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This is an audio transcript of the FT News Briefing podcast episode: A make-or-break meeting for the WTO

Marc Filippino
Good morning from the Financial Times. Today is Wednesday, June 15th, and this is your FT News Briefing.

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The World Trade Organization is trying to prove it’s still credible.

Andy Bounds
If it can’t move forward in terms of reducing subsidies and easing trade flows, then people ask, you know, what’s the point of it?

Marc Filippino
The US dollar is strong but that’s actually a bad thing for American companies. Plus, Ukraine is laying out a weapons wishlist ahead of a meeting with Western nations. I’m Marc Filippino and here’s the news you need to start your day.

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The World Trade Organization has been responsible for basically accelerating globalisation for the past two and a half decades. But as the group meets this week in Geneva, it’ll be under a cloud of possible deglobalisation. The FT’s Andy Bounds is in Geneva covering the WTO meeting now. Hey, Andy.

Andy Bounds
Hey, Marc.

Marc Filippino
All right, so what are the stakes here? Why is this such an important meeting for the WTO?

Andy Bounds
Yeah. So this is the first meeting of trade ministers together from these 164 countries since 2017. That meeting broke up without an agreement because of a dispute over farming subsidies, which is a perennial bugbear for the WTO. And it’s really a question of credibility. I mean, the WTO still does its day to day work, but if it can’t move forward in terms of reducing subsidies and easing trade flows, then people ask, you know, what’s the point of it?

Marc Filippino
Now, Andy, you’re on the ground at the WTO meeting. What’s the mood like there?

Andy Bounds
It’s pretty frenetic and fraught. Most ministers will be leaving today and they desperately want to get deals on at least one of the five areas that are looking at. The talks, I’m told, are stuck in some areas. They’re inching forward, but there’s nobody predicting deals on anything in particular today in what people call a make-or-break meeting for the WTO.

Marc Filippino
And why is there this fear of deglobalisation right now?

Andy Bounds
Yeah, I mean, there’s been the trauma of the pandemic, Donald Trump in the White House, the rise of China, which is seen to be not playing by the same global rules as many other members of the WTO. So you’ve got these massive shocks of the system, which is causing a sort of fragmentation in trade. So people are starting to talk about friendshoring rather than offshoring. So you give investment and invest in trade with countries that you’re allied with.

Marc Filippino
Who are the biggest players? I know that all of the countries in the WTO have to sign off on any agreements to pass. But who has the most influence?

Andy Bounds
Yeah, we’ve really got four. You know, there’s the US, the EU, China and India. You know, it has to be said the biggest block to most things at the moment, people tell me is India, which tends to, you know, want to be treated as a poor developing nation and get special carve-outs from certain areas and other countries reluctant to give it to one of the biggest countries in the world.

Marc Filippino
So is this something the World Trade Organization can actually tackle?

Andy Bounds
Yeah, that’s a great question, Marc, because, of course, everybody has to agree. This is a consensus-driven organisation. Any one member can stop things. And of course, in today’s world it’s pretty hard to get everybody to agree on things. You know, they’re trying to get a deal to end the harmful fishing practises, which are underpinned by billions of subsidies around the world. They’re also trying to get an agreement that countries will sell food to the World Food Programme so it can feed the starving. And believe it or not, there are still countries which are holding out, saying, you know, we might not be able to part with our food to the World Food Programme because we might need it for ourselves.

Marc Filippino
Andy Bounds is the FT’s EU correspondent. He’s in Geneva covering the World Trade Organization meeting going on now. Thanks, Andy.

Andy Bounds
Thanks, Marc.

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Marc Filippino
The US dollar is very strong right now, but this actually hurts American companies. The financial technology firm Kyriba reports that a strong dollar has already knocked off $40bn from North American companies earnings. And that’s just in the first half of this year. The FT’s Kate Duguid explains why.

Kate Duguid
When the dollar is stronger, it means that companies that have large exposures to international markets often lose money because the cost of their products go up abroad. So that’s especially true for a company like Microsoft, right, which depends on a lot of sales of software, laptops, whatever else sales abroad. And sales are worse abroad because products are more expensive for foreigners.

Marc Filippino
OK, so let’s back up a little bit, Kate. Why is the dollar so strong right now?

Kate Duguid
So there’s this unusual phenomenon with the dollar where it both outperforms when the US is doing a lot better than its peers and it also performs better when everyone is in recession. Right? That, like, the US dollar is this safe haven asset. So when markets are really volatile, when there’s a risk of recession, people flood into the dollar because it’s the safe haven asset. And so for the first half of this year, we’ve seen the dollar benefiting, in part because the US has been raising rates, but also the US economy has been doing better than a lot of its peers. In the second half of the year, we may see the dollar continue to outperform because everybody’s scared of a recession.

Marc Filippino
Yeah, and those recession fears are very real. We’ve been seeing them in the markets all year because of inflation and central banks tightening monetary policy. But as far as the strong dollar goes, what do investors think about what it’s doing to American businesses?

Kate Duguid
I mean, this is more bad news for US companies, right? That US companies are suffering at home in part because of recession fears that, you know, people are worried that the US consumer is getting slightly weaker. Not only is the US consumer weakening potentially because the Fed is raising interest rates and financial conditions are tightening, but US companies are also not able to make as much money abroad because of the strength of the US dollar.

Marc Filippino
I see. So just because the US is doing better at the moment compared to other countries, it’s not like things are going particularly well here.

Kate Duguid
Exactly. Exactly.

Marc Filippino
Kate Duguid is the FT’s US capital markets correspondent. Thanks, Kate.

Kate Duguid
Thank you so much. [MUSIC PLAYING]

Marc Filippino
Senior Ukrainian officials have been pretty clear about what they need in order to keep up with Russia on the battlefield. And today, Ukraine will meet with defence ministers from western countries to ask for more military aid.

John Paul Rathbone
Ukraine consistently says it needs more and those needs change.

Marc Filippino
That’s the FT’s John Paul Rathbone. He says that when the Ukraine war first started, the country wanted things like anti-tank missiles. Most recently, the conversation has moved on to heavy artillery.

John Paul Rathbone
This is where the war is at the moment because Russia has an abundant supply of artillery and artillery shells, and Ukraine does not. And that means that in the front line in the eastern Donbas, its troops are being hammered by Russian artillery shells. And there’s nothing they can do about it except sit there with their AK47s. So if that equipment arrived in quick order at the front lines, and if there were also Ukrainians who were trained sufficiently to to use it, they probably could make a large difference in the eastern Donbas region.

Marc Filippino
John Paul, is there any sense that the west is sort of hesitating or not coming up with the goods?

John Paul Rathbone
Well, some countries have been abundant in their help and the US has led and the UK has not been far behind. And other countries have been less able to provide because their army doesn’t have sufficient supplies. The sort of overarching problem is that western supplies of some of these weapons is short. It has to be got to Ukraine and then into the front line, which is no small task. And on the Nato air equipment, Ukrainian troops have to be trained how to use it. But it is true that Ukraine says that it hasn’t been supplied with enough. And when you compare its needs with what’s being delivered, just a fraction of what it says its needs are have been delivered so far.

Marc Filippino
So what’s at the top of Ukraine’s wishlist?

John Paul Rathbone
There is a contact group meeting between 45 or so western countries today with Ukraine. And top of its list is anything that will help it with long range strikes. And that includes tanks, multiple rocket launchers, which have a longer range than artillery, howitzers, drones, so they can provide reconnaissance and help with the targeting and the integration of the command and deployment of the howitzers. And those are the things they need at the top.

Marc Filippino
John Paul Rathbone is the FT’s defence and security correspondent.

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Before we go, Apple is getting in on the live sports streaming hype. The FT is reporting the tech giant has agreed to a two and a half billion dollar broadcasting rights package with Major League Soccer. Apple is already streaming live sports with Major League Baseball, but this is the first comprehensive rights package with the league. And analysts told the FT that sports packages are clearly the next battleground for tech giants. And even though Apple may be a little late joining the party, it’s still a serious player.

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You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

This transcript has been automatically generated. If by any chance there is an error please send the details for a correction to: typo@ft.com. We will do our best to make the amendment as soon as possible.

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