tv Talking Business BBC News June 14, 2022 1:30am-2:01am BST
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this is bbc news. we will have the headlines and all the main news stories for you at the top of the hour straight after this programme. hello. let us take a look at what is on the show. the global economy is facing multiple crises, from supply chain chaos, war in europe, and potentialfamine. can this so—called poly crisis be taken on by the wto, world trade organization, as global trade ministers meet face to face for the first time since the pandemic? and the war in ukraine.
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iam going i am going to be discussing all of this with these two. there they are. the boss of the world trade organization, as well as a former wto judge from china. and what does this mean for a business where trade is everything? i will be speaking with the boss of one of the biggest shipping and freight companies to find out how they are navigating through these choppy waters. whenever you arejoining me from around the world, hello, welcome to the show. we are in a poly crisis. that is according to ngozi okonjo—iweala, director—general of world trade organization, because the wto is holding its most important meeting in more than four years.
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this week, trade ministers from more than 150 countries will gather in geneva in switzerland. the meeting has twice been postponed covid outbreaks. but now, as well as a world facing a pandemic and this aftermath, there is a war on european soil. globalfood shortages. and the global cost of living crisis. and of course, the continuing climate emergency. yes, poly crisis doesn't seem about right. last time, the ministers met in december 2017, in buenos aires, they were greeted by anti—globalisation protesters. but the sense from the ministers as the bigger challenge that needs to be addressed. existence was top since 2019, and the presidency of donald trump, the united states has blocked the appointment of any newjudges to the wto applet body. that is a panel ofjudges from different member countries
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that decide on any challenges to the organisations rules. of this body cannot do its job because newjudges are not being appointed then none of the trade battles between countries, like us and china, can be resolved. while the biden administration says it wants to move beyond this, the block on newjudges remains. despite this, trade around the world has badged back after the pandemic. global trade went to a record high in 2021. making it worth about $20.5 trillion. that's13% higher than the same number in 2019. before the pandemic to hold. but the supply chain crisis from the pandemic continues to linger, exacerbated by russia's ruthless attack on ukraine. oil prices have skyrocketed. global shortage of that country's grain is causing global concerns. that has led to some of the other big wheat producers such as india banning
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exports of their grain. but among measures that could be agreed by all parties at this wto meeting is exemption on all bans from food programme which is seeking to feed people in crisis. another change that could get approval is that of temporary waivers for intellectual property around vaccines. with much of the world still striving to jab its population, this could be a big win for the world trade organization. agreements to stop over fishing and fishery subsidies could also be approved by the entire conference. smaller agreements between select countries could yield big results, which could include major economies agreeing to cut red tape for the service sector, new measures for america, europe, china among others, to address the climate crisis. and key agreements to make digital trade more seamless across much of the world. so, as you can see, some major global challenges, and a very full plate for all those gathering at this all—important meeting.
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but where do they even start? to find out, i caught up with the big boss of the wto. dr ngozi okonjo—iweala, my friend, always a pleasure having you on my show. let us start with this. as you've said, the global economy is facing multiple crises, which are having a profound effect on living standards around the world. where do we even start with these major issues? this is what i call this simultaneous crisis or poly crisis, it cannot be solved by any one country alone. that this what we need international cooperation. we need is multilateral system. some of them, like the food crisis, that is facing as, the international health crisis, the pandemic, we see the pandemic going down in some countries, but it does not completely over.
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we now have vaccines that can help us that, to solve it, although some parts of the world, like africa, still needs to get their vaccination rates up. we need to work on that, otherwise it might be variants more common among us. on food, we need to work together, we need to get the grain out of ukraine, because 20—25,000,000 tons of waiting to be exported. we need those to be released on to international markets. above all, our members, we need them not to put on export restrictions and prohibitions for any length of time. on that note, because we are seeing some nations putting up trade barriers, which of course hinders the free flow of goods all around the world. perhaps, as you have mentioned, most worryingly on food essential. but you, the wto, you exist to facilitate free trade. how do you bring
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down those barriers? with transparency. one of the tools we have as it's ourjob to monitor these barriers. and once we know that members have put them up and it and it is transparent, it is easy, you know, to identify them, and work with them and get them to take those barriers away. we have 25 countries now have restrictions, this is a much lower number than at the height of the pandemic. this transparency, this will keep the number not going to high, with respect to countries that have put in restrictions and prohibitions. and if they have, we are asking that the stick to the mutual
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guidelines, make them transparent, temporary and proportionate. indeed. it has been years since your top dispute resolution body was able to function. we know it was crippled by president trump blocking the appointment of newjudges. i want to ask you, when will you get it up and running again? and just briefly explain how important this group ofjudges are? the judges are part of what we call the appellate body, the central system of resolution. it has the panel where the members end —— send a dispute. at the first level, for the panel to make a ruling. then they can put it to the appellate body. if we do not agree with a finding of the panel, then it is very important.
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the issues that we are getting conversation going on reform of this system, the us is reaching out at a technical level to talk with other members. of this system, the us is reaching out at a technical level to talk with other members. that is promising because it means that one of the things we will be looking at, at least in the us despite concern, that is a good sign that we are beginning that process. there are some governments around the world aren't even in particular the united states, that they are concerned about how china, the worlds second biggest economy is treated by the wto. they say china should not get the concessions developing economy is afforded. is there a minute and that argument, given that sheer size and influence of the chinese economy in the 20 years since its jointed wto?
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well, one of the things that is interesting or different or strange at the wto is that the wto, when it was founded, said countries should self designate what they want, whether they want to be called developed or developing. that is it. that does not change. china is designated as developing but in the past 25 years its economy has changed enormously, and changed fast. that has brought a lot of discussion about whether some of the ways of managing the economy in china are according to the rules, or that is something anti—competitive. what we are doing here, the wto, is trying to work with members on these issues, trying to make sure that benefits of special treatments, which is what those developing country members who are pruner gates, they are able to implement agreements is perhaps a slower pace, and perhaps with more space and support than others, they are going to make sure
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that that benefit does go to members that need it. looking at the issue of subsidies, level playing field. just completed the first stage of that kind of study with imf, the world bank, and the wto all working together to look into that problem. what is the level of industrial success? where is it coming from? agricultural subsidies. how can we reform the way we function in order to take account of these issues? we are moving at a level playing field. here is something i know
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is close to your heart because we know the covid pandemic still is not over and many countries are still struggling to access vaccines. you at the wto have spent more than 18 months trying to reach a deal on intellectual property rights. to make them more accessible will have ministers meet in person at this gathering finally mean you get a deal? we are cautiously optimistic. right now, as we speak, negotiations are ongoing on this very issue. the good news is that after one and a half years of not really negotiating with each other, we have a text that everybody agrees on. the idea is to narrow the differences as much as possible so that when we discuss it next week finalise and approve. we are cautiously optimistic. we are not out of the woods because there are strong areas of differences still. but we are very encouraged by the progress in negotiations.
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very briefly, the critics will say, the pharmaceutical companies have spent billions creating these vaccines, why give it away for free? is there a worry that if they have two it could jeopardise future vaccines? well, i do not think so. i think the kind of agreement that is being negotiated right now — to allow developing countries to be able to access patent so that they can be produced, should there be a bigger problem, is not such a disincentive for the pharmaceutical companies. a deal on reducing fishing subsidies, we know that has proved elusive through 20 years of talks. given the threats to global fish stocks, and the focus on food security, given the war in ukraine, our mind is now focused on finally reaching a deal? you are touching on all the right issues. minds are really focused on this.
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i can tell you, for 21 years this agreement, right now in the past one year, very encouraged by the progress we are making. i do not want to overestimate the number of divergences that still exist among members on this important agreement, but again we are making progress. and we have to see how we land next week when the ministers come. but it is encouraging. ngozi okonjo—iweala, i wish i had more time. always a pleasure having you on the show. good luck with everything. i would love to talk to you soon. thank you. as we said at the top of the show, since 2019 the world trade organization has faced a crisis about its existence. the body ofjudges which rules on appeal to the wto has not been sitting. since 2019, the so—called appellate body was shut down after america said it would not approve the apartment
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of any new judges. as appeals can't be heard and ruled on, countries been able to ignore some of the organisation's rules. earlier i caught up with one of china's formerjudges on the wto appellate body. thank you for your time. it is great to have you. i want to make it clear that you are speaking to me from a personal point of view, not as a representative of the chinese government. so i really appreciate your time. let us start with this. for the past two and a half years the appellate body has not been functioning. it has not been able to function because china, the united states keep blocking judges. i want your opinion. do you think the appellate body will be able to recover? i feel very bad about the situation. the appellate body has done a wonderfuljob,
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deemed as the best function among four functions the wto. but with the blockage of the selection process, so all the appellate body cease to function, however since then, more than ten cases of appeal already submitted to the dsp, but nobody to handle these cases. so it is still pending. the rights to appeal of members are deprived. so it is a pity. does the wto have an answer, especially in this upcoming meeting? i think so. i compare with other issues on the table. fisheries, vaccine waiver, or others. i think a resumption
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of the selection process of the appellate body is the easiest one, and is the urgent one, the most urgent issue. on that note, thank you so much for your time. i really appreciate it. good luck with everything. i will talk to you soon. 0k. thank you. even before russia invaded ukraine, globaltrade was reeling from the many shocks of the pandemic. changing consumer patterns, a bruised airline industry, and covid—related absences of shipping workers. add to that a war in europe and this has made the movement of global trade is uniquely challenging, and sending shipping rates through the roof. how do you navigate through all of that? i spoke to the boss of ocean network express, based in singapore, and one of the biggest shipping companies. a pleasure having you on the show.
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what is it that governments specifically have to do to free up global trade? they need to first of all look at their own individual countries. look at how is the existing supply chain working. look at the infrastructure that they have. their ports, the terminals, their railroads, the trucking operations, and do they have enough labour in those particular sectors. and i are those sectors working under very tight planning restrictions? is there enough new capacity being brought online to build to that. on the container shipping site, we have been traditionally building 4%—5% additional capacity over the last ten years on a regular basis. we have not seen that consistent supply—side extraction and build—up also on the landside operations.
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governments have got to look a lot more clearly at the infrastructure planning, and look at how the markets, how efficient are the markets working within their own individual domestic economies. secondly, they need to recognise the entire supply chain is linked up, so governments have to work together at a global level to make sure trading rules are clear, make sure that any adjustments that are being made to policies to do with transfer of people or crews or restrictions around certain commodities or whatever, are being thought through, and that this will not have some negative impact on supply chain and create additional bottlenecks and problems. make sure your markets are working, and working efficiently in terms of supply chain, also look at total global picture and realise supply chains are so interlinked that we need to work together, and total government policy at a global level to pull us through. part of this, you are saying the need to be more
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part of this, you are saying the needs to be more investment from government. indeed. also, to realise the pandemic is not completely finished. for example, in china we are still hoping that situation is improving, and that any stage we may get another flare—up somewhere else. while it may be covid situation and health situation is hopefully going to calm down, we still have weather—related issues, you sometimes have industrial relation issues that can also pop up, to do with trucking strikes, to do with labour strikes as well. we have various factors which could happen and bottleneck app, which would impact the overall supply chain. no room for any complacency. we need to work on this continuously to look at where these bottlenecks are, and free them up very quickly, because if they are allowed to continue they will have an overall knock—on impact right through the supply chain which may take many months to clear. we know that the pandemic is not over. winter is not far round the corner for the northern hemisphere.
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in terms of covid. if it hits again, another variant hits again, will we have learned to right lessons to move forward? you have hit it on the nail. i am often asked, when is the supply chain going to calm down? when will things improve? i say, we are heading in the right direction, but we still of the pandemic existing, and while we still have locked out in certain areas, flairups in certain areas, leading to labour shortages or complete closing down of factories in receiving areas, then that is going to mean problems will continue to exist. we need to get over that. secondly, we have had this major pandemic, hopefully the world learns from that. maybe we are better in the future in terms of predicting and spotting when the pandemic are happening, working quicker to close them down and stop them becoming
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a global phenomenon. but you need to do more in the healthcare sector, regarding our future risk aversion of these types of things happening. we are still dealing with post—pandemic chain chaos. but in late february of this year comes a war on european soil. what's that done? supply chain has been tough. many of you will be aware we are still getting delays because of that back up from land side coming to oceanside. ships are running fine on the ocean side, we can carry things, we just cannot get them through the ports. changing gears and talking about that russia invasion, february, march this year, overall, russia, ukraine is 1—2% of global container business, not that significant in terms of overall supply chain.
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of course, very significant in terms of the citizens and businesses in russia and ukraine. we had to move very quickly for two reasons. one, first of all, operationally we were having difficulty moving our ships into russian waters, because of the sanctions and conditions in and around the trading environment, particularly things like insurance cover, banking cover. secondly, the sanctions came on very fast, in terms of what goods and products can be moved into those markets. many of our customers stopped booking. we had to suspend pretty quickly back in february, march, also our russian business. just briefly, russian and ukrainian workers make up a lot of seafarers? that is a very good point. often when these things happen there as many unintended consequences that come out later. while overall cargo volumes may
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be only one or 2% globally ukraine and russia, 15% of all global seafarers on the 60,000 ships around the globe trading are from ukraine or russia, and that provides a significant issue as well. we have to work diligently to find other crew members during this temporary situation, or maybe longer, as we can see, as things are developing at the moment. and make sure we have the cruise on board to keep the ships, the supply chain, are moving. when will rates normalise? we factor in design planning around the average container taking 50 days roundtrip. if it is taking 100 days we will run short of containers. and the ports, we are normally used to ships arriving on schedule on monday and immediately being served, 2a hours alongside, then departing. if we have to wait one or two weeks, that creates
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a huge problem, and the supply chain push back. we are seeing the port situation starting to improve. but we still have bottlenecks, like in north america and north europe. and some parts of asia as well. i would expect that as the supply chain starts to improve due to the health and covid issues, as the landside force comes back more effectively, as we get more resources from government and industry into more trucking and distribution centres, that by sometime the end of calendar 2022 we should see a return to normality, in terms of supply chain fluidity. if that happens, then assets could be deployed efficiently and effectively, therefore in 2023 we start to recover back to pre—covid levels in terms of business performance. on that note, i appreciate your time, thank you. good luck. talk to you soon. thank you. it has been a pleasure. i hope you enjoyed
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this week's show. follow me on twitter. thank you for watching. i will see you soon. hello there. we're expecting a short spell of rather hot weather across much of the uk, but not all of it, over the next few days or so. the heat and the humidity will be gradually building northwards. and that's because there's a heat wave across the iberian peninsula at the moment — temperatures in parts of spain have surpassed a0 celsius. that heat will be pushing northwards into france, and eventually into southern areas of the uk, so england and wales, by the time we get to friday when that heat is likely to peak. and that means that temperatures in london and in birmingham could get over 30 celsius on friday. but further north and west, across much of northern ireland and scotland, they'll stick in the low 20s in celsius. at the moment, we do still have this area of low pressure giving us swathes of cloud, some outbreaks of rain —
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most of it quite light and patchy — across much of western scotland, northern ireland. this will help to keep the temperatures mild here, overnight tonight, but underneath the clear skies, temperatures will drop back into single figures, mid—single figures locally, perhaps, across england and wales. so a locally chilly start to the day here. but here, of course, we'll see lots of sunshine throughout the day on tuesday, some fair weather cloud building through the afternoon. further north and west, with still all of this cloud around, some outbreaks of rain for western areas of scotland. eastern areas of scotland, though, should see some sunny spells emerge at times. temperatures peaking in the southeast of england at around 25 celsius. the pollen levels, of course, in all of that sunshine, will be very high, a lot lower underneath the cloud and the rain towards the northwest, and that's where the cloud and the outbreaks of rain will tend to stay as we head through tuesday night. we'll start to see some warmer nights as we head through the rest of the week. temperatures across the board into wednesday morning should stay in double figures for the most part. still got some outbreaks of rain up towards the northern isles as we head through the day on wednesday, lots of cloud here.
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again, cloudier towards the northwest. across england and wales, temperatures will start to rise into the high 20s in celsius, so 26—27 celsius for much of london. cooler the further north you go. and let's take a look at what happens for the rest of the week — so our high pressurejust gradually moves eastwards and the cold front will sink southwards, introducing that cooler—feeling air. but if we take a look at the temperatures, you can see that across northern ireland, 19—20 celsius, whereas across cambridge, 31 celsius by friday.
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welcome to bbc news. i'm rich preston. our top stories: explosion fierce fighting in the battle for severodonetsk, as ukraine's grip on the strategic eastern city seems to weaken. we have a special report. this is a deliberate tactic — bomb, shell, burn, and leave nothing but scorched earth. the uk government publishes plans to override part of the brexit agreement involving trade rules for northern ireland and insists it's not breaking international law. donald trump's former attorney general testifies that his boss became detached from reality as he made false claims of voterfraud. scientists plan to sequence the genomes of all forms of life in britain,
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