24/07/2017 BBC Business Live


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This is Business Live from BBC News with Ben Bland


The Uk's International Trade Secretary meets his US


Live from London, that's our top story on Monday the 24th of July.


A deal between the US and UK could boost trade by tens


of billions of dollars - but can't be struck until after


The International Monetary Fund cuts the growth prospects


for the UK and US - while boosting its forecasts


And how did this thing change the world?


I sit down with the man who invented the USB Memory stick.


He sold the firm for $1.6 billion but describes it as one


And as lab-grown diamonds become more popular,


today we want to know, would you mind if the diamond


in your engagement ring was man-made.


Later today the UK's trade secretary Liam Fox will be in Washington


to discuss a preliminary trade deal ahead of Britain's departure


A final trade agreement cannot be ratified until the UK


formally leaves the EU, but the two nations are keen to lay


the foundations for what the US President expects to be,


In an interview with the BBC, Mr Fox said that UK-US


trade is currently worth nearly $220 billion.


But this could increase by as much as $52 billion if trade barriers


For now though the process cannot begin in earnest because the UK


is not permitted to hold formal trade talks with non-EU


countries until it has left the European customs union.


To complicate matters, the UK's trade secretary has


welcomed a transition agreement with the EU which could potentially


last up until the next scheduled general election in 2022.


Although this would prevent the UK dropping off a cliff-edge in 2019,


it is currently unclear whether the UK would be able


to start negotiating with non-EU trading partners


while the transition deal is active.


Marianne Schneider-Petsinger is Geo-economics fellow with the US


and Americas Programme at Chatham House.


Good morning. Welcome to the programme. Ben running through some


of the issues there. Ifs, buts and maybes and preliminary deals, can't


strike a deal until we leave the European Union. I suppose the first


question is, how likely is it that this will get done? I think at some


point it will be, but for these talks, the focus is very much laying


the ground work, scoping an exercise of where the trade deals might be


done. Also providing continuity and certainty to US and UK businesses.


There are a number of regulatory and technical agreements that could be


part of the discussions, whether it's with regards to data flows and


also air transport for example. We talk there about what needs to be


done, certainly business wants some certainty. What is likely to be the


sticking blocks? If you take a look at the trade negotiations that have


been going on since 2013, lots of sticking points will likely emerge,


so concerns about the importing of US chlorinated chicken, beef and


also the question about financial services regulation I think could


likely resurface. So where do you think the areas of perhaps easiest


agreement are likely to be and where are they most likely to strike a


deal? I think if you have an agreement that covers these things,


that could be low-hanging fruits. There could be issues about


standards, that is where the challenges will be. With the


transition period, as you pointed out, the implications of a US trade


deal, sorry the UK EU trade negotiations will have implications


for the negotiations between the United Kingdom and the United


States. If it came down to a choice between having a transitional deal


with the EU or getting a US UK trade deal in place, which do you think


would be the most important? Obviously the UK trade negotiations


with the EU have priority trade. It's four times larger than anything


else with the US, so that is where the key priority will be. It also


strikes me then, all of this, we are talking about this cliff edge, that


time is running out whether we like it or not and a deal has to be done


at some point. That cliff edge is a real possibility that no deal will


be done in any scenario and the UK falls off the cliff en? Yes and if


you have an agreement in place, again what this future relationship


might be has implications for any negotiations with the United States


and don't forget that negotiations in general take a lot of time. For


the United States on average it's like three-and-a-half years now to


have an agreement from the start of negotiations to the implementation


phase so it will be a long time. We may have to talk about this again


in the future. For now, thank you very much.


Let's take a look at some of the other stories making the news.


Irish low-cost airline RyanAir, has reported a 55% rise in profits


The airline says passenger numbers grew by 12 percent to 35 million -


But it admitted the figures were distorted by the timing


Australia's consumer watchdog agency is investigating the recall


of Takata airbags after a driver's death earlier this month could be


If proven, it would be the 18th fatality related to faulty


The oil-producing companies are meeting in Russia today. The


ministers from the Organisation of Petroleum Exporting Countries OPEC,


as well as other oil producers, with dealing with the oversupply of oil.


Earlier this year they came up with a plan to try to curb production in


order to stop crude oil prices from falling.


This news in about Uber Grab. They are calling it the biggest round of


investment. A real power play for these firms around the world, some


of course in some countries uber- is banned, others like Lift and Grab


managing to enter the market as a result. Grab operating in seven


countries, east Asia's most popular ride-sharing firm.


The IMF has released the latest world economic outlook


and while there's good news for China, Japan and the Eurozone


there's bad news for the US and the UK Karishma Vaswani


Tell us more? China, the eurozone and Japan have been a slight bump


upwards. The US and UK are expecting to Cee Loer rates mainly because of


the weak first quarter. The IMF says the UK will grow 1.7%, compared with


the previous 2% it was forecasting, but to be honest it doesn't clarify


why. I've looked through the report and it doesn't say much more than


that. The funds said meanwhile that the US would grow by just 1.2% in


comparison to the 2.3% it previously forecast down to of course the fact


that fiscal stimulus in the US isn't going the way everyone expected


because the Trump administration seems preoccupied, to be frank, at


the moment. Let's take a look at China. It got a slight bump up.


Growth rates in 2017 expected to come in at 6.7%. Next year at 6.4%.


Both figures are slightly higher than what the IMF previously


forecast. As we have been talking about over and over again, all the


comes at a hefty price tag. The IMF says Beijing, in order to achieve


the growth rates will be focussing on Government spending. That might


mean a delay of much-needed financial reforms and more debt to


its already ballooning debt pile. That's a massive problem for the


Chinese. The IMF says that if China doesn't address the risks in the


long-term, that could result in a slowdown in growth.


Japanese stocks dropped to more than two-week lows


on Monday after Wall Street retreated on Friday.


A stronger yen dampened sentiment, while investors looked


for opportunities to buy small and mid-size stocks.


A strong yen drags on exporters' shares.


The dollar suffered fresh losses at the start of the week on lower


expectations for under-fire Donald Trump's ability to push


Let us take a look at the European markets. Earnings reports from


Alphabet which owns Google, also Am zok and Facebook will come out with


their figures. Samira act head joins us now.


Investors expect to see a rise in revenue and profit helped by


advertising sales on video content and mobile devices. The company's


cloud computing business is doing well, which has long been trailing


behind Amazon and Microsoft. It managed to win some major deals for


it cloud business but investors are worried about how much Google


depends on searches. Any update on its plans to beef up its cloud


business will be interesting to watch. Finally, the second largest


toy maker in the US, Hasbro, will be reporting earnings. Based on


Spider-Man, Hasbro and other products, will be very much the


reason why they'll be up. Joining us is Jessica Ground, UK


equities fund manager at Schroders. Nice new glasses, I approve, by the


way. What is happening? They are talking


about the same level of growth, still not back to pre-crisis levels.


Still quite vulnerable. But within that, downgrades for the US, because


we haven't seen the tax reforms that people had hoped for and downgrades


for us in the UK because we have had a slow start to the year and


uncertainty of the election won't have helped either. I was talking


about the downgrades for the US and the UK there, but it's a different


picture around the world and it shows that diverging view of some


economies managing to weather the storm better than others?


Definitely. What is really encouraging is that there is better


news for some of the European economies and the Japanese economies


which have had a really tough longer term outlook. Their growth is


starting to come back. That's good. China looking reasonably stable and


again some of the other emerging economies sort of being a bit


stronger. So almost like a sort of two-speed thing. As mentioned a


moment ago, lot of corporate results out this week, which are the ones


analysts will be watching closely? US tech's had a phenomenal run,


that's been because there is this environment where growth's been


harder to come by. People have been looking for the tech stocks to


deliver that. Google, Alphabet, what they're doing in terms of


advertising will be really interesting. Similarly some of the


results from the European companies are going to be interesting.


Europe's been rerated by investors partly because they now see growth


returning. Is that happening in the bottom line of the companies, that


will be interesting. As far as the potential trade negotiations with


the US, as we heard at the start of the programme, it's vital but there


are so many question marks over whether it will get done because


frankly we can't do anything until we leave the European Union anyway?


These things are really complex. As you have already talked about,


geographically, we have trade deals with people physically close to you,


so yes the US will be great and yes Boris Johnson going off to Australia


and New Zealand is fantastic. But getting the transitional trade deals


with Europe will be really important.


Thank you for talking to us about that. Still to come:


I meet the man who invented the humble USB memory stick.


It changed the way we use computers and share data


but why does he describe selling the firm as his biggest regret?


You're with Business Live from BBC News.


Here in the UK, lots of stories including Ryanair, which we will get


into in a moment. Profits up substantially. But let's go to the


live page once again. B shares, the discount retailer. Asda could be


looking to make a bid for it. It would be ?4.4 billion if it is


confirmed. There is a huge debate about the value of these low cost


retailers in the UK. They often do well when incomes are squeezed. B


is one of the biggest success stories of late and Asda are


potentially wanting a slice. Why? For access to that network of


stores. The Sunday Times reporting on that early stage of assessing the


bid for B Plenty more on the website for you as well, including


news from Ryanair this morning. They are reporting that their shares have


fallen by 5%. This is after the airline announced they expect fares


to fall in the six months to the end of September and even further in the


months to the end of March next year, despite them reporting


positive results, saying that the profits soared 55% in the three


months to the end... I've lost where I am! To the end of June! I tell you


someone who know exactly which man is involved! That is the chief


financial officer of Ryanair, who spoke to me earlier. A very strong


airline. We saw our unit costs excluding fuel drop by 6% at a time


in the cost of our competitors are rising. We are looking at savings on


a full-year basis. The airline is in good shape. We did see a benefit


from east in April of this year in the same quarter last year. The


fares will be down in the region of about 5% in the first half of the


year and we are sticking to that that we see no reason to change that


guidance. We are looking at fares down approximately 8% this winter.


Very good value for the customers at the moment. The chief financial


officer of Ryanair speaking to me earlier today. Another story that


caught my attention on the website. The electricity shake-up that could


save consumers up to ?40 billion. This is by our environment analyst,


Roger. This is about how electricity is generated and stored and whether


people generating their own power using solar power could sell it to


the national grid. the UK's trade secretary, Liam Fox,


will be in Washington But a final trade agreement cannot


be ratified until the UK formally As you would expect, a lot of


uncertainty about what could happen and crucially what it will mean for


business. We will be discussing that at the start of the programme. A


quick look at how the markets are faring. This is how they looked at


the start of the trading day, the start of the trading week, across


Europe. All just into the red, down just a shade. That is what the pound


will buy you against the dollar. It revolutionised the way


we save documents and you can carry it around


in your pocket. And it was invented


by an Israeli entrepreneur. In fact, outside of California's


Silicon Valley, one of the most exciting places for tech start-ups


and innovation is Israel. The country has a record


of attracting big In the last three


years 195 companies, together worth just over


$35 billion, were either bought out or floated


on the stock market. This year saw Israel's biggest ever


takeover when technology firm MobileEye - a pioneer


of driverless car technology - was bought by Intel


for $15.3 billion. We spoke to Intel about that deal on


the programme. The big money deals


are nothing new though. In 2006 M-Systems was bought


by SanDisk for $1.6 billion. M-Systems


was founded by Israeli entrepreneur and inventor Dov Moran,


also known as the man I sat down with him to hear


how he turned his big We were going to a conference in


Israel, and at the end of the conference, I said, guys, I have


this amazing device that we are going to launch very soon. Here it


is. It is the first time you'll get to see it. The USB flash drive. And


people didn't like it. There were many questions. Like, why should I


use this? There are floppy disks, they are cheaper, what is the price


of that? Only eight megabytes? What is that? Nothing is obvious, nothing


is clear. What was the secret of the success? First of all because it is


in your pocket, you see. That's one. It is easy, in your pocket. It is


very simple to use. Everybody could use it. You didn't have to study


anything, you didn't have to learn anything. There are no problems, it


just works like a hard drive. Then fast forward to 2006, and you sold


the company that you had created for a lot of money. Tell me about that.


In 2006 I sold the company, $1.6 billion. Not so bad. Not so great!


Interesting that you say that. On one hand, you have described that


sale as your biggest excess, but on the other, one of your biggest


regrets. Why is that? -- biggest success. I don't regret it. You


can't save you regret selling a company for $1.6 billion but I


wasn't happy to sell. It wasn't my dream. The reality is that the CEO


of Sandisc try to approach me to acquire the company and I said no


until I broke down. I said yes. It wasn't really because I wanted to


sell the company. There was a situation which I won't go into, but


I was not happy with my board and the way they treated the company and


acted. Tell me about signing on the dotted line. You had committed


yourself to selling the company. What was going through your head?


Mixed feelings. For a long time I had a very heavy bad feeling of


disappointment. I saw it as a failure, not a success story. It


took me time to accept that this was sort of success. You sold the


company but it is like you retired. You have been doing a lot since


then. I know you are very active in tech start-ups, especially in


Israel. Tell me about the way that the country lurches start-ups.


Israel is an amazing place. Lots of start-ups. But very few investors


are investing in the really difficult stuff. I feel that this is


required and it is what I am doing these days. You have had a lot of


failures but also a lot of successes. What advice would you


have for people who want to emulate that success? A relatively simple


idea and you turned it into a huge business. You have got to learn a


lot and really understand the market very well. My advice to people is go


study. Understand technology very, very well. Understand the market.


Pick market. Go very deeply into this market to see what is going on,


what other and requirements. Then come up with an invention. -- what


are the needs and requirements. A fascinating interview about new


technology being nurtured in Israel. Of course you can forget the memory


stick and leave it in the computer. Or not know which way up it goes!


You always have to try three times. Now, the IMF. The latest army of


forecasters holding the headlines. They put it out every quarter and


they have downgraded the UK's economy. They thought it would grow


by 2% and now they say 1.7% this year. Similar downgrade for America


this year and next year. The IMF has been wrong about the UK economy


quite a few times in the recent past but it does provide a good snapshot


of what is happening in the world. UK slowing down, the eurozone doing


better, the USA stuttering. Let's turn our attention to something very


different. This is the Washington Post, man-made diamonds.


Traditionally diamonds are dug out of the ground at great cost.


Man-made diamonds in a lab. Industrial diamonds have been around


for a long time. You start with a sliver of diamond and you stick


carbon around it and apply heat and pressure and eventually you get a


man-made diamond. Many they have been used for industrial diamonds


but now getting bigger and bigger and bigger and they are being used


in fashion and jewellery like traditional diamonds. There is


competition for the ones that are dug out of the ground. Some people


might prefer a man might diamond. Our viewers do. David says he


doesn't mind the long as it is cheaper than a real rock. Joe says


her engagement ring is man-made and she loves it. And hopefully it puts


an end to child labour and poverty still needs to be addressed. The


trick is not to tell her! Maybe you can tell if you are an absolute


expert but they are indistinct or from the real thing because they are


real, just created using chemicals. Nice to see you, Dominic. There will


be more business news today and throughout the week. We will see you


soon. Goodbye. Hello. It was quite worked for many


of us over the weekend. Heavy showers and longer spells of rain.




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