25/01/2017 World Business Report


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Now for the latest financial news with Sally


Mexico's economy and foreign Ministers brace for talks with US


trade officials as President Trump tells car makers they must build


A warning from Lego that more must be done in China to stop


counterfeiters as its own master builder struggles to tell a fake


Japan enjoying lower or ill prices with a trade surplus for six years.


Mexico's Economy Foreign ministers are due to meet top US officials


later today as they brace for the renegotiation of NAFTA -


the North American Free Trade Agreement.


President Trump is pushing to bring more manufacturing jobs back


He's already met with the heads of Ford, General Motors


and Fiat-Chrysler - telling them they must make more


Taking a look at this graph - you can see its exports to the US


have surged since Nafta came into force in 1994.


Mexico now sells more than $270 billion worth of goods


It's thought talks between Mexico and the US will focus on so-called


'Rules of Origin' - which limits the proportion


of a product which comes from outside North America.


If limits were tightened, it could boost manufacturing


But can this be achieved in production lines with incredibly


complicated supply chains like the car industry?


With me is Anna-Marie Baisden, Head of Autos at BMI Research


Good morning. Bosses of the three carmakers in talks yesterday and


lots of information coming out. Give us your take on how negotiations are


going? What we heard was largely to be expected. It was very generic,


looking forward to working with the Administration and really we could


not expect too much in terms of commitment because they have very


little to go on themselves in terms of what these trade policies might


be. We have had some change of mind where they talked about keeping jobs


in the US and doing less in Texaco for top any us saying it is


windowdressing, it is not a big shift in policy. Not at all. It was


mostly the timing of the announcement. Most of these were


already in the planning of stop it was more a story of not as much


demand for these cars. They are still moving production focus to


Mexico just not with the extra capacity. These rules of origin is


going to be critical. 62% of a car has to be originating from North


America. That could be upped to 80% or more. With the car industry, it


is difficult to establish with components moving across the border


many times. This will be one of the most complex elements. Components


will cross the border several times and you also have the US component


manufacturers supplying to Mexico which could also get hurt if you


start increasing tariffs to and from Mexico. You can see US businesses


being heard. How will it play out. President Trump once more jobs in


America but it is easier said than done in a critical and complicated


industry. These big three carmakers not alone in Goa were either


bankrupt or on the brink of it? Absolutely. They were making cars


that were not selling very well so you could see a situation where if


they are forced to open new plans, they could start edging back to


overcapacity. The small cars produced in Mexico are ready in


declining sales in America. Do you want them to be producing things


that are not selling in. I am sure we will be getting news and tweet


from Washington as the day progresses following the talks


between Mexico and the US officials. Lego - the Danish-owned toy company


has told the BBC that authorities in China need to do more


to tackle fake goods - after the man in charge of Lego's


huge new factory in China failed to spot a fake piece


from the real thing. Lego is currently involved in legal


action against one Chinese manufacturer it claims


is ripping off its products. Here's our Shanghai


Correspondent Robin Brant Billions and billions of these


little elastic bricks have been sold the world over and out Lego is


betting big on China. What started out with handcart bricks in Denmark


in 1949 is now a $100 million state-of-the-art operation near


Shanghai but they are not the only ones doing it. Is this Lego? Copies


like these and fakes and counterfeit our prolific in China. Lego is


currently suing the firm producing this copycat. How is the user to


spot the different? We asked the experts.


If you have to ask me to guess I would say this one, maybe. Which one


do you think is a real? You think this one is real. Correct. The truth


is, they look and feel almost identical. So good even the boss of


the new factory cannot tell. Have a look at that for me. What do you


think of that? It looks like a mini figure to me. What do you think of


him? Which one is yours? Have a guess. I would say this is housed


and this is not. This is Lego. That is not Lego. It is trying to be


Lego. Lego is not the only foreign firm investing big in China but


having trouble with local copycats. Land Rover is made here. These


assault particularly well but the British firm has been powerless to


stop this, cut away, this is similar on the inside and very, very similar


on the outside but a lot cheaper. This is the copycat that caught


people out. You can buy these on Aly Baba. The twin maker is still


pursuing manufacturers in the courts because even the boss cannot tell


the difference. I have so many of those in my house


and I shall they are all genuine, but who knows!


Let's head to Asia - Japan has posted its first annual


trade surplus since the Fukushima disaster.


Rico Hizon is in Singapore - Rico how did Japan pull it off?


The numbers in Japan are surely in January. Surely! That is good news.


Yes, and it has been a long way. A combination of soaring exports and


lower energy prices and the depreciation of the yen. They fell


by nearly 16% due to the falling cost of crude oil and liquefied


national gas which left Japan in an almost $36 billion debt. The 2011


Fukushima disaster sent the import bill soaring as it turned to pricey


fossil fuel alternatives and exports rose in December for the first time


in more than a year. This could be a good year once again for the


Japanese economy. Let's keep the fingers crossed that this could be


sustained. Let's quickly show you markets. Markets across Asia having


a real boom. Japan boosted by the news about the trade surplus.


MPs have stepped up demands for the government to publish


its plan for Brexit in a formal policy document.


The demands for a white paper, including from some Conservatives,


follow yesterday's Supreme Court ruling.


Theresa May must give parliament a vote before triggering Article 50,


the formal process for leaving to the EU.


It's thought legislation could be introduced as early as tomorrow.


Here's our political correspondent Tom Bateman.


After the judge is ruled only Parliament could start except, today


a warning from MPs not to try to derail the plan. -- Brexit. Article


50 is at the start of the process and it must be put before MPs and


laws. What lies ahead? The government says the legislation


paving the way for Brexit will be tabled within days and voted on by


both houses of parliament. Theresa May wants Article 50 triggered by


the end of March then Britain has two years to leave the EU. There can


be no going back. The point of no return was passed in June of last


year. Labour said they will not block Article 50 but one to amend


the bill, giving MPs more control. If necessary, there will be


hand-to-hand combat. We need to make sure we get the best deal on behalf


the country and she cannot say she acts on behalf the country. Theresa


May also faces opposition and some of her side. For now, at least


ministers believe they are on track to get Brexit triggered by the


spring. Coming up at six o'clock


on Breakfast - Dan Walker and Louise Minchin will have


all the day's news, They'll also have more on a delayed


upgrade to the radio system, used by the emergency


services in England, Scotland and Wales, that may cost


taxpayers ?475 million The top stories this hour: American


media say President Trump will sign an order tightening security along


the Mexican border on Wednesday. He is also said to be seeking


tougher visa regulations for citizens from seven


Middle Eastern and African, Mr Trump tweeted that it would be


a big day for national security. The Israeli government has approved


plans to build 2,500 more homes on occupied Palestinian


land in the West Bank. It is the second such announcement


since President Trump took office. Palestinian officials say it


will fuel extremism and make any Several MPs from the governing


Conservative Party have supported calls from the Opposition


for the British Government to formally set out its negotiating


position on leaving Ministers are preparing to bring


forward draft legislation, following a ruling in


the Supreme Court on Tuesday that Parliament needs to vote in favour


before the Government can trigger The French President,


Francois Hollande, has been meeting leaders of Colombia's


largest rebel movement, the Farc, at a rural camp


in the west of the country. Mr Hollande, accompanied


by President Juan Manuel Santos, offered financial support


for de-mining programmes The Telegraph leads with yesterday's


historic UK Supreme Court ruling. Only through Parliament can there be


a vote on whether the Government can The judgement means the Government


cannot begin talks with the EU until MPs and peers


give their backing. The Guardian says US


President Donald Trump has infuriated environmentalists


by signing executive orders that support two controversial


oil pipelines. The new Republican President


backed the Keystone XL The Arab News reports that Israel


has approved the construction of 2,500 settler homes


in the occupied West Bank. Prime Minister Benjamin Netanyahu


said they had agreed to the move The Independent says close to ?8


billion was wiped of the market value of BT, after the UK


telecommunications giant said accounting errors in its Italian


business are far greater The Guardian business pages say


Citigroup is deliberating over which new EU financial


centre will relocate The banking giant is in discussion


with Ireland, France, Italy, Spain, Germany


and the Netherlands. Pretty much the whole of the EU, it


seems, write? -- right? And finally, hit Hollywood film


musical La La Land has scored Only two other films,


Titanic and All about Eve, Joining us is Cornelia Meyer,


who is CEO of MRL Corporation, Good morning to you. Morning. Have


you seen the La La Land? No. I am not a big movie-goer. This whole


Brexit thing, and the Supreme Court ruling, apart from what it means for


Brexit, it is also very momentous in terms of saying who has real power


in the United Kingdom, and Parliament was told you will be able


to vote. Yes, but I think the Supreme Court was quite clear they


can't overturn the verdict of the people. It is a matter of process.


It is Parliament needs to give its blessing to triggering Article 50.


So there is another review of Article 50, but it was not a ruling


that said, OK, you can now sort of negate the will of the people, who


sadly wanted to leave the EU. The issue, though, is about the law,


isn't it? The fact that a lot of EU law is law in the country, domestic


law. On the point is that ministers cannot change the law that has been


approved in the UK Parliament without the approval, without an act


of Parliament. So that was the actual issue, wasn't it? It was an


eight issue of law. It was an issue of law and process. The government


has said they will make the EU laws our own laws and deal with it later


on. What I find interesting is how... One of the things is also,


they said Parliament should get a say. They said the government didn't


have to go to the devolved powers. So they didn't have to go to


Scotland and Wales, and so on, to get the go-ahead to trigger Article


50. That was very important as well. Here we come to the fallout. We have


Nicola Sturgeon from Scotland, Tim Farron from the Lib Dems and Jeremy


Corbyn from the Labour Party and how they will be able to potentially


affect how the government goes about negotiating Brexit. Because they


have their own ideas. They have their own ideas, and it is good we


are a democracy and good we are discussing it out, but we had a


referendum. And I was a firm remainer, we had a referendum and


said leave. We probably have to leave, and it is a bit disconcerting


when certain parts say let's have another referendum. Referenda are


not things you can do and do until you get what you want. They are not


asking for another referendum, but a route to stay in the single market,


do you see what I mean? It is how we leave, but the Lib Dems asked for a


second referendum. Some of them even asked for a second referendum. Says


a lady from Switzerland, where they have referenda every other day! That


is a different story. That is part of the problem, because we don't do


referenda here so often. That is why we had to go back to the Supreme


Court to get a ruling on how do we now deal with a referendum? OK,


Donald Trump. Do you want to take this? We know what the story is, the


controversial pipelines. Barack Obama didn't want them, Donald Trump


wants them, and also coal and that sort of thing. I think those two


pipelines I would not be against those two pipelines. Let's not


forget, Barack Obama only nixed the Keystone XL pipeline just before the


Paris agreement, so he had a better position. What I am worried about


is, some of the things he wants to do may not necessarily be bad


things, but the way he goes about it, the way he rams everything


through, I have one, and now I can do whatever I want. I am very


fearful of a huge backlash against the oil industry and against other


energy industries, you know, in the next three to four years, because it


is just round down. When you swing the pendulum too much to one side,


it usually swings back quite violently. That sort of where I


would stand on this. Arab News. Israel approves 2500 new settlement


homes in the occupied West Bank. That is their headline, talking


about the announcement from Benjamin Netanyahu yesterday. Give us your


take on this. It is to do with President Trump. It is to do with


President Trump, who is clearly one of the most pro- Israel presidents


there ever were. Two of his advisers, his son-in-law and Steve


Bannon, are very much pro- Israel, pro- settlement. It is also, as your


correspondent said, to do with internal politics in Israel. What it


means, it is very bad for everybody who believes in a two state


solution, this is very bad for a two state solution. Because it infringes


on what is Palestinian territory. And the question is, how do you get


to a lasting peace? Most people see a two state solution, including the


Secretary General of the UN, C at two state solution as the way to get


there. And if that is the objective, this is very bad news. A couple of


days before this BT wiping off a brilliant pounds of its share value,


I heard that BT broadband's prices are going up. As a BT customer I


thought, well, that is the market, but I wonder if it knew it was about


to become public? Probably not, but what this shows is that you really


need to have, as a company, you need to get your account is clear. And


when you have bad news you need to make sure you understand that the


bad news is, and you communicated immediately to the market. Because


this drip, drip, and then we were wrong, that totally goes against


investor confidence. And having 20%... It was a shocking


announcement, and the market reacted accordingly. 20% of the market


value. And it was, because they first said it was 145 million, and


then it was sort of four times more. So I think that is... That shows


that when you have bad news, it is very important that you first get


your together, and that you communicate effectively. Shall we


move on to... You want to look at films? We have to talk about


Citigroup, and then the Oscar nominations. Quickly on Citigroup,


it will be very interesting to see how Citigroup and other banks,


fearful of the passporting rights within the EU, my favourite is


Dublin. The Frankfurt people think Frank that is so good but the


trouble with Frankfurt and Paris is that the Labour laws are so


difficult. Once you have hired someone it is very hard to fire them


again and if you have a trading room you need to be able to immediately


hire our lot of people and then immediately let go of them.


Financial markets are fickle, and your headcount has to reflect that.


So Dublin is probably the easiest to do those sorts of things. Do you


like musicals? Yes, I do like musicals. Did you ever see Titanic?


I did when it came to the small screen. And La La Land has equalled


the number of nominations of Titanic and All About Eve. I did enjoy it,


but because it has had so much publicity and has all these awards,


I expected to be completely wowed, and I wasn't. At as you said, when


we had a quick chat before, Hollywood loves Hollywood. It is


about Hollywood, so of course they love it. Thank you very much indeed.


The film I would choose to take you to is Predator versus Aliens on a


massive screen. See you soon. Wednesday will start quite windy


across northern and western parts


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