22/08/2014 Asia Business Report

say sorry on previous occasions. Now on BBC News, all the latest business

news live from Singapore. Bank of America is hit with a near

$17 billion fine by US authorities for misleading customers.

Australia's trade minister is forced to reassure the country's biggest

trading partner. Welcome to Asia Business Report. It

is the highest fine a single company has ever agreed to with regulators.

The Bank of America is paying US authorities close to $17 billion to

settle claims that it and its affiliates misled investors by

pretending risky mortgage securities were safe. The settlement will cut

its third`quarter profits by more than $5 billion. More from New York.

Bad mortgage investments devastated the US housing market and sparked a

depression the economy is only now just shaking off. Now another bank

has been punished for those investments with a huge fine. Bank

of America is paying $17 billion, substantially more than rivals JP

Morgan and Citigroup paid to settle a similar matter. In a statement,

the bank's chief executive Brian Moynihan, said the deal was in the

best interests of its shareholders. This settlement brings a measure of

closure to the bank which has been dogged by legal problems ever since

the start of financial crisis. A large portion of the penalty will go

towards modifying the mortgages of borrowers who owe more than their

homes are worth, the rest will go to the authorities. US Attorney General

Eric Holder emphasised the severity of the punishment. This constitutes

the largest civil settlement with a single entity in history, addressing

conduct uncovered in more than a dozen cases and investigations. I

want to be very clear, the size and scope of this multibillion dollar

agreement goes far beyond the cost of doing business. This outcome does

not preclude any criminal charges against the bank or its employees.

The penalty exceeds Bank of America's entire profits last year.

But many still think such fines are not enough of a punishment for the

people and companies that did such damage to the global economy.

In other news, clothing giant Gap says it plans to open 40 stores in

India next year. The announcement came after the company unveiled

second`quarter results, which showed net sales increasing by 3% to under

just $4 billion. The move into India from where it has sourced products

for many years is part of the company's strategy to expand

operations in Asia, including China, Hong Kong and Taiwan.

To go `` Toyota has cut its prices in China, reducing it in certain

models by an average of 26%. The price cuts follow a $200 million

fine issued by China against 12 Japanese companies over price

manipulation. The mainland government is in the middle of

conducting investigations in the country's automotive sector.

Australia's biggest trading partner is China.

So when a Member of Parliament goes on national television and describes

the Chinese as mongrels who shoot their own people, it has the makings

of a major trade dispute. Clive Palmer, who also happens to be on a

V`Australia's richest men, has left the Australian government trying to

limit the damage. `` one of Australia's.

It is distinctly un` `` on helpful. It was a statement yesterday

afternoon where the Chinese government officially said that they

do not think it in any way reflects the views of the government or the

community in Australia. That's a welcome sign. But, nevertheless,

comments by someone in his position to say these things, is

extraordinarily unhelpful. It can be misinterpreted and can colour the

attitude of people we are negotiating with. Within ten years,

trying to bring the negotiation to this stage. For a free`trade

agreement within two countries? Yes. Ten years, our biggest trading

partner. It would... In the end, hundreds of thousands of jobs could

be at `` created with a free trade agreement. These things are very

important and he has done potential damage to the prosperity and the

prospects of millions of Australians. Do you think Clive

Palmer's words might be able to be measured in terms of dollars lost?

I'm hopeful that we will be able to walk through this and go beyond it

and the Chinese won't hold it against us. But, you know, we

shouldn't be in this position in the first place. We shouldn't have to be

wondering whether it's going to have the material and permanent impact.

Australia is a robust democracy. We are. But he is a senior Member of

Parliament and on a V`Australia's wealthiest men. He stood for

Parliament, saying people should trust him to look after their

interests. This in no way, in my view, looks after the interests of

the Australian people. It's an attempt to look after his own

business interests. After the last transpacific partnership

negotiations in Singapore, which Australia plays a key role in, you

were confident that the talks on a TPP could be completed by the end of

this year. That's no longer possible it? I don't think so, to be honest.

I think the best opportunity will be in the first half of next year. We

are not far away, if there is the political will. I think we could hit

close to concluding by the end of this year. But the first six months

of next year provides the best political opportunity that we are

likely to see in the US, to get the support of Congress. How high do you

rate the chances of the TPP not going ahead? Think we are close to

85%`90% there. It's just the politics. I think it is on the side

of being passed next year. Greater than 50%, I think. You wouldn't go

higher than that? I do know how much greater. That's the trade minister

from Australia, speaking to the BBC. Argentina's plan to exit its debt

default has been ruled illegal. The South American nation wanted

investors holding defaulted on is to swap them for new locally issued

debt. The judge in New York said the plan was Lawless. Argentina had been

trying to get around an earlier court ruling, banning it from paying

interest to investors with accepted we structured bonds. Russia has

announced on schedule takes on McDonald's restaurants across the

country as part of an investigation into food standards. The move comes

after Russia's top watchdog temporarily shut down four of the

fast food restaurant in Moscow. This comes amid rising tensions and

sanctions between Russia and the West, over the Ukraine crisis.

As Asia becomes more urbanised, food security is a looming problem.

Agricultural land is dwindling as people move to the cities. There

will be less food for people to eat, which is why experts have gathered

in Singapore to discuss their concerns. Earlier I spoke with the

director`general of the international rice research

institute. I asked about Asia's rising urbanisation and its impact

on agriculture. There's no question that the urban sprawl is associative

with taking away the best plants for rice production in the region. ``

associated with. We will have to make up the shortfalls. Howdy do

that? What needs to be done to improve rice production? There are

areas where yields aren't where they could be. Some adjustments of

practices and, more importantly, the development of varieties that can

tolerate certain stresses like droughts and floods, can convert

these loans into highly productive areas. Is the government operating

in terms of creating policy to ensure security? That something that

is quite important. We don't have proper in investment in

infrastructure, we don't have proper investment in trained personnel,

rural infrastructure, so that the lands can produce up to their

capacity. We could face shortages. And then we could see the rising

price of rice. How concerned are you about this? I think we will see

general upward pressures on rice prices. It's up to us to make sure

that, as economies grow, and demands shifts, that we are able to meet

those demands. Vietnam and Thailand are key rice exporter is here the

region. China is huge. But they are starting to be important now. How

big of an issue is this? The question is, around food Security in

China, if China is food insecure, the world is. So the imports we are

starting to see in China is an indicated that supply chains will

have to respond, meaning other kind `` countries will have to step up

their production. We don't want the Chinese government computing with

other Asian companies for food supplies.

With that, we end this edition of Asia Business Report. Thanks for

investing your time with us. Goodbye for now.

The United States says the group calling itself the Islamic State

presents a long`term threat, greater than any other so far. He says they

must be defeated in Syria as well as