27/01/2017 World Business Report


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27/01/2017

The latest business news with informed analysis from the world's financial centres.


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But these days is the 'special relationship' simply more special

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And when is a $5.3 billion profit in three months just not enough?

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We'll tell you why investors are not happy with Google and also find out

:00:29.:00:32.

if its parent company Alphabet's other bets will pay off?

:00:33.:00:41.

We have the Friday feeling and if you are watching for the first time,

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stay where you are, we have a snapshot of the latest in the world

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of business and money. We will also discuss the year of the Golden

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Rooster. we start in the US where,

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as you have been hearing, UK Prime Minister Theresa May

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will become the first world leader to meet President Trump

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when they hold talks later today. Mrs May has called on the President

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to renew the 'special relationship' She is keen to show Britain can

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prosper outside the European Union - so lining up a post-Brexit trade

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deal is high on her agenda. But is it really

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a priority for the US? Let's show you some

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of the numbers involved. the United States is the UK's

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top export destination. Britain sold goods and services

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worth $125 billion to Taken together though,

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the European Union is by far Britain's top export market,

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worth $280 billion. Any drop in those exports

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as a result of Brexit could see Britain is far less

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important to the US America sold $65 billion of goods

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and services here in 2015 - half the amount that

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went the other way. And to put that in the context

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of the vast US economy, that is little more than 4%

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of total US exports. And less than half

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a percent of US GDP. So putting aside the warm words,

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will this really be a priority We'll be getting the views

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of an expert in just a moment. We are excited that Prime Minister

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May is coming on Friday. We look forward to it. It may not seem like

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it but president Donald Trump and Prime Minister Theresa May have a

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few things in common. Their rise in power was fuelled by populism and

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the establishment rejection. Another hoped to create bilateral treaties.

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He will talk to the Prime Minister and have a great conversation about

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the potential for greater trade with the UK. The pressure is on. Brexit

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negotiations are imminent. And nailing down a trade agreement with

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the US would give Theresa May a big boost back home. Because of these

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strong economic and commercial links and our shared relationship, I look

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forward to pursuing to talks with President Trump and his new

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administration about a new UK US free trade agreement in coming

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months. The fact she is the first world leader to visit the White

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House under a Trump administration is perhaps a testament to Britain's

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special relationship with the United States. I am meeting with the Prime

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Minister tomorrow, as you know. Great Britain. So I am meeting was

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her tomorrow. I don't have my commerce Secretary and they want to

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talk trade. I will have to handle it myself. Which is OK. There you go.

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Stephanie Hare is an independent political risk analyst.

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Thank you for being here. He will handle himself, right? Looking at

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those numbers, it is astonishing. Just 4% of US exports come over here

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compared to what we, as is the Australian to be American, we ship

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over there. If they can deal the table, they do a big deal, can the

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US make up for the void if we lose out on the union? Theoretically,

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sure. What is likely in what is probable? The fact that the matter

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is that if you were to take the trading relationship between the

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United Kingdom and the EU and the United Kingdom and the United States

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and remove the labels and look at the numbers you would pick the with

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the EU everytime. And, yet, we have had a vote where we are leaving the

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European Union and now we are in a position where we have to leave an

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extremely advantageous trade relationship and make up for it with

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other deals. The Prime Minister has a job on her hands. President Trump

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as saying that he will do this himself but we know that today it is

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just talks between the leaders. They won't do anything, it is just about

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the team of negotiators. As the UK have the right people in place to

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make, to do the negotiations without being eaten alive by your lot? The

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United Kingdom does not have sufficient numbers of trade experts

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right now and at what is worrying, of course, is that they had to do

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trade negotiations with the EU and the other 27 member states and now,

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potential, with the United States. So, again, it is sort of like

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entering a boxing ring with one arm tied behind your back. And how about

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the US boxer? They have some of the best trade negotiators in the world.

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OK. OK... That is reassuring, isn't it? What will success look like for

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these two today? Success will look like the two of them being able to

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come away making some reassuring noises about the special

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relationship. We can expect to see the UK Prime Minister talking about

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that, that she has made her point and she is coming back with her red

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white and blue Brexit deal, getting a good value the United States. Like

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Chamberlain walking off the plane back in 1938, 939...? She is quite

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constrained in terms of what she can do to the next two years. Until the

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United Kingdom leaves the European Union cannot formally negotiate any

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other free trade union agreement. We need the UK to trigger Article 50,

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go through Brexit, formally leave the EU and only then can we formally

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negotiate. There will be talk behind the scenes and that is what is

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happening today. Donald Trump, he can talk about anything and say

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things and we have all learned that what he tends to say things like he

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is floating a balloon, he can walk things back. He will make noises

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that make him seem positive. But I don't think it will really be worth

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the paper it's written on. We need to see what is going to in two years

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time. As an American living in the UK, do we matter? Is Britain Mattan

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to the US? It is always good to have friends in the world. Very

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diplomatic. -- -- does Britain matter to the world?

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When is $5.3 billion profit in three months just not enough?

:07:48.:07:50.

The parent company of the internet giant saw its shares fall

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in after hours trade after its quarterly

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As Dave Lee reports from San Francisco,

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there are concerns about a slowdown in the growth

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and just how future proof the company may be.

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We call it picks cell. The final three months of 2016 were important

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for Google. It launched a new smart phone range and went big with its

:08:19.:08:23.

new voice-activated system. The company did not break out the

:08:24.:08:27.

numbers to those new devices so it is difficult to know how they

:08:28.:08:30.

perform. O'hAilpin chief executive said he was comfortable with the

:08:31.:08:33.

direction things were going with the new products. He will lead them to

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succeed. The revenues of Alphabet which are at 22% on this time year

:08:40.:08:45.

still rely heavily on earning money through Google's advertising. It's

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even more of us turned to mobile computing people are tapping on

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Google ads more than they used to. But advertisers of paying less per

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click than before. Aside from Google, Alphabet has what it calls

:08:59.:09:03.

its other bets. Things like superfast broadband, self driving

:09:04.:09:07.

cars, smart thermostats. The revenue of those is double compared to this

:09:08.:09:11.

time a stupid overall in the last three months those bets collectively

:09:12.:09:12.

lost the company $1.1 billion. Let's go to Asia finally -

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where tomorrow marks the start Roosters are supposed to be

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hardworking, confident and talented but can be vain and arrogant

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with a tendency to boast. And they have a tendency

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to ruffle feathers. There you go. Thank you. Happiness

:09:29.:09:52.

and asperity for you, Aaron. Right back at you. The year of the

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rooster... You have been speaking to an astrologer? Is that right? That

:09:57.:10:01.

is right. You know what? We are leaving the year of the monkey which

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was full of mischief and unexpected outcomes in 2016. Let us all welcome

:10:09.:10:14.

the year of the rooster. Here it is. 2016 was bad and according to the

:10:15.:10:21.

astrologers I spoke with 2017 will be a year of disruption,

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transformation, conflict and revolution. And if you take a look

:10:26.:10:28.

at the political side of the fence, the most important link here is the

:10:29.:10:38.

combination of China's leader, US leader and Russian leaders. They

:10:39.:10:41.

were all born in the year of the rooster. The big question is will

:10:42.:10:45.

they be able to work with each other because this will surely dominate

:10:46.:10:50.

global markets. But if you take a look at the business side in the

:10:51.:10:54.

near term, build lunar New Year and the biggest human migration in the

:10:55.:10:59.

world, citizens get a seven-day break and much of the economy will

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come to a halt. Many people will return to their home towns or visit

:11:05.:11:07.

families and travel overseas. This is big money going forward. OK,

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Rico. Please put your rooster away. We will be back later and you can

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follow us on Twitter.

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