:00:00. > :00:19.After seven years of pain-staking negotiations, is this the end
:00:20. > :00:23.of the road for the Pacific trade deal?
:00:24. > :00:26.And Britain's Brexit Minister meets with the European Parliament's chief
:00:27. > :00:37.negotiator, but will they see eye to eye?
:00:38. > :00:44.Welcome to World Business Report, I'm Sally Bundock.
:00:45. > :00:47.Also in the programme: We are keeping an eye on the black
:00:48. > :00:52.stuff, as the price of oil teases with the $50 a barrel level.
:00:53. > :00:56.The US President-elect, Donald Trump, says the country
:00:57. > :00:59.will quit a trade pact known as the Trans-Pacific Partnership,
:01:00. > :01:01.on his very first day in the White House.
:01:02. > :01:04.Instead, he pledged to negotiate bilateral deals, which he believes
:01:05. > :01:06.will bring jobs and industry back to the US.
:01:07. > :01:09.The TPP covers 12 Pacific Rim countries, and was signed
:01:10. > :01:11.in February, but has not yet been ratified.
:01:12. > :01:14.Combined, it would have covered 40% of the world's economy.
:01:15. > :01:17.But crucially, and you can see this here on the map,
:01:18. > :01:29.Its aim was to deepen economic ties, and boost growth by hundreds
:01:30. > :01:36.of billions of dollars, but opponents argued
:01:37. > :01:43.it was negotiated in secret and favoured big corporations.
:01:44. > :01:46.Deborah Elms is the executive director of the Asian Trade Centre
:01:47. > :02:02.Give us your take on this. Donald Trump is delivering on his election
:02:03. > :02:15.rhetoric, that he would a sickly pull this trade deal apart.
:02:16. > :02:20.Basically. Well, it is possible the other 11 will continue without the
:02:21. > :02:25.United dates involved. But without the United States, how attractive as
:02:26. > :02:28.this trade deal for the other 11? Well, that is an interesting
:02:29. > :02:33.question. I thought the other 11 wouldn't continue without the United
:02:34. > :02:37.States but in a way it is actually win-win for the others, because the
:02:38. > :02:41.United States doesn't have a lot of barriers in place. So for the other
:02:42. > :02:45.11 it is actually better for them. They continue to have access to the
:02:46. > :02:48.US market and don't have to face American competition at home, but
:02:49. > :02:54.they have much lower barriers to one another. So from Asia's perspective,
:02:55. > :02:57.in a way, it is better. They don't have to deal with the Americans,
:02:58. > :03:01.they still have access to the US market, they have much better access
:03:02. > :03:06.to one another. So from Asia's perspective in a way it is better.
:03:07. > :03:10.It is very damaging for American companies, American leadership and
:03:11. > :03:15.the United dates as a whole, but for Asia it is not so bad in the end. So
:03:16. > :03:19.what you're saying is TPP will still go ahead without America. If that is
:03:20. > :03:23.the case, how long will it take? Is that not the sort of unpicking and
:03:24. > :03:28.reworking from a legal point of view, at the very basic level? Well,
:03:29. > :03:31.it is going to be very interesting because the agreement was written in
:03:32. > :03:35.large part with the Americans in mind and if the US isn't there then
:03:36. > :03:39.some provisions may need some adjustment. But it is unclear how
:03:40. > :03:44.much adjustment the rest of the 11 will want to do, will need to do.
:03:45. > :03:47.They may just go ahead with the agreement as it is, and see what
:03:48. > :03:52.happens, in case the United States changes its mind at some point in
:03:53. > :03:57.the future. But isn't this actually a win-win for China, who were
:03:58. > :04:02.excluded from the TPP, now that it doesn't seem to be perhaps seen on a
:04:03. > :04:05.global level is such a strong deal without the US involved? Things may
:04:06. > :04:11.swing back in the direction of China. It is definitely a victory
:04:12. > :04:19.for China and for Asia as a whole. It is really, in my view, it is the
:04:20. > :04:27.ceding of leadership and trade from the United States to Asia in general
:04:28. > :04:32.and China in particular. We can see this as the point when China stopped
:04:33. > :04:38.leading on trade globally, at least for the next four years, for sure.
:04:39. > :04:42.It may not be a boxing match, but there is no doubt that those
:04:43. > :04:44.involved in the upcoming Brexit negotiations are unlikely
:04:45. > :04:48.You could argue both sides need to use fancy footwork to get
:04:49. > :04:52.So in the next few hours the UK's Brexit Secretary,
:04:53. > :04:58.David Davis, will meet with the European Parliament's chief
:04:59. > :05:00.negotiator, Guy Verhofstadt, and both gentleman have already
:05:01. > :05:05.Mr Verhofstadt has said, if the UK wants to remain part
:05:06. > :05:08.of the single market, it will have to accept the free
:05:09. > :05:13.And this is the key sticking point, with the UK Government pointing out
:05:14. > :05:16.around 40 countries currently have some sort of free trade agreement
:05:17. > :05:18.with the Europe Union without a deal on migration.
:05:19. > :05:21.With me is Geoffrey Yu, head of UBS Wealth Management's UK
:05:22. > :05:45.Nice to see you. Now, David Davis meeting with Guy Verhofstadt today,
:05:46. > :05:52.but yesterday, the European Commission Brexit negotiator, he has
:05:53. > :05:57.got a busy week. How will he get on? Well, I think his reception might be
:05:58. > :06:02.hostile in some quarters, with establishment links around Brexit,
:06:03. > :06:06.but it is an important initial step for both sides, to get a sense so
:06:07. > :06:09.that they know where both sides stand. We saw from the prime
:06:10. > :06:18.Minister's comments yesterday that she is keeping her cards close are
:06:19. > :06:22.just right now, but it is important that they understand each other. And
:06:23. > :06:26.Brexit negotiations don't officially start until the button is hit on
:06:27. > :06:30.Article 50, which is expected to happen in March next year.
:06:31. > :06:34.Absolutely, and I think it is important for the UK to realise as
:06:35. > :06:38.well that on the continent it is something we are looking at, and
:06:39. > :06:42.next year it will be dictated by economic interests, they will not be
:06:43. > :06:46.the only thing driving negotiations, but bite political pressures as
:06:47. > :06:53.well. They have a crowded electoral calendar on the continent, so we
:06:54. > :06:57.will see where things had to. A very busy year ahead but from your point
:06:58. > :07:01.of view, what will be going on in the meantime? While all this
:07:02. > :07:06.uncertainty hangs over both the UK and Europe, what impact is that
:07:07. > :07:10.going to have? For our clients, we are telling them if you go out
:07:11. > :07:14.looking for reasons not to invest, if you look for uncertainty, you are
:07:15. > :07:17.always going to find it. But experience has shown especially this
:07:18. > :07:24.year, if you stayed investing during those key points, Brexit and the US
:07:25. > :07:28.election, then your returns would have been very strong. That is one
:07:29. > :07:34.message we want to send the clients next year as well. Stay invested,
:07:35. > :07:46.stay diversify. In terms of the negotiations itself, how do you
:07:47. > :07:51.think they will play out? -- state stay diversified. It is interesting,
:07:52. > :07:55.if you saw the reaction in Stirling, when we had the hints of a
:07:56. > :07:58.transitional agreement, ministers will have taken note of the fact
:07:59. > :08:02.that markets will welcome something along those lines. This is an
:08:03. > :08:08.initial step negotiations are heading towards right now. Don't go
:08:09. > :08:11.for an extreme shot immediately. Find positions agreeable to
:08:12. > :08:17.households and businesses in the UK. Certainty is demanded. We will keep
:08:18. > :08:22.you up-to-date with how Mr Davies gets on in Strasbourg and elsewhere.
:08:23. > :08:24.In other news: South Korea's troubled shipping firm Hanjin
:08:25. > :08:27.will sell part of its container ship business to Korea Line,
:08:28. > :08:31.Korea Line will take over Hanjin's operations in seven countries,
:08:32. > :08:36.In those markets, the new owner will manage the shipping routes
:08:37. > :08:39.as well as assets and manpower related to Hanjin's logistics
:08:40. > :08:44.Britain's Finance Minister, Philip Hammond, is expected
:08:45. > :08:46.Brazil's government has cut its economic growth forecast
:08:47. > :08:51.It also says the economy will contract this year by 3.5%.
:08:52. > :08:55.The news echoes recent market pessimism, as the country struggles
:08:56. > :09:02.to exit its worst recession in decades.
:09:03. > :09:04.Britain's Finance Minister, Philip Hammond, is expected
:09:05. > :09:07.to announce a $500 million investment into fibre broadband.
:09:08. > :09:10.He is due to say that the UK must move towards providing fibre
:09:11. > :09:28.Currently, only 2% of the UK has access to fibre internet.
:09:29. > :10:21.We We will talk about that in more
:10:22. > :10:25.The insurance industry says carmakers will need to provide more