31/03/2017 World Business Report


31/03/2017

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The EU will set out its stall on Brexit later but Britain says

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trade talks must get under way at the same time.

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Why the price of butter is soaring on US markets.

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If you are in Britain it is nice and early, stay where you are and give

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me eight minutes, nine minutes they just told me, and I will give you an

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exciting snapshot of the exciting world of business and money.

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We start in Malta, where later this morning EU

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Council President Donald Tusk will present Europe's guidelines

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The key question for Britain - can it negotiate a future trade deal

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Or, as France is insisting, must it wait until

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Two years is already seen as tight to do such a complex trade deal.

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So what happens if one can't be done in time?

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For a start, these: Tariffs are customs taxes slapped

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They range from around 1.5% on things like toys and watches,

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If the UK leaves the EU single market without a deal,

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it would be subject to those tariffs under

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According to the think tank, Civitas, that would see British

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exports to the EU hit by tariffs worth $6.5 billion.

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That would make them more expensive and less attractive.

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Civitas says Europe's tariff bill would be well over double that,

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$16 billion, a lot of it landing on Germany and its carmakers.

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A huge incentive then on both sides to do a deal as fast as possible.

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Then there's the potential chaos caused by all those extra customs

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checks at ports and airports, especially in the south of England.

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For Britain, there's another specific worry.

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It also needs to secure access to the EU for its huge financial

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If it fails, 70,000 jobs in the City of London could be at risk.

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Within five to ten years, Britain's total trade could slump

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by 30% if there's no trade deal with the EU.

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That's according to a recent study by the National Institute

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It argues deals with the likes of the US and Australia just

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wouldn't make up for the loss of the EU single market.

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David Campbell Bannerman is a conservative member

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of the European Parliament representing the east of England.

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He is a former deputy leader of the UK Independence Party,

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which of course campaigned for Brexit, and he co-chairs

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the Eurosceptic pressure group Conservatives for Britain.

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Great to have you with me this morning on this programme, David.

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Let me start with this, no matter what side of defence people sit on,

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I think we all agree a deal has to be done. Is it realistic, two years,

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to get a deal? I think we can. I work on trade deals all the time on

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the trade committee. We have just done Canada. That has taken seven

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years, three years of negotiations. We don't have any tariffs to

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negotiate, not 1600 Paris as Canada did, we don't have any quotas and

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all other laws are a equivalent, so we start in a very different

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position from any trade deal under WTO rules than the US -- 1600

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tariffs. Picking up on that, talking about deals around the world, the

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nationalistic or economic and social research, you know, the point about

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Britain not making up for the loss of trade with the EU with the likes

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of the US and Australia... Go on. They are EU funded, that body, they

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are a disgrace in the referendum, carrying on Project Fear. It is

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nonsense. We are the largest single customer of the rest of the EU.

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Let's not forget that. They want access to the fifth-largest

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continent in the world, that is asked, the UK, they want access to

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the city of London. Let's do a good deal like Canada, super Canada what

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I argue for, and the EU has done trade deals in most countries in the

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world. And the ones it has done deals with it is doing so now. Yes,

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no, absolutely, I am an Aussie, so let's do big deals with Australia

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and New Zealand, go back to that relationship. Direct me if I am

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wrong, you are in Norwich, big farming community. Is their concern

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about the whole immigration FAQ? Farming needs workers and typically

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a lot are migrant workers. Yes, I think we should go back to the

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temporary workers scheme, agriculture workers scheme, started

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in 1947, way before the EU was created. So we have been there

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before. We need agricultural workers in the east of England, yes. That

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will continue. Under a new visa regime. I think the point is, even

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if we have the worst case scenario, which is WTO rules, you touched on

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that, well, six out of ten of the largest trading partners of the EU

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use those rules, including the US, Japan, China. We import 300 Willian

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dollars worth of Chinese goods -- $300 billion worth of Chinese goods

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without a formal trade agreement. Can I ask briefly before we wrap up,

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I am curious on your point, I was travelling the last three weeks,

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this is my week back, people asking about Brexit, and I am like, yes, a

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big issue, but I am like, you know what, watch what happens in the rest

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of Europe, keep your eye on that, not necessarily just tax it. France

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is only, what, three weeks away from an election? I mean, that could

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overtake Brexit, couldn't it? Well, that is true, I mean, Marine Le Pen

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is in a strong position. She is likely to get to the second round.

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We'll have to see what happens, whether she is beaten in the second

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round stage, which is probably likely. As we saw with President

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Trump and with Brexit, surprises can happen. Brexit's case, thank

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goodness they did it. We appreciate your time. Thank you very much.

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To Asia now, where there's more evidence China's economy

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Activity in the country's factories has increased at its fastest pace

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There's also been string growth in services and construction.

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Rico Hizon has been looking at the numbers for us in Singapore.

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Hey, Rico, I have missed you! Welcome back from your holiday.

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Well, I was visiting family. It wasn't really a holiday, Rico. Hey,

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listen, my friend. China, Beijing and the administration, the powers

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to be, have for the last several years tried to shift the economy

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away from making staff to being more services driven. At the moment the

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factories are making a lot of stuff. That is right. It looks like it is

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coming from both manufacturing and from services. That is why things

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may be looking up, Aaron, for the Chinese economy. This is another

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fresh sign that it is picking up steam, factory activity picking up

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yet again last month to its highest level in nearly 60 months, Aaron,

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with the official PMI index climbing 51.8 from 51.6 - a number of bad 50

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is an indicator of expansion and it is the strongest level since April

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2012 with a report revealing production orders expanded in the

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key manufacturing industry. As for the official nonmanufacturing

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Purchasing Managers' Index, Aaron, it rebounded as well, indicating

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strength in the services sector. Growth in the services industry is

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accelerating at the fastest pace in nearly three years and the services

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sector accounts for over half of the mainland economy and for the

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majority of its 6-.7% growth in 2016. So, things are looking

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positive for the Chinese economy, hopefully. Indeed, a healthy Chinese

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economy is a healthy global economy. OK, Rico, love you, in the

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nonbiblical sense, of course. We will see you soon, have a great

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weekend. Stay with me, I didn't make a

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mistake. We are in the US

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where there's a new meaning The price of butter

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is at an all time high - butter futures on the Chicago

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Mercantile Exchange have jumped 14% So what's behind all

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this spread betting? Jonathan White and his dog Lorraine

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by his side is off to meet his co-workers. That is stellar right

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there. Oh, and that is Lousi. The cows here are all 100% grass fed.

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The dairy is used primarily to make cheese but also butter. Since I got

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into the butter business in 1983, but has had a huge - I wouldn't even

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call it a comeuppance, it is a calm - backance and it is gratifying to

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see. The demand is set to skyrocket this year as more people want to eat

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clean, less processed food and it means the price of butter will go

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up, which is great news for dairy farmers like this one, but it is not

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a win for everyone. So there is as much butter as this... This pastry

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Seth is making his version of a lemon tart -- chef. Creamy and

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smooth like shaving foam. This shop online users at 635 kilograms of

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butter per week -- alone. The bakery will use a lot more butter than any

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restaurant. A bakery will use so much butter for all the bread, all

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of the dough, all of the croissants and we can sell large volumes, so it

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is something to look at. Making these rich pastries is getting

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costly. The price of butter is 10% higher than one year ago. That is

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because America's new taste for butter has caught the dairy industry

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by surprise. And these hard workers have yet to catch up with the

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demand. But maybe a pricey commodity these days but the results are just

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delicious -- butter. Butter on everything. It is good for

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you. Follow me on Twitter, I will be back with Alpa to look at the papers

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from around the world. Bye bye. The Head of NHS England says waiting

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times will be longer for routine operations as a "trade off"

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for improvements in A performance and better

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treatment in other areas. Simons Stevens is to unveil

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a new strategy for the NHS later.

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