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QUEST MEANS BUSINESS

Who Will Be the Next Head of IMF?

Aired May 25, 2011 - 14:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


RICHARD QUEST, HOST, QUEST MEANS BUSINESS: The first IMF candidate, Christine Lagarde, launches her bid to replace Dominique Strauss-Kahn.

(BEGIN VIDEO CLIP)

CHRISTINE LAGARDE, CANDIDATE FOR MANAGING DIRECTOR OF THE IMF: I'm a leader by temper and attitude and professional experience. I'm also a person that can reach out and can reach consensus.

(END VIDEO CLIP)

QUEST: Dealing with the debt crisis, Greece insists it is on course.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Leave us in peace to be able to do-to bring Greece out of this crisis and we will do so.

(END VIDEO CLIP)

QUEST: The Doha deal, the U.S. trade representative tells me tonight, we'll do what we can, and dump the rest.

I'm Richard Quest. I mean business.

Good evening.

Tonight's show is largely from France. We have an interview with the French Finance Minister Christine Lagarde, the first official candidate for the IMF. It comes as Paris hosts the 50th anniversary of the OECD. Bringing together business leaders and ministers, discussing the most pressing issue on the agenda of international economics. One of those is undoubtedly the leadership of the IMF. Tonight, we also speak to the secretary general of the OECD Angel Gurria, the governor of the Bank of Israel, Stanley Fischer, the U.S. Trade Representative Ron Kirk, the U.S. Undersecretary for Economic Affairs Robert Hormats.

In fact, if you go away and don't stay with us for the full hour, who knows-

(DESK BELL CHIMES)

-what you'll miss.

She is a lawyer, a business leader, a wife and a mother. And perhaps the new head of the IMF, Christine Lagarde is now also beginning her campaign to succeed Dominique Strauss-Kahn. Tonight Germany is the latest European nation to support her, while the BRICS the world's biggest emerging economy says the job should not automatically go to a European. CNN's Jim Bittermann sat down with Christine Lagarde in Paris.

(BEGIN VIDEOTAPE)

JIM BITTERMANN, CNN INTERNATIONAL CORRESPONDENT: So, why are you qualified for this job?

CHRISTINE LAGARDE, FINANCE MINISTER, FRANCE: I'll tell you what I bring, I think, to the fund, if I was elected. I'm a lawyer by background. And I have that set of legal skills. I'm a leader by temper and attitude and professional experience. I'm also a person that can reach out and can reach consensus. I'm a person that expects others to shine and bring their talent to resolving problems.

On the top of which, having been 25 years in private practice and having lead a very large institution, although in the private sector, Baker & McKenzie, one of the largest law firms in the world. I've been the minister for finance for France for the last four years. And you know, we have traveled the tempest, not too badly. The crisis did not hit France as hard as it hit other countries.

BITTERMANN: Minister, in your announcement why did you emphasize that you were bringing your expertise as a lawyer, and a head of enterprise, but also as a woman. What was the point of that?

LAGARDE: I mad the point about my gender because, number one, women represent about half of the population of the world, if not a little more. And it is OK to actually be able to, not represent, but come from that majority which is often a minority. So, I'm not suggesting that I should have any special favor, but I will certainly bring my skills as a woman, as well, as a mother, too.

BITTERMANN: Will you do anything to change gender equality at the IMF?

LAGARDE: Well, wherever I have been, whether as chairman of Baker & McKenzie, or as minister of finance to the last four years, I've always tried to improve the gender ratio and the situation that women have in their work life so that it can help them just express their talent.

BITTERMANN: Four of the last 10 directors of the IMF have been from France. Does it seem like a likely prospect that they would turn once again to France for its candidate (ph)?

LAGARDE: As I have declared candidacy now I would hope that to be the case. But I hope that it is also done on the basis of merits, comparing talent in respect of circumstances, and certainly in an open and transparent process, which is what we advocated, what my president has stated yet again at the time when the managing director stepped down.

BITTERMANN: Do you feel like the organization has an image problem after Dominique Strauss-Kahn?

LAGARDE: I really commit to stay for the entire duration of the term. And I know it is a frustration on the part of the staff of the IMF, but work is undertaken, projects are begun, and the director has to go, for whatever reason. So my commitment would be to actually stay throughout the term.

BITTERMANN: There is something called the Tapie affair here in France that is being investigated. You are being investigated. Do you take the investigation seriously?

LAGARDE: Some very political politicians try to make it such. But I have full confidence, because I have always acted in the interest of the state, and in total compliance with the law. So I am extremely confident. It is a process that is, you know, engineered a little bit by the opposition. We are entering an election year. The campaign is on. And I stand very solid and-and-and very confident.

BITTERMANN: So, where do you go from here? Next will be a bit more interviews like the one we are having at the moment. And I will certainly travel to a few places to actually sit down and meet with those that expect their countries to be properly represented. And that will take me outside Europe.

(END VIDEOTAPE)

QUEST: Christine Lagarde speaking to Jim Bittermann. Now, Lagarde's opponents say it is time the leadership of the IMF was opened up. Since the fund was founded, in the 1940s, the managing director has, by convention, always been a European. And four of the 10 have been French. Lagarde's rivals say now there needs to be a break with tradition. And indeed many suggest that was the implication, when Dominique Strauss-Kahn got the job.

(DESK BELL CHIMES)

Join me over in the library and we'll perhaps review some of the other candidates. Agustin Carstens is the head of Mexico's central bank and is also a candidate. Enjoys the support of the Mexican government. He told "The Financial Times" he wants to carry the flag for emerging markets. Saying they needed a stronger voice. He added he would still put Europe at the top of his priority. Interestingly, the BRIC countries which wrote their letter, which we'll hear about in a second, haven't come out in support yet of him.

The BRICS say that of the rules, "obsolete, unwritten convention, requires the head of the IMF be necessarily from Europe."

So a very firm view by the BRICS that they don't believe that it should either automatically or necessarily or indeed in practice go to a European. But the BRICS not coming down, at this point, in favor of the Carstens' candidacy. Now, another name that we hear constantly mentioned, being as a potential candidate, Stanley Fischer, former deputy managing director at the fund. Worked at the World Bank. Exceptionally respected international economist and now the governor of the-the governor of the Bank of Israel.

I asked Governor Fischer whether he is in the running for the top job.

(BEGIN VIDEO CLIP)

STANLEY FISCHER, GOVERNOR, BANK OF ISRAEL: I'm not officially a candidate yet. This is one of the great jobs in the international system. It would be a great honor to be considered. I happen to have the job that I-is important to me, that I enjoy at the moment. So we will wait and see what happens.

QUEST: But you are not ruling it out? You use the word "yet", so let's just be clear. You are not ruling it out.

FISCHER: Well, I heard what you said.

QUEST: Governor, the whole question of the IMF and the European prerogative, now, the phraseology that has being used now, transparent, merit based, open process. It all assumes that there won't be a presumption or an entitlement. A European may or may not get it but can we say that the presumption of European predominance has gone?

FISCHER: I thought that it had gone after previous announcements by various European statesmen, but there are people who are making arguments now that-the fund needs a European because the most important problem it is dealing with is European. This seems to be a non sequitur, it certainly wasn't an agreement that was invoked, in the Asian crisis, or the Latin American crisis. And I am fully in favor of choosing the best candidate, but not on a basis like that.

QUEST: What is the priority for the fund in the years ahead? Because the predecessor, or Dominique Strauss-Kahn ably competent, extraordinarily led the fund to new and important areas. So what is now the priority?

FISCHER: Well, there are a number of unfinished tasks, of which dealing with Europe's debt crisis and the European banking crisis, European banking problems which underlie this, remain to be deal with. That is a massive problem, which is-will be on the plate of whoever gets to head IMF, by the end of June. And then there is the U.S. fiscal situation, which needs dealt with.

QUEST: Right.

FISCHER: And way back, but still and issue which is unsolved, and has been unsolved since the fund was set up, is the issue of global imbalances.

QUEST: Turning to your own economy now, if we may, you have raised interest rates and if the futures market is anything to go by rates are going higher. But at the same time you have got this-you are nutcrackered, aren't you? Between inflation on the one side and needing to raise rates, but the worries of Israel exports if the shekel rises accordingly?

FISCHER: Well, that is exactly the dilemma we face and we're in a situation which is not bad from that viewpoint because our exports have held up remarkably well, despite significant appreciation of the shekel. We have intervened from time to time to deal with the appreciation. At the moment it seems the situation is reasonable. If it were to, if the exchange rate were to slip away from what we thought was its equilibrium value we would be willing to intervene once again. We don't see a need at the moment.

(END VIDEOTAPE)

QUEST: Stanley Fischer anticipating my next question as to whether or not they would intervene. Well, now you know, as far as the Israeli Central Bank is concerned, on their shekel policy, there will be no intervention in the short term. As for whether or not he is going to throw his hat in the ring, not yet-"yet" is the word.

Well, leaders and finance ministers are in Paris. It is OECD's 50th anniversary meeting. I wonder if they have a big birthday cake with 50 candles. They certainly had a photo op. In a moment, the head of the organization will tell us why the global recovery is firmly underway. The OECD Sec-Gen Angel Gurria, next.

(COMMERCIAL BREAK)

QUEST: A stark warning tonight from the head of the OECD. That the economic times in which we live are amongst the most difficult and dangerous that he can remember. With problems of inflation, low growth in many environments, high budget deficits and political ill will. These are not recipes for strong economic growth overall. Join me over at the-in the library and you will see why Angel Gurria is so concerned.

World GDP has a growth of 4.2 percent in 2011. Now that is slowing from the 4.9 percent that was seen last year. And it will be 4.6 next year. But that is global growth. So you factor in the fast growing economies of the BRIC nations and other emerging markets and you subtract out Germany.

And you start to see everybody else isn't doing very well at all, because the risks are real: Japan, of course, and the devastating tragic earthquake; the rising price of oil; the European debt crisis, which has continued to take its toll on confidence; the fact that equity markets have barely budged since the beginning of the year. And the U.S. government that can't reach a budget deficit agreement, it shows it is all very difficult.

On this sovereign debt question, we got a clear warning from the prime minister of Greece today. That when it comes to default restructuring, reprofiling, whatever you want to call it, it is time to back off.

(BEGIN VIDEO CLIP)

GEORGE PAPANDREOU, PRIME MINISTER, GREECE: Every analyst in the world has now become an expert on Greece and is predicting whether we will default or whether we need to restructure, or whether we should not restructure at all. And this is a daily title in Greek newspapers, of course, which we-or on the blogs or on the Internet. This is not conducive for the great efforts the Greek people are making.

Day in and day out, the great, if you like, the sacrifices they are making to change their country. So sometimes I say, please, leave us in peace. We know we have problems. We are changing Greece. Greece is changing. We will be on track. We will make it. We will do what is necessary. Leave us in peace to be able to do-to bring Greece out of this crisis, and we'll do so.

(END VIDEO CLIP)

QUEST: The Greek prime minister calling for a little bit of peace and quiet, or at least, turn the volume down. The OECD said that some countries are going to have to turn interest rates up, particularly, the United Kingdom, which it said rates would have to rise to stall inflation, and monetary tightening. Also, the United States, the OECD says long term inflation expectations are rising and therefore the OECD recommend that there will have to be some movements there. I turned the head of the OECD, the Secretary General Angel Gurria, who joined me on the line just a short while ago from Paris.

We needed to start-forget global economics-let's start with the IMF. Was Mr. Gurria, a name that has been bandied around the markets, was he interested in being the new managing director.

(BEGIN VIDEOTAPE)

ANGEL GURRIA, SECRETARY GENERAL, OECD: Well, there are two candidates, both of them are excellent. And the idea is to keep the process open, to keep the process transparent, to keep the process based on merit. And, of course, fast in this particular case, because there is no boss at the IMF now and the deputy, who is now taking over has already announced that he would be leaving. So it is important that the process is done fast, also.

QUEST: Right. But, but, but where does that leave you, in terms of whether or not you are thinking of joining the process. Are you a candidate?

GURRIA: Oh?

QUEST: Would you like to be a candidate?

GURRIA: I have just been given an additional five-year mandate starting on the first of June, precisely. We are celebrating our 50th anniversary here in Paris, so I got a lot of work to do her at the OECD. The government of Mexico has chosen Mr. Carstens as their candidate to be competing.

QUEST: Right.

GURRIA: So we'll see what happens in the next few weeks.

QUEST: The OECD and this particular point of the economic recovery, never has it been more important for governments to have strong economic guidance. But the way I see it, sir, we are-some countries are heading to stagflation. Other countries are roaring too fast. And in many other countries inflation is back.

GURRIA: Richard, this is one of the most difficult moments that I personally have witnessed in terms of the policymakers. We have very low growth. We have very high unemployment. We have high budget deficits and high accumulated debt. And, of course, we have created what-10 percent in some countries, 9 percent in other countries, with the unemployment. But for the youth the unemployment is 20 percent. Sometimes it is 30 percent. As much as 40 percent and I'm talking in some of the most developed countries.

QUEST: So do you-

GURRIA: So, it is a very difficult moment. We also have the big problem of the huge-the huge deficits, you know, the debt to GDP ratio of the OECD countries is now above 100 percent.

QUEST: So, is there anything really to celebrate after 50 years?

(LAUGHTER)

QUEST: 50 years of doing this, and we have deficits, inflation, and unemployment. It is not exactly a recipe for success.

GURRIA: I think we have made very important contributions over the last 50 years. And I have to say that precisely for the challenges, that you have just described. Now, we are even more inspired and more encouraged to go forward. Hillary Clinton just left a while ago. She is sharing her ministerial-we had 16 prime ministers and presidents, we have 70 ministers from all over the world, commemorating with us, but also committed to this very difficult task that you have just very aptly described.

(END VIDEOTAPE)

QUEST: That is the secretary general of the OECD who, of course, now he has a second five-year term. Good news for us, you and me, and QUEST MEANS BUSINESS because of course, he has a standing invitation to come and talk economics with us any day.

Let's return to the future of the IMF. So, we have Christine Lagarde, and we have Mr. Carstens, and possibly there is the governor of the Bank of Kazakhstan, who will also throw his hat in the ring, too. Not yet confirmed.

Stanley Fischer says, not yet. So, yesterday I spoke to the president of the World Bank, the American Robert Zoellick. It is important that we remember he is an American, because the head of the World Bank is always from the U.S. I asked President Zoellick if the presumption is still true, a European directs the fund, and an American runs the bank?

(BEGIN VIDEOTAPE)

ROBERT ZOELLICK, PRESIDENT, WORLD BANK: Well, I think they now have agreed on having a merit-based open process. That is the way to try to do it. I think they are trying to move quickly, which is also important. The IMF staff is a very professional staff. Just over the weekend I talked with John Lipsky, the acting head of it, on some of these Middle East issues. But it is important to move forward with a new leadership process.

You have got some good candidates out there. Countries are always going to have their own perspectives on their nationals. That doesn't surprise me. But frankly, all the names that I've seen are first rate names. Right, but if it is a European that finally does get it. They will get it because they are merit based. Not because they are a European. I'm trying to get to the philosophy now, that basically your replacement, sir, you're replacement won't de facto automatically be an American?

ZOELLICK: Well, that is-my term doesn't finish until next year. So that is a question for the shareholders as they face it. It is not my decision. But I think for the IMF, right now, it is going to be a combination. There is no doubt and whether it is a U.N. post, or whether it is other international positions, countries prefer their own nationals, or people from their own regions. I don't think that is a shock or it is a surprise. At the same time I do think that it is important to try to have a process that draws the best people forward. And I think the IMF process is doing that.

QUEST: Do you have a preferred candidate. You can't-you can't blame me for asking. But (inaudible) Madam Lagarde, friend of yours, is she the right woman for the job?

ZOELLICK: What would you think my answer is going to be?

(LAUGHTER)

I have enjoyed working with Christine Lagarde, I also-Augustine Carstens, of Mexico, his name has also been put forward with the chair of our development committee. As I said, what encourages me is that every name that I have heard mentioned are first-rate people.

(END VIDEOTAPE)

QUEST: You pays your money, you takes your choice.

The skies are clearing over Europe. Clearing of the ash, that is. Some good news for flyers and we'll explain after the break.

(COMMERCIAL BREAK)

QUEST: Europe's air traffic monitors say there will be no significant effect on flights, from the ash cloud tomorrow. I'll just say that word again, no significant effects. Just in case you misheard. Germany's airports will be getting back to normal. Euro Control expects no major disruption across the air space on Thursday. Iceland's prime minister says the worst is over after the Grimsvtn volcano stopped erupting at least for now. In fact, I read somewhere that they said, excuse me, that they don't expect potentially another eruption four to five years, from this volcano, if history is any judge.

The ash cloud from the eruption meant 450 flights were cancelled across Germany today. The cloud will dissipate, according to Euro Control. Germany's airports are now fully accessible again. Britain's Airport Authority also confirms-Air Space Authority-there is no ash cloud disruption.

So, if you were disrupted, and you need to know your rights, it all comes down to our old friend, EU 261. That is the law that protects the stranded travelers who have been a bone of contention for airline bosses. Join me in the departure lounge and I'll explain EU 261.

You can certainly go for rerouting. Now that involves either the next available flight, if there are free seats available. Or you can go at a later time and date. But it must be comparable travel conditions to the original booking. Which means if you are booked in first class and business class, they can't really put you in steerage unless you would agree to that. If rerouted, you can go to a different airport, and the airline must pay for the expenses of getting you from A to B.

The stranded passengers are entitled to free meals and hotels. This is the bugbear, of EU 261, which is why Ryanair now has a 261 levy, which it charges on all fees. This is the one that if you are on a European carrier and you are stranded, they have to find you a hotel and give you a hot meal. If all else fails, compensation. Unfortunately, very unlikely because of the extraordinary circumstances, get out of jail free clause. That is the reason why most passengers had to go for care and comfort and not compensation. And it is quite clear, the rules on this particular area.

So, if you had a claim, you are probably better off getting some form of insurance. If you couldn't get insurance, get a bit of care and comfort, and eventually get to your final destination.

Guillermo is at the World Weather Center for us this evening, looking closely at the maps.

GUILLERMO ARDUINO, CNN METEOROLOGIST: I have a question, though. This EU regulation is for airliners that belong to the European Union, or a plane that is within the European Union?

QUEST: It is for EU registered airlines. So, for instance last year, when during the air crisis from the volcano, I was stranded in New York for 10 days, I was flying on a U.S. carrier, which is not bound by EU 261. So, I didn't even get the price of a cup of coffee.

ARDUINO: Oh, my god.

QUEST: If I had been on a-I know, I was most distressed. If I had been on a European carrier they would have had to pick up my hotel bill for six or seven days.

ARDUINO: Well, interesting to know. Thank you for the clarification.

I'm going to tell you what happens. I think that we have to be cautiously optimistic again. Because, you know, it all came together now for good news. The winds are favorable. Then the eruption stopped, so, it means that we are not going to see anymore eruptions, according to what authorities are saying, based on history.

Now, there could be an exception, of course, things could change because there is no way to forecast an eruption. And as you see, Germany is in the clear, now, into tomorrow. Britain is in the clear too. And parts of North America are far up there, compromised, but not by much.

I'm going to show you also a beautiful scene. All these planes over Europe, operating. Thank you very much, indeed. Now, I continue on with the same map I was showing you yesterday with the updated forecast, with low, medium and high concentration. Being high, the no-fly zone, the medium, maybe depending on the air carrier, low, OK to navigate around that, also over it.

As you see, Germany still, and Poland, with some concentration of ash, but not by much. And then, mostly low, so it seems that we are covered. Nevertheless, as I said, cautiously optimistic, if I had to choose whether to take my flight tomorrow or the next day, or put it off because I'm having a good time in Europe. I would definitely go just in case.

Winds at this level, low level, as you see, Iceland in here, pushing northward, so fine, to the south, you know, since we don't have a cloud, we're fine. And then, in the higher levels, that is to say, cruising altitude, it all appears to be OK because the winds continue to move -- to push whatever air or particles that are there away.

And the last element that I want to look at is the jet stream, which would be like a highway of very high winds in the upper -- upper levels. So you see how it is in here. It continues to dig down. No contact at all with Iceland. So far, so good. Good luck -- Richard.

QUEST: Well -- well, yes. I mean we're lucky that you're here today, I mean with -- with your history of taking holidays, don't -- you've gotten so many off.

Are you late?

ARDUINO: And some are coming up.

QUEST: Oh, please. Please.

What else is new?

Guillermo is at the Weather Center.

ARDUINO: Thanks.

QUEST: Ten years on and still no deal. It's the Doha Rounds. The U.S. trade chief believes it's not completely dead, there's something flapping about.

But what can be salvaged, after this?

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.

This is CNN. And here, the news always comes first.

The French finance minister, Christine Lagarde, is getting strong support in her bid to run the International Monetary Fund Madame Lagarde would be the first woman to head up the fund. She's had competition from Mexico's central bank chief, Agustin Carstens, who's running against her. They're vying to replace Dominique Strauss-Kahn, who faces sexual assault charges in the US. And there are still several days to go before nominations close.

Barack Obama is now the first U.S. president to have the rare honor of speaking to both British houses of parliament in Westminster Hall. He made the case that it is a pivotal point in history for American and British leadership because of the value the two countries place on human rights and democracy.

Trucks were swept up by tornadoes, children were wrenched from their parents' arms. A new round of tornadoes has been striking the Central US. It's the season's deadliest in more than 60 years. More than 500 people have been killed. Teams of rescuers are out searching for missing people in Arkansas, Kansas, Missouri and Oklahoma.

The worst is over, is the message from Iceland's prime minister after the troublesome Grimsvoetn volcano has decided to stop spewing ash -- at least for now.

Days of eruptions like this forced 1,100 flights to be canceled in Europe -- Northern Europe. Most of the affected airports have reopened or they are expected to do so quite soon.

The former head of the World Trade Organization, the two, is warning it's do or die for Doha. Peter Sutherland says unless agreement on the Doha Round is drawn up by July, the global free trade talks will fail. Sutherland says prolonging the round beyond this year is not credible because of the U.S. presidential election campaign next year.

To make it clear, they have been talking for a decade since the Doha Round started in Qatar. And so far, most would agree a calamity of acrimonious meetings, missed deadlines and divides between developed and developing countries, the North and the South.

This, of course, means the negotiators have to decide what to do. A new proposal being put forward suggests do what we can and ditch the rest. It's a dramatic development.

And one of those promoting the idea is Ron Kirk, the U.S. trade representative, who joined me on the line from Paris.

(BEGIN VIDEOTAPE)

RON KIRK, U.S. TRADE REPRESENTATIVE: Well, I think what -- what we've had is a real moment of clarity in that I had the prevailing, Richard, of just hosting 21 of my colleagues from around the world at our APEC meeting last week in Montana and other forums. And I think there's a growing recognition and acceptance of the fact that the -- the gaps in ambition and the gaps in market access, as Pascal Lamy has described, are unbridgeable.

The good news is there is as much consensus around the general proposition that there's just too much on the table to throw in the towel, but that we do need a more honest assessment of how we can come together on a package. And one advantage of being here at OECD, particularly since you have a number of ministers that are committed to global trade and principles of open markets, we'll have the opportunity to begin that process of determining what is a more practical approach to allow us to come up with a successful package.

QUEST: Right. But let's be clear, there is almost now a consensus that a complete Doha Round is not possible.

KIRK: I think there is a consensus that based on the gaps right now, in not only manufacturing, non-agriculture manufacturing assets with services and agricultural, that it's -- that it's probably not likely we're going to conclude a package around that basic paradigm that everybody has been operating on...

QUEST: Right.

KIRK: -- since 2008.

QUEST: If we take a look at the general trade agenda at the moment, in some cases, it's a question of bilateral; in some cases, multilateral. But the -- that the -- the demand, if you like, the philosophy of multilateralism has certainly taken a knock in recent years.

KIRK: Well, they -- look, it's a challenge. The reality -- the -- the good thing is more and more economies around the world have accepted and embraced the proposition that having a more open economy, one that empowers consumers and businesses and gets government out of the way of that choice is going to be the way to build a more sustainable long-term economy.

What that means, though, instead of having a World Trade Organization with 90 countries, now you've got 150 plus...

QUEST: Right.

KIRK: -- and it's a challenge to try to find common ground in that.

But I honestly, Richard, believe that the proliferation of regional and bilateral agreements is a recognition that countries and economies all over the world realize a great way to expand their economic base, to create jobs, is by opening up markets and...

QUEST: Right. But...

KIRK: -- obviously, if we can do it in the multilateral form, that's best. But what we're seeing in this proliferation of bilateral and regional agreements is that countries are going to move forward with the opportunity to grow their economies by creating a more dynamic trade flow.

(END VIDEO TAPE)

QUEST: So for all those years where every communique I've ever read finishes off with the ministers commit themselves to a successful conclusion of the Doha round, what are they now going to say?

The ministers commit themselves to doing what they can and dumping the rest?

We'll wait and see at the end of the G8, which takes place in Deauville next -- later this week.

Going to work in the morning can feel pretty good when you run the whole town.

(BEGIN VIDEO CLIP)

FREDERIK BRAUN, MINIATUR WUNDERLAND: If I can be a fireman, a policeman, a train driver, I can be everything in this layout.

(END VIDEO CLIP)

QUEST: It's a place like no other. We'll take you to the most remark model city that you have ever seen. I guarantee you that.

(COMMERCIAL BREAK)

QUEST: Right. So we've got a couple of 747-400s and we've got an Emirates A380, one of the near 100 that they bought, landing over on 26 right. As you can see, it's a model airport. Well, obviously, it's a model airport. And frequent travelers like you and me, we could probably sit and play here and -- and recognize all the planes for hours.

But there's one airport in Hamburg that is also -- wasn't affected by the ash cloud today. And it might be a little bit bigger than this, but it's still a model, nonetheless. Its terminals are only a few meters wide and it's part of a miniature wonderland, a sprawling model city complete with model railways and a full replica of the Hamburg Airport.

(BEGIN VIDEOTAPE)

F. BRAUN: My childhood dream was to -- to become a fireman. And when I look around, I think that it's the better one, because I can be a fireman, a policeman, a train driver, I can be everything in this layout.

I went to Zurich for holidays and I went around the small streets. And there was a -- a small (INAUDIBLE) for model trains. I got inside and five minutes later, I had this idea. I called my brother in Germany. Now, I have the idea and then we built the largest model railroad in the world.

GERRIT BRAUN, MINIATUR WUNDERLAND: The idea of playing with trains, making a big and big model railroad was a nice idea, but not for a business idea.

F. BRAUN: There was a point I decided, yes, we'll do it. Then I counted how much money we have to -- to get from the bank. It was two million German marks. It was a problem.

So I called my bank. This guy listened to me two hours. Seven days later, they said yes.

G. BRAUN: the bank's idea is they get the two million marks for your model railroad, maybe this is -- is a good idea.

When we started, many people are saying this can't work. We had one million visitors last year. We were sure that we'd have to inspire the whole family, not only the men playing with the model railroad at home, the whole family -- the kids, the women.

And so we thought about having a landscape cities and something that has moving cars.

F. BRAUN: Money is not so important for us. We always start to build and when it's finished, we collect -- we -- we count what we needed. But this was a problem because when you told me five years ago we needed more than three (INAUDIBLE) -- 3.5 million euros to build this airport, I don't really know if we started to build it.

When you see it in the reality, now in this moment, you forget what it costs. So the small details and the many, many things you can look around, it's more important for them than just with the train.

My favorite time is the airport, because it's brilliant. But if you would ask this question a half a year ago, I would say that it's Las Vegas, because of the many lights. When it's getting dark and there are 30,000 lights that are burning, it's -- it's crazy.

If you close your eyes a little bit, you can imagine the reality.

This is a dream for me but as well for the visitors. One million persons are coming inside and became a child again. It's the same with our employers. They are all small children when they build something (INAUDIBLE) when what you see here, that's not a -- a thing you can do with your angry old person.

I think it's a dream if you can make your hobby to your business. We are going to build the Italy train section. We -- we tried to build Great Britain, later on, Africa.

So I think the next 10 years, we build these four layouts. And then we look around at what we can do. We need more space. The space is -- is full in this area. So when we got more space, I hope that I can build until I die.

(END VIDEO TAPE)

QUEST: Absolutely amazing. Extraordinary stuff. Something tells me my -- my airport has a little way to go.

There is no denying one simple fact -- this woman broke the mold. Tonight, the undisputed queen of television, Oprah Winfrey, sees her final ever show go on to air, at least the final show of the one she's been doing for the last 25 years.

In that time, she's become one of the most powerful women in the world. And whatever the project, if she plugged it, we bought it.

Felicia Taylor looks at the industry of o

(BEGIN VIDEOTAPE)

(BEGIN VIDEO CLIP, COURTESY OPRAH.COM)

(ON SCREEN)

The first show, September 8, 1986

OPRAH WINFREY, HOST: I'm Oprah Winfrey and welcome to the very first national "Oprah Winfrey Show".

FELICIA TAYLOR, CNN CORRESPONDENT (voice-over): Twenty five years ago, Oprah launched the beginning of what would become the most successful talk show in TV history. Almost 5,000 episodes and 48 Emmys later, Oprah has become a household name and an international brand.

ANDREW EDGECLIFFE-JOHNSON, MEDIA EDITOR, "FINANCIAL TIMES": What happened, I think, and what she did as a businesswoman is very early on understand the power of multi-media. And that it doesn't just mean the Internet. You know, it means a radio show. It means a magazine show. It means the Oprah brand on any number of things.

TAYLOR: A mere mention on her show, and a book was launched onto the best-seller list. It became known as the Oprah effect.

EDGECLIFFE-JOHNSON: The Oprah effect is huge. She has this incredible ripple effect through the sales of any number of products, from face creams to entertainment.

TAYLOR (on camera): And by owning her own brand, i.e. Harpo Productions, she's only the third person in American female TV history to do something like that. That was a big chance she took early on.

EDGECLIFFE-JOHNSON: She has controlled her business destiny. And, you know, she's kept quite tight control over the things. You know, she does make quite careful decisions about what she'll allow her brand to be put on.

TAYLOR (voice-over): Millions of fans will tune in for her last show, where some advertisers have reportedly paid a million dollars for 30 seconds of commercial time. A multi-billionaire, she will devote the next phase of her career to her own cable network. It needs a boost, having struggled since its January launch.

EDGECLIFFE-JOHNSON: She is doing this with a partner. She has a 50- 50 joint venture with Discovery Communications. To give you an idea of the value of Oprah, Discovery has put in $190 million, OK. Oprah has put in Oprah.com and her archive of old shows and the promise that she'll be on -- on air for 70 hours a year.

There is only one Oprah. That's still going to be valuable for a long time.

TAYLOR: Felicia Taylor, CNN, New York.

(END VIDEO TAPE)

QUEST: As Oprah's talk show comes to an end, so does her reign on the Forbes Celebrity 100 list. Lady Gaga has knocked Oprah off the top spot, earning some $90 million last year. It was social media, though, which helped her to the top spot. Forbes credits Lady Gaga's fans and followers for moving one million digital copies of "Born This Way" in five days.

Right now, of course, Lady Gaga is also very much a part of the battle because these two want to try and get you off iTunes. So these two are doing whatever they can to try and kill off iTunes. And that means often your places to store your music in the cloud. They want you to buy music.

Amazon offered Lady Gaga's newest album for just $0.99. The deal was so overwhelmingly good, it overwhelmed Amazon's servers yesterday. It looks like there's some smog in the cloud of Lady Gaga.

Now, if you want to know what you can read about that brought down the house of Amazon, read about it at Facebook.com/cnn/quest. And tell us if you're planning to go into the clouds.

We'll be back in a moment.

(COMMERCIAL BREAK)

QUEST: QUEST MEANS BUSINESS is part of the CNN Freedom Project. It's looking at responsible travel and tourism and how we all can do our bit in fighting modern-day slavery.

ECPAT, End Child Prostitution and Trafficking, is working to eliminate the commercial sexual exploitation of children around the world. ECPAT created a voluntary code for travel and tourism companies to help the cause.

Now, key points on this, the core points are creating a clause in contracts with suppliers and rejecting commercial sexual exploitation. Obviously, providing information -- relevant information -- to travelers through brochures, in-flight films and catalogs.

Many companies have signed the -- signed the code. One company which has just signed up is Hilton hotels. And our Freedom Project coverage will, of course, be talking about that when we speak to the company about its efforts to tackle human trafficking.

But we stay with the ECPAT code and we'll look further into this.

Carol Smolenski is ECPAT USA's executive director.

And carol joins me now from New York.

It's almost inconceivable, in a sense, because the acts we're talking about, they are illegal. So it's not as if we're just looking at the things that are unsavory or bad practice, are we?

CAROL SMOLENSKI, EXECUTIVE DIRECTOR, ECPAT USA: Right. It's absolutely illegal. And not only is it illegal, but it's really bad for children to be sexually exploited, to be used in prostitution.

QUEST: Right. So where does the burden -- obviously, the burden lies on people not to do it. That's a given.

But in terms of stamping it out at the core and at the root, is it on the rest of the travelers?

Is it on the hotel industry?

Is it on the travel industry?

SMOLENSKI: There's absolutely a role for every sector of society to play. There's a prevention side and there's a detection side. And what the code of conduct is seeking is to have private industry do what it can do to prevent sexual exploitation, sex trafficking of children from happening within their environment.

So, as you were explaining, there are six steps that companies can agree to do. And they're not that hard to do.

QUEST: No, no.

SMOLENSKI: But it does take a commitment for them to do it...

QUEST: And that's...

SMOLENSKI: -- and that's why...

QUEST: -- and -- and that's...

SMOLENSKI: -- (INAUDIBLE) companies are...

QUEST: And that you've just put your finger on it. It takes a commitment for them to do it. It takes them to do -- to do more than, perhaps, lip service to -- to -- to the code's principles. And many companies are not going that extra mile.

SMOLENSKI: Right. What we need is for exactly as you said, to make a commitment to take the steps, to train their personnel, to have a policy against sexual exploitation, sex trafficking of children.

It's interesting to me, from the United States, to see oh so many companies even having a problem and having a policy against it. From the U.S. point of view, we only have four U.S. companies that have signed the code, although 1,000 around the world have.

QUEST: And, look...

SMOLENSKI: So we need to do a much better job in our country.

QUEST: Hang on, Carol.

Isn't it time to start naming and shaming those companies that have been invited to save -- sign the code and have refused to do so?

You cannot make an omelet without breaking eggs.

SMOLENSKI: Yes. And there are many ways that people can put their -- the names of the companies out there on the Internet that have had this happen. In fact, we have a long list of companies who have had a problem of sexual exploitation of children on their premises. We have sent that to those companies, asking them to sign the code of conduct. And anybody can find the names of these. They're often mentioned in news alerts...

QUEST: Right.

SMOLENSKI: -- about, you know, a bus of child prostitution at a...

QUEST: Right.

SMOLENSKI: -- at a hotel.

QUEST: Carol, we're going to have to do with that.

SMOLENSKI: It's not that hard.

QUEST: It's not that hard and you and I will talk more about this in the future.

Thank you for taking the time to come in and talk to us tonight.

We consider it very important that we discussed this tonight.

I ought to just mention to you that pretty much as we've focused on this this week, just about every chief executive and every company that we've tried to approach to come on this program and talk about it has said no.

And that is QUEST MEANS BUSINESS for tonight.

I'm Richard Quest in London.

Whatever you're up to in the hours ahead, I do hope it's profitable.

"WORLD ONE" is next.

END