haidi: i'm haidi stroud-watts in sydney. sophie:-- haidi: the u.s. and china signed a trade -- a phase one trade deal in the making. that set wall street to new highs. set a high.

and the impeachment debate moves forward. a ceremonial process after a vote that was mainly split along party lines. live: we are looking at a shot on capitol hill in washington. house speaker nancy pelosi named the managers of the impeachment case against president trump. this kicking off a ceremonial process that transfers the impeachment case to the senate. today, the house voted to transmit charges to the senate. that vote was mostly along party lines. very similar to the december 18 vote to send articles for abuse of power and obstruction of congress. we will bring you those events as you happen. first let's get a quick check on the market close in the u.s. stocks again at record highs. we have the u.s. and china signing the phase one trade deal and markets getting a boost

after white house economic advisor larry kudlow promoted tax cuts. they set a record for the sixth consecutive trading session. had disappointing results from goldman sachs and bank of america after mostly positive results in the previous session. rally mostly a defensive held by utilities treasuries also gaining ground. the nasdaq unchanged, but we also saw cotton futures trading lower with more caution about the phase one trade deal. let's see how this is shaping up the markets in asia. sophie: we can anticipate defensive moves in asia ahead of a session that will bring chinese home prices and japanese ppi along with earnings from tech heavyweights. futures have settled higher after the midweek tumble we saw in mainland stocks. let's check in on the close wednesday. we did see the index cap the

worst drop in three weeks as we materialsty and stocks among the worst performers. in after you checked strengthening to the highest levels since july. this holds steady as the phase i one deal was signed. analysts not too impressed with the two-page section saying that not much new was had and it is less than the agreements reached with mexico and canada. with the u.s. and china signing a phase one trade deal three years in the making, it commits beijing to crack down on the theft of u.s. technology and corporate secrets and underlines a spending plan to close the trade deficit. >> today, we take a momentous step that has never been taken before with china. toward a future fair and

we signal trade as phase one of the historic trade deal between the united states and china. haidi: let's bring out senior trade editor sarah mcgregor and our coanchor tom mackenzie. you,e start off with sarah. was there anything surprising when we got the text of the deal ? sarah: it did outline the specific purchases china is going to make. things like manufactured goods. that is over two years. there were details about that that i think shed a bit more deal,on what is in this but how it is going to happen is the big question. chinahard to imagine forcing its companies or importers to buy american goods and how that will take place. that raises a big question. what else we learn and what we

expected all along is that the u.s. is going to hold out this threat of escalating tariffs if china backtracks on some of its commitments. there are timelines over the next few months. there were a few more details. nothing too surprising. at the end of the day, everyone agreed the deal reduce tensions but does not achieve a lot of what the trump administration set out to do, which is crackdown on ip theft and forced technology transfers. haidi: to sarah's point, they did say they would try to move beyond a phase one deal but when you are talking about 30 $2 billion of agricultural purchases and energy purchases, how reasonable is it? tom: it is a huge demand on china. that is why we think there will probably be some creative accounting from china going forward, whether that is routing some exports or imports via hong

kong, but certainly china does need and depends on external energy. it is the largest consumer of oil in the world. it has a gas pipeline with russia. how much more gas a can at is a question but it does need more energy. it can in theory redirect more demand from the u.s. but in terms of how it is implement it, in terms of the energy -- food product i should say, demand is growing. andalk about swine for you swine fever that has affected the pig population. if that starts to pick up, they have signed contracts with the likes of brazilian farmers who will be reluctant to undo those. things, theyide of will likely sign a deal. we are hearing from boeing. controversy has not made that easy. tariffs onreduce

u.s. autos. they say they will do that on a case-by-case basis. it is going to come down to them limitation and as the economy slows, we have seen three straight years of falling demands, that will be a question as well. haidi: one about emblem mentation when it comes to the structural reform related part clampingal, which is down and penalizing companies that go against the tech transfer side of things. is beijing able template that given that the country has struggled over many years? tom: it absolutely has. what they have done o far is put in place the changes. the investment started and is taking place early part of this year and is still being rolled out across china. in terms of intellectual property, those have been beefed up in the last couple of years. it really benefits the private

companies. they are creating their own intellectual property so their own domestic needs to strengthen the ip regime. it comes down to implementation not just at the central government level but the local government level and the ministerial level as well. that is what they are going to be looking at in terms of how far china can go and forced tech transfer is another key element of pushing back on the chinese demand around that. what happened on the ground is something that chinese or u.s. is nice lobbyists and other groups will be looking at closely. haidi: the big new seems to be tariffs on chinese imports would stay in place. how different is this phase one deal from agreements in the past, especially when it comes to dispute resolution in 90 days? sarah: i think you point out the key here. the trump administration sees

this first phase as a trade agreement with china. getting the easy stuff out of the much harder phase will be the second one. to get thate way done is to keep up the leverage. that is always going to be something that can really be used against them. of course, if trump wants to juice the economy, he may alleviate his own reasons. advantageous that the trump administration will be able to make that take place. to hold out that terror that maybe this trade war could escalate again. mentioned, as a

win for president trump. i'm wondering how that will be perceived where you are. is that something that is politically palatable? about don't forget trying to put out three key conditions for getting a deal. some of the most important ones where at least a partial removal tariffs and a balanced two-sided deal. the third component was that there were not be over demands in terms of purchases from china. in terms of tariffs marginal relief in the last section. $250 billion of chinese goods. it doesn't look like a two-sided deal. i think china is going to try to spin this and say this is in line with longer-term ambitions and we saw that from the

commentary that was published. haidi: tom mackenzie, thank you for that. ourchina correspondent and senior trade correspondent. from watching the impeachment proceedings with the house having voted now to send articles of impeachment to the senate, we are expecting speaker pelosi to come out. resolution signing a that appoints a house manager to prosecute the case against the president and exhibit articles of impeachment. they will be delivered to the secretary of senate this evening , but the bigger picture remains that removal from office requires a two thirds vote in the senate and we have seen mitch mcconnell continue to make a case for president trump's acquittal. let's bring in congress editor anna edgerton. -- sendingosi in

these articles of impeachment. what is next? anna: tonight, the clerk will go to the impeachment managers named earlier today and notify the senate that the impeachment has happened. the house adopted the articles of impeachment and that will begin to set in motion the senate trial. as you pointed out, the important thing to remember is that the president probably will be acquitted. they will be a lot of ceremony, political haggling and there could be new witnesses and documents introduced. there could be new information revealed but none of that is likely to change the final outcome, which could be one month or two from now whether the president will remain in office and will remain until at least the 2020 election. sayingthe judiciary term that this is not just president trump that is in the spotlight and on trial. it is the senate on trial. what does he mean by that in

terms of the constitutional seriousness of what is to come? anna: he and other impeachment managers made the point that it is important for the senate to do their constitutional duty. there is going to be pressure on senators, especially those running for reelection in some of the swing states next year to treat this as a serious process, to at least show that they are trying to make it a fair trial, even if the outcome is predetermined. press we are seeing the taking pictures of documents being placed on that table on capitol hill. of course nancy pelosi is supposed to sign the resolution appointing the managers. there is articles of impeachment will be sent to the senate. tell us a little bit about what happened once this goes to the senate. republicans seem to have rallied behind the president. anna: absolutely. we did see as many as four republicans that break with mitch mcconnell in procedural

votes. we could see senators running for reelection. key question is, who will those witnesses be. one person the democrats insist on calling. it could also be hunter biden, the former vice president. for that ukrainian gas company, rudy giuliani who wanted to start to give political gain into 2020. haidi: even if this doesn't go beyond the senate, how damaging is the active impeachment birding -- impeachment during an administration? anna: it is hard to tell.

just like anything with president trump, it is hard to see -- ec has most ardent supporters who are strongly behind him. it is hard to imagine anything that would get them to break with the president. what we don't know is how many voters are in the middle. how many voters could be swayed by something like an impeachment process? it seems like the country is so polarized that there are very few voters still in the middle making up their mind about president trump. people either strongly support impeachment, think you should be removed from office or are strongly behind him and think this process is a sham and he has been badly treated. it will be the question of 2020 how big the mental bloating -- the middle voting block is. shery: president trump during the signing ceremony without trade deal repeatedly mentioning the impeachment "witch hunt." let's talk about when the democrats pursued this case, the

idea was that the american public would be able to understand it better than perhaps the special counsel mueller probe that was more complicated. is there any sign of how the american public is receiving this, if they have stronger feelings about this proceeding than they did perhaps about the mueller report? anna: polls show that the american public is divided. according to different polls, around 51% support removing trump from office. what was interesting when we got to these allegations was the impact that it had on the house democratic caucus. there were a bunch of moderate democrats who even when former special counsel robert mueller's report came outside we don't need to impeach the president for this. we are not there yet. when we saw these allegations regarding ukraine, which was not backward looking to the 2016

election, it was forward-looking to the 2020 election, things the president was doing to influence his reelection campaign and the next election he will stand in, that is when we saw house democrats, even the moderates coming out and saying i don't care about the political risk. it is my constitutional duty to hold this president to account. shery: thank you so much for your insight. we will keep you on that story developing at the moment on capitol hill. for now, let's turn to the other top story today and that is the u.s. china trade deal in the signing of that phase one negotiation. we have somebody familiar with this topic. wendy cutler, vice president and a former career diplomat. she joins us from seattle where she is attending the u.s. china conference. always great having your.

we have heard president trunk also many other trade deals the greatest ever including the usmca which looks very much like the transpacific partnership. how different is this deal? wendy: it is a solid deal in the administration should get credit for achieving this deal. it falls way below the expectations they set out at the beginning of this negotiation when they were going to address all of the issues that were keeping u.s. companies out of the chinese market and doing it within 90 days. the negotiations proved a lot tougher than they thought. shery: how significant is the fact that we still have some dispute resolution mechanism with the 90 days in place. potentially more punishment for beijing if they don't enforce the deal. wendy: this is an important part of the agreement and one that

distinguishes this agreement from previous ones. i think the hope is that a strong settlement mechanismagren period will allow both sides ample time to resolve differences before having to resort to action. haidi: wendy, i have to interrupt at the moment. do stay with us. we are looking at live pictures on capitol hill where house speaker nancy pelosi is speaking on the articles of impeachment. upheld the constitutional duty and voted articles of impeachment against the president of the united states. he said in the course of the debate that he did not uphold protect of office to and defend his constitution of the united states. the president takes a special of the different from the congressional of. he takes and of that was taken

by president george washington. so tragic for a country that the actions taken by the president undermine our national security to violate his oath of office and jeopardize the security of our election integrity. it has taken us to this place. today, we will make history. we'll cross this threshold. and obstruction of the house. we areake that history, making progress for the american people. progress and support for the constitution, progress in honor of the sacrifice of our

founders. progress in honor of the sacrifice of our men and women in uniform and progress for the future of our children. that thise very clear president will be held accountable, that no one is above the law, and that no future president should ever entertain the idea. article two says he can do whatever he wants. sign the, i will resolution transmitting the articles of impeachment to the deliveredich will be by our managers, of whom i am very proud. when they bring this over, it will set in motion a process on the senate side. probably tomorrow, i don't know their schedule, but it may be as

soon as tomorrow. senators will take and oath of office, a special of to be impartial judges and to impartial justice according to the constitution and the law. let's hope that they uphold that both that they take tomorrow. we are very honored to be here with our chairman who worked so hard to help us uphold the constitution with their legislating, investigating, litigating. the chairman of the judiciary committee is a part of the managers. the distinguished chairman of the intelligence house select ,ommittee on intelligence congresswoman maxine waters, chair of the national services committee. congresswoman carolyn maloney, chair of the oversight committee.

congressman mr. chairman elliott angle of the foreign affairs committee and richie neill, chairman of the ways and means committee. we thank them for all of their difficult work and be honor our darling elijah cummings who said when one day we are dancing with the angels, what will we say about what we did at this difficult time in our country? nadlerry proud that mr. and mr. schiff are part of our managers but i want to acknowledge our other managers with us. a freshman member. they have been here one year. accomplish great things. congressman jason crow of colorado.

congresswoman val demings from the state of florida. congresswoman garcia of texas. are we all here? hakeem, distinguished chair of our caucus of new york. this is her third impeachment. she was in the nixon impeachment, a staffer for a judiciary committee member in california. she was a member of the judiciary committee -- clinton impeachment in her own right in the judiciary committee, and now member of the judiciary chair of the house administration which oversees elections and a manager. with that, i thank them all for their leadership and their service and i am now going to proceed to sign the articles.

shery: house speaker nancy pelosi signing a resolution. after this ceremony, the impeachment managers led by the house clerk and sergeant at arms will begin a procession through the national hall and capitol rotunda in the senate. they will present the articles of impeachment to the secretary of the senate. this will be the first step toward that trial in the chamber , but the bigger context, conviction and removal from office still requires a two thirds vote in the senate and of course the senate is controlled by republicans. we know that with speaker nancy pelosi now signing this resolution that ends a month long stalemate with senate

majority leader month -- mitch mcconnell, she was not able to get the concessions she wanted on new witnesses to be called. continuedconnell has to make a case for president trump's acquittal from the two articles of impeachment. those would be the abuse of power based on the president's efforts to pressure ukraine to investigate joe biden and his family, the other article of impeachment would be obstructing congress's efforts to investigate his dealings with ukraine. you are seeing speaker nancy pelosi signing that resolution which be the first step toward a trial in the senate. we have already seen this senate have some restrictions during the impeachment proceedings. some communication restrictions. of the the format

process being set already. a very significant day for americans and american history. watching thee house speaker nancy pelosi and the house managers delivering the articles of impeachment to the senate, the signing of the paperwork. it is very ceremonial. quite fascinating, even as you pointed out this is unlikely to go beyond the senate. in terms of what happens next, the house speaker said she is not sure of the timing of the democratic impeachment managers could head to the senate as early as tomorrow morning to read the articles of impeachment out loud. later in the day, chief justice john roberts would be sworn in to preside over the impeachment trial and he will swear in the senators as jurors. president trump will also be receiving his official summons as well as a date which he has to respond in the various deadlines and pretrial motions

will be set in motion as well. in terms of the main part of the trial, that could start as early as tuesday and could go on for several weeks passed the state of the union and address. we are pointing out that schedule for february 4. president trump's defense team will be held by the white house counsel and his personal lawyer as well. that is according to people familiar. more people will be added to that team as well, but certainly the ceremonial part we are seeing house speaker nancy pallone's -- nancy pelosi signing paperwork. speaker pelosi already talked about the historical significance of this event. the president will be held accountable, that he cannot do everything that he wants, and the historical significance is huge. only two presidents in american history have been impeached by the house. that was the impeachment of

andrew johnson in 1868 and bill clinton in 1998. richard nixon resigned in 1974 before he was formally impeached. huge forificance is american history at the moment. we are seeing speaker pelosi having finished signing the resolution of counting the house managers, and the next step would be to deliver those articles of impeachment of the senate and that would be the first step toward the trial in that chamber. of course, removal requires a two thirds vote in the senate and we have heard majority leader mitch mcconnell publicly declaring that he will coordinate with the white house when it comes to impeachment proceedings and we are now seeing speaker pelosi exit the room on capitol hill where she just signed that resolution that appoints the house managers who

will prosecute the case against president trump. we continue to wait and see how this progresses. the house speaker saying that the house managers will said over to the senate as early as the next morning to rate the articles of impeachment. dates and deadlines are set from there. we talk about the historical significance and it is significant. bloomberg speaking with house managers in the 1999 impeachment case. getting recollections as to the significance in this moment in history. best be prepared not test -- not to mess it up. we will continue to monitor that story with those articles of impeachment being sent to the senate. let's get back to our other top story, which is the phase one

trade deal between the united states and china, up to three years of threats and negotiations and back and forth. i went to bring in our asia society vice president guest to has been waiting patiently. very sorry to have interrupted you. in terms of what we are talking about, clearly the impeachment proceedings are about to begin. a trial could be happening in the next few days. how much of a welcome distraction politically is this trade deal and the ability to make this a positive for president trump? wendy: i am sure that played into the administration's efforts today to have a big public ceremony to show the president's ability to manage a very important relationship with he key country. he played into it. looking ahead, we are looking

forward to implementing the deal and make sure they are not violating the deal, but this is a phase one deal. by definition, there is a phase two negotiation and that is going to be difficult. a lot of the tough issues were put off and that phase is going to start presumably soon and will be proceeding as the election campaign keeps up as well. wendy, are you optimistic that the thornier issues in a phase two or phase three, the really deep structural changes that president trump was so ambitious about, forcing china's hand on, do you think they will be dealt with? wendy: i don't think so. i think the phase two negotiations will begin but the prospect for a successful agreement that really addresses these issues is pretty remote. not only because of u.s. politics, but also because these

are the issues that are really at the heart china's economic model. it is just difficult for me to see xi jinping letting his negotiators really move on these issues and curtail subsidies and the operations of his own enterprises in any meaningful way. unfortunately, i am not optimistic, but i think some progress can be made. i think we need to lower expectations. shery: what do you make by the moves of the u.s. to work with the european union and japan in order to strengthen wto rules when it comes to china subsidies, even that at the same time, the u.s. has been weakening this organization? wendy: correct. i think it is important, because i think issues like subsidies, by definition, need a multilateral solution. it is hard to deal with subsidies on a bilateral basis. i was pleased to see the fact

that after months of work, the eu, japan and the united states could reach an agreement on the parameters of what a subsidies deal could look like and particularly given how difficult phase two negotiations are going to be, doing this in tandem could help the united states achieve success. shery: viewers, you have been watching the articles of impeachment be delivered to the senate after speaker pelosi signed a resolution to appoint house managers. impeachment managers led by the house clark and sergeant of arms beginning this very ceremonial procession through the national statuary hall of the capitol rotunda to the senate. they will be resenting impeachment articles to the secretary of the senate, which would be the first step for a trial.

of course bigger context here, we see the conviction of the president will still require a two thirds vote in the senate in the republican-controlled chamber. deliverede articles i to the senate tomorrow on thursday, chief justice john roberts will be sworn in and he will be presiding over this trail and swearing in the senators. wet is interesting is that have seen a series of restrictions put forth in the senate trial during the impeachment, which could be cumbersome for democratic senators that are seeking a presidential nomination. we continue to watch this very ceremonial process at capitol hill. haidi: that is right. as to when this will set into process the next

two days when we expect the trial to begin as early as tuesday. we heard from house speaker nancy pelosi earlier saying she was not sure exactly when this would happen but that the impeachment managers could head to the senate as soon as tomorrow morning to read the articles of impeachment out loud. tomorrow, we will see chief justice john roberts being sworn in to preside over the trial. he will be swearing in senators to act as jurors. there has been a lot of rhetoric and reminders to take this job seriously, the historical momentousness of this issue, even if at this point, the impact of this administration and the removal of a president is largely symbolic given that is not expected to go through the senate. a date by which is legal party will respond.

all this procedural pretrial motions to be set as well. on thist more context topic as we continue to watch capitol hill. eric watson is joining us now to talk more about this. we see the historical significance of this. what happens from here, and what is the likely outcome, given we know how it played in the senate? is really no doubt that the president will be acquitted and remain in office but it will be interesting to see whether his political ratings and chances of reelection are compromised. we are seeing the house clark presenting articles of impeachment from the house and letactual reading -- shery: me interrupt before a because we are now seeing mitch mcconnell speaking.

let's listen in. beginningpose of articles of impeachment against president trump, agreeably to the notice communicated to the senate. further, the at the hour of 2020,noon on january 16 the senate will receive the managers in order that they may present and exhibit. articles of big -- against president trump. big diction -- is there any objection? if not, so ordered. >> i asking animus consent to the rules of procedure and practice when sitting on impeachment trials that at the senate 2:00 p.m., the proceeds to the consideration of articles of impeachment and the presiding officer notify the chief justice of the united states of the time and place

fixed for consideration of the articles and request his attendance as presiding officer pursuant to article one section three of the u.s. constitution. >> is there any objection? so ordered. >> i asking animus consent that the presiding officer be present a to committee of senators on the recommendation of the democratic leader to escort the chief justice into the senate chamber. i further asked that the secretary of the senate be directed to notify the house of representatives of the time and place fixed for the senate to proceed upon the impeachment of donald trump in the senate chamber. i asking animus consent that access to the senate wing, floor and chamber through all of the

proceedings of consideration of the articles of impeachment against donald trump at all times that the senate is sitting in trial with the chief justice presiding be in accordance with the allocation and provisions i now send to the desk and i ask that it be printed in the record. so ordered. >> i asking animus consent that senate proceed with consideration. >> the clerk will report. 47senate resolution authorizing the taking of a is thereh1 >> objection? without objection, the senate will proceed. >> i ask unanimous consent the resolution be agreed to and the

resolution be considered. >> without objection, so ordered. >> a few minutes ago, the senate was notified at the house has -- is ready to proceed with articles of impeachment. consent, we have laid some of the groundwork that will structure the next several days. we have officially invited the house managers to come to the noon toomorrow at exhibit their articles of impeachment. later tomorrow afternoon at 2:00, chief justice of the united states will arrive in the , then the sworn in chief justice will swear in all senators. we will pledge to do justice for our institutions and for our states and the nation, then we will notify the white house of

our pending trial and some in the president to answer the articles at the senate. the trial will commence in earnest on tuesday. first, some important good news for the country. we anticipate the senate will finish the usmca tomorrow and send this landmark trade deal to president trump for his signature. a major victory for the administration. close with -- this is a difficult time for our country this is precisely the kind of time for which the framers created the senate. i am confident this body can rise above factional fever and serve the long-term interests of our nation. we can do this and we must.

shery: you have been listening to mitch mcconnell speaking in the senate, saying that the impeachment trial will be starting tuesday. he laid out formal proceedings going forward. chief justice roberts will be brought to the senate at 2:00 p.m. thursday. he will be sworn in than swear in senators. very interesting that senator mcconnell made mention of the fact that the usmca trade deal will be finished tomorrow, then sent to the president for his signature. of course, we have seen the 2018 be signed on november , but many different issues have held that trade deal being moved forward. let's bring back eric watson and discuss what is happening with the impeachment trial, which is set to begin tuesday, according

to senator mcconnell. we have heard from mitch mcconnell making the case for the president's acquittal and speaker pelosi had delayed the delivery of the articles of impeachment in order to get concessions from him. at least for now, could we say that this is a partial victory for the senator? eric: certainly, he has made no concession that there be witnesses and documents, exhibition of new evidence in the trial. it remains to be seen if that will come to pass. there will be an initial resolution setting up phase one of the trial in which each side puts forward their opening argument but that will allow for a roll call vote. it is in important stipulation from modern senators who want to see that provision. whether that results in new

witnesses is yet to be seen. so far, we have lisa murkowski of alaska saying they are interested in hearing from witnesses such as john bolton. it remains to be seen. mcconnell has won this round, but he may have to allow witnesses at some point. it is important to say the usmca is going to get done tomorrow. once the senate takes up in impeachment trial, it cannot get to any other business. there was some delay with democrats renegotiating the deal . they see it as a win. been: senators have also told to stay in place for the entirety of the proceedings. what does this potentially mean for the senators seeking a presidential nomination? erik: it is potentially a boon for joe biden who is no longer a senator and pete buttigieg, the south bend mayor.

they will have free reign to roam around iowa and subsequently in new hampshire to over amyly get an edge klobuchar, elizabeth warren and bernie sanders. they won't even be able to bring in electronic devices. they will be isolated in the chamber for lengthy arguments that could take several weeks. shery: a very important, crucial time as we get closer to that presidential nomination. the latest on the impeachment trial. back wendy cutler. u.s. trade representative as well. thank you so much for sticking around. finally we are getting that usmca trade deal. how long has it been?

democrats and republicans and president trump. over thetting usmca finish line is important. going on for over two years now. and deal was negotiated when it was brought to congress, they need to work with the democrats to get approval. once the agreement had passed to the u.s. senate in the president signs it, my understanding is canada still needs to pass the deal. both sides are going to need to make sure that the deal is ready to be and plummeted, and that may add a few more weeks or months onto the actual and limitation date of the trade deal. trade deals are complicated. there are lots of steps between negotiation and entering in, but if the senate can bring it over the finish line, it is a good

day for trade. with the signing of the phase i deal in about three years since the trade war began. is the news out of this the wto? does this suggest there will be more reform when it comes to the wto as well as the idea of multilateralism in trade to be more efficient? wendy: it is not a good day for the wto when a big dispute between the two largest trading partners is settled outside of the wto. the wto is viewed as an organization whose roles don't even address the issues that were being negotiated. it is also an important year for the wto. they have an important ministers meeting coming up and that will be a pivotal moment to show whether they can update and make other going toor

be increasingly sidelined as trading partners take matters into their own hands? shery: thank you for sticking around throughout this hour. the vice president of the asia society policy institute. we will have plenty more to come on daybreak. this is bloomberg. ♪

haidi: australia's scott morrison has doubled down on his despite growing concerns of climate change i made bushfires. the world's largest investment manager signals that is pulling back from coal and working toward gradual decarbonization. let's bring our next guest. tim buckley is at the institute for economics and financial net -- financial our analysis.

is this as much of a challenge as the government make it out to be? tim: it is understandable that our government is protecting the domestic industries that are relevant today, back at the end of the day, i take issue with the comment that the cost of transition and transformation is too high. to me, with the bushfires have the cost oft inaction is too high. that is probably the pivotal shift. a lot our politicians are realizing that having a transition plan or a fire emergency plan on the government's desk leaves everyone in australia exposed. that to me is politically acceptable. haidi: is part of the issue that you have so much political instability and a rotating door of leaders hard to get long-term policy?

, as weere to start today see these fires continue, we know that it will be ongoing, if we were to start making changes today, what needs to be done? tim: to me, the absolute first step is to accept the science that the scientists have been telling us for 40 years. it is a given. have got to stop to nihilism. we got to say our elected representatives are elected to represent australians, accept with the scientists have told us and prepare for the future rather than trying to hold onto the past and dean i want to me is an inevitable technology driven transformation. shery: the defenders of coal power point to the long-term growth potential of this sector. what would you say to them? tim: that is delusional. day, we have the seen blackrock move and when you

read larry fink's logic. he says this is the right fiduciary decision but it is not a moral question. it is about economics. blackrock's own analysis says no more coal. that power generation is technologically obsolete. it is on its way out. when the biggest investor in the world says those words, they are pretty strong. that says australia is the second biggest coal exporter, we have to support for a decline in the long term of what is a key product for australia. a key export frost all you. cost ofou mentioned the inaction. in what areas will be see that the most? the 20 odd lives that have been lost, apart from the hundreds of thousands of houses destroyed, everyone in australia is now going to have

rising insurance premiums. normal, so new insurance premiums are going to go through the roof. that is one example where every one of 25 million australians will bear the economic cost of inaction from our government. to me, that changes the political context but there is a real economic cost of inaction. at the end of the day, we are also very exposed. where the world's number three exporter of fossil fuels, so as the world deke harmonizes, australia is exposed if we don't prepare our economy. we have got to look to industries of the future and invest in the alternatives. haidi: as we see from this announcement, there is momentum building, divestment away from fossil fuel stocks. what about the finance side? that is a very good

question. have been tracking for the last year. there are now 100 16 globally significant banks and insurers who have formal coal divestment exclusion policies. significant banks and insurers. that side is actually growing faster than the equity side, the asset management side. i think finance is becoming increasingly difficult and we saw that when they mentioned they were unable to secure a single investor to support their opening up the coal basin and had to finance it themselves. that shows you the magnitude of the shifting global finance. on the insurance side and the equities side. haidi: what do you want to see in terms of the export side? there is a lot of information and misinformation about --

saying that if australia does not export high quality coal, it is going to be replaced by lower quality coal and that could be worse emissions? tim: it is a good drug pushers argument. haidi: that is not how coal infrastructure works. tim: not at all. a number of our senators. this idea that our coal is better. our coal is the same energy content as russian exported coal, south african exported coal. it is a myth. the idea that our coal is higher energy content than indonesia is true what our energy content is four times as high. at the end of the day, it is still coal and it will be replaced by alternatives. thank you so much for joining us. a fascinating conversation. that is it for david custer

they'll but we have all the action on -- that is it for "bloomberg daybreak: australia." we will have the action on daybreak asia next. this is bloomberg. ♪

haidi: good evening. i am haidi stroud-watts in sydney. shery: japan and south korea open in one hour. sophie: welcome to "bloomberg daybreak: asia." haidi: our top story, the u.s. and chinned the trade deal that has been three years in the making. president trump said they has righted the wrongs of the past. the accord is broadly welcome, although phase