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tv   HAR Dtalk  BBC News  August 29, 2018 12:30am-1:01am BST

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our top story: the un security council has been holding an open meeting on myanmar. it comes the day after un investigators accused myanmar‘s military leaders of crimes against humanity and genocide. the un secretary—general, antonio guterres, said those found responsible must be held to account. a new study from china finds air pollution is causing a huge drop in our intelligence. researchers believe that the negative impact increases with age, and affects men with less education the worst. and this video is trending on this ana flight was trying to land at tokyo's narita airport during a typhoon last week — winds were up to 200 kilometres an hour throughout japan. as you can see, the pilot had some trouble with the initial descent, but did eventually get everyone down safely. that's all for the moment. stay with us here on bbc world news. now here on bbc news, it's time for hardtalk. welcome to hardtalk
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with me, zeinab badawi. it is not an easy time to be involved in international trade. the world's two biggest economies, the united states and china, are trading insults and imposing tariffs on each other. beijing says it's reporting washington to the world trade organization. the current tensions were sparked by donald trump's decision to impose tariffs on billions of dollars of imports from china, the european union, canada and mexico. and they are retaliating. my guest is arancha gonzalez, the executive director of the international trade centre, which is co—owned by the world trade organisation, the wto, and the united nations. her mandate is to help small and medium businesses in developing countries participate in global trade. but with an international trading system that some believe is discredited and outmoded, is she pursuing the wrong ambitions? arancha gonzalez,
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welcome to hardtalk. thank you very much. so we're seeing tariffs being slapped around all over the place. the mood music on international trade has changed very much to your detriment. well, no, i wouldn't say so. i would tell you that there is a huge geostrategic rivalry between the us and china, and maybe it's not that bad that the biggest expression of this rivalry is international trade. why is that? because economies being so interrelated today, the fact that there is this huge rivalry and the temptation to go
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unilateral is making a lot of the coalitions in every country mobilised for international trade, so maybe it is not that bad. so you're saying that they are sort of carrying out a proxy war through trade and it might be worse otherwise? what i'm saying is that in trade, this fight may be a bit more rational than it would be in other areas. like militarily? like militarily, like diplomatic, like we've seen in climate change, for example. and why is that? because there is a system of rules today that makes countries and makes businesses think twice before throwing the system under the bus. 0k. you may say it's the lesser of two evils or whatever, but nevertheless, there is this trade war going on and it really signals a real lack of confidence, particularly in the united states, about international rules, about the world trade organization,
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and that should be very worrying to you. well, let's unpack this. there is angst in america. there is anger in many parts of america. i'm not surprised by that. when you look at the figures, american households in the ‘80s, were getting — the bottom half were getting 20% of national income. today, they are getting a little bit over 10% of national income. there's been a big concentration of the benefits of economic progress on a very few households in america. this is not the case in europe, where this figure has been stable around 20%. but you're... the question, zeinab, is is this anger to be committed to international trade, and will we fix the problems bottom half of america? the answer is yes to some people,
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that globalisation and free trade, we are seeing people say look, it's become a flashpoint of populist theory now. people don't like free trade, including the leader of the free world, donald trump. but then why is their response to this globalisation so different in america than it is, for example, in europe? well, i don't know. why is that? well, why — is that the case? in the united kingdom, you saw that brexit was partly animated by people saying they don't like free trade globalisation, free movement of people. no, i would not say that. they would tell you they do not like free movement of people. i haven't heard in the uk, brexiteers saying we do not like international trade. the prime minister herself, theresa may, has said that part of the reason there was brexit was that there are people who feel that there are haves and have—nots from globalisation. fine, fine, but was this from trade measures? i'll tell you what trump tweeted in may this year, "when the united states is losing billions of dollars on virtually every country that the us
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is doing trade with, trade wars are good and easy to win." well, what has happened some months later is that trade wars have not been easy to win, and that those americans that were suffering six months ago continue to suffer even more today, because there has been billions of dollars in tariffs that have been imposed, that represent a tax on consumers, a tax on americans, like a tax on chinese, like a tax on europeans. so my response to this is yes, i agree there's a problem, but no, i disagree that the solution is unilateral trade measures. but look at the figures though, economic growth in the united states has recently been at 4.4%, when it's been about 2% for the past eight years. you have the ceo of nucor, a steel company in the united states, john ferriola, announcing an investment in arkansas, saying that these tariffs are helping because it's protecting the us steel industry, jobs being created, it's working for trump. well, it's working for some but it's not working for others.
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if you read very carefully and if you look at what's happening in america, you will also hear lots of stories, thousands of stories of companies who are finding harder and more expensive to source imports for manufacturing in the us. you will find stories of companies who are not making investments because they find that the current situation is too unpredictable, too unstable, and you'll find consumers complaining that prices have gone up. but the trend is moving — obviously offhsoring happens a lot under globalisation — sending people's jobs offshore, where jobs could be done more cheaply. you're now seeing reshoring of these jobs, creating lots and lots ofjobs. this was the story of the second and the first industrial revolution — more jobs were created than jobs were destroyed,
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but this is not good enough answer to those whose jobs were destroyed. but let me give you a figure. how much do countries spend in active labour market policies, in helping those that have lost theirjobs retrain, retool, gain a newjob? it changes enormously what feeling citizens have in that country towards globalisation, towards trade. denmark, 2% of gdp. france, i% of gdp. germany, 0.6% of gdp. america, 0.1% of gdp. so it's not enough to say that globalisation, technology creates jobs, we have to take care of those whose jobs are lost. but you also have to acknowledge that as somebody who has worked for many years in international trade, you were chief of staff to pascal lammy when he was head
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of the wto, you have to accept that there is a prevailing mood that the system as it is is not working for several reasons. do you accept that? i do. i think the system is not working but... shouldn't you have more sympathy then? i do have sympathy, but the question then is what we do when we say that the system does not work? do we throw the system under the bus? no, my answer is no. my answer is let's fix the system. there are two things. one, the wto was created in a world that was binary, there were rich countries and poor countries, and today it's no longer binary. we have multiple shades of rich and multiple shades of poor countries, and this is something we need to fix. who takes which commitments and how much flexibility do we give countries to adjust? and that's not being done... i agree. because one of the anomalies of the wto, as pascal lammy said in 2013, wto members have not made up their minds if china is a rich country with many poor people or a poor country with many rich.
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depending on how you answer this, your trade regime will be different. sure. that's one of the points that donald trump makes, which is that china is treated as a developing nation in the wto, which itjoined not that long ago, in 2000, and he says that's not right, it's not a level playing field because it has subsidies, it floods markets with its goods — more cheaply produced, and it's notjust the united states that's worried about that, you know, asian countries are worried about that and so on. i think it is fair... so how is that going to be fixed? i think it is fair to say that we need to adjust the wto to new realities where countries are multiply rich and multiply poor, there is a graduation — there is a gradation and we have to address that. the second thing we have to address in the gradation is the impact of trade, cyber security, data protection, e—commerce. .. donald trump says that it does not respect intellectual property rights and so on.
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if you look at what the united states is doing now, it says it will not allow the selection ofjudges in the body within the wto that settles disputes, and this could lead to losses within the wto. i agree, and this is why what we have in front of us is a decision to be made. do we throw the system out of the window or do we adjust the system? and my clear answer to this question is we have to adjust the system, and this requires the two big countries, the us and china, to sit around the table and start a conversation. and maybe we need a third ingredient called the european union, why? because the three of them are the countries that have the power of initiative. when donald trump met jean—claude juncker, what many didn't realise is that the previous week,
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donald trump had met the president of china, xijinping. the three, the us and china, with the eu somehow mediating between china and the us, they need to start the conversation. they will not be the only ones necessary to end the conversation, we need all the other coalition of silent willing to come around the table, but these two fundamental issues need to be fixed. again, don't throw the system, fix it, make it work, because it is arguably going to be in your interest to do so. do you think that this current trade dispute between the united states and china will be resolved by negotiation? china says it's going to go to the wto to raise the dispute. do you think it is going to be resolved, or will it get worse before it gets better? i hope it gets better. what we have in front of us is a very simple choice, either the system is taken down in the fight between china and the us, or the two understand that the system,
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the system meaning basically what we learned from the second world war, from the mistakes of the 20th century, which is a system of checks and balances, called the world trade organization, mediates to help them find a solution to ensure trade is fairer to the realities of today. that's the question ahead of us. we've talked about china and the united states but actually, it's not just china and the united states. i mean america also said that — actually donald trump said that the european union is almost as bad as china. so, we're also seeing calls for protectionism and we want things made in our country. there is a prevalent mood of economic nationalism, isn't there? and people perhaps seeing protectionism — is something that we need to protect ourjobs, to protect our industries, and that's the reality i'm saying that the wto has to adjust to or die. i think we're seeing a lot of moves to protect people, but we are not seeing a lot of use of trade protectionism. trade protectionism is being used
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by some very selectively. protecting people is being used by many, and i think that is the right answer to the challenges that technology is posing today on the job market. while i see a certain, let's say unilateralism in some parts of the world, i see africa moving to create a huge internal market by breaking down trade barriers between its 55 countries. and that is the future, isn't it really? when you bring up africa, and actually this is one thing you hear a lot from developing countries, in asia and africa, that as a professor at the university of california, berkeley peter evans said, it is actually an informal oligarchy of a few bunches of nations. and the african countries feel that the rules or the wto is fixed by those countries, it does not work to their benefit. wrong. it's wrong, and the current
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situation has made the necessity of wt0 become sharper in the eyes of the smaller, let's say, economies, of those that may be not so integrated with the world economy, because around the wto table they have a say and a voice. in purely bilateral relations, they have no say. playing field is not level for developing countries. i will give you an example of what aliko dangote, africa's richest man, nigerian, says, "if you look at where we are today," that's africa, "where there is no protection, you are not going to have any industries — in africa, if we don't put up tariffs, we will be the dumping ground of the entire world." so you've got to have rules that protect african, nascent, infant industries, and not see african markets flooded with goods from the developed world. well, i think africa has made a different choice. africa has made a choice of doing two things — walking and chewing gum at the same time. africa has decided to tear down barriers among themselves, why?
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because they realise they were being hugely inefficient. they were not benefiting from economies of the scale. that is the point i am making. they were being ripped off by and economic system that was loaded against them and they say "let's focus on our regional trading blocs." no, because when they do regional integration they are opening up more to the rest of the world, they are doing the two, because they understand is that in today's economy what matters is agility, your ability to do value addition and value addition will be very difficult to do in a small... they can't do that, arancha gonzalez. of course they do! if you look at, for example, the european economic partnership agreements with africa, they say, yes, you can send us cocoa, you can send us your raw commodities, the minute they want to add value to those products, and finish them and send textiles or whatever, they see barriers, more tariffs go up, they see the tariffs go up, and conversely, the other way, they have to allow their markets to be open to textiles from the united states,
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we are seeing a big dispute now between washington and rwanda because rwanda has said, we don't want your second—hand clothes, we want to protect our own textile industry, what has america done? it said, we are going to close our markets to rwanda. and what has rwanda said, ok, fine with us, do that, but we will stand, we will continue... but that is an example of a rich country bullying a poorer country! 0k. that is the point i am making. but this is why the wto exists. take this to the wto, you will win your dispute and you will win your case in court. because, right, the law is on your side. you see... as the head of the international trade centre i spend most of my time in africa, and i see african countries doing more and more value addition, because they are investing in people, they are making sure technology is an integral part of the economic development, because they are integrating with each other, they are moving up the value chain. to trade with one another. exactly. and with the rest of the world. and with the rest of the world,
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i see the senegalese it industry, i see the digital sector in kenya booming. the senegalese textile industry, arancha gonzalez, says we are getting all of these cheap textiles being flooded in from china and so on. i will tell you what the president buhari of nigeria said in april, "our industries cannot compete with the highly technologically driven industries in europe," he says, for example, they can't compete. this is not what i see on the ground. what i see on the ground is countries investing in competitiveness, and this is a key component to thriving in international markets, to become competitive. they are investing in more value adding. they are doing all that, but the point i am making... and they are reaping the benefits. professor robert wade, from the london school of economics, says that the us and many european countries today use aggressive industrial policy to foster frontier industries in companies, much of it below the radar of public scrutiny. the global playing field is level
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only from the perspective of the west. he's right. i'm not sure this is right. but if — if — this is an issue, it is another argument to bring this matter to the world trade organization and reduce the level of state intervention in the economy because, frankly, only a few countries have the ability to prop up domestic industries in such a way. or an argument for protectionism for africa and developing countries, wouldn't you say? no, isolating yourself from the rest of the world, disconnecting yourself will prevent you from innovating, will prevent you from accessing larger markets, it will prevent you... ..i mean, no country in the world has developed by simply turning its back to the world economy. of course they have. they have, they have, with their subsidies, ha—joon chang, a cambridge economist, says this is the west kicking away the ladder that
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countries that use protectionism to get rich are now banning poor countries from doing the same. no... we have got subsidies left, right and centre in developed countries — on agricultural policy, state subsidies. that's true, that is true, there are issues. that is the point i am making. there are subsidy issues that still need to be disciplined. this is why the wto exists, and needs to exist, because all the subsidies will not be disciplined, not unless there was this policeman in the system to discipline them. your mandate at the wto seeks to promote global trade opportunities for small and medium sized business enterprises. but, i mean, iwill tell you what in myanmar, u nay win, vice—chair of the industry zone said at the end of last year that smes in myanmar can't compete with international industrial goods and so on, they can't deal with the mass production because of a lack of modern machinery — so you've got automation now, and it's only the richer countries that can really mass—produce and take advantage of the automation. no, i think the problem of micro, small and medium
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enterprises is the same around the world — it's a problem of competitiveness. it's true that there is a huge gap between large companies and smes anywhere in the world, including in germany, including in the us, including in the uk, so this gap is obviously larger the poorer the country, and this is where we have to act. it's not by closing the markets that we will prop up the competitiveness of smes, it is by supporting the smes to become more competitive, supporting them... but can they really compete with the mass production, automated methods of production? they can, they can. look, ijust came back from nairobi, kenya is today the number one exporter of high—quality avocados and you will tell me, pfft, well... where is the added value? look, for the 200,000 farmers in kenya whose families are living on avocados, moving from exporting avocados that were fetching five shillings, to avocados that today fetch 20 shillings, 20 shillings makes a huge
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difference, for the children that go to school, a huge difference for the children that go to get healthcare. the point i am making is that you need value added. you're not getting that. that is value added. the big chocolate companies make all the profits from cocoa, not the cocoa producing countries. 0k... no, no, no, zeinab, let me get this point, before, the avocados were plain avocados, five shillings, today these meet the standards in the eu, 20 shillings — more than 200,000 farmers, many women, by the way, because avocado is a female crop, believe it or not, they get a better income through international trade, so before we trashed the international trade and the international trade system, let's look at the impact this is having on the ground. all right, someone who is not trashing the trade system is here in the uk, the prominent brexiteer, jacob rees—mogg, the conservative mp says about brexit, when britain, if they were to leave with no deal, he says trading with the eu on wto
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terms would work well for the uk and would allow the uk to achieve brexit sooner. the british government said the chances of a no—deal brexit are very real. so, just outline for us, what would it mean in practice for the uk to trade on wto terms? eu on wto is like chalk and cheese. eu is a market. so, today, when you export from london to berlin, it is like you are from london to birmingham, right? it's the same, it's one market, it's one single market. the same rules applying, no borders. moving back to the wto means establishing a border. exporting from london to berlin orfrom london to paris would have to cross a border, and the question today is, how thick is this border going to be? and that is a question that needs to be answered here in the uk. so, could they do that, the day after a no—deal brexit, they could immediately just trade on wto terms?
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yeah, but this would mean a border, and this would mean a thick border today, a thick border on some products, a thinner border on other products, but it would be a border, and the question is, how thick is this border going to be? and there is no agreement here in the uk about how thick this border is going to be because today they have no border, so there is... what this has brought to the fore for many constituencies is the cost of moving out of the eu for the uk, given the level of imbrication of uk producers with the rest of continental europe. as someone who is spanish and pro—eu, you might not think it desirable, but is it practicable, is it practical? it's not the question of is it practicable, of course everything is practicable, you have 163 countries sitting around the wto table, why shouldn't it be practicable? the question is whether this is in the interest of the uk,
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and this is only what the uk can answer, and until and unless they answer the question the rest of the world will be looking at the uk waiting for the answer. arancha gonzalez, thank you very much indeed for coming on hardtalk. pleasure. thank you. hello. wednesday starts with a bit of umbrella weather across some parts of the uk, but it should turn dry and sunny for many of us as the day goes on. two weather systems to talk about early on. this one clipping parts of south—east england and east anglia, with either showers or some rain, could be some heavy bursts. and this one moving out of scotland and northern ireland, taking some increasingly light and patchy rain further south through england and wales.
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starting temperatures double figures for england and wales, but something fresher for scotland and northern ireland, and it's less humid behind this weather front, and there'll be some sunshine around. a few showers pushing into north—west scotland, maybe along to the west of northern ireland. rain clears east anglia and the south—east lunchtime at the very latest, and then a weakening weather front takes a few late—day showers towards this part of the world. sunny spells developed elsewhere in england and wales. here is a look at things at ii:00pm in the afternoon, and on the breeze, a feed of a few showers into north—west scotland. but most other parts here in scotland, and indeed in northern ireland, it'll be dry. you mayjust catch the odd shower in the west. good sunny spells developing across northern england, wales, the midlands and into the south—west. but a weakening weather front, with still maybe the odd shower associated with it, moves into east anglia and the south—east towards the end of the day. but hardly any rain left, really, and then it clears away and we've got clearing skies. and there mayjust be the odd patch of mist and fog as we go into thursday morning, but overnight into thursday, our weather systems have cleared away — clearing skies, and
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temperatures dip away. a much cooler night to come going into thursday morning, and into low single figures in some spots. under those clearing skies, we have an area of high pressure starting to build into the uk, which means although it's chilly first thing on thursday, there'll be plenty of sunshine to come first thing. it may not last all day. you see the band here showing that we've got clear skies. as we go deeper into thursday, you could see some cloud starting to build. it may produce the odd shower, maybe more so into western scotland. most will be dry, just expect a bit more cloud to come, but still some sunny spells, and temperatures high teens, for a few into the low 20s. so, once we get past that chance of umbrella weather in the day ahead, for the rest of the week, it's looking mainly dry. but do note — again, the night will be chilly. and then, as we go into the weekend, we'll see a theme of cloud coming
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into western parts of the uk. that may produce a bit of patchy rain. the emphasis is on the plenty of dry weather, but as the weekend goes on, it will start to warm up a little bit too. that's your latest forecast. welcome to newsday on the bbc. i'm sharanjit leyl in singapore. the headlines: after myanmar‘s military is accused of genocide against the rohingya. the un security council calls for accountability. innocent human beings were raped, murdered and burned alive for no other reason than their religious and ethnic identity. the whole world is watching what we will do next and if we will act. air pollution may damage the brain and cause a massive drop in intelligence. a shock warning from china. hello. i'm ben bland in london. also in the programme:
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the beat goes on. britain's prime minister looks for business in africa ahead of the brexit deadline.
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