Tuesday, Mar. 7
BREXIT SAGA ROLLS ON
Lawmakers in the House of Lords will debate making further amendments to the Brexit bill on Tuesday, followed by a final vote. Last week, the chamber convincingly voted in favour of a change to protect the rights of EU citizens who lived in the UK before the June 23 vote.
Ms May has been less than impressed. She insists the bill be passed unamended, arguing that by tying the government to certain provisions, lawmakers are weakening the UK’s negotiating position and thus harming the national interest.
Regardless, the upper house is expected to consider making further amendments on Tuesday before sending the bill to the lower house for a final and decisive vote early next week. One change under consideration is the so-called ‘meaningful vote’ clause, which would require Parliament to approve the final product of future Brexit negotiations with the EU.
But even if this additional amendment is passed on Tuesday, the Conservative Party’s strength in the lower chamber will likely see both amendments fail. To ensure this, PM May will have to maintain strict party discipline – just a handful of defections could spell disaster for the government’s ‘hard Brexit’ plans.
THE PRICE IS RIGHT: OIL INDUSTRY MEETS
Oil industry leaders will gather in Houston on Tuesday to gauge the effectiveness of last year’s OPEC deal.
The deal was intended to cut production and drive up sluggish oil prices; the market is now 70% higher than this time last year. The agreement’s effectiveness has been driven by a record compliance rate, reaching 90% of targets set for January. Additional cuts are likely to occur in the coming months, with the largest non-complying states – Iraq and the UAE – having signalled their intentions to catch up.
Tuesday’s meeting is the largest assembly since the end of the two-year price war that drove prices to a 12-year low in an attempt to push higher-cost US shale producers out of the market. While over 100 shale producers went bankrupt in 2015, the number of rigs drilling in the US has grown 90% over the past nine months. With many of these shale rigs expected to come online when prices surpass $60 per barrel, the effectiveness and sustainability of OPEC’s market-manipulating tactics are increasingly being called into question.
NEIGHBOURLY AFFECTION: AUS-INDO TIES IMPROVE
The two regional heavyweights have long had a wobbly relationship, with economic linkages often described as “undercooked”. Today PM Malcom Turnbull will travel to Jakarta for the Indian Ocean Rim Association leadership summit. But his focus will not be on the multilateral pow-wow. Instead, Turnbull will use his surprise visit to build upon the dramatic warming of relations resulting from his counterpart’s trip to Australia last week.
Canberra’s priority will be deepening security cooperation with its archipelagic neighbour – it is deeply concerned about Chinese maritime assertiveness. Last week the two countries restored military cooperation, which had been suspended after a kerfuffle in January. Jakarta’s aims for the meeting are rather different: President Joko Widodo is intensely focussed on economic diplomacy.
Bilateral trade flows are a mere trickle, and expedited negotiations on a free trade agreement are expected to produce a deal by the end of the year. With Indonesia forecast to be the world’s fourth largest economy by 2050, opening the country to Australian investment will be a boon for the land down under.
HAPPENING ELSEWHERE…
Australia’s central bank is expected to keep rates on hold at 1.5%.
The OECD will announce its Interim Economic Outlook – a reassessment of the economic forecasts made by economists in November last year.
The most recent attempt at implementing the Minsk Protocol in eastern Ukraine was scheduled to begin on Tuesday. The agreement mandated the withdrawal of heavy weaponry from frontline positions. However, scepticism about the latest talks is mounting in the face of continuing clashes.