessors for losing a general election.

Are they close to giving May the push now? Evans is guarded but makes little secret he thinks the time is close at hand. “Her authority is greatly weakened,” he says grimly.

Replacing May

Pro-Brexit Conservative bloggers and columnists are in vituperative mood, blaming May for mishandling the negotiations with the EU and, from their viewpoint, giving too much ground to Brussels. Gridlock has been the result, they say.

“I can see no scenario where she is the answer for taking the country forward. She should by rights go now. At some point in the next two or three weeks it will even dawn on Mrs. May that it is time to go,” Conservative blogger Iain Dale tells VOA.

WATCH:  British Leadership Change Possible in Wake of Brexit Chaos

Then what?

The vultures are circling. Half-a-dozen would-be replacements from inside May’s Cabinet have in effect been auditioning already for the job, delivering speeches carving out their vision for the country. Some contenders have advanced plans, including printing up campaign material for what they expect is an inevitable leadership election.

A Conservative grassroots favorite, Boris Johnson, the former foreign minister, has had a modern makeover and dispensed with his trademark tousle-haired slapdash look and is now sporting a stylish boyband haircut.

But it is not clear that replacing Theresa May will solve anything or break the political impasse, which is why the 1922 Committee has stayed its hand.

There is no obvious unity candidate to succeed her. A new leader will face the same splits inside the Conservative party between Remainers, Brexiters and the those who favor a so-called soft Brexit modeled on Norway’s relationship with the EU, which would see Britain remain in the bloc’s single market and customs union as well as accept freedom of movement.

And the deadlocked parliamentary arithmetic will remain the same.

Another try

In a final throw of the dice, May is planning to bring her contentious deal back to the Commons for a third time, hoping that she will prevail by sheer persistence. It is the continuation of her strategy of brinkmanship — to run the clock down and force Conservative Brexiters and a handful of allied Northern Irish lawmakers to give in, prompted to do so by the fear that otherwise Britain might never leave the EU in any form.

It is not clear that the pro-EU Speaker of the House, John Bercow, will allow her to do so — under parliamentary rules a government is not meant to keep asking the House to vote repeatedly on the same measure. “If she can pull it off, it will be the political equivalent of Lazarus rising from the dead,” admits a Downing Street official.

Some believe she has a chance of succeeding in this high-stakes game of chicken. Evans does not think so. “For some of the rebels it would be better to stay in the EU than accept this deal, which would have us at the beck and call of Brussels without any power,” he says. Another key Brexiter, Steve Barclay, says he and many of his colleagues will keep voting the deal down “whatever the pressure we’re put under.”

Keeping calm and carrying on?

Beyond Westminster, there is fear, exasperation and anger. And clear Brexit fatigue. BBC Radio Five Live has seen the volume of Brexit-related call-ins tail off recently. There are signs, according to some opinion polls, that the mood of the country may have shifted slightly in favor of remaining in the EU, suggesting that a second referendum would deliver a narrow win for Remain.

As yet there is no majority in the House of Commons for holding a re-run referendum. Nor are lawmakers keen on holding a snap general election, for fear that might result in an equally deadlocked parliament afterwards.

Business leaders were already fuming at all the Brexit uncertainty before this week’s upheaval. “Enough is enough. A new approach is needed by all parties. Jobs and livelihoods depend on it,” said Carolyn Fairbairn, the director-general of the Confederation of British Industry, a major business association.
…

China’s top legislature is expected to pass the country’s first Foreign Investment Law this week at a time when negotiators from Beijing and Washington work to hammer out a trade deal.

Analysts and business groups say the legislation is a step in the right direction, but still falls short. In some ways, they add, it even raises new concerns that negotiators need to address before the two sides reach a deal.

For decades, China has been grappling with the question of just how far and how fast it should open up its state directed economy, and steps — while always welcome — have long lagged behind expectations. The Foreign Investment Law is not different.

In a statement, the American Chamber of Commerce in China (AmCham China) said it welcomes the law and appreciates the effort to improve the investment environment.

“We are concerned, however, that such an important and potentially far-reaching piece of legislation will be enacted without extensive consultation and input from industry stakeholders, including Foreign Invested Enterprises,” the statement said.

An earlier version of the law was put together in 2015, but later stalled during the review process, only to resurface more recently. When it did, the wording was more general and more vague, analysts note. By contrast, the first version had 171 articles, the new one has 41.

This some argue, helped pave the way for the bills speedy passage. NPC Observer, a website that closely follows China’s legislature or National People’s Congress, notes that by keeping the legislation vague, the government will have more room and time to craft implementing regulations after the law is enacted.

“The law is phrased and drafted with very general provisions. There are a number of things that are not covered in there, such as what percentage of foreign investment qualifies as foreign invested,” said Lester Ross, who heads AmCham China’s policy committee. “Another major concern is the requirement for security assessments even for non-mergers and acquisitions, even for greenfield investments, which seems unnecessary.”

Subsidies still an issue

The newer version of the law was fast-tracked as Washington and Beijing work to hammer out a trade deal. While the provisions in the legislation address some persistent concerns, such as forced technology transfers, equal access to government procurement and national treatment, it does not address other issues, such as subsidies for state owned enterprises.

Clearly though, the legislation was pushed through the system in part to address what is being discussed at the negotiation table, said Mats Harborn, president of the European Chamber of Commerce in China.

“It is more than a law, it is a document that states principles and it is a document that states principles that we [foreign investors] would like to hear. And it also states the principles that U.S. negotiators want to have on paper from China,” Harborn said. “But the proof in the pudding will be the implementation.”

National security concerns

And while the law echoes concerns that are part of what trade negotiators are discussing, issues such as the broad application of national security reviews and the mention of national security in the law are cause for concern, argues Austin Lowe, a Washington D.C.-based consultant and analyst.

In a recent article on the legal and national security website Lawfare, Lowe highlighted provisions in the legislation that foreign companies should not “harm national security or the public interest” and that businesses that affect national security should be subject to a review.

“Together, these provisions essentially give the state — and, in turn, the Chinese Communist Party — free rein to intervene in a wide range of investment activity, signaling to foreign investors that they are better off avoiding any investment in an area that may be construed as politically sensitive or threatening,” he wrote.

Ross notes that while security reviews have been in place since 2011, they have, so far, been used very selectively and largely for mergers and acquisitions.

“Now it looks like this is an additional hurdle that will apply across the board,” he said.

While it doesn’t mean that every investment could face such scrutiny, there are no bounds to how it can be applied, and in some cases that would require revealing a company’s intellectual property, Ross added.

“When you put national security into any document it creates a great deal of arbitrary judgement on what is national security and what is not,” notes the EU Chamber of Commerce’s Mats Harborn. “It is a very wide definition that creates uncertainty.”

Not only does it create uncertainty, but the questions the new law raises will add to the issues negotiators will need to resolve going forward, Ross said.

“While on the one hand it is a good thing that they are showing some significant degree of intention to reduce barriers to foreign investment and actually making some substantive changes, once the law is in place it may actually be more difficult to make departures from that in the course of the negotiations,” he said.
…

U.S. President Donald Trump said on Wednesday he was in no rush to complete a trade pact with China and insisted that any deal include protection for intellectual property, a major sticking point between the two sides during months of negotiations.

Trump and Chinese President Xi Jinping had been expected to hold a summit at the president’s Mar-a-Lago property in Florida later this month, but no date has been set for a meeting and no in-person talks between their trade teams have been held in more than two weeks.

The president, speaking to reporters at the White House, said he thought there was a good chance a deal would be made, in part because China wanted one after suffering from U.S. tariffs on its goods.

But he acknowledged Xi may be wary of coming to a summit without an agreement in hand after seeing Trump end a separate summit in Vietnam with North Korean leader Kim Jong Un without a peace deal.

“I think President Xi saw that I’m somebody that believes in walking when the deal is not done, and you know there’s always a chance it could happen and he probably wouldn’t want that,” Trump said.

China has not made any public comment confirming Xi is considering going to meet Trump in Florida or elsewhere.

The president, who likes to emphasize his own deal-making abilities, said an agreement to end a months-long trade war could be finished ahead of a presidential meeting or completed in-person with his counterpart.

“We could do it either way. We could have the deal completed and come and sign, or we could get the deal almost completed and negotiate some of the final points. I would prefer that,” he said.

Trump decided last month not to increase tariffs on Chinese goods at the beginning of March, giving a nod to the success of negotiations so far.

But hurdles remain, and intellectual property is one of them. Washington accuses Beijing of forcing U.S. companies to share their intellectual property and transfer their technology to local partners in order to do business in China. Beijing denies it engages in such practices.

Asked on Wednesday if intellectual property had to be included in a trade deal, Trump said: “Yes it does.”

He indicated that from his perspective, a meeting with Xi was still likely.

“I think things are going along very well – we’ll just see what the date is,” Trump told reporters at the White House.

“I’m in no rush. I want the deal to be right. … I am not in a rush whatsoever. It’s got to be the right deal. It’s got to be a good deal for us and if it’s not, we’re not going to make that deal.”

‘Maintaining contact’

China’s Foreign Ministry said on Tuesday that Xi had previously told Trump that he is willing to “maintain contacts” with the U.S. president.

Over the weekend, Vice Commerce Minister Wang Shouwen, who has been deeply involved in the trade talks with the United States, did not answer questions from reporters on whether Xi would go to Mar-a-Lago.

Two Beijing-based diplomatic sources, familiar with the situation, told Reuters that Xi would not be going to Mar-a-Lago, at least in the near term.

One said there had been no formal approach from the United States to China about such a trip, while the second said the problem was that China had realized a trade agreement was not going to be as easy to reach as they had initially thought.

“This is media hype,” said the first source, of reports Xi and Trump could meet this month in Florida.

Though Trump said he is not in a hurry, a trade deal this spring would give him a win to cite as an economic accomplishment as he advances his 2020 re-election campaign. The trade war has hurt the global economy and hung over stock markets, which would likely benefit from an end to the tensions.

In addition to smoothing over sticking points on content, the United States is eager to include a strong enforcement mechanism in a deal to ensure that Beijing can be held accountable if it breaks any of its terms.

U.S. Trade Representative Robert Lighthizer, who has spearheaded the talks from the American side, said on Tuesday that U.S. officials hoped they were in the final weeks of their talks with China but that major issues remained to be resolved.
…

Democrats in the U.S. House of Representatives gave a cool reception to the replacement for the North American Free Trade Agreement on Wednesday as the top U.S. trade negotiator opened a  campaign to win broad support for the accord in Congress.

Several Democrats said a closed-door meeting between United States Trade Representative Robert Lighthizer and their caucus failed to ease their concerns about the new U.S.-Mexico-Canada Agreement’s (USMCA) provisions on labor, biologic drugs and some other issues.

A USTR spokeswoman declined to comment on the meeting.

The support of Democrats, who control the House, is considered important to passage of the USMCA, and Wednesday’s meeting at the U.S. Capitol signaled that the Trump administration has a lot of work to do to address the party’s concerns.

Democrats questioned whether new labor standards aimed at ensuring workers have the right to organize can be adequately enforced, as this depends partly on Mexico passing new labor laws.

“What you’re hearing is that a lot of people don’t think it’s good enough,” Representative Pramila Jayapal said of USMCA after the meeting, adding that she was concerned the new pact would not solve the biggest shortcoming of NAFTA, which allowed Mexican wages to stagnate.

“We know that when you don’t have strong enforcement provisions, you are essentially facilitating the outsourcing of jobs and bad worker protections and undercutting of U.S. workers,” said Jayapal.

NAFTA dealt with labor provisions in an unenforceable side-letter, allowing unions in Mexico to remain weak and wages low, drawing factories from the United States and Canada.

While USMCA’s labor chapter is part of the trade agreement itself and requires Mexico to adhere to International Labor Organization standards, Democrats questioned whether this could be adequately enforced through a state-to-state dispute settlement mechanism.

The Mexican government expects its Congress to pass a labor bill by the end of April that it says will strengthen the rights of unionized workers and fulfill its commitments under USMCA. Mexico “could say they passed the laws, but the laws could be very weak,” said Representative Judy Chu, a Democrat on the House Ways and Means Committee.

She said Lighthizer told Democrats that he believed that Mexico’s labor law would meet the terms of the agreement and that any enforcement issues could be resolved through a subsequent agreement following ratification. Jayapal added that Lighthizer said this could be addressed through implementing legislation.

Some Democrats said that Lighthizer listened closely to their concerns and that he would work to address them. 

“He understands the concerns of our caucus and he knows we’re not there yet,” said Representative Bill Pascrell.

Other Democrats raised concerns about the prospect for higher drug prices resulting from the USMCA’s provision for 10 years of data exclusivity for biologic drugs. The United States allows 12 years currently and negotiated a five-year exclusivity period in the Trans-Pacific Partnership trade deal, which President Donald Trump declined to join in 2017.

Representative Rosa DeLauro, a Democrat who opposed several previous trade deals, called this an “absolutely unbelievable giveaway to the pharmaceutical industry.”

House Ways and Means Committee Chairman Richard Neal, whose panel will handle the USMCA legislation, said the meeting did not provide any further clarity on the timing of the Trump administration’s submission of implementing legislation to Congress, or when a vote might occur.
…

Spotify has filed a complaint with European Union antitrust regulators against Apple, saying the iPhone maker unfairly limits rivals to its own Apple Music streaming service. 

Spotify, which launched a year after the 2007 launch of the iPhone, said on Wednesday that Apple’s control of its App Store deprived consumers of choice and rival providers of audio streaming services to the benefit of Apple Music, which began in 2015. 

Central to Spotify’s complaint, filed with the European Commission on Monday, is what it says is a 30 percent fee Apple charges content-based service providers to use Apple’s in-app purchase system (IAP). 

Forced to raise price

Horacio Gutierrez, Spotify’s general counsel, said the company was pressured into using the billing system in 2014, but then was forced to raise the monthly fee of its premium service from 9.99 to 12.99 euros, just as Apple Music launched at Spotify’s initial 9.99 price. 

Spotify then ceased use of Apple’s IAP system, meaning Spotify customers could only upgrade to the fee-based package indirectly, such as on a laptop. 

Under App Store rules, Spotify said, content-based apps could not include buttons or external links to pages with production information, discounts or promotions and faced difficulties fixing bugs. Such restrictions do not apply to Android phones, it said. 

“Promotions are essential to our business. This is how we convert our free customers to premium,” Gutierrez said. 

Voice recognition system Siri would not hook iPhone users up to Spotify, and Apple declined to let Spotify launch an app on its Apple Watch, Spotify said. 

Spotify declined to say what economic damage it believed it had suffered. 

“We feel confident in the economic analysis we have submitted to the commission that we could have done better than we have done so far,” Gutierrez said. 
…

The United States is working on a plan to lift tariffs from Mexican and Canadian steel and aluminum but preserve the gains that domestic producers have received from the duties so far, U.S. Trade Representative Robert Lighthizer said on Tuesday.

“What I’m trying to do is a have a practical solution to a real problem … get rid of tariffs on these two, let them maintain their historic access to the U.S. market which I think will allow us to still maintain the benefit of the steel and aluminum program,” he told the U.S. Senate Finance Committee at a hearing about the World Trade Organization.

The United States imposed the “Section 232” tariffs on steel and aluminum nearly a year ago to protect domestic producers on national security grounds. A plan to lift tariffs on the metals from Canada and Mexico was once linked to the renegotiation of the North American Free Trade Agreement but ultimately was excluded from that deal.

Since then, a number of U.S. lawmakers have said they did not believe the new U.S.-Mexico-Canada Agreement (USMCA) could win approval in Congress if the metals tariffs — along with and retaliatory duties on U.S. farm and other products — were left in place.

Members of the New Democrat Coalition in the House of Representatives echoed a similar message in a meeting with Lighthizer later on Tuesday.

“Some of us impressed the need to resolve 232 before we have a chance to move forward” on consideration of USMCA, said Representative Ron Kind, a pro-trade Democrat from Wisconsin.

Kind added that Lighthizer expected to meet with Mexican and Canadian counterparts on the issue this week.

A spokeswoman for the U.S. Trade Representative’s office declined to comment, saying there were no scheduling announcements on the 232 issue.

The United States has sought quotas on steel and aluminum in lieu of tariffs, but Canada and Mexico have resisted such restrictions, arguing that they pose no threat to U.S. national security.

A Mexican official said talks were continuing.

“Our position is that we should not have tariffs or quotas.

We have to help the U.S. construct the narrative of why exclusion for Mexico is valid,” added the official, who was not authorized to speak publicly on the matter and requested anonymity.

Kind cautioned that the Trump administration would need to submit the USMCA enabling legislation soon to Congress so it could be considered before the August recess. After that, it could become caught up in another border wall funding fight in the fall and later the 2020 presidential election campaign, which would diminish its approval chances.

“There’s a lot of work and the clock’s ticking,” Kind added.
…

The United States is working on a plan to lift tariffs from Mexican and Canadian steel and aluminum but preserve the gains that domestic producers have received from the duties so far, U.S. Trade Representative Robert Lighthizer said on Tuesday.

“What I’m trying to do is a have a practical solution to a real problem … get rid of tariffs on these two, let them maintain their historic access to the U.S. market which I think will allow us to still maintain the benefit of the steel and aluminum program,” he told the U.S. Senate Finance Committee at a hearing about the World Trade Organization.

The United States imposed the “Section 232” tariffs on steel and aluminum nearly a year ago to protect domestic producers on national security grounds. A plan to lift tariffs on the metals from Canada and Mexico was once linked to the renegotiation of the North American Free Trade Agreement but ultimately was excluded from that deal.

Since then, a number of U.S. lawmakers have said they did not believe the new U.S.-Mexico-Canada Agreement (USMCA) could win approval in Congress if the metals tariffs — along with and retaliatory duties on U.S. farm and other products — were left in place.

Members of the New Democrat Coalition in the House of Representatives echoed a similar message in a meeting with Lighthizer later on Tuesday.

“Some of us impressed the need to resolve 232 before we have a chance to move forward” on consideration of USMCA, said Representative Ron Kind, a pro-trade Democrat from Wisconsin.

Kind added that Lighthizer expected to meet with Mexican and Canadian counterparts on the issue this week.

A spokeswoman for the U.S. Trade Representative’s office declined to comment, saying there were no scheduling announcements on the 232 issue.

The United States has sought quotas on steel and aluminum in lieu of tariffs, but Canada and Mexico have resisted such restrictions, arguing that they pose no threat to U.S. national security.

A Mexican official said talks were continuing.

“Our position is that we should not have tariffs or quotas.

We have to help the U.S. construct the narrative of why exclusion for Mexico is valid,” added the official, who was not authorized to speak publicly on the matter and requested anonymity.

Kind cautioned that the Trump administration would need to submit the USMCA enabling legislation soon to Congress so it could be considered before the August recess. After that, it could become caught up in another border wall funding fight in the fall and later the 2020 presidential election campaign, which would diminish its approval chances.

“There’s a lot of work and the clock’s ticking,” Kind added.
…

Mexican President Andres Manuel Lopez Obrador on Tuesday denied any delay to a flagship refinery project in his home state after the deputy finance minister was quoted as saying $2.5 billion for its construction will be moved to state oil firm Pemex.

The planned investment for the Dos Bocas refinery “can go to exploration and production” for Pemex, Arturo Herrera told the Financial Times in an interview during a trip to London for meetings with investors.

However, Lopez Obrador stood by his plan to build the refinery within three years, saying the tender could be unveiled next week. In answer to a question about whether the $2.5 billion would be spent this year on the refinery, said “Yes.”

The president’s plans to fast-track construction of the new refinery in Tabasco, his home state, have concerned investors that it would take away much-needed resources from Pemex, which is creaking under $106 billion of debt.

His energy minister, Rocio Nahle, said she understood Herrera’s budget concerns but said the project was on track.

“The faster we do this project, the cheaper it will be,” she said on Mexican radio.

The conflicting statements appeared to confuse investors.

Mexico’s benchmark stock index reversed gains and weakened 0.7 percent after Lopez Obrador’s rebuttal of Herrera’s comments, while the peso pared gains.

“Contradictions within the federal government do not help financial markets,” said James Salazar, an economist at bank CI Banco.

The government is under growing pressure to dispel doubts Pemex can successfully manage more than $16 billion of debt payments due by the end of next year, halt the firm’s extended oil output slide and avert a threatened credit rating downgrade to “junk.”

Finance minister Carlos Urzua said last week the government would announce new measures to support the ailing company, after unveiling a $3.9 billion bailout in February that failed to impress ratings agencies.

Herrera said the government was in talks with the International Monetary Fund and other multilateral organizations about structuring a fresh capital injection for Pemex, though he noted that those discussions were technical and no borrowing was involved, according to the Financial Times.

Lopez Obrador said it was very likely the government would make an announcement about tenders for the refinery on March 18, a national holiday that celebrates the 1938 nationalization of Mexico’s oil industry.

He also predicted Pemex would reverse its output decline by next year, with “new wells” coming on line by December under a production plan that allows Pemex to hire service companies to help explore mature fields.

He repeated that the refinery would cost between $6 billion and $8 billion, and said that work for now was focused on preparing the ground at the refinery site and readying the framework for the tender.

The refinery has already hit obstacles after the proposed construction site was cleared of protected mangrove without the correct environmental permits. The government has yet to present an environmental impact assessment for the wildlife-rich site.

Herrera said the tender framework was being prepared, but said the finance ministry needed to see a solid financial plan before releasing funds.

“We will not authorize (construction) until we have a final figure that is not very different from the original $8 billion,” said Herrera.

($1 = 19.3083 Mexican pesos)
…

The United States is preparing to impose “very significant” Venezuela-related sanctions against financial institutions in the coming days, U.S. special envoy Elliott Abrams said on Tuesday.

Abrams did not elaborate on the fresh measures but his warning came a day after the U.S. Treasury imposed sanctions on Russian bank Evrofinance Mosnarbank for helping Venezuelan state oil firm PDVSA evade U.S. financial restrictions.

Abrams said Washington was also preparing to withdraw more U.S. visas from Venezuelans with close ties to President Nicolas Maduro.

Washington has taken the lead in recognizing opposition leader Juan Guaido as Venezuela’s rightful president after the 35-year-old Congress chief declared Maduro’s 2018 re-election a fraud and announced an interim presidency in January. Most countries in Europe and Latin America have followed suit.

Abrams’ comments came as Venezuela ordered American diplomats to leave the country within 72 hours.

Washington said it had decided to withdraw the remaining diplomats due to deteriorating conditions in Venezuela, which has been plunged into its worst blackout on record.

Abrams emphasized that the withdrawal of diplomats was not a change in U.S. policy.

“This does not represent any change in U.S. policy toward Venezuela, nor does it represent any reduction in the commitment we have to the people of Venezuela and to their struggle for democracy,” he said, adding that the U.S. intended to keep up pressure on Maduro through sanctions.

“You will see very soon a significant number of additional visa revocations. You will see in the coming days some very significant additional sanctions,” Abrams added.

He said the United States was in talks with other countries that could act as its “protecting power” in Venezuela to ensure the safety of the U.S. embassy’s premises and provide assistance to Americans in trouble.

A “protecting power” is a country that represents another in cases where two countries have broken off diplomatic relations.

Washington, for example, has appointed Switzerland as its “protecting power” in Iran.

“We are trying to decide on a protecting power,” Abrams said.

He said the safety of U.S. diplomats was a key factor in the withdrawal decision reached by U.S. Secretary of State Mike Pompeo in the late hours of Monday night.
…

North Korean leader Kim Jong Un may not be able to achieve his economic development goals given the divergent ideas over denuclearization exhibited by Washington and Pyongyang after the Hanoi summit, said experts.

After the Hanoi summit broke down last month over discussions of Washington’s demand on denuclearization and Pyongyang’s demand on sanctions relief, Kim made a first public statement emphasizing economic development, a goal he set for this year during his New Year’s Day speech.

If the sanctions are not lifted, North Korea and its citizens will likely to face tougher economic conditions this year.

North Korea’s main state media outlet, Korea Central News Agency (KCNA), reported on Saturday that Kim stressed last week “the need to concentrate all efforts of information and motivation on accelerating socialist economic construction.” KCNA added that Kim emphasized the [North] Korean people should “further display their might in the spirit of self-reliance.”

Ahead of the report, U.S. National Security Advisor John Bolton told Fox Business Network last week the U.S. is looking to increase sanctions if Pyongyang is not willing to denuclearize.

“They’re not going to get relief from the crushing economic sanctions that have been imposed on them,” Bolton said. “We’ll look at ramping those sanctions up in fact.”

A State Department official said on Thursday that the U.S. is not looking to provide exemptions to South Korea to resume joint economic projects with North Korea, which Seoul has been pushing for since the first inter-Korean summit in April.

Missile sites

Based on commercial satellite imagery, North Korea appeared to be rebuilding the Sohae Satellite Launching Station at Tongchang-ri last week. Pyongyang began to dismantle the largest missile engine test site in the country after the first summit with the U.S.in Singapore in June.

Movements around the Samundong facility near Pyongyang were also detected last week, suggesting North Korea might be preparing for a missile launch.

Built in 2012, the Samundong facility’s mission is the development of long-range missiles and space-launch vehicles, such as the Hwasong-15 intercontinental ballistic missile, which analysts agree is capable of reaching the U.S. mainland. 

Experts said Kim will not be able to develop North Korea’s economy, one of the world’s most opaque, without a sanctions lift from the U.S.

According to South Korea’s central bank, North Korea’s economy shrank 3.5 percent in 2017, a year after the United Nations Security Council imposed sanctions banning North Korea’s key exports including coal, textiles and fisheries and limited its imports of oil. Without the income derived from selling those export commodities, the North Korean economy is likely to face limits on its growth. 

“Sanctions are really serious obstacles to the prospects for North Korea to fully develop its economy,” said Scott Snyder, director of the U.S.-Korea policy program at the Council of Foreign Relations. 

Robert Manning, a senior fellow at the Atlantic Council, said the North Korean economy is likely to dwindle as the result of sanctions. 

“Kim’s economy is in difficult shape, squeezed by sanctions,” Manning said. “Some think it is likely to contract in 2019.”

Snyder said North Korea will likely continue to look for ways to bypass sanctions, and turn to Russia and China, which have been willing partners in that effort in the past. But, he thinks that Pyongyang is unlikely to get very far with Moscow and Beijing. 

Since the U.S.-North Korean summit process started in June, Snyder said China has eased off enforcing sanctions in the past two months.

“But I believe that China is willing to continue to apply sanctions up to a point, and that the level of relaxation on the part of China is not going to be sufficient to meet North Korea’s desire toward its needs,” he added.

Joshua Stanton, a Washington-based attorney who helped draft the North Korea Sanctions Act in 2016, thinks the consequence of sanctions are not rigorous enough at the current level to deter evasions by North Korea.

“So far, they are not,” Stanton said. “You need to go out to Chinese banks that continue to launder money for North Korea. And although the Trump administration threatened that, it hasn’t followed through with that threat.” 

US legislation

A day before the Hanoi summit that took place Feb. 27-28, Congressman Brendan Boyle, a Democrat from Pennsylvania, introduced a bill calling for the prohibition of lifting sanctions on North Korea. 

Stanton said Congress will likely look for ways to make sanctions stronger now that North Korea has demonstrated its unwillingness at the Hanoi summit to agree to U.S. demands on denuclearization. 

Ken Gause, director of the International Affairs Group at the Center for Naval Analyses, said North Korea is most likely to turn to South Korea for concessions and look to resume inter-Korean projects, such as the Kaesong Industrial Complex and Mount Kumgang tourism, which South Korea has been planning to discuss with the U.S. prior to beginning preparatory work because of potential sanctions violations.

​The Kaesong Industrial Complex that opened in 2004 included factories where South Korean manufacturers could employ North Korean workers for low wages. It was shut down in 2016 following a North Korean nuclear test. South Korean tours to the venerated Mount Kumgang ended in 2008 after a South Korean tourist was shot by a North Korean guard. 

Gause said, “It will definitely make it more difficult for [South Korean President Moon Jae-in] to just provide concessions to North Korea with the United States taking a hardline following Hanoi.”

Snyder thinks “the inter-Korean projects cannot go ahead under current circumstance because they would pursue contrary to the sanctions efforts,” and if South Korea tries to resume the projects with North Korea, “it would definitely create tension.” 

“So I believe South Korea is going to get essentially a red light on the idea of large-scale economic cooperation,” he added. 

Gause, on the other hand, thinks inter-Korean economic projects could help U.S. negotiate denuclearization with North Korea.

“If the South Koreans were able to get some sanctions relief and provide North Korea with some resources, maybe reopening the Kaesong Industrial Complex or Mount Kumgang, that could actually lay the path for better negotiations with the United States down the line than if we just take a hard line against North Korea, and they go into a shell,” said Gause. 

After the Hanoi summit, Snyder said North Korea is looking for a way to boost its leverage over the U.S. position by making a preparation to resume testing. 

“One leverage that North Korea can use to push back on the U.S. position is the idea of making preparations for possible resumption of testing,” he said. “It’s kind of logical move for North Korea to make as a means by which to send the signal that the North Koreans also have some leverage and they’re not just going to roll over.” 
…

U.N. experts say they are investigating possible violations of United Nations sanctions on North Korea in about 20 countries, from alleged clandestine nuclear procurement in China to arms brokering in Syria and military cooperation with Iran, Libya and Sudan.

The expert panel’s 66-page report to the Security Council, obtained Monday by The Associated Press, also detailed the appearance in North Korea of a Rolls-Royce Phantom, Mercedes-Benz limousines and Lexus LX 570 all-wheel drive luxury vehicles in violation of a ban on luxury goods.

 

And it noted a trend in North Korea’s evasion of financial sanctions “of using cyberattacks to illegally force the transfer of funds from financial institutions and cryptocurrency exchanges.”

 

The report’s executive summary, which was obtained in early February, said North Korea’s nuclear and missile programs “remain intact” and its leaders are dispersing missile assembly and testing facilities to prevent “decapitation” strikes.

 

The full report said “the Yongbyon nuclear complex remained active,” noting that satellite imagery through November showed excavation of water channels and construction of a new building near the reactors’ water discharge facilities. Satellite imagery also “indicates possible operation of the radiochemical laboratory and associated steam plant,” it said.

 

The panel said it continues monitoring uranium concentration plants and mining sites in the country.

 

It also has “surveyed, confirmed and reported ballistic missile activity sites and found evidence of a consistent trend” by North Korea “to disperse its assembly, storage and testing locations,” the report said.

 

In addition to using civilian facilities, the panel said North Korea is using “previously idle or sprawling military-industrial sites as launch locations” — some close to, and some up to 10 kilometers (6 miles) from the assembly or storage sites.

 

As examples of this trend, it cited the test launch of Hwasong-14 intercontinental ballistic missiles from the Panghyon aircraft factory on July 4, 2017, and a launch from Mupyong-ni 24 days after that. It said Pyongyang’s Sunan International Airport, the country’s largest civil-military airfield, was used to launch Hwasong-12 missiles on Aug. 29 and Sept. 15 of that year.

 

As for trade sanctions, the experts said they continue to investigate two Chinese companies on the U.N. sanctions blacklist — Namchogang Trading Corp. and Namhung Trading Corp. — and associated front companies and their representatives “for nuclear procurement activities.”

 

The panel said it is also currently surveying the world’s manufacturers of nuclear “choke point” items such as “pressure transducers,” focusing on their end-use delivery verification methods.

 

The experts said they also were continuing “multiple investigations into prohibited activities” between North Korea and the Syrian government of President Bashar Assad.

 

These include Syrian nationals reported to be engaged in arms brokering on behalf of North Korea “to a range of Middle Eastern and African states, reportedly offering conventional arms and, in some cases, ballistic missiles, to armed groups in Yemen and Libya,” the panel said. They also include North Koreans working for sanctioned “entities” and for Syrian defense factories, it said.

 

The experts said a country, which they didn’t identify, had informed them that Iran “was one of the two most lucrative markets” for North Korean military cooperation and that both the Korea Mining Development Trading Corp. and Green Pine Associated Corp. offices in the country “are active.” The unnamed country also indicated that North Koreans in Iran were being used as cash couriers, the report said.

 

The Iranian government replied to the panel that the only North Koreans in the country were diplomats, and they have not violated U.N. sanctions, the report said.

 

The panel said it is continuing investigations into “multiple attempts at military cooperation” between North Korea and various Libyan authorities and sanctioned “entities” and foreign nationals working on their behalf.

 

The experts said they are also continuing investigations into military cooperation projects between North Korea and Sudan, including information on activities involving a Syrian arms trafficker and technology for “anti-tank and man-portable air defense systems.”
…

U.N. experts say they are investigating possible violations of United Nations sanctions on North Korea in about 20 countries, from alleged clandestine nuclear procurement in China to arms brokering in Syria and military cooperation with Iran, Libya and Sudan.

The expert panel’s 66-page report to the Security Council, obtained Monday by The Associated Press, also detailed the appearance in North Korea of a Rolls-Royce Phantom, Mercedes-Benz limousines and Lexus LX 570 all-wheel drive luxury vehicles in violation of a ban on luxury goods.

 

And it noted a trend in North Korea’s evasion of financial sanctions “of using cyberattacks to illegally force the transfer of funds from financial institutions and cryptocurrency exchanges.”

 

The report’s executive summary, which was obtained in early February, said North Korea’s nuclear and missile programs “remain intact” and its leaders are dispersing missile assembly and testing facilities to prevent “decapitation” strikes.

 

The full report said “the Yongbyon nuclear complex remained active,” noting that satellite imagery through November showed excavation of water channels and construction of a new building near the reactors’ water discharge facilities. Satellite imagery also “indicates possible operation of the radiochemical laboratory and associated steam plant,” it said.

 

The panel said it continues monitoring uranium concentration plants and mining sites in the country.

 

It also has “surveyed, confirmed and reported ballistic missile activity sites and found evidence of a consistent trend” by North Korea “to disperse its assembly, storage and testing locations,” the report said.

 

In addition to using civilian facilities, the panel said North Korea is using “previously idle or sprawling military-industrial sites as launch locations” — some close to, and some up to 10 kilometers (6 miles) from the assembly or storage sites.

 

As examples of this trend, it cited the test launch of Hwasong-14 intercontinental ballistic missiles from the Panghyon aircraft factory on July 4, 2017, and a launch from Mupyong-ni 24 days after that. It said Pyongyang’s Sunan International Airport, the country’s largest civil-military airfield, was used to launch Hwasong-12 missiles on Aug. 29 and Sept. 15 of that year.

 

As for trade sanctions, the experts said they continue to investigate two Chinese companies on the U.N. sanctions blacklist — Namchogang Trading Corp. and Namhung Trading Corp. — and associated front companies and their representatives “for nuclear procurement activities.”

 

The panel said it is also currently surveying the world’s manufacturers of nuclear “choke point” items such as “pressure transducers,” focusing on their end-use delivery verification methods.

 

The experts said they also were continuing “multiple investigations into prohibited activities” between North Korea and the Syrian government of President Bashar Assad.

 

These include Syrian nationals reported to be engaged in arms brokering on behalf of North Korea “to a range of Middle Eastern and African states, reportedly offering conventional arms and, in some cases, ballistic missiles, to armed groups in Yemen and Libya,” the panel said. They also include North Koreans working for sanctioned “entities” and for Syrian defense factories, it said.

 

The experts said a country, which they didn’t identify, had informed them that Iran “was one of the two most lucrative markets” for North Korean military cooperation and that both the Korea Mining Development Trading Corp. and Green Pine Associated Corp. offices in the country “are active.” The unnamed country also indicated that North Koreans in Iran were being used as cash couriers, the report said.

 

The Iranian government replied to the panel that the only North Koreans in the country were diplomats, and they have not violated U.N. sanctions, the report said.

 

The panel said it is continuing investigations into “multiple attempts at military cooperation” between North Korea and various Libyan authorities and sanctioned “entities” and foreign nationals working on their behalf.

 

The experts said they are also continuing investigations into military cooperation projects between North Korea and Sudan, including information on activities involving a Syrian arms trafficker and technology for “anti-tank and man-portable air defense systems.”
…

The United States told international carriers on Monday that the Boeing 737 Max 8 is airworthy as regulators scrutinize two fatal crashes of the new model of aircraft since October, but said it will mandate forthcoming “design changes” from Boeing by April.

An Ethiopian Airlines 737 Max 8 bound for Nairobi crashed minutes after take-off Sunday, killing all 157 aboard and raising questions about the safety of the new variant of the industry workhorse, one of which also crashed in Indonesia in October, killing 189 people.

In a notice, the Federal Aviation Administration said it planned to require design changes by Boeing no later than April.

Boeing is working to complete “flight control system enhancements, which provide reduced reliance on procedures associated with required pilot memory items,” the FAA said.

The FAA also said Boeing “plans to update training requirements and flight crew manuals to go with the design change” to an automated protection system called the Maneuvering Characteristics Augmentation System or MCAS. The changes also include MCAS activation and angle of attack signal enhancements.

The FAA said in the notice made public that external reports are drawing similarities between the crashes in Ethiopia and Indonesia.

“However, this investigation has just begun and to date we have not been provided data to draw any conclusions or take any actions,” according to the Continued Airworthiness Notification to the International Community for Boeing 737 Max 8 operators.

U.S. Transportation Secretary Elaine Chao told reporters that regulators would not hesitate to act if they find a safety issue.

“If the FAA identifies an issue that affects safety, the department will take immediate and appropriate action,” Chao told reporters. “I want people to be assured that we take these incidents, these accidents very seriously.”

Boeing’s top executive told employees on Monday he was confident in the safety of the U.S. manufacturer’s top-selling 737 Max aircraft.

Reuters and other media outlets have reported that Boeing has for months planned design changes after the Lion Air crash in Indonesia, but the FAA notice is the first public confirmation.

Canada’s transport minister also said he will not hesitate to act once the cause of the crash is known.

FAA chief Dan Elwell on Monday said the notification basically “informs the international community where we are and [gives] sort of … one answer to the whole community.”

Some Boeing jets grounded

Senator Dianne Feinstein, a California Democrat, and Paul Hudson, the president of FlyersRights.org and a member of the FAA Aviation Rulemaking Advisory Committee, on Monday both said the plane should be grounded.

“The FAA’s ‘wait and see’ attitude risks lives as well as the safety reputation of the U.S. aviation industry,” Hudson said in a statement.

The National Transportation Safety Board and the FAA are both at the crash site in Ethiopia, Chao said.

Boeing’s shares fell as much as 10 percent on the prospect that two such crashes in such a short time could reveal flaws in its new plane. Boeing, whose shares closed down 5.3 percent at $400.01 in the heaviest trading trade since July 2013, did not immediately comment Monday on the FAA notification, but said it was sending a team to Ethiopia to aid investigators.

The 737 line, which has flown for more than 50 years, is the world’s best-selling modern passenger aircraft and viewed as one of the industry’s most reliable.

China ordered its airlines to ground the jet, a move followed by Indonesia and Ethiopia. Other airlines, from North America to the Middle East, kept flying the 737 Max 8 on Monday after Boeing said it was safe.

Boeing’s 737 Max is the newest version of a jet that has been a fixture of passenger travel for decades and the cash cow of the world’s largest aircraft maker, competing against Airbus SE’s A320neo family of single-aisle jetliners. The 737 family is considered one of the industry’s most reliable aircraft.

The Max has a bigger and more efficient engine compared to earlier 737 models.

Boeing rolled out the fuel-efficient Max 8 in 2017 as an update to the already redesigned 50-year-old 737, and had delivered 350 Max jets out of the total order tally of 5,011 aircraft by the end of January.
…

White House economic adviser Larry Kudlow says that President Donald Trump will call for a 5 percent “across the board” cut in domestic government spending in 2020 when he proposes his new budget on Monday.

“It will be a tough budget,” Kudlow told the Fox News Sunday show. “We’re going to do our own caps this year and I think it’s long overdue.”

Kudlow said that “some of these recent budget deals have not been favorable towards spending. So, I think it’s exactly the right prescription.”

Trump’s third budget proposal during his presidency, for the year starting in October, is expected to draw wide opposition from Democratic lawmakers and some Republicans, setting off months of debate just weeks after a record 35-day government shutdown over government spending in the current year was ended.

The recent dispute centered on Trump’s demand for more than $5 billion for construction of a wall along the U.S.-Mexican border to thwart illegal immigration. When Congress rejected Trump’s request, he declared a national emergency to bypass congressional authorization to tap money allocated for other projects to build the wall. Congress is now considering whether to revoke the emergency declaration and 16 states have sued to overturn it.

U.S. news outlets reported Trump will seek at least another $8.6 billion in new wall funding in the 2020 budget. The reports said the budget cuts will not affect popular programs providing health care funding and pensions for older Americans, but will pare other funding for domestic programs while boosting defense outlays.

Kudlow said he expects a new fight over border wall funding.

But he contended that Trump has justified his call for the wall’s construction even though surveys in the U.S. show that a majority of voters oppose it.

“I would just say that the whole issue of the wall and border security is a paramount of importance,” Kudlow said. “We have a crisis down there. I think the president has made that case effectively. It’s a crisis of economics, it’s a crisis of crime and drugs, it’s a crisis of just of humanity.”

For years, U.S. presidents and Congress have squabbled over the budgets, what to spend taxpayer dollars on and the size of the annual deficits, often hundreds of billions of dollars that add to the country’s long-term debt of more than $22 trillion. The current budget is more than $4.4 trillion, with a deficit of about $1 trillion expected, largely because of tax cuts Congress approved a year ago at Trump’s behest.

There are signs the U.S. economy, which grew at a 2.9 percent pace last year, is slowing, but Kudlow said he was not worried by some predictions that say the American economy, the world’s largest, will only advance between 1 and 2 percent in the first three months of the year and that the overall advance for 2019 will be just above 2 percent.

“I’m not going to score it just yet,” Kudlow said. “I’ll take the over on that forecast. As long as we keep our policies intact, low tax rates for individuals and businesses, across the board deregulation, lighten the paperwork, let small businesses breathe and get a good rate of return. The president has ended the war on business. The president has provided incentives for economic growth. we’ve opened up the energy sector. Our policies are strong and I think the growth rate this coming year will exceed these estimates just as they have last year.”

He added, “If the markets were overwhelmingly worried about our budgets and our spending and our deficits, you would see that interest rate rise and be a greater penalty. I don’t see it right now. Long run, we do want to reduce the burden of spending and borrowing, absolutely.”

The U.S. added just 20,000 new jobs in February, but Kudlow described the figure as “a very fluky number,” attributing the weak hiring to the partial government shutdown that ended in late January.

Kudlow said the U.S. is “making good progress” in ongoing trade talks with China although an agreement has not yet been reached.

“As the president said,  across the board, the deal has to be good for the United States, for our workers and our farmers and our manufacturers, got to be good,” Kudlow said. “It’s got be fair and reciprocal. It has to be enforceable. That’s an important point.”
…

After months of Brexit deadlock, this is it: decision time. At least for now.

 

With Britain scheduled to leave the European Union in less than three weeks, U.K. lawmakers are poised to choose the country’s immediate direction from among three starkly different choices: deal, no deal or delay.

A look at what might happen:

 

Deal deja vu

 

The House of Commons has a second vote scheduled Tuesday on a deal laying out the terms of Britain’s orderly departure from the EU. Prime Minister Theresa May and EU officials agreed to the agreement in December, but U.K. lawmakers voted 432-202 in January to reject it. To get it approved by March 29, the day set for Brexit, May needs to persuade 116 of them to change their minds — a tough task.

 

Opposition to the deal in Parliament centers on a section that is designed to ensure there are no customs checks or border posts between EU member Ireland and the U.K.’s Northern Ireland. Pro-Brexit lawmakers dislike that the border “backstop” keeps the U.K. entwined with EU trade rules. May has been seeking changes to reassure them the situation would be temporary, but the EU refuses to reopen the withdrawal agreement.

 

Around 100 hard-core Brexit supporters in May’s Conservative Party look set to oppose the deal unless the backstop is altered. To offset them, May has courted the opposition Labour Party with promises of money for urban regeneration.

 

Oliver Patel, a research associate at the European Institute at University College London, says “it’s highly unlikely the deal will be passed. The big question is, what will the margin be?”

 

If, against the odds, lawmakers approve the deal, a short delay to Brexit may be needed so Parliament can translate the agreement’s terms into British law. But the U.K. would be on course to leave the EU in the next few months, with a long transition period built in to help people and businesses get used to the new relationship.

 

May will have delivered on her promise of an orderly Brexit — and snatched an astonishing political victory from the jaws of widely predicted defeat.

 

Destination no-deal

 

If the deal is rejected, lawmakers expect to vote Wednesday on whether to abandon efforts to secure an agreement and leave the EU as planned on March 29 without a deal.

 

That idea is backed by a phalanx of pro-Brexit politicians, who say it would cut Britain free of EU rules and red tape, allowing the country to forge an independent global trade policy.

 

But economists and businesses fear a so-called “no-deal Brexit” would hammer the economy as tariffs and other trade barriers go up between Britain and the EU, its biggest trading partner.

 

In the short term, there could be gridlock at British ports and shortages of fresh produce. In the long run, the government says a no-deal scenario would leave the economy 6 percent to 9 percent smaller over 15 years than remaining in the EU.

 

Last month, Parliament passed a non-binding amendment ruling out a “no-deal” Brexit, so lawmakers are unlikely to go with it now.

 

Delay, delay, delay 

If lawmakers reject leaving the EU without an agreement, they have one choice left: seek more time. A vote scheduled for Thursday would decide whether to ask the EU to delay Britain’s departure by up to three months.

 

This is likely to pass, since politicians on both sides of the debate fear time is running out to secure an orderly Brexit by March 29.

 

An extension requires approval from all 27 remaining EU member countries. They will probably agree, possibly at a March 21-22 summit in Brussels. But they are reluctant to grant a delay that stretches past elections for the EU’s legislature, the European Parliament, in late May.

 

Crisis deferred

 

Whatever the U.K. Parliament decides, this week will not bring an end to Britain’s Brexit crisis. Both lawmakers and the public remain split between backers of a clean break from the EU and those who favor continuing a close relationship — either through a post-Brexit trade deal or by reversing the decision to leave.

 

May is unwilling to abandon her hard-won Brexit agreement and might try to put it to Parliament a third time, especially if she loses by a small margin on Tuesday. But some lawmakers want her to have Parliament consider different forms of Brexit to see if there is a majority for any course of action.

 

Maddy Thimont-Jack, a researcher at the Institute for Government think tank, said this week’s votes could force the famously stubborn May to compromise.

 

“If she loses the vote by quite a significant margin again, it really suggests that what she has done is just not going to fly,” Thimont-Jack said. “In which case she will be under a lot of pressure to follow what Parliament wants.”

 

Some think the only way forward is a snap election that could rearrange the forces in Parliament and break the political deadlock. May has ruled that out, but could come to see it as her only option.

 

And anti-Brexit campaigners haven’t abandoned efforts to secure a new referendum on whether to remain in the EU. The government opposes the idea, which at the moment also lacks majority support in Parliament.

 

But that could change if the political paralysis drags on. The Labour Party has said it would support a second referendum if other options were exhausted.

 

It all means more twists are coming in the Brexit drama.

 

“No one really believes this is the last chance saloon,” Patel said.

 

 

 
…