:00:08. > :00:09.Hello, I'm Ros Atkins, this is Outside Source.
:00:10. > :00:19.The UK is outlining four key areas including citizens rights -
:00:20. > :00:22.not for the first time, the EU is asking for one thing.
:00:23. > :00:32.We need to examine and compare our respective positions in order to
:00:33. > :00:36.make good progress. was behind a hack on Qatari state
:00:37. > :00:43.media that precipitated Completely untrue and through our
:00:44. > :00:49.Washington embassy we refuted them. Russia is demanding that two
:00:50. > :00:55.of its diplomatic compounds And if you want to get in touch on
:00:56. > :01:33.any of the stories we're covering - Round two of the Brexit talks. The
:01:34. > :01:38.chief negotiators were both there. Michel Barnier for the EU and David
:01:39. > :01:42.Davis for the UK. At the end of the first day of talks, they gave a
:01:43. > :01:49.press conference. Let's begin with the EU's side. We need to examine
:01:50. > :01:56.and compare our respective positions in order to make good progress. As
:01:57. > :02:01.you know, our negotiating groups will work on citizens' rights and
:02:02. > :02:07.the financial settlement and other separation issues. Our coordinators
:02:08. > :02:13.will engage in apolitical dialogue on Ireland. And they will work on
:02:14. > :02:20.enforcement of the Article 50 agreement. Next, David Davis. We are
:02:21. > :02:30.now getting into the substance of the matter. As you have heard, there
:02:31. > :02:35.are four categories. The issue of citizens' rights, finance,
:02:36. > :02:37.separation issues and of course separately, Northern Ireland. It is
:02:38. > :02:45.incredibly important that we make good progress. We will identify the
:02:46. > :02:49.differences so that we can deal with them and identify similarities so
:02:50. > :02:54.that we can reinforce those. Now we have to get down to work and make
:02:55. > :03:00.this a successful negotiation. You may have seen this picture being
:03:01. > :03:04.shared a lot. Michel Barnier and colleagues on the left and David
:03:05. > :03:11.Davis and colleagues on the right. People pointing out that the EU team
:03:12. > :03:15.have more papers. Pro Brexit people say that it was a photo opportunity
:03:16. > :03:20.and he didn't need to bring in papers, typical EU for
:03:21. > :03:25.overcompensating. Let's bring ourselves up-to-date.
:03:26. > :03:30.Here is Anna Fleming in Brussels. -- Alan Fleming.
:03:31. > :03:35.The first day of negotiations has wrapped up. David Davis left the
:03:36. > :03:40.city quite early this morning, leaving most of the work to his
:03:41. > :03:45.office shelves. They have been rattling over the three priority
:03:46. > :03:51.areas set by the EU. They are citizens' rights, the rights of
:03:52. > :03:55.nationals living in Britain and British people living elsewhere in
:03:56. > :04:00.the EU. And the financial settlement, how do you calculate how
:04:01. > :04:04.much money the UK owes EU as a result of financial commitments made
:04:05. > :04:08.when it was a member. And the big issue of the Northern Irish border
:04:09. > :04:13.which will become an external frontier of the EU. That will run
:04:14. > :04:19.throughout the talks as a big issue. No white smoke from the officials
:04:20. > :04:23.taking part today. And next update will be on Thursday when David Davis
:04:24. > :04:28.will be back here to have a wrapping up lunch with Michel Barnier and his
:04:29. > :04:32.EU counterparts. Then we expect a press conference and the whole thing
:04:33. > :04:36.will happen again in August, September and again in October. It
:04:37. > :04:43.is only then that the EU will assess whether sufficient progress has been
:04:44. > :04:51.made in those priorities use for the advice to go to the other leaders
:04:52. > :04:54.that it is time to start the other negotiations about the future trade
:04:55. > :05:00.relationship between the UK and the EU.
:05:01. > :05:04.We started in Brussels, next to Washington and Moscow. An
:05:05. > :05:08.interesting story concerning two Russian diplomatic compounds. The
:05:09. > :05:13.Russians don't have access to them at the moment but they would like
:05:14. > :05:20.that to change. One of them is in Maryland. A 45 acre retreat on the
:05:21. > :05:31.state's Eastern Shore. And the other one a New York mansion on the -- in
:05:32. > :05:38.New York. These places are for the use of Russian diplomats but the
:05:39. > :05:43.Americans claimed they were being used as buying outposts and they
:05:44. > :05:47.seized them. We have heard from Sergei Lavrov the Russian Foreign
:05:48. > :05:54.Minister and his position is clear. TRANSLATION:
:05:55. > :05:59.It is daylight robbery. They are acting like bandits, taking property
:06:00. > :06:05.which belongs to us according to bilateral ratified government. In
:06:06. > :06:11.absorbed into the principal, what is absorbed into the principal, what is
:06:12. > :06:17.mine is mine, what I have, we will share. -- what you have, we will
:06:18. > :06:21.share. Moscow has been dropping not so
:06:22. > :06:24.subtle hints that it may be about to expel lots of American diplomats and
:06:25. > :06:33.close down a couple of American diplomatic compounds in Moscow. Why?
:06:34. > :06:36.Because last year, resident Obama did something similar, he ordered
:06:37. > :06:42.diplomats out of the country and close compounds, his reaction to
:06:43. > :06:47.Russian cyber attacks aimed to on influencing the outcome of the
:06:48. > :06:50.election in America. Russia cried foul and accused America of
:06:51. > :06:55.violating international law but at the time of the Kremlin did not
:06:56. > :07:05.retaliate. Resident Peter knew that President Obama would be on the way
:07:06. > :07:11.out and a new man would be there. Donald Trump. So we decided not to
:07:12. > :07:15.act immediately, to give Donald trump the opportunity to resolve
:07:16. > :07:22.this. If you cannot do this, we have to do something. Nothing personal,
:07:23. > :07:31.just business. This is not about Mr Trump. This about tradition -- this
:07:32. > :07:35.is about traditions. What is frustrating the Russians is that
:07:36. > :07:42.after six months in the White House, President Trump, who has a going to
:07:43. > :07:47.transform relations, has not returned the compounds. But
:07:48. > :07:58.President Trump faces a dilemma with alleged links between Russia and his
:07:59. > :08:03.team, which only the compounds would cause problems. But Russia will
:08:04. > :08:09.retaliate and this could end his hopes of a better relationship with
:08:10. > :08:14.Russia. Barbara Plett usher is with us. To
:08:15. > :08:25.what degree is this down to Donald Trump? He could reverse the
:08:26. > :08:29.decision. At this point, Congress is looking at legislation which would
:08:30. > :08:34.require a review if he wanted to return any sections. Legally and
:08:35. > :08:37.technically he could do it. Politically it is difficult because
:08:38. > :08:42.the environment here is toxic when it comes to Russia and gets more
:08:43. > :08:46.toxic all the time. There is the ongoing investigation into the
:08:47. > :08:51.allegations that Russia meddled in the election and possible collusion
:08:52. > :08:54.with the Donald Trump campaign. That will start up again with the
:08:55. > :09:02.allegation that Donald Trump Junior had joined up to talk about Hillary
:09:03. > :09:06.Clinton. It is the gift that keeps on giving and makes it harder for
:09:07. > :09:10.the administration to make any concessions to the Russians. Even
:09:11. > :09:18.the meeting that he had with Putin which was presented as pleasant, he
:09:19. > :09:23.tried to act as if he had been hard on Mr Putin when he came back. Are
:09:24. > :09:28.you surprised that the Russians are pushing this Arda? These compounds
:09:29. > :09:33.are very nice for relaxation, but they are not that big a deal in the
:09:34. > :09:37.scheme of things given what Russia and America normally concern
:09:38. > :09:42.themselves with. They have made pretty clear for a long time that
:09:43. > :09:46.this is at the top of the agenda when it comes to bilateral
:09:47. > :09:49.relations. They did hold off to see if Mr Trump would reverse them that
:09:50. > :09:54.they have made the calculation that he isn't able to all that he at
:09:55. > :09:58.least need a bit of pressure to force the situation. They are
:09:59. > :10:03.talking it up at the moment. Last week, when the State Department
:10:04. > :10:08.spokeswoman was asked about this, she said they had heard threats from
:10:09. > :10:11.Russian officials before, and they would not respond. Publicly, they
:10:12. > :10:16.are taking it in their stride but this is something that the Russians
:10:17. > :10:21.want to depress now. Whether that means is, what that means for any
:10:22. > :10:25.limited or pragmatic operation they might be able to eke out with the
:10:26. > :10:31.Trump administration as opposed to the larger policy apparatus in
:10:32. > :10:36.Washington, remains to be seen. What is interesting about this is that
:10:37. > :10:42.this informs us about how the Trump- Russia story is starting to affect
:10:43. > :10:50.all elements of how Russia operates -- administration operates. Yes, you
:10:51. > :10:53.have had congresspeople in the last months say that they are not happy
:10:54. > :10:57.with the way policy is going, that they don't trust the Trump
:10:58. > :11:01.administration to take steps that need to be taken. That has to do
:11:02. > :11:06.with Russia but in some cases other topics. You see Congress pushing
:11:07. > :11:10.back. Especially with this legislation to pass more sanctions
:11:11. > :11:16.on Russia and do have that clause that allows them to review any steps
:11:17. > :11:19.by the White House to roll back any sanctions. The White House is
:11:20. > :11:24.pushing against that strongly saying it will harm its ability to find
:11:25. > :11:31.areas of cooperation with Russia. Barbara, thank you.
:11:32. > :11:38.We will be talking about Jerry Brown in a little while. He is
:11:39. > :11:43.California's Governor, who is leading a big push to extend a tax
:11:44. > :11:46.plan in California which means that companies who pollute more pay more
:11:47. > :11:47.and we will explain how that fits into the Paris climate change
:11:48. > :11:58.agreement. Schools in England are to get an
:11:59. > :12:04.extra ?1.3 billion a year but the money will have to come from savings
:12:05. > :12:08.elsewhere in the education budget. Labour has criticised the proposals
:12:09. > :12:11.but the Education Secretary says she is making efficiencies within her
:12:12. > :12:16.department to allow more money to reach the front line. What I am
:12:17. > :12:21.doing is make my department make some efficiencies so that we can get
:12:22. > :12:24.that money to the front line. The alternative is higher taxes or more
:12:25. > :12:29.debt. I figured I should be asking my civil servants to make my budget
:12:30. > :12:34.work harder and we think we can do that and put that money into the
:12:35. > :12:39.front line. Schools have already lost ?2.8 billion and this money is
:12:40. > :12:43.only coming on stream next year and schools facing the pinch already. I
:12:44. > :13:06.welcome it, but it needs more investment.
:13:07. > :13:18.This is an outside source, and hourly story is that second round of
:13:19. > :13:23.talks on Brexit have started. Some of the main stories from BBC World
:13:24. > :13:29.Service. BBC Vietnamese is reporting that at least one person has died in
:13:30. > :13:34.a Tropical Storm Fitow the centre of the unarmed. The woman's room
:13:35. > :13:41.collapsed. A Culdrose -- a cargo ship collapsed and there is also
:13:42. > :13:52.flooding in Hanoi. A former state governor of India --
:13:53. > :13:59.in India is excited to become the next head of state.
:14:00. > :14:05.And the most unlikely story of the day, China's social media sensors
:14:06. > :14:07.are blocking references to win a deeply because the cartoon character
:14:08. > :14:19.has been compared to President G. The UAE has been accused of being
:14:20. > :14:24.behind a key incident that helped sparklers hold rift between Casar
:14:25. > :14:36.and its neighbours. Let's go back to me, these inflammatory posts which
:14:37. > :14:41.supposedly appeared on the Qatar website. They claimed at the time
:14:42. > :14:47.that they were one not true, that this was a hack. But Saudi Arabia
:14:48. > :14:55.and Bahrain and the UAA and Egypt all blocked Qatari media. Then they
:14:56. > :15:02.all cut all links with Qatar over its alleged support for terrorism
:15:03. > :15:08.and relations with Iran. Today, you get this article in the Washington
:15:09. > :15:11.Post. It contains the accusation that US intelligence officials have
:15:12. > :15:16.evidence that this was a hack and that the UAE was behind it. The
:15:17. > :15:28.Foreign Minister gave Lucy Hawking is a quite different story earlier.
:15:29. > :15:33.Completely untrue. And posting comments... Completely untrue. I
:15:34. > :15:38.think if you look at the comments, they are very consistent with what
:15:39. > :15:42.they have been doing. I am talking about the hack, completely untrue.
:15:43. > :15:45.They also said that on the 23rd of May, senior members of your
:15:46. > :15:48.government discussed the plan and implementation. The whole story is
:15:49. > :16:00.completely untrue. We turned to BBC Arabic for help.
:16:01. > :16:05.The UAE Ambassador in Washington denying the involvement of his
:16:06. > :16:10.government. The statements for foreign affairs in the UAE also
:16:11. > :16:16.denying involvement. We need to know that this was the trigger for the
:16:17. > :16:22.crisis. But we go beyond going back to the trigger and finding out if
:16:23. > :16:33.the UAE hacks Casar's news agency or not. UAE is asking for International
:16:34. > :16:42.Monetary Fund of Qatari media. It may not be in the interest of the
:16:43. > :16:47.Gulf monitor key to change Qatar, is ask for changes in the foreign
:16:48. > :16:52.policy which is funding extremists in the region. That is not going to
:16:53. > :16:57.happen. It is really difficult to predict. In 2014, Casar went to
:16:58. > :17:02.Saudi Arabia and there was an agreement that Qatar would stop
:17:03. > :17:09.funding certain political factions. Now Saudi Arabia, and Bahrain are
:17:10. > :17:17.saying that Qatar did not abide by the agreement. Now Qatar has a
:17:18. > :17:23.foreign policy and to change the policy would be extremely big hit
:17:24. > :17:27.for them. It is difficult for them to say that they will not be backing
:17:28. > :17:32.certain political factions in the region. On the other hand, the Saudi
:17:33. > :17:39.and emirates blockaded on Qatar is really harming the interests of the
:17:40. > :17:44.state. Can I ask you one question about the alleged hack. When those
:17:45. > :17:48.statements came out, did BBC Arabic and other regional media thing, this
:17:49. > :17:56.is a strange? Will did it feel within the realms of the possible?
:17:57. > :18:00.For BBC Arabic, it seems really strange. I have lived in Qatar for
:18:01. > :18:04.15 years, I have friends who work for the state media. I asked them an
:18:05. > :18:12.iPhone on the morning of the 23rd of May when Sky News Arabia and another
:18:13. > :18:16.channel funded by the United Arab Emirates government and another one
:18:17. > :18:22.funded by the Saudi Arabia government had this sudden breaking
:18:23. > :18:27.news and sudden coverage for the statements. When I asked my Qatari
:18:28. > :18:30.friends who are working, they said they had been hacked and they said
:18:31. > :18:37.that from the first moment of the crisis. But the Saudi and emirates
:18:38. > :18:42.channels did not even carry the denial of the Qatari government. And
:18:43. > :18:47.then the crisis began to roll up onto the stage. If you speak Arabic,
:18:48. > :18:51.there is coverage of that story CBBC Arabic .com.
:18:52. > :19:02.Let's go to the Korean police -- peninsula. Rain talks are proposed
:19:03. > :19:08.in between North and South Korea. The proposed talks could begin as
:19:09. > :19:14.early as this Friday, a move seen as a mean end all acts of hostility
:19:15. > :19:21.along the military demarcation line. The timing is significant, two weeks
:19:22. > :19:23.after Yong Yang tested what experts believe was its first
:19:24. > :19:31.intercontinental ballistic missile which could reach the United States.
:19:32. > :19:33.It also comes just two months into a new presidency. President Mona has
:19:34. > :19:40.said that he would try to reopen talks with the North as part of a
:19:41. > :19:44.new dialogue which is different from the past ten years. He keeps the
:19:45. > :19:50.pressure up with sanctions and also tries to re-engage. What can we
:19:51. > :19:54.expect from the talks? We will see confidence building measures being
:19:55. > :19:58.discussed, in particular, the possible seizing of those propaganda
:19:59. > :20:04.broadcasts which get lead through loudspeakers across the border. But
:20:05. > :20:12.there is the possibility that the capital of been North may also call
:20:13. > :20:20.for an end to drills between US and South Korean military. There is also
:20:21. > :20:24.a humanitarian aspect. Seoul is looking to reopen the possibility of
:20:25. > :20:28.reuniting people from the South and the North who have been separated
:20:29. > :20:33.for many decades in many cases. That could be a bone of contention for
:20:34. > :20:38.the northern capital. It is still angry with soul because of its
:20:39. > :20:42.failure to send back home a number of key defectors.
:20:43. > :20:46.We will be following that very closely.
:20:47. > :20:53.China's economy is huge, and it is performing above expectations. It
:20:54. > :21:00.has grown by 7% in the last three months. There is concern over its
:21:01. > :21:04.level of debt. It is 2.5 times the entire economy's yield over one
:21:05. > :21:09.year, too large for the comfort of some.
:21:10. > :21:14.Analysts have been talking about it for years. Particularly this year
:21:15. > :21:20.and even Chinese state media organisations are now talking about
:21:21. > :21:24.debt getting out of control. The government has been borrowing money
:21:25. > :21:28.off its own people and pouring it into infrastructure projects. The
:21:29. > :21:33.return on that money is getting less and the burden of debt is weighing
:21:34. > :21:37.more heavily. The authorities know they have to do something about it
:21:38. > :21:39.but they need the political backing of the party and a strong economy in
:21:40. > :21:52.order to be able to do that. Next, Procter Gamble, a US firm
:21:53. > :22:00.worth two -- 20 $3 billion. Consumer goods, that most of us use. There is
:22:01. > :22:05.a group of activists investors who despite its huge size, won some
:22:06. > :22:09.fundamental changes to the company. Michelle, what would they do if they
:22:10. > :22:14.were in charge? They say that they can bring about
:22:15. > :22:18.change at a much faster rate. This company's culture is at times
:22:19. > :22:25.resistant to doing things differently. This is why this
:22:26. > :22:30.activist investor, a billionaire known as Nelson Pelz is trying to
:22:31. > :22:34.force the board of Procter Gamble to revamp its business and he is
:22:35. > :22:38.pushing to try and get elected to the board of directors. Whether or
:22:39. > :22:42.not this will succeed we will have to see, but the company has been
:22:43. > :22:49.struggling to increase sales. To give you context as to why this is
:22:50. > :22:54.coming about now. Keep us posted. Another farm I want
:22:55. > :23:00.to talk about, Netflix. How is that doing? This is the entertainment
:23:01. > :23:07.company reported earnings in the last few minutes. Their reaction to
:23:08. > :23:12.the share price is swift, it is up about 9% in the last few minutes.
:23:13. > :23:18.The company is exploding in terms of the number of users, subscribers of
:23:19. > :23:23.the streaming service. That added 5.2 million. To give you some idea,
:23:24. > :23:28.Wall Street was inspecting that figure to be 3 million in a week
:23:29. > :23:35.period of the year. The channel is known for content like house of
:23:36. > :23:38.cards, Orange is the new black. What will surprise people is that
:23:39. > :23:43.international viewers now account for more than half of Netflix's
:23:44. > :23:47.membership. Clearly, investors liking what they are hearing.
:23:48. > :23:50.Thanks, Michelle talk to you during the week.
:23:51. > :23:58.The new series of game of thrones started in the US. The New York
:23:59. > :24:02.Times has estimated that this show generates billions of dollars
:24:03. > :24:08.annually and is costumes and props get attention. The success of the
:24:09. > :24:21.show is knocking on to companies that produce the props in India.
:24:22. > :24:30.Over six seasons, TV fantasy Game Of Thrones has captured the imagination
:24:31. > :24:35.of millions. But far from the seven kingdoms, the costumes, grand sets
:24:36. > :24:41.and armoury that feature in the throat -- show are serious business
:24:42. > :24:47.for companies in India. And it is not just Game of Thrones. This
:24:48. > :24:53.company supplies props to many Hollywood productions, from the
:24:54. > :24:57.avengers and Gladiator, to the Star Wars franchise. It's only the Indian
:24:58. > :25:01.subcontinent which has the art of hand embroidery. They can't get it
:25:02. > :25:10.in the West. Whether we do embroidery or anything, it is very
:25:11. > :25:14.handmade, very period looking. This is the largest factory of its kind
:25:15. > :25:22.located in the foothills of the Himalayas. This company makes every
:25:23. > :25:25.type of sword from heavy steel to light titanium. It supplies the
:25:26. > :25:34.armies around the world but its salts are not sold commercially in
:25:35. > :25:42.India. Domestic business is only 10%. Sometimes it can stretch into
:25:43. > :25:48.30%. But it is mostly seasonal. This army business is not seasonal. These
:25:49. > :25:52.are the details that make the story come alive on the big screen. And it
:25:53. > :26:00.means more business on the work floor here.
:26:01. > :26:13.I be back in a couple of minutes. -- I will be back.
:26:14. > :26:14.I wanted to update you on a number of stories that