The UK and the EU looked for a way to kick the can forward while leaving the Article 50 agreement in place; China and the U.S. set the stage for a possible breakthrough in trade; Venezuela's dueling concerts provided little relief.
"As things stand…there is no absolute guarantee that we would be able to continue to export food to the EU."
Brexit and China: Looming Deadlines
UK - EU: Kicking the can in the desert?
The shape-shifting negotiations as the March 29 deadline looms took yet another form, as the EU side was reported to be willing to listen to a proposed "technical amendment" to the original agreement that would have the effect of buying a few months' time before the actual implementation of Article 50 would take place.
UK Prime Minister Theresa May will have an unusual opportunity to discuss this directly with the EU. An unrelated February 24 summit between the EU and the Arab League will bring her to Sharm el-Sheikh, Egypt, giving her a chance to speak directly to European Council President Donald Tusk before a scheduled debate in Parliament on February 27th. Despite the hopes for a delay, it's unclear whether there are any new proposals under consideration for arrangements on Ireland between the EU and the UK that would break the current deadlock.
One possible result of a no-deal Brexit, according to a leaked report from the UK's Department for Transport, could be delays in passport clearances for passengers by French and British passport officials, resulting in a worst-case queue of some 15,000 potential passengers per day at London's St. Pancras rail station for the London-EU Eurostar train service.
U.S. – China trade negotiations: Stopping the clock
The week's negotiations in Washington are set to conclude with a Friday meeting between China's Vice Premier Liu He and U.S. President Donald Trump, raising hopes that a substantive agreement on trade could be concluded before the U.S. self-imposed March 1 deadline for raising U.S. tariffs. The flurry of unofficial statements about components of an agreement did little to reduce the atmosphere of optimism, despite insistence from the U.S. side that matters of enforcement and industrial policy were required to be settled before any long-term agreement could be made. Lurking in the background of the U.S. – China discussions is a similar tariff threat by the U.S directed toward EU auto manufacturers.
Venezuela: Concerted efforts
The visibly massive buildup of undelivered food aid just over Venezuela's border with Colombia seems intended to erode the morale of Maduro supporters. Adding to the propaganda value of the buildup: A music festival set up on the Colombia side, ostensibly intended to raise funds for more aid. But the festival site is constructed within sight – and hearing – of the soldiers blocking the roads over which aid would be delivered. Not to be outdone, pro-Maduro forces are presenting their own concert near the border. Meanwhile, reports of protest-related deaths continue to surface in reports by major media outlets.
All data Source: Bloomberg as of Feb 22, 2019, unless otherwise specified.
1Article 50 of the Treaty on European Union is the legal and political process whereby an EU member state ceases to be a member of the Union. Article 50 states that "Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements"