27/04/2017 World Business Report

Now it's time for World Business Report.

The White House tells Mexico and Canada it won't cancel

the North American Free Trade Agreement,

Italy's flag carrier battles to stay in the sky as its rescuer pulls

Also coming up, raking it in, but are they worth it?

Top bosses face their shareholders amid growing concern over excessive

We start with President Trump, because once again he's taken

The White House has confirmed it has told the leaders of Canada

and Mexico they won't be scrapping the North American Free Trade

But instead they will seek to renegotiate the terms of it.

That has sent the Canadian Dollar and Mexican Peso soaring.

President Trump has repeatedly vowed to pull out from the 23-year-old

trade pact with the two neighbouring countries,

calling it 'the worst trade deal in history'.

He already used an executive order on Jan 23 to pull out of the huge

Trans-Pacific Partnership trade deal.

Financial markets were worried he was about to do the same

with Nafta, with huge implications for industries from agriculture

The news is moving the currency markets, both the Mexican Peso

Rico Hizon is looking at this in Singapore.

We don't have a lot of time, but what sort of games are we talking

about? -- gains. We are seeing it moved drastically, there was a plan

to pull out of the Nafta agreement but there has now been a change of

heart. According to analysts, disruption in trade could create

chaos in the auto sector and other industries, impacting profits for

companies. Mexico's low Labour costs could also be affected. They are

taking this renegotiating process, they are taking it seriously. The

Mexican peso and Canadian dollar have soared. Trade watchers have

said that Nafta could be expanded to cover issues that did not exist when

it was created, such as e-commerce. With this renegotiation process,

trade watchers are asking about the Trans-Pacific Partnership. That

could be renegotiated after the US pulled out several months ago. Thank

you for that. We will talk to you again soon.

Marco Lopez is an International trade consultant and he joins us now

from Hermosillo in the Sonora state of Mexico.

Another surprise for all of us, I guess from where you are sitting,

this is a very good surprise? A very good surprise indeed. We have been

saying it is very difficult to try and go out and kill 6 million jobs

that rely on American free trade, which was exactly what he was

proposing. So, good news for those American workers, 6 million that are

-- that depend on trade with Mexico. I think he has figured out that it

is a lot more difficult to govern than it is to campaign. This is a

sign for everyone in all of those industries, especially the auto

industry, agriculture, e-commerce, industries that depend on keeping

the relationship between the US, Mexico and Canada alive and well,

it's a sign that things will get better. From the Mexico side of

things, does Mexico think it needs to be renegotiated? I am wondering

where they would try to renegotiate it? I think that after all the

criticism that came from President Trump, and with my experience as

director of the Department of commerce in the state of Arizona,

you realise that there are things that occur throughout a period of 25

years that do need to be looked at. E-commerce is one. Energy, trade

facilitation is a second. There are things in the agricultural space

that might need to be strengthened. It is at least important to have

that conversation. I think we are getting to that place. Even Congress

is literally having to vote on any adjustments enacted before the

midterms next year. So, this could be a very long process. We do

exactly what shape it will take, but will not be easy. Indeed it won't

be. But thank you so much for joining us.

Let's return to London where spring is in the air,

and that means it's the season for AGMs,

Annual General Meetings, where top companies have

Top of the list of concerns for investors, how much bosses get

Let's give you an idea of the sums we are talking about.

Pharmaceutical giant Astrazeneca holds its annual

The CEO saw his overall pay jump 68% last year to more than $17 million.

And that's after his annual bonus was halved!

So there could be some grumbling there.

Consumer goods maker Unilever is also meeting its shareholders.

They will be voting on changes to the way its bosses are paid,

making more of it in shares as a performance incentive.

Unilever's CEO made 8.4 million euros last year.

That was down 20% on 2015, but a lot of the fall is down

to the weak pound, his pay is set in sterling but paid

Tomorrow could be the big one, when global banking giant

CEO Stuart Gulliver has seen his potential pay soar,

Excessive CEO pay has become a big political issue here in the UK.

The government has proposed reforms including giving shareholders more

control over what top executives get paid.

Here's what Prime Minister Theresa May said at the annual conference

of the bosses organisation, the CBI, last November.

The behaviour of a limited few has damaged the reputation of the many.

And fair or not, it is clear that something has to change.

For when a small minority of businesses and business figures

appear to game the system and work to a different set of rules,

we have to recognise that the social contract between business

and society fails, and the reputation of business

Theresa May speaking in November. Great for you to come in at this

horrible time of mourning. This is becoming a huge political issue, and

also a moral issue. I am all for, work hard, be rewarded. But when

bosses are being paid nearly 140 times more than the average worker,

it leaves a bad taste in your mouse? It does. That is why it is such a

hot political issue. At the end of the day, millions of ordinary people

in the UK and around the world, who are paid very modest earnings and

have seen very modest pay rises, are paying into pension schemes and

retirement system is that, buy the shares in the companies and what

losses are getting, they are getting a 68% pay rise. This is a company

that is facing a profit warning around some of its products. That's

why this is such a hot issue. This has been rumbling on year after

year. What we are seeing is a lot more melodrama than action. Why and

investors being more vocal and aggressive about this? Investors are

in on the same games to a large extent. Working people hand our

retirement savings over two companies whose bosses are in on the

same tricks. It's a very big challenge about, who have we put in

charge of controlling this problem? Talking about being in charge,

Theresa May, she is trying to make a big push. We have the general

election, I imagine this is going to be a big focus? Some would be asking

why we aren't more like Germany, where a representative for workers

is on the board so they get is a straightaway? There was a proposal

from Theresa May to put workers on boards but she backtracked on it. We

will see what happens. I think the government is serious about reforms

on this. I think we need to focus on holding accountable by large,

institutional shareholders to whom we hand control of the vote for the

cast on pay. One thing to watch out for this season is that this is a

season in the UK where we will see a lot of winding, three-year votes on

pay policy. A big controversy last year was the pay of the BP CEO. This

year, the company has changed its structure, as has Shell. What we are

saying is that shareholders should take a tough line on the three-year

binding vote. I think we will be talking about this for the next

three... We do have to wrap it up unfortunately. That is the issue,

being more aggressive. We want shareholders taking a tough line on

behalf of all of us. I wish we had more time. Thank you.

We are also looking at Italy's flag carrier airline Alitalia.

Its shareholders are meeting to discuss starting bankruptcy

proceedings after labour unions voted to reject a cost-cutting plan.

Alitalia's investors, including the Gulf airline Etihad,

have reacted to the vote by cancelling a $2.2 billion dollar

cash injection, which the airline was relying on to secure its future.

Alitalia is the sick man of the skies. It loses hundreds of millions

of dollars a year. In 2015, desperate for cash, it sold 49% of

its shares to Etihad Airways. That company offered to inject $2.2

billion to fund Alitalia's recovery. A key condition was for Alitalia to

cut costs. The airline's plan was to lay off 1700 staff. Cut wages by 8%.

And cut its fleet size. But union members voted to reject these

measures, the Etihad Airways has taken its money off the table. Now,

Alitalia is planning to appoint an administrator to decide whether the

airline can be said, or whether it should be wound up. The Italian

government says it will give Alitalia a bridging loan so it can

continue to operate for the next few months.

There you go full. Can follow me on Twitter, I'll be back later to take

a look at the papers from around the world with James.

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