22/09/2016 BBC Business Live


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Prospects are fading fast for the massive free trade deal between


Europe and the United States, EU trade ministers meet today to


discuss the future of the transatlantic trade and investment


partnership. Live from London, that is the focus today.


Unfair trade, transatlantic megadeals, face a growing backlash


against globalisation, is it terminal for Tito? Also in the


programme, Mark Zuckerberg and his wife have pledged $3 billion of


their own wealth in an attempt to cure, prevent or manage all diseases


by the end of the century. We will be talking about philanthropy and


reacting to the Fed as expected Janet Yellen and her team have kept


the cost of borrowing on hold, we will talk you through the market


reaction around the world. And we will get the inside track on the


initiative to encourage more rich business leaders to share wealth to


solve some of the world problems. Intentions are good but does it make


a difference or is it just good PR for those who donate? We will be


finding out later. Facebook founder Mark Zuckerberg pledges $3 billion


to tackle all disease by 2100, we are looking at the business of


philanthropy. Can big business solve problems in the world, or is it just


good PR? Send in your comments, we will


mention as many as we can. As far as trade deals go, this would be a big


one but it has been beset by problems since the beginning, and so


European trade ministers are gathered today, to discuss the


massive free trade deal with the United States, but prospects are


fading fast. We are talking about the transatlantic trade and


investment partnership, TTIP for short, it is facing a growing public


backlash against rising political opposition on both sides of the


Atlantic. Supporters of the deal say that cutting trade tariffs and


regulations would bring big economic benefits, they have done the sums,


they claim, for the United States, every year looking at a benefit of


95 billion euros, for the European Union they argue it could boost the


region by 119 billion euros a year. That translates to around 500 euros


for each person in Europe. Opponents say that it gives too much power to


international companies and many of them are American, they fear that it


will lower European standards on issues like food and the


environment, also it could threaten jobs, it could push down wages,


outsourcing is a big fear. A similar deal between the UN Canada, has


already been signed, it will come into force next year, if Europe's


national parliaments ratify it. That is a big if. There has been


the whole idea. Over to you. Robert the whole idea. Over to you. Robert


Parker is with us, senior adviser of investment and strategy and research


at credits wheeze. Both sides of the argument laid out there, pros and


cons, critics and supporters, which side do you fall on? There are many


elements to this. -- Credit Suisse. These negotiations are very


compensated, against a background of very weak or mediocre growth, at


best in 2017 we will get US growth close to 2%, euro zone around 1.5%.


As far as a specific deal, Japanese growth is struggling to get above


1%, if one says, what side of the argument I come down on, it is


fairly straightforward, if this deal goes ahead, which unfortunately at


the moment is looking very difficult and problematic, I think it clearly


would see benefits but one has to challenge whether the numbers that


Sally mentioned are exact right, there is a high degree of error. I


think there would be clear benefits to the Eurozone economy and to the


US. In this environment of weak growth you have touched on, it


strikes me, they do not have an alternative, should they be getting


this deal Duncan Watmore eight, because growth is so weak? There is


a number of things to do to reboot growth in the Eurozone and the


United States, this free-trade steel, this agreement, would be part


of a jigsaw puzzle of a number of things to do to boost growth,


obviously a change in fiscal policy would be another element of that.


The political environment, both in the United States and in Europe, one


has to emphasise that in Europe in 2017 we had elections in Germany,


France, the Netherlands, next month a referendum in Italy. The political


framework in Europe is actually very difficult to push this deal through.


That political framework we have seen sparking protests, looking at


pictures we have had from Brussels, people protesting against the deal,


that is what is so interesting, in that arena, people have a strong


opinion and on both sides people do not want to compromise. You see this


also in the American presidential political debate, Linton and trump,


both, particularly Donald Trump, have no interviews yet for these


deals at all. The populist reaction is people are concerned about job


security. They are concerned about competition from other parts of the


world which might depress wages, I would argue that a lot of those


concerns are not properly founded, having said that, you see


demonstrations on the street, you see political opposition, as a


consequence, pushing Beale steals through, getting an agreement, I do


not think we will see deals being cancel completely. -- pushing these


deals through. But we could be having these conversations in one


year's time. And I am sure that we will. Thank you very much for coming


in. Let's tell you more about what Mark Zuckerberg and his wife have


been doing. Facebook's founder Mark Zuckerberg and his wife Priscilla


Chan have pledged $3bn to fund medical research over the next


decade. At a press conference in San Francisco, they said their ultimate


goal was to "cure, prevent or manage all diseases by the end of the


century". The funds will be distributed by the Chan Zuckerberg


Initiative, which they created in December 2015. Here is Priscilla


Chan outlining the goals of the initiative. our aim is to bring


together teams of innovative scientists and engineers to bills


transformational tools that unlock a new era of accelerated progress in


science and health. for this initiative we will be investing more


than $3 billion over the next decade to achieve our collective mission.


applause i didn't realise, priscilla chan is


a paediatrician. do send in your thoughts about what they are up to,


and also the very public way in which they told the world about it.


we will discuss this in detail later in the show.


Formula 1 team McLaren has played down reports that it's received


an investment bid from tech giant Apple.


The Financial Times says the talks started several months ago


and could see Apple pay up to ?1.5bn for McLaren.


It's understood McLaren had been in talks with Apple


over its rumoured Apple car, but those talks have since ended.


Insurance market Lloyds of London has reported profits of almost


$2 billion for the first six months of the year.


That's a rise of a quarter of a billion pounds


AT the same time, the firm says it's putting plans in place that


will ensure it continues trading across Europe following Brexit,


weeks after its chairman warned that the group could be forced


to move parts of its business to the EU.


We grilled her on that point, about what Brexit means for the company.


Some of the details that came out of that, they are on the business page.


Brexit is a major issue, says the insurer, Lloyds. The insurance


market in London, accounts for 50,000 jobs. It is one fifth of the


GDP growth for the City of London, quite a substantial element. It is


about that. As you would expect, about that. As you would expect,


much more on the life page about the news we were covering at the start


of the programme, about Mark Zuckerberg's pledge to eradicate or


manage disease by the year 2100. At the press conference, I did not


watch it but I have seen snippets, Bill Gates was there, the Gates


foundation is quite major in the world of philanthropy, he was on the


stage as well to cheer on the decision to go ahead with that. --


Gates Foundation. We will talk about that much later in the programme.


Turning to Asia, because shares of troubled Hanjin Shipping have jumped


by as much as 28% in South Korea after the board at Korean Air Lines,


its biggest shareholder, approved a loan of around $54 million for the


troubled shipping firm. Sharanjit Leyl is following this for us from


our Singapore newsroom. Phyllis in on the latest in the long saga of


Hanjin. They thought perhaps this would be resolved fairly soon, the


problem is the shipping line has, you mentioned Korean airlines, major


stakeholder in and Jean shipping, the funds will be abided as soon as


necessary checks are conducted. -- and Jean shipping. The Korean


development bank agrees to $45 million of a loan to the firm as


well. -- hand Jim there is estimates from the South


Korean government that have shown that the government needs at least


half $1 billion to cover unpaid costs such as fuel and cargo


handling. Earlier this month, the parent company, Hanjin Group, said


that it would inject around $100 billion of fresh funds to resolve


the problems with the cargo shop at sea -- stuck at sea. In various


ports including South Korea they are working to prevent seizure. Right


here in Japan and Singapore as well. Dozens of ships continue to be


anchored off ports and this is causing great disruption in the


industry. The whole economic downturn we have seen in recent


years has really impacted profits across that cargo shipping industry.


Hanjin Very much in focus. Japanese markets, closed for a public


holiday, Wednesday's closed, when the Nikkei was responding to the


bank of Japan news, it's too kept its interest rate on hold but


introduce measures to try to boost the economy. When Japan reopens it


may have a tougher time. The yen has strengthened following on from the


Federal reserve decision in the US late Wednesday, Hong Kong traded


today up half a percent. Nearly 8% at the close. Europe, as you can


see, gains right across-the-board. I would imagine this is a reaction to


the US Federal reserve, strong positive gains in Asia and the night


before, tends to flow through into the European day, and we will talk


about market reaction in a few minutes, but first, we can speak


with Samira Hussain in New York. The Fed have held off from raising


interest rates this month, it was not an easy decision, over two days,


members of the committee debated, and of the ten voting members, three


had voted in favour of a rate rise this month. This kind of division


among members of the Federal Reserve is especially rare, as they like to


present a unanimous front. The case for a rate rise has really


strengthened, chair of the US Federal Reserve, Janet Yellen,


really wants to see the economy doing better before making a move.


The labour market is strengthening but inflation remains just a little


too low to take action. Going forward, the Federal Reserve


believes that the US economy will still grow but at a slightly slower


pace, than they had anticipated, at the beginning of the year. The eagle


eyed among you will have spotted that Samira was not in New York,


contrary to what we have said, she was in Washington, she is outside


the Fed. That is in Washington, DC. Joining us is Mike Amey, managing


director and portfolio manager at PIMCO. No change from the fed but


nonetheless, it has not stopped the speculators. Two things going on


here, one is that the Fed has raised interest rates only once, they have


been trying for 12, 18 months, some guidance that they are aiming to


raise rates in December, which was not massive news. The reason the


markets have responded well, stock markets up everywhere, it is as much


about what they expect to do next year and the year after, next year


they are pencilling in at the moment gots further rate hikes, down from


three, the market has taken that well, it means the Fed is not going


to be too aggressive on rate hikes, that supports asset prices. That is


why you have seen stock market prices bounce. Janet Yellen was


grilled in the press about the election, she vociferously refused


to even say that it was an issue. She was specifically asked by one of


the journalists in the press conference, whether the upcoming


election played a part in her decision, they meet again before the


US election, one week before the US election, she was very clear, as you


would expect her to be, the election is not their issue and they will do


what they expect is right. The yen was strengthening today. The bank of


Japan met the day before, and the bank of Japan, the challenge the


Japanese have, they want to get inflation up, they need to stop the


yen from going up, because if it goes up, it puts pressure on


domestic prices. The yen is seeing just over 100, pretty key level. The


yen is really high up. Mike, thank you. Michael returned to


talk us through some of the stories in the papers. We will discuss


whether philanthropists investing in health stories are really making a


difference, or whether it is just PR.


That's a rise of a quarter of a billion pounds


Our economics correspondent Andrew Walker is following the story


there are some games on currency movements, the strength of the


dollar has helped the business maker and improved profits. Its actual


insurance underwriting business, the core of the business, sore lower


profits, and that was largely due to the extent of the fires in Fort


McMurray in Canada. Big pay-outs on claims there. That is very much the


fundamental business. Looking ahead, what the business is quite concerned


about is the impact of Brexit, the decision to leave the European


Union. The chief executive has been planning for that eventuality. The


Lloyds, we anticipate that by losing any licensing and losing any


passport in that we have into the EU countries, that 4% of our revenues


will be impacted. We have obviously got contingency plans in case the


Government doesn't come up with a negotiation that suits us, and


enables us to continue trading in those EU countries. So we are


working on contingency plans to either work on having a subsidiary


in one of those countries, or perhaps branching, but certainly 4%


of our revenues are impacted, and we will no longer be able to write that


business from London. That was Inge Beale, the boss, and interesting


what she had to say about Brexit. It is clearly something she has been


concerned about. She is emphatic that for the time being there is no


change. The business continues as before. She has been very anxious to


reassure clients that that remains the case, that Lloyds for the time


being continues to be able to do that same insurance business on


exactly the same basis as before, but there is the possibility


depending on what accepted the terms of the British departure are, that


it might need to organise that European aspect of the business


somewhat differently, perhaps moving some operations to a limited extent


to other parts of Europe. Andrew, thank you very much. Much


more on the website. The US-EU trade agreement,


the Transatlantic Trade and Investment Partnership,


is on the verge of collapse as trade ministers meet today to try


and save the project. But the prospect of an agreement


on TTIP before the end of the year We have been looking at the


implications. They are meeting in Bratislava, and if we hear any news,


we will let you know. The markets are not fussed about that, they are


reacting to what the Federal reserve didn't do and what it had to say


about what it might do in the future. The bookies are betting


perhaps December is the most likely month for a rate rise. We have been


here before. Don't place your bets! That is what I am saying. I have a


feeling we will be talking about this quite a little bit more. Now


let's get the inside track on philanthropy.


As we mentioned earlier, the Zuckerbergs are pledging


they are giving $3 billion to try and eliminate all diseaseses


This is the latest example of many high-profile business leaders


who are using their wealth to fund such causes.


Others include the likes of Bill Gates.


Well, one hotel chain has seen the opportunity.


The Six Senses hotel chain caters to travellers looking


for a slice of paradise, with all the trappings


of an ultra-luxe, five-star experience -


but with an emphasis on philanthropy.


Joining us now is Sonu Shivdasani, founder, Chairman of Board


and Chief Executive Officer of the Soneva Group.


Welcome. It's a pleasure being here. I founded Six Senses, but I sold


that back in 2012, and I am now running Soneva. We have the Soneva


Foundation. And you invite other business leaders to get together to


talk about how you can spend some of your money to put the world's


problems right. There are various aspect of Soneva, and the crux of it


is, I believe strongly that business success comes when you can happily


merge apparent contrast and make them fit in harmony. So at Soneva we


offer our guests a luxury but strive to have them fit with the


environment of the planet, and these things go hand in feed off each


other, so to reinforce that, we created the Soneva Foundation,


because I think fundamentally, companies must have a purpose beyond


pleasing shareholders and paying employees' salaries, and that is


essential for the 21st-century. But how can you offer luxury travel but


not cover an impact on the environment? There are lots of touch


points, but fundamentally, everything from, we measure all our


carbon emissions, so I believe strongly that we need to make small


tweaks to our business model that doesn't affect profitability. I


would love to have the net worth of marks ago Berg, and it is fantastic


what they are doing. The richest 85 people on the planet, according to


Oxfam, have more wealth than the poorest half, will you think about


Soneva at his wife, so I think what they are doing is fantastic, but I


don't have the liquidity and the net worth. I believe that companies have


to make small tweaks to our business model, we have to be a force for


good generally. I will give you some examples, and that has funded the


Soneva Foundation. We have raised less than the billions of the


Zuckerbergs, it is in the millions, but we have made small tweaks. We


haven't donated money, it has come from small changes. We are the only


hospitality firm to measure all three scopes of carbon, Scopes one


and two are very, limited, but the third is guest travel, supplier of


food is coming in, and the irony is that 85% of the CO2 emissions is


that, scopes three, so we measure that, and we then have a carbon


levy, and that has raised $6 million, and has given people, it


has funded a 1.5 megawatts windmill in India, 5000 trees in Thailand


supporting local communities, and cooking stoves in Darfur. Sorry to


interrupt you. How do the examples of the Mark Zuckerberg, will Gates,


Warren Buffett, affect the business community? Does it encourage other


business leaders to do the same? As you know, Gates and buffet have made


a pledge around the world, and they have enormous wealth, given that


their wealth adds up to more than half the world's population, if they


spend it on philanthropy, it can have a huge impact. But coming back


to the point I was making, companies need to put that into their business


model. Like the mandatory carbon levy, it has had no negative impact


on our profitability or the way guests perceive us, but it has


supported 150,000 families. We have a world today worth 4 million people


die per year of lung succeed Asian. By using firewood to heat their


food. -- lung asphyxiation. David Haye is suggesting, wouldn't it be


easier for companies just to pay their taxes and let governments


decide how money is spent? A lot of this is ego. That is a tricky


balance, how much is going back to saying, we are giving all this money


away, rather than actually maybe filtering that money through the


proper channels and then governments pulled aside what to do. In a


country like Britain, having this debate between the effectiveness of


government versus the private sector, there is no better country


to do it, Margaret Thatcher's privatisation of the economy has


completely revolutionised the private sector. Some people might


disagree with you! The economy is thriving and the infrastructure is


doing well, so it is fantastic that individuals and the private sector


do give, because they will give with passion. We can tell you are


extremely passionate, but we have to leave it here, I'm afraid. We have


run out of time. It was a fascinating conversation. Thank you


for having me. That's it from us, we will see very


soon. Good morning. A lot of fine weather


around for the next couple of days, but not completely dry by any


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