12/03/2018 BBC Business Live

This is Business Live from BBC

News, with Sally Bundock

and Alice Baxter.

Taking on the tariffs -

Australia secures an exemption

to US duties on steel

and aluminium imports.

Live from London,

that's our top story

on Monday 12th March.

The European Union and Japan

are also looking to be let off

the hook by President Trump, as

fears of a wider trade war heat up.

We will add an expert view.

Also in the programme -

the oil isn't flowing just yet.

Speculation grows that Saudi Arabia

won't sell of a chunk of its state

oil company until next year

at the earliest.

Financial markets trading right now

in Europe have seen a bumper start

to the week following the lead from

Asia. We tell you all you need to

know.

And pouring your

money into alcohol -

we'll find out how you can

turn wine into profits,

and how Asia is driving

the demand for wine investing.

Today we want to know whether you

think life on Mars -

including a Mars Bar -

could be a reality anytime soon?

Because that what the maverick

entrepreneur boss of SpaceX

and Tesla, Elon Musk, thinks.

Let us know know.

Just use the hashtag BBCBizLive.

Hello and welcome to Business Live.

Yes, Elon Musk has been talking at

an event in Texas. You can hear what

he had to say about Mars, would also

about his company, space X, and

Tesla. Let's talk trade.

With the clocking ticking down

until President Trump's

tariffs on steel and aluminium

imports come into force, countries

are scrambling to seek exemptions.

And in the last hour or so,

Australia's Prime Minister has

welcomed his country being given

a waiver, which he said

on Twitter was important

for thousands of people who rely

on the industries for work.

And the EU and Japan are due to hold

more talks this week over

getting their own exemptions.

The Trump administration

says the tariffs

are necessary, because the sheer

quantity of steel and aluminium

in the global market is threatening

to impair the "national security"

of the US.

But America has made legally

binding trade commitments

as part of its membership

of the World Trade Organisation

rules, and other countries

are likely to use the WTO

to challenge the tariffs.

But whilst WTO rules allow

members to seek a "national

security exception" for industries

regarded as important

for the defence of the country,

some experts have already questioned

if that can apply here.

One of the United States' defence

allies is Australia, and its

Prime Minister, Malcolm Turnbull,

welcomed his country's exemption

whilst touring a steel

works in Wollongong.

This is a real example of a win-

win. We have got jobs in Australia,

jobs in the United States. The

tariff would simply have put jobs on

both sides of the Pacific at risk.

It is a very important outcome.

There are 77 anti-dumping measures

in place. 51 relate to steal. Seven

related to aluminium. We are very

vigilant in ensuring there is a

level playing field. We are

committed, passionately committed to

free trade. But it has to be fair.

That is the key.

Aline Doussin is a trade lawyer

at Squire Patton Boggs,

specialising in international trade.

She joins us in the studio. Good

morning. Australia has secured an

exemption, joining Mexico and

Canada. We know this week we will

see lobbying from EU officials and

other countries around the world

trying to secure the same. Liam Fox

from the UK goes to Washington this

week. What is the likelihood of

other countries securing a similar

exemption?

It is a very good

question and very difficult to

answer. We are entering into this 15

day timeline where members are

apparently allowed to seek exemption

on a measure that most trade

lawyers, including myself, view as

completely contradictory to the

philosophy of the WTO rules. The EU,

even though it reserves its right to

challenge the measure, is focusing

on negotiating an exemption. It is

very unclear, the legal business

research exemption, where it

resides. Which criteria it uses. It

seems to be discretionary.

Although

not totally unprecedented, this is

uncharted territory, using this

national security exemptions under

article 21 of WTO rules to justify

tariffs being imposed. One guest

that we spoke to rarely went further

to suggest this pick and mix

approach to is entitled to an

exemption and who isn't, is actually

illegal. What do you think?

The

national security exemptions exist

under WTO agreements. There is an

Article 21 and 14 which allows a

member, for national security

threats... It was raised before in

the past. The UAE and Qatar got

exemption. It has never been

adjudicated at the WTO panel level.

So it is uncharted territory. Having

said that, the president and the

administration are not at this stage

raising Article 21. Everybody is

commencing on this exemption being

used both so far there is no

challenge at WTO level. The WTO

cannot enter the dispute. A country

as to raise a complaint. Japan have

indicated they will do so. They have

confirmed it is something they are

currently looking to do if needs be,

but nothing has been launched

officially as yet.

And all of this

really increases the focus on the

WTO as an organisation. Is it really

fit for purpose? You mentioned the

processes involved. It is very long

winded, isn't it?

Yes. I worked at

the WTO years ago at some point, and

it does take a long time to agree on

negotiations because there is no

voting. Having said that, it is the

only forum where trade disputes can

be judged. There is no other forum

in the world that has these

disputes. It is still very relevant.

It has some issues that it needs to

deal with. Including respecting the

length of a judgment and the

negotiations that sometimes take a

very long time. But I think at this

stage it is not the case the WTO is

dead. It is a very resilient

organisation.

Thank you. Fascinating story that

has been unfolding for weeks. We

will keep you up to date.

Let's take a look

at some of the other

stories making the news.

The takeover battle for UK

engineering company GKN has

intensified with a new $11.2

billion bid from Melrose.

It also raised the amount GKN

shareholders would own in Melrose

following the deal, and said

that this offer is "final".

Britain is in danger

of losing its status

as a "credible military power",

according to the former commander

of the UK's Maritime Forces.

Rear Admiral Alex Burton told

the BBC that budget cuts and rising

military threats meant the defence

budget needed an urgent boost.

It comes a day before the UK

Chancellor's update on the state

of the public finances.

The superhero movie,

Black Panther, has taken

an estimated $65 million

on its opening weekend in China.

It means the film has now made more

than $1 billion globally.

China is the world's second-biggest

movie market and has

become a lucrative country

for Disney and Marvel.

The founder of SpaceX

and Tesla, Elon Musk, said

colonisation of the moon and Mars

could help preserve human

civilization in the event

of a Third World War.

The billionaire entrepreneur

Elon Musk was speaking at the South

by South West conference in Texas.

We have asked for your views on some

of his comments. He had a lot to say

about Tesla. We will talk about that

later.

One of the world's biggest carmakers

looks like is hoping it

may have a new lease of life

in South Korea.

America's General Motors

could get an injection

of cash from a bank funded

by the South Korean government,

which would mean it doesn't need

to close more factories.

Leisha Santorelli is

in our Asia Business Hub.

What more do you have on this?

There

have been large protests in South

Korea over General Motors' plans to

close at least one of their four

factories. The South Korean

government is assessing whether they

should contribute money towards a

rescue of GM business in the

country. GM is the third biggest

car-maker in South Korea behind high

Hyundai and Kia. It has been losing

money for several years. Sales at

home and abroad have been falling.

The outlook is not good. GM the

business decision seems clear. Their

strategy has been to focus on the

big market of and China,... They

have done this in Russia, Australia

and parts of Southeast Asia. When it

comes to Korea, GM has offered a

lifeline. They have offered nearly

$3 billion investment plan and

offered to upgrade its operations in

the next ten years. This is critical

the South Korean government can

contribute money, and if they don't,

we could see tens of tens of

thousands of workers lose their jobs

in South Korea when those factories

close.

Thank you. Let's show you financial

markets. Across the board in Asia we

had strong gains. Also in Japan. And

in Hong Kong at the close. Asian

stocks, following on from what

happened in Wall Street on Friday,

the Nasdaq closing at a record high.

Basically concerned about a trade

war taking a back-seat. Economic

optimism kicked in as regards the

jobs report out on Friday. It showed

more people employed but wage growth

not as robust as some thought. Let's

look at Europe right now and how the

European Day is starting. Not such

strong gains seen in Europe. Germany

must up a percent. We will talk more

about marketing a second.

First, Joe Mellor is in New York.

After a bust employment figures

drove markets to the close on

Friday, Monday will give investors

time to breathe ahead of Tuesday's

inflation report, which last month

showed the price of goods and

services in the United States had

grown at nearly 2.9%. Wall Street is

expecting the yearly figure to have

risen to 2.2%, but a significant

uptake in the rate of inflation

would weigh on markets and could

prompt the Federal reserve, under

the new leadership, to be more

aggressive with interest rate rises

in the coming months. And in a week

to void of major company news, we

will hear whether sports retailer

Dicks has been hurt by its decision

to stop selling assault rifles in

the wake of a shooting at a Florida

high school.

Joining us is Mike Bell,

Global Market Strategist,

JP Morgan Asset Management.

Good to see you. Let's talk about

those numbers. Unemployment was

expected to fall and actually it was

flat. What does that tell us?

It is

quite complicated, but what happened

was actually very positive. The

number of people who are working is

now more than 300,000 more than was

previously. The reason that didn't

cause the unemployment rate to fall

is because the number of people

looking for a job went up. The way

the numbers are calculated meant he

didn't go forward in the

unemployment rate. The simplest way

to think about it is, if nobody was

looking for a job, then even, than

the unemployment rate would be zero.

As soon as more people start

looking, the unemployment rate would

rise. That is how it is possible to

have job gains put the unemployment

rate to be flat.

Strong numbers,

softer wage growth. Potentially the

Fed increasing rate rises sooner

than thought. What are your

thoughts?

I think there is positive

news on that front. It may seem

counterintuitive that lower wage

growth numbers is viewed as a good

thing. What everybody got concerned

about last month is that low -- wage

growth numbers were picking up quite

quickly. We have seen it has become

clear that that was due to weather

distortions. Even the wages are

rising gradually, it is at a much

slower pace than people were

concerned about. The central bank

would have to put interest rates up

as fast as they might otherwise have

two.

In terms of the week ahead, there

was so much economics at last week,

European Central Bank, the bank of

Japan, the jobs figures in the US...

I think the ECB was interesting.

They removed the easing bias, the

view that if things got worse they

might have to do more QE. I think by

the end of this year they will have

stopped doing QE. We don't think

that means they will stop -- start

putting interest rates up but we

don't think that will be the case.

Thank you.

Still to come...pouring

your money into alcohol.

We'll find out how you can turn wine

into profits and how Asia

is driving the demand

for wine investing.

You're with Business

Live from BBC News.

A record 660,000 customers switched

electricity supplier in February

with over 1 million doing so this

year so far.

Energy UK, which released

the figures today, claims

the energy market has never

been so competitive.

We're joined in Salford

now by Clare Bailey,

founder of Retail Champion.

Thanks for joining us. Why do you

think so many people have chosen to

change at this time?

I think there's

a couple of factors in play. With

the energy switch guarantee we have

procedures that make consumers more

confident in the process of

switching, and nine tenths of the

market are already subscribed to

that which is a process that ensures

that when customers choose to switch

the processes run seamlessly. Also,

looking at other figures out today,

there has been issues around

consumer confidence, reductions in

consumer spending and people are

tightening their belts. So actually

looking to make savings on moving

energy provider to reduce costs of

gas and electric is contextual with

everything else in the market in

terms of seeing reduction in

spending and trying to tighten their

belts.

Also has the weather had

anything to do with it? The fact we

are experiencing quite adverse

weather conditions and people might

think that is a trend that is here

to stay.

We would typically get the

seasonal cold spells some time

between December and February every

year. It has been late this year but

that might encourage people to think

harder. But from my point of view it

is around the confidence and

process, and the fact suppliers are

making it a lot easier. There's a

lot of the and the fact people are

finding things difficult. The

statistics show people are spending

far less in terms of the consumer

side of the market so I think

looking savings in any of your

bills, energy as well as telecoms,

our ways consumers will try to

ensure they moderate the fact that

income growth is not catching up

with inflation and I think switching

energy provider is a great way to do

that in terms of immediately taking

a saving.

Thank you.

Clare Bailey,

founder of Retail Champion.

You're watching Business live -

our top story: Australia's Prime

Minister has welcomed his country

being given an exemption

to US tariffs on steel

and aluminium imports.

It comes as the EU and Japan step up

efforts to secure their own waivers.

A quick look at how

markets are faring...

We talk about trading

in commodities like oil and gold

but did you know you can also bet

on the performance of burgundy,

chardonnay and Champagne?

It's pretty popular too.

In 2016, wine was the top performing

asset class on the Knight Frank

Luxury Investment Index,

with growth of 24%.

Last year it came in

second place, after art.

So what's driving it?

Well most of the demand

is coming from Asia.

According to Cult Wines, sales

there increased by 123% in 2017.

Cult Wines is an investment

manager in fine and rare wines

and currently manages assets

in excess of 90 million dollars.

The company has around

2,400 customers spanning

70 countries worldwide.

Tom Gearing is the co-founder

and Managing Director of the firm.

Thanks for joining us. That return

figure is something a lot of asset

managers would really like to have

on their balance sheets, isn't it?

Talk me through the thoughts behind

the company, is what got you into

wine?

My family background helped to

lead me into this as a career and I

was lucky to go around some of the

greatest vineyards at a young age

with my father so I was always

growing up around wine. He started a

price comparison website for fine

wines in the early 2000 so I spent a

lot of time typing in prices, and

data. Winds have historically

increased in value because the best

wines in the world are produced in

small quantities and it's a

consumable product so every time a

bottle is opened that wine doesn't

exist any more and it will keep

dwindling until there's none left

some fine wine prices will always

continue to rise.

You started this

company more than ten years ago?

Yes.

When you were at university

with your brother and friends, and

your dad is involved as well because

of his expertise. Talk us through

how you made a success of it through

the financial crisis.

Our timing was

fantastic, sometimes you need some

luck and to be coming into the

market at the right time. With the

global financial crisis people lost

confidence, there was a lot of

market volatility. We are in a

record low interest rate environment

and that's not just in the UK, it is

globally. People were having to look

outside of the normal areas for

sources of return. When you spoke

about the Knight Frank index, things

like classic cars and wine have done

so well because investors want to

make a decent return. We have been

one of the market leaders in this

particular industry.

For some of you

who think you might recognise Tom,

that's because this is not your

first time on television, is it? You

were on the Apprentice. How did you

find the whole experience, and did

it help with the business or was it

just something you did on the side?

From a personal perspective I was 23

years old and it was a remarkable

experience. It's a

once-in-a-lifetime opportunity and I

loved every minute of it, regardless

of the pressure and even Claude's

interview. I want to this day so

that was one of the worst

experiences of my life! It was

outrageous. Apart from that on the

business side of things it was great

for us because it gives you a great

reputation and I get to meet people

like you this morning and on a media

publication like the BBC so it was a

great helping hand in that regard.

And you became runner-up which is no

mean feat because it's not easy.

This was under Alan Sugar in the UK,

how do you think you would have got

on if it was Donald Trump saying

you're fired?

It's funny because I

was in Beijing meeting some people,

I told them I was on the Apprentice,

and they said "Oh, Trump! Trump!" I

thought they probably don't know who

Alan Sugar is!

We have got to leave

it there. This is how to stay in

touch, and we will be back in a

moment to talk about Elon musk.

We have insight and analysis from

our team of editors around the globe

and we want to hear from you too,

get involved on the BBC Business

Live web page. We are on Twitter,

and Facebook. Business Live, on TV

and online. What you need to know,

when you need to know.

What other

business stories has the media been

taking an interest in?

Joining us again is Mike Bell,

Global Market Strategist,

JP Morgan Asset Management.

One thing that piqued our interest

was comments made by Elon Musk over

the weekend. He spoke about whether

life on Mars could be a reality any

time soon. We have had a few

responses in. We have heard from

Mark, who says, it depends on what

you classed as soon. I would have

thought we would want a base on the

moon first as a springboard to Mars.

I'm sure Elon Musk wants to achieve

a landing in his lifetime. I don't

know whether you think life on Mars

will be possible in the time soon,

but what did you make of Elon Musk

said, not only in terms of

colonising Mars but also when he

went on to talk about the precarious

health of Tesla and space X.

The

Mars thing seems far-fetched to me,

it seems like a long time before we

could be going to Mars. On companies

struggling in the early stages, that

is nothing abnormal at all.

Obviously start-ups tend to come

into difficulty, if you take Space X

as an example it requires a lot of

investment with no real revenues. I

think there will be some people in

the city who will be upset about it

being delayed, a lot of fees on

whoever manages to list that but it

will still happen.

Mike, many thanks

for coming on. Goodbye.