:00:00. > :00:09.This is Business Live from BBC News with Ben Bland
:00:10. > :00:15.The Uk's International Trade Secretary meets his US
:00:16. > :00:39.Live from London, that's our top story on Monday the 24th of July.
:00:40. > :00:42.A deal between the US and UK could boost trade by tens
:00:43. > :00:45.of billions of dollars - but can't be struck until after
:00:46. > :00:50.The International Monetary Fund cuts the growth prospects
:00:51. > :00:54.for the UK and US - while boosting its forecasts
:00:55. > :01:07.And how did this thing change the world?
:01:08. > :01:12.I sit down with the man who invented the USB Memory stick.
:01:13. > :01:17.He sold the firm for $1.6 billion but describes it as one
:01:18. > :01:25.And as lab-grown diamonds become more popular,
:01:26. > :01:38.today we want to know, would you mind if the diamond
:01:39. > :01:39.in your engagement ring was man-made.
:01:40. > :01:52.Later today the UK's trade secretary Liam Fox will be in Washington
:01:53. > :01:58.to discuss a preliminary trade deal ahead of Britain's departure
:01:59. > :02:07.A final trade agreement cannot be ratified until the UK
:02:08. > :02:11.formally leaves the EU, but the two nations are keen to lay
:02:12. > :02:13.the foundations for what the US President expects to be,
:02:14. > :02:21.In an interview with the BBC, Mr Fox said that UK-US
:02:22. > :02:25.trade is currently worth nearly $220 billion.
:02:26. > :02:31.But this could increase by as much as $52 billion if trade barriers
:02:32. > :02:40.For now though the process cannot begin in earnest because the UK
:02:41. > :02:43.is not permitted to hold formal trade talks with non-EU
:02:44. > :02:47.countries until it has left the European customs union.
:02:48. > :02:52.To complicate matters, the UK's trade secretary has
:02:53. > :02:57.welcomed a transition agreement with the EU which could potentially
:02:58. > :03:00.last up until the next scheduled general election in 2022.
:03:01. > :03:05.Although this would prevent the UK dropping off a cliff-edge in 2019,
:03:06. > :03:10.it is currently unclear whether the UK would be able
:03:11. > :03:13.to start negotiating with non-EU trading partners
:03:14. > :03:15.while the transition deal is active.
:03:16. > :03:19.Marianne Schneider-Petsinger is Geo-economics fellow with the US
:03:20. > :03:24.and Americas Programme at Chatham House.
:03:25. > :03:32.Good morning. Welcome to the programme. Ben running through some
:03:33. > :03:35.of the issues there. Ifs, buts and maybes and preliminary deals, can't
:03:36. > :03:38.strike a deal until we leave the European Union. I suppose the first
:03:39. > :03:44.question is, how likely is it that this will get done? I think at some
:03:45. > :03:49.point it will be, but for these talks, the focus is very much laying
:03:50. > :03:53.the ground work, scoping an exercise of where the trade deals might be
:03:54. > :03:57.done. Also providing continuity and certainty to US and UK businesses.
:03:58. > :04:02.There are a number of regulatory and technical agreements that could be
:04:03. > :04:06.part of the discussions, whether it's with regards to data flows and
:04:07. > :04:10.also air transport for example. We talk there about what needs to be
:04:11. > :04:17.done, certainly business wants some certainty. What is likely to be the
:04:18. > :04:25.sticking blocks? If you take a look at the trade negotiations that have
:04:26. > :04:33.been going on since 2013, lots of sticking points will likely emerge,
:04:34. > :04:37.so concerns about the importing of US chlorinated chicken, beef and
:04:38. > :04:41.also the question about financial services regulation I think could
:04:42. > :04:46.likely resurface. So where do you think the areas of perhaps easiest
:04:47. > :04:54.agreement are likely to be and where are they most likely to strike a
:04:55. > :04:58.deal? I think if you have an agreement that covers these things,
:04:59. > :05:02.that could be low-hanging fruits. There could be issues about
:05:03. > :05:06.standards, that is where the challenges will be. With the
:05:07. > :05:11.transition period, as you pointed out, the implications of a US trade
:05:12. > :05:14.deal, sorry the UK EU trade negotiations will have implications
:05:15. > :05:18.for the negotiations between the United Kingdom and the United
:05:19. > :05:23.States. If it came down to a choice between having a transitional deal
:05:24. > :05:27.with the EU or getting a US UK trade deal in place, which do you think
:05:28. > :05:32.would be the most important? Obviously the UK trade negotiations
:05:33. > :05:36.with the EU have priority trade. It's four times larger than anything
:05:37. > :05:40.else with the US, so that is where the key priority will be. It also
:05:41. > :05:43.strikes me then, all of this, we are talking about this cliff edge, that
:05:44. > :05:48.time is running out whether we like it or not and a deal has to be done
:05:49. > :05:54.at some point. That cliff edge is a real possibility that no deal will
:05:55. > :05:58.be done in any scenario and the UK falls off the cliff en? Yes and if
:05:59. > :06:03.you have an agreement in place, again what this future relationship
:06:04. > :06:07.might be has implications for any negotiations with the United States
:06:08. > :06:13.and don't forget that negotiations in general take a lot of time. For
:06:14. > :06:17.the United States on average it's like three-and-a-half years now to
:06:18. > :06:17.have an agreement from the start of negotiations to the implementation
:06:18. > :06:28.phase so it will be a long time. We may have to talk about this again
:06:29. > :06:30.in the future. For now, thank you very much.
:06:31. > :06:33.Let's take a look at some of the other stories making the news.
:06:34. > :06:35.Irish low-cost airline RyanAir, has reported a 55% rise in profits
:06:36. > :06:41.The airline says passenger numbers grew by 12 percent to 35 million -
:06:42. > :06:48.But it admitted the figures were distorted by the timing
:06:49. > :06:54.Australia's consumer watchdog agency is investigating the recall
:06:55. > :06:59.of Takata airbags after a driver's death earlier this month could be
:07:00. > :07:05.If proven, it would be the 18th fatality related to faulty
:07:06. > :07:23.The oil-producing companies are meeting in Russia today. The
:07:24. > :07:27.ministers from the Organisation of Petroleum Exporting Countries OPEC,
:07:28. > :07:31.as well as other oil producers, with dealing with the oversupply of oil.
:07:32. > :07:37.Earlier this year they came up with a plan to try to curb production in
:07:38. > :07:55.order to stop crude oil prices from falling.
:07:56. > :08:09.This news in about Uber Grab. They are calling it the biggest round of
:08:10. > :08:16.investment. A real power play for these firms around the world, some
:08:17. > :08:19.of course in some countries uber- is banned, others like Lift and Grab
:08:20. > :08:26.managing to enter the market as a result. Grab operating in seven
:08:27. > :08:31.countries, east Asia's most popular ride-sharing firm.
:08:32. > :08:34.The IMF has released the latest world economic outlook
:08:35. > :08:36.and while there's good news for China, Japan and the Eurozone
:08:37. > :08:39.there's bad news for the US and the UK Karishma Vaswani
:08:40. > :08:51.Tell us more? China, the eurozone and Japan have been a slight bump
:08:52. > :08:56.upwards. The US and UK are expecting to Cee Loer rates mainly because of
:08:57. > :09:01.the weak first quarter. The IMF says the UK will grow 1.7%, compared with
:09:02. > :09:06.the previous 2% it was forecasting, but to be honest it doesn't clarify
:09:07. > :09:10.why. I've looked through the report and it doesn't say much more than
:09:11. > :09:16.that. The funds said meanwhile that the US would grow by just 1.2% in
:09:17. > :09:20.comparison to the 2.3% it previously forecast down to of course the fact
:09:21. > :09:24.that fiscal stimulus in the US isn't going the way everyone expected
:09:25. > :09:27.because the Trump administration seems preoccupied, to be frank, at
:09:28. > :09:33.the moment. Let's take a look at China. It got a slight bump up.
:09:34. > :09:40.Growth rates in 2017 expected to come in at 6.7%. Next year at 6.4%.
:09:41. > :09:43.Both figures are slightly higher than what the IMF previously
:09:44. > :09:49.forecast. As we have been talking about over and over again, all the
:09:50. > :09:52.comes at a hefty price tag. The IMF says Beijing, in order to achieve
:09:53. > :09:57.the growth rates will be focussing on Government spending. That might
:09:58. > :10:00.mean a delay of much-needed financial reforms and more debt to
:10:01. > :10:06.its already ballooning debt pile. That's a massive problem for the
:10:07. > :10:09.Chinese. The IMF says that if China doesn't address the risks in the
:10:10. > :10:11.long-term, that could result in a slowdown in growth.
:10:12. > :10:24.Japanese stocks dropped to more than two-week lows
:10:25. > :10:27.on Monday after Wall Street retreated on Friday.
:10:28. > :10:30.A stronger yen dampened sentiment, while investors looked
:10:31. > :10:33.for opportunities to buy small and mid-size stocks.
:10:34. > :10:36.A strong yen drags on exporters' shares.
:10:37. > :10:40.The dollar suffered fresh losses at the start of the week on lower
:10:41. > :10:42.expectations for under-fire Donald Trump's ability to push
:10:43. > :11:08.Let us take a look at the European markets. Earnings reports from
:11:09. > :11:11.Alphabet which owns Google, also Am zok and Facebook will come out with
:11:12. > :11:22.their figures. Samira act head joins us now.
:11:23. > :11:26.Investors expect to see a rise in revenue and profit helped by
:11:27. > :11:30.advertising sales on video content and mobile devices. The company's
:11:31. > :11:35.cloud computing business is doing well, which has long been trailing
:11:36. > :11:39.behind Amazon and Microsoft. It managed to win some major deals for
:11:40. > :11:44.it cloud business but investors are worried about how much Google
:11:45. > :11:47.depends on searches. Any update on its plans to beef up its cloud
:11:48. > :11:56.business will be interesting to watch. Finally, the second largest
:11:57. > :12:13.toy maker in the US, Hasbro, will be reporting earnings. Based on
:12:14. > :12:15.Spider-Man, Hasbro and other products, will be very much the
:12:16. > :12:17.reason why they'll be up. Joining us is Jessica Ground, UK
:12:18. > :12:24.equities fund manager at Schroders. Nice new glasses, I approve, by the
:12:25. > :12:28.way. What is happening? They are talking
:12:29. > :12:33.about the same level of growth, still not back to pre-crisis levels.
:12:34. > :12:38.Still quite vulnerable. But within that, downgrades for the US, because
:12:39. > :12:42.we haven't seen the tax reforms that people had hoped for and downgrades
:12:43. > :12:47.for us in the UK because we have had a slow start to the year and
:12:48. > :12:52.uncertainty of the election won't have helped either. I was talking
:12:53. > :12:56.about the downgrades for the US and the UK there, but it's a different
:12:57. > :13:00.picture around the world and it shows that diverging view of some
:13:01. > :13:03.economies managing to weather the storm better than others?
:13:04. > :13:06.Definitely. What is really encouraging is that there is better
:13:07. > :13:10.news for some of the European economies and the Japanese economies
:13:11. > :13:15.which have had a really tough longer term outlook. Their growth is
:13:16. > :13:19.starting to come back. That's good. China looking reasonably stable and
:13:20. > :13:25.again some of the other emerging economies sort of being a bit
:13:26. > :13:32.stronger. So almost like a sort of two-speed thing. As mentioned a
:13:33. > :13:36.moment ago, lot of corporate results out this week, which are the ones
:13:37. > :13:40.analysts will be watching closely? US tech's had a phenomenal run,
:13:41. > :13:44.that's been because there is this environment where growth's been
:13:45. > :13:49.harder to come by. People have been looking for the tech stocks to
:13:50. > :13:51.deliver that. Google, Alphabet, what they're doing in terms of
:13:52. > :13:55.advertising will be really interesting. Similarly some of the
:13:56. > :14:00.results from the European companies are going to be interesting.
:14:01. > :14:05.Europe's been rerated by investors partly because they now see growth
:14:06. > :14:10.returning. Is that happening in the bottom line of the companies, that
:14:11. > :14:14.will be interesting. As far as the potential trade negotiations with
:14:15. > :14:17.the US, as we heard at the start of the programme, it's vital but there
:14:18. > :14:20.are so many question marks over whether it will get done because
:14:21. > :14:25.frankly we can't do anything until we leave the European Union anyway?
:14:26. > :14:28.These things are really complex. As you have already talked about,
:14:29. > :14:33.geographically, we have trade deals with people physically close to you,
:14:34. > :14:39.so yes the US will be great and yes Boris Johnson going off to Australia
:14:40. > :14:42.and New Zealand is fantastic. But getting the transitional trade deals
:14:43. > :14:46.with Europe will be really important.
:14:47. > :14:54.Thank you for talking to us about that. Still to come:
:14:55. > :14:59.I meet the man who invented the humble USB memory stick.
:15:00. > :15:01.It changed the way we use computers and share data
:15:02. > :15:04.but why does he describe selling the firm as his biggest regret?
:15:05. > :15:17.You're with Business Live from BBC News.
:15:18. > :15:23.Here in the UK, lots of stories including Ryanair, which we will get
:15:24. > :15:30.into in a moment. Profits up substantially. But let's go to the
:15:31. > :15:39.live page once again. B shares, the discount retailer. Asda could be
:15:40. > :15:43.looking to make a bid for it. It would be ?4.4 billion if it is
:15:44. > :15:47.confirmed. There is a huge debate about the value of these low cost
:15:48. > :15:52.retailers in the UK. They often do well when incomes are squeezed. B
:15:53. > :15:58.is one of the biggest success stories of late and Asda are
:15:59. > :16:01.potentially wanting a slice. Why? For access to that network of
:16:02. > :16:05.stores. The Sunday Times reporting on that early stage of assessing the
:16:06. > :16:11.bid for B Plenty more on the website for you as well, including
:16:12. > :16:16.news from Ryanair this morning. They are reporting that their shares have
:16:17. > :16:21.fallen by 5%. This is after the airline announced they expect fares
:16:22. > :16:26.to fall in the six months to the end of September and even further in the
:16:27. > :16:30.months to the end of March next year, despite them reporting
:16:31. > :16:38.positive results, saying that the profits soared 55% in the three
:16:39. > :16:46.months to the end... I've lost where I am! To the end of June! I tell you
:16:47. > :16:50.someone who know exactly which man is involved! That is the chief
:16:51. > :16:54.financial officer of Ryanair, who spoke to me earlier. A very strong
:16:55. > :16:59.airline. We saw our unit costs excluding fuel drop by 6% at a time
:17:00. > :17:04.in the cost of our competitors are rising. We are looking at savings on
:17:05. > :17:08.a full-year basis. The airline is in good shape. We did see a benefit
:17:09. > :17:13.from east in April of this year in the same quarter last year. The
:17:14. > :17:16.fares will be down in the region of about 5% in the first half of the
:17:17. > :17:22.year and we are sticking to that that we see no reason to change that
:17:23. > :17:26.guidance. We are looking at fares down approximately 8% this winter.
:17:27. > :17:30.Very good value for the customers at the moment. The chief financial
:17:31. > :17:36.officer of Ryanair speaking to me earlier today. Another story that
:17:37. > :17:41.caught my attention on the website. The electricity shake-up that could
:17:42. > :17:46.save consumers up to ?40 billion. This is by our environment analyst,
:17:47. > :17:50.Roger. This is about how electricity is generated and stored and whether
:17:51. > :17:56.people generating their own power using solar power could sell it to
:17:57. > :18:00.the national grid. the UK's trade secretary, Liam Fox,
:18:01. > :18:06.will be in Washington But a final trade agreement cannot
:18:07. > :18:18.be ratified until the UK formally As you would expect, a lot of
:18:19. > :18:21.uncertainty about what could happen and crucially what it will mean for
:18:22. > :18:26.business. We will be discussing that at the start of the programme. A
:18:27. > :18:29.quick look at how the markets are faring. This is how they looked at
:18:30. > :18:35.the start of the trading day, the start of the trading week, across
:18:36. > :18:37.Europe. All just into the red, down just a shade. That is what the pound
:18:38. > :18:40.will buy you against the dollar. It revolutionised the way
:18:41. > :18:45.we save documents and you can carry it around
:18:46. > :18:50.in your pocket. And it was invented
:18:51. > :18:59.by an Israeli entrepreneur. In fact, outside of California's
:19:00. > :19:02.Silicon Valley, one of the most exciting places for tech start-ups
:19:03. > :19:04.and innovation is Israel. The country has a record
:19:05. > :19:06.of attracting big In the last three
:19:07. > :19:10.years 195 companies, together worth just over
:19:11. > :19:12.$35 billion, were either bought out or floated
:19:13. > :19:14.on the stock market. This year saw Israel's biggest ever
:19:15. > :19:21.takeover when technology firm MobileEye - a pioneer
:19:22. > :19:25.of driverless car technology - was bought by Intel
:19:26. > :19:30.for $15.3 billion. We spoke to Intel about that deal on
:19:31. > :19:33.the programme. The big money deals
:19:34. > :19:36.are nothing new though. In 2006 M-Systems was bought
:19:37. > :19:39.by SanDisk for $1.6 billion. M-Systems
:19:40. > :19:41.was founded by Israeli entrepreneur and inventor Dov Moran,
:19:42. > :19:43.also known as the man I sat down with him to hear
:19:44. > :20:01.how he turned his big We were going to a conference in
:20:02. > :20:06.Israel, and at the end of the conference, I said, guys, I have
:20:07. > :20:10.this amazing device that we are going to launch very soon. Here it
:20:11. > :20:16.is. It is the first time you'll get to see it. The USB flash drive. And
:20:17. > :20:21.people didn't like it. There were many questions. Like, why should I
:20:22. > :20:26.use this? There are floppy disks, they are cheaper, what is the price
:20:27. > :20:34.of that? Only eight megabytes? What is that? Nothing is obvious, nothing
:20:35. > :20:41.is clear. What was the secret of the success? First of all because it is
:20:42. > :20:48.in your pocket, you see. That's one. It is easy, in your pocket. It is
:20:49. > :20:51.very simple to use. Everybody could use it. You didn't have to study
:20:52. > :20:56.anything, you didn't have to learn anything. There are no problems, it
:20:57. > :21:01.just works like a hard drive. Then fast forward to 2006, and you sold
:21:02. > :21:08.the company that you had created for a lot of money. Tell me about that.
:21:09. > :21:17.In 2006 I sold the company, $1.6 billion. Not so bad. Not so great!
:21:18. > :21:20.Interesting that you say that. On one hand, you have described that
:21:21. > :21:24.sale as your biggest excess, but on the other, one of your biggest
:21:25. > :21:30.regrets. Why is that? -- biggest success. I don't regret it. You
:21:31. > :21:34.can't save you regret selling a company for $1.6 billion but I
:21:35. > :21:52.wasn't happy to sell. It wasn't my dream. The reality is that the CEO
:21:53. > :21:58.of Sandisc try to approach me to acquire the company and I said no
:21:59. > :22:02.until I broke down. I said yes. It wasn't really because I wanted to
:22:03. > :22:08.sell the company. There was a situation which I won't go into, but
:22:09. > :22:14.I was not happy with my board and the way they treated the company and
:22:15. > :22:17.acted. Tell me about signing on the dotted line. You had committed
:22:18. > :22:24.yourself to selling the company. What was going through your head?
:22:25. > :22:29.Mixed feelings. For a long time I had a very heavy bad feeling of
:22:30. > :22:35.disappointment. I saw it as a failure, not a success story. It
:22:36. > :22:40.took me time to accept that this was sort of success. You sold the
:22:41. > :22:44.company but it is like you retired. You have been doing a lot since
:22:45. > :22:50.then. I know you are very active in tech start-ups, especially in
:22:51. > :22:56.Israel. Tell me about the way that the country lurches start-ups.
:22:57. > :22:59.Israel is an amazing place. Lots of start-ups. But very few investors
:23:00. > :23:05.are investing in the really difficult stuff. I feel that this is
:23:06. > :23:09.required and it is what I am doing these days. You have had a lot of
:23:10. > :23:15.failures but also a lot of successes. What advice would you
:23:16. > :23:19.have for people who want to emulate that success? A relatively simple
:23:20. > :23:23.idea and you turned it into a huge business. You have got to learn a
:23:24. > :23:28.lot and really understand the market very well. My advice to people is go
:23:29. > :23:35.study. Understand technology very, very well. Understand the market.
:23:36. > :23:39.Pick market. Go very deeply into this market to see what is going on,
:23:40. > :23:48.what other and requirements. Then come up with an invention. -- what
:23:49. > :23:52.are the needs and requirements. A fascinating interview about new
:23:53. > :23:59.technology being nurtured in Israel. Of course you can forget the memory
:24:00. > :24:06.stick and leave it in the computer. Or not know which way up it goes!
:24:07. > :24:10.You always have to try three times. Now, the IMF. The latest army of
:24:11. > :24:14.forecasters holding the headlines. They put it out every quarter and
:24:15. > :24:20.they have downgraded the UK's economy. They thought it would grow
:24:21. > :24:23.by 2% and now they say 1.7% this year. Similar downgrade for America
:24:24. > :24:27.this year and next year. The IMF has been wrong about the UK economy
:24:28. > :24:31.quite a few times in the recent past but it does provide a good snapshot
:24:32. > :24:37.of what is happening in the world. UK slowing down, the eurozone doing
:24:38. > :24:42.better, the USA stuttering. Let's turn our attention to something very
:24:43. > :24:45.different. This is the Washington Post, man-made diamonds.
:24:46. > :24:52.Traditionally diamonds are dug out of the ground at great cost.
:24:53. > :24:57.Man-made diamonds in a lab. Industrial diamonds have been around
:24:58. > :25:01.for a long time. You start with a sliver of diamond and you stick
:25:02. > :25:05.carbon around it and apply heat and pressure and eventually you get a
:25:06. > :25:08.man-made diamond. Many they have been used for industrial diamonds
:25:09. > :25:11.but now getting bigger and bigger and bigger and they are being used
:25:12. > :25:14.in fashion and jewellery like traditional diamonds. There is
:25:15. > :25:20.competition for the ones that are dug out of the ground. Some people
:25:21. > :25:24.might prefer a man might diamond. Our viewers do. David says he
:25:25. > :25:28.doesn't mind the long as it is cheaper than a real rock. Joe says
:25:29. > :25:36.her engagement ring is man-made and she loves it. And hopefully it puts
:25:37. > :25:43.an end to child labour and poverty still needs to be addressed. The
:25:44. > :25:47.trick is not to tell her! Maybe you can tell if you are an absolute
:25:48. > :25:51.expert but they are indistinct or from the real thing because they are
:25:52. > :25:56.real, just created using chemicals. Nice to see you, Dominic. There will
:25:57. > :25:58.be more business news today and throughout the week. We will see you
:25:59. > :26:12.soon. Goodbye. Hello. It was quite worked for many
:26:13. > :26:16.of us over the weekend. Heavy showers and longer spells of rain.
:26:17. > :26:18.Through