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QUEST MEANS BUSINESS

Trump Signs Order Dismantling Obama Climate Action; U.K. Prepares to Trigger Brexit Process; Samsung to Release New Smartphone Wednesday; IATA: In-Flight Electronics Ban "Not Acceptable" Solution; Fillon's Wife Under Formal Investigation. Aired 4-5p ET

Aired March 28, 2017 - 16:00:00   ET

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


[16:00:00] RICHARD QUEST, CNN ANCHOR: The market is rising on Wall Street. The closing bell is ringing. The Dow is up the best part of 155 points.

So, the Trump rally continues, some would say. The Trump bump has not followed through. Certainly, no record breaking losing streaks. And at

the top of the hour, no, no, you can stop now. Yes, thank you. Good grief. They get more aggressive with that gavel every day. It is Tuesday,

today is March the 28th.

President Trump dumped coal on the economic fire. Critics say now watch out for the smoke.

A document that was never intended to be invoked. You'll hear tonight from the author of Article 50 of the Lisbon Treaty. He tells us what he had in

mind.

And power down the electronics ban. The airline industry says restrictions aren't sustainable over the long term. I'm Richard Quest live from London,

where I mean business.

Good evening from London. We begin tonight in the United States where Donald Trump has put the economy over climate and throws out a key part of

his predecessor's legacy. Mr. Trump has signed an executive order which halts the government's attempt to curb carbon emissions. And he's ordered

a review of President Obama's Clean Air Plan. In doing these measures, he has revoked a ban on coal mining on federal land, that will encourage more

mining to take place. He's urged federal agencies to identify any rules that hinder the company's energy independence. And he says energy

regulations are putting American jobs at risk.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: My administration is putting an end to the war on coal. We're going to have clean coal, really clean coal. With

today's executive action, I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion and to

cancel job-killing regulations.

(END VIDEO CLIP)

QUEST: That was the President a short while ago. But these are the numbers. According to the U.S. government, coal makes up a third of all

energy sources used in the United States to create electricity. So, coal remains extremely important. Now, the energy department says that's about

35 percent less than the peak. It's important but it's going down. And that drop has little to do with regulations, according to some experts, and

a lot to do with economics. Because now it is just as cheap and there are environmental reasons to use natural gas. And as you can see, coal up 33

percent, natural gas at 33 percent.

The chief executive of the National Association of Manufacturers was in the room when president Trump signed that order. He's Jay Timmons and he joins

me now live from Washington. Mr. Timmons, let's be clear about this. Why do you believe these measures will not harm the environment even though

they will obviously create some new jobs?

JAY TIMMONS, PRESIDENT & CEO, NATIONAL ASSOCIATION OF MANUFACTURERS: So, Richard, this is exactly what you and I talked about last month when we

were on our state of manufacturing tour. Regulations and the cost of regulations make it more difficult for manufacturers to innovate, create

new technologies, and respond to the market conditions that are demanding cleaner air, cleaner water. We want to be able to address those issues.

But we can't do it if we're having costs imposed on us like these regulations do.

QUEST: Let's be clear, first of all, sir. Just so we know from where you're coming on a matter of policy, do you accept the principle that the

climate is changing and that humans, you and I, are largely responsible?

TIMMONS: Our board of directors has acknowledged that, absolutely. And the question is, how do we deal with that in all will a way that doesn't

cripple the economy? The last time you and I talked, I talked about the number of regulations that directly impact manufacturers. That number is

297,696 regulations. That equates to about 35 thousand dollars per employee per year for a small to medium sized manufacturer. That's just

not sustainable. Because what that means, Richard, as you know, all that money that's going into compliance costs means you can't use it to invest

in new techs, to invest in research and development, and to create new jobs. I was

[16:05:00] QUEST: And I can see your argument. I can see that there was a common ground somewhere in the middle. What I question, though, is the

speed with which this administration has decided to reverse the policy. Now, if you remember, one of the very first actions, the executive orders,

was concerning rivers and streams from coal manufacturing in rural parts of America, people said that was going to be dangerous. Now they're saying

this could be environmentally dangerous. Is it too fast?

TIMMONS: Oh, but why Richard?

QUEST: Is it too fast though?

TIMMONS: I think you asked the same question about the last eight years. I mean, we had hundreds upon hundreds of regulations that were -- 650 major

regulations and major means more than $100 million impact to the economy. So, we had 650 of those in the last eight years imposed on the economy.

That's an average of about one every 4 1/2 days. That was what was fast. Add that on to the hundreds of thousands of regulations that had been added

on over the course of decades before that. We're happy that there is some very quick action being taken. And it's sending, to your point at the

beginning of the program, it's sending a message to the markets that it's time to invest again in America, it's time to create jobs. When we invest

in research and development, we end up with cleaner air and cleaner water.

QUEST: Do you accept that there will not be a massive rival in the coal industry, simply on the economic grounds that coal, your members, sir, tell

you that coal is not economic as a form of energy for them.

TIMMONS: You know, I don't know the answer to that, Richard, to be quite honest with you. I think that -- I think what we have to understand is in

order for us to compete and succeed and drive down the cost of doing business in the United States, we have to embrace an all of the above

energy strategy. That certainly includes coal. But it also includes oil and natural gas and renewables as well. And that's what we embrace as

manufacturers. That's what we want to promote.

QUEST: Jay Timmons, you're always very kind and very good for coming on and talking to us, we appreciate it. Good to see you as always, sir.

Hopefully both of us will be in New York across each other from the desk.

The Trump economy is getting help from the Ford Motor Company. The carmaker said it's investing more than a billion dollars in three of its

manufacturing facilities in Michigan. President Trump was the first to seize upon the news. In a quick tweet, he says, "Big announcement by Ford

today.Car companies coming back to the U.S., JOBS! JOBS! JOBS!"

Joe Hinrichs is the Ford president of The Americas. And earlier on "QUEST EXPRESS," he said the investment is about protecting jobs as well as

creating new ones.

(BEGIN VIDEOTAPE)

JOSEPH HINRICHS, PRESIDENT, THE AMERICAS, FORD: There's 130 new jobs created as part of the investment in the Romeo engine plant. So, those are

new income incremental jobs. And there's $850 million protects and provides employment for 3,600 people at the Michigan assembly plant which

we had committed to keeping that plant viable and keeping it, all those employees employed in the future.

ZAIN ASHER, CNN ANCHOR: Wait a second. It only creates 130 new jobs and protects previous jobs, $1.2 billion just seems like a lot for only 130

jobs being created that are new.

HINRICHS: Again, that's where you get into this new versus protecting existing jobs. If we didn't make the investment in the Michigan assembly

plant, 3,600 people would lose their jobs. We're reinvesting in the plant and keeping people employed there. That's a big part of the investment

today.

QUEST: How much money, can you share with us, I know you mentioned obviously, the jobs, how much money is actually going towards automation

and perhaps technology that might actually end up replacing some jobs?

HINRICHS: Well, not a lot in this investment announcement today. The data center announcement is a part of this. That has the capacity to store

data, use data with the connected vehicles, autonomous vehicles of the future. That will create some jobs. But the new products, The Bronco and

the Ranger coming to the Michigan assembly plant, will protect those 3,600 jobs I talked about. The investment in Romeo adds capacity to components,

there's physical machinery, and employees will do that work.

(END VIDEOTAPE)

QUEST: The president of Ford Americas here today.

So, to the markets. The Dow ended today on a positive note, it ended an eight-day streak of losses. Stocks avoided what would have been the first

nine-day losing streak since 1978. That's some time ago. The NASDAQ and S&P 500 also ended in the green. Jonathan Corpina is the senior managing

partner of Meridian Equity Partners, joins me from the floor of the Stock Exchange. Two issues here, firstly, obviously, it reversed its trend, but

it didn't just reverse it. It went into full throttle, up over 150. Why such a strong performance?

[16:10:06] JONATHAN CORPINA, SENIOR MANAGING PARTNER, MERIDIAN EQUITY PARTNERS: Right. You have to put that on top of the movement that we saw

yesterday, right? We had some serious pressure in the market yesterday. We immediately hit the lows. Then little by little, we gained momentum.

That momentum translated to today. Once again, the DC headlines are clearly dictating where this market is going back and forth. The headlines

today say that healthcare reform, everyone is kind of coming back to the table, key Republicans, White House staff coming back to the table here. I

think that was the real major factor behind the movement we saw today.

QUEST: One interesting aspect, the losses that we have seen have been relativity small over these -- 30 points here, 50 point here, maybe one or

two larger ones. But when the market does turn, we see these much more powerful gains, triple-digit gains. Is it your feeling that this market

wants to go higher in the face of whatever headwinds there may be?

CORPINA: I think so. I think our market has not really seen any major negative headlines since November. It has not seen these headwinds. As

the market moves back and forth, and yes, it is healthy that we move higher, then take a step back, and move a little bit lower and find some

consolidation. Overall, when the market shrugs off anything that's the in front of it, whether it's economic data, earning season, international

headlines, the momentum, the sentiment is to move higher and higher. And also, just remember, Richard, we're getting to the end of the month, the

end of the quarter this week. There's a lot of activity that's been waiting to come into this market to see funnel in now.

QUEST: Good to see you, sir, thank you, on the exchange.

We'll show you tell other markets later. Now, as you can see, things moving along very smoothly. Welcome to our version of the Amazon

warehouse.

[DOORBELL]

Ah, it must be time for my delivery. Thank you very much, sir. A special delivery has just arrived, not just from Amazon. It's from Souq.com. If I

manage to get my thumbs right, I can open it up. And inside is the invoice from Souq. It's an invoice for Amazon's purchase of Souq.

Souq is the biggest e-commerce platform in the Middle East. The final price has not been confirmed. But according to this it's estimated at some

$600 million. Now that's what you call buying something online. CNN's John Defterios with the story of Souq and Amazon from Abu Dhabi.

(BEGIN VIDEOTAPE)

JOHN DEFTERIOS, CNNMONEY EMERGING MARKETS EDITOR: While Souq.com started several years ago, online market penetration in the Middle East has been

capped at just around 2 percent. So, Amazon sees a lot of room to grow. Here are the two parties involved in the deal.

RUSS GRANDINETTI, SENIOR VICE PRESIDENT, AMAZON: Right now with Souq, even just in the Emirates, in Saudi, in Egypt, we have a lot of work to do

because online commerce is still a very small percentage of total retail. I think that's plenty of work in the near term, although obviously

expanding further in the region is something we will do in time.

RONALDO MOUCHAWAR, CEO, SOUQ.COM: I mean, Amazon for us it was a great fit. They are a long-term thinker. They are focused on the customer.

They bring so much innovation. We feel opportunity and growth in this part of the world is still massive. Online is only 1 to 2 percent of what is

being purchased. For us just culturally also, Amazon is a great fit for us. This is why Amazon was our partnering choice.

DEFTERIOS: Mouchawar, the tech entrepreneur of Syrian dissent was educated in the United States. He called Amazon his partner of choice because of

global scale. But it seems a lot of money was left on the table. Souq.com was proud to be the first technology unicorn in the region with a $1

billion valuation after its last round of financing. That's no longer the case. Sources work with Emaar, the owner of the Burj Khalifa, the world's

tallest tower and the Dubai Mall, confirmed again Tuesday that the group offered $800 million overall and $500 million in cash for Souq.com. It was

locked into a signed exclusivity clause, so that offer went nowhere. In the Middle East, many are waiting for Emaar to formally launch its own

portal for e-commerce called Noon.com. John Defterios, CNNMoney, Abu Dhabi.

(END VIDEOTAPE)

QUEST: The time for the empty talk is over. The real talk and the negotiations are about to begin. The U.K. is ready to trigger Article 50

and so start the process of leaving the European Union. We'll be live in London and we'll be in Brussels after the break. QUEST MEANS BUSINESS.

[16:15:00] (COMMERCIAL BREAK)

QUEST: Nine months after the referendum, after tomorrow the European Union will never be the same. That's when Britain's EU representative will hand-

deliver a letter to Donald Tusk. The letter is from the British Prime Minister, Theresa May. In doing so, the Brexit process will finally be

under way. Leaders across the U.K. are preparing for a new reality. In Edinburgh, the Scottish Parliament voted in favor of a second referendum on

independence from the United Kingdom. In Brussels, the mayor of London, Sadiq Khan, met with Jean-Claude Juncker, the president of the commission

and called for EU citizens in Britain to be protected. And the British Prime Minister Theresa May, has just spoken by telephone to Mr. Juncker,

the commission president. And Mr. Donald Tusk, the Council President and Angela Merkel, the German Chancellor. Earlier she met with her Qatari

counterpart for talks on a new trade deal after Brexit is completed. All in all, the British Prime Minister said Britain's future looked bright.

(BEGIN VIDEO CLIP)

THERESA MAY, BRITISH PRIME MINISTER: Tomorrow we begin the negotiations to secure a new, deep, and special partnership with the European Union. As we

do so, I am determined that we should all seize this historic opportunity to get out into the world and to shape an even bigger role for a global

Britain. This means not just building new alliances, but going even further in working with old friends who have stood alongside us for

centuries.

(END VIDEO CLIP)

QUEST: Now, the U.K. has already earmarked several countries to make new trade deals with. Today's announcements add Qatar to the list. It's

already told India it wants a trade deal as soon as possible. There were trade talks with Donald Trump on Theresa May's visit to Washington.

There's a possibility of an agreement with China, that's still to come. Of course, the big trade deal or the customs union or whatever variant there

will be, is with the European Union at the same time as it negotiates the divorce. Now, we're covering this from both sides of the English Channel.

CNN's Isa Soares is at Westminster. Politicos senior EU's correspondent, Ryan Heath, joins me from Brussels. First of all, to you Isa Soares, let's

not get too much into the weeds of the politics, but the form tomorrow. What happens?

ISA SOARES, CNN CORRESPONDENT: So basically tomorrow, Theresa May will meet with the cabinet in the morning, around 9:00, Richard. And in that

meeting she will basically outline what her letter will say. That's the letter that will be handed over to Europe. At the same time, that letter

will be traveling to Brussels. Then she will hold Prime Minister's questions as usual, as she does during the week. After that she will

announce what the letter will say. Then we'll have a better sense, Richard, of exactly what's in that letter.

[16:20:02] The European Union then has a period of 48 hours, Richard, to reply to basic knowledge receipt of that letter.

QUEST: Ryan, in Brussels are they waiting for this letter with baited breath? They know it's coming.

RYAN HEATH, SENIOR EU CORRESPONDENT, POLITICO: They are indeed. They're a little over the waiting game, frankly, here in Brussels, Richard. There

are a lot of people who will be very annoyed over the hoopla around this tomorrow. At least the real gains can begin once that letter is handed

over. And was really been surprising is that the EU has for the most part, kept its act together, stayed united, and is upbeat over the last few weeks

before this triggering of Article 50 and it's Theresa May who is a little bit on the back foot with all the problems in Scotland and now Northern

Ireland as well.

QUEST: When you say there upbeat -- because the conversation tonight that she had with Juncker, Tusk and Merkel, basically everybody is saying we're

negotiating in good faith, but what are they privately saying to you?

HEATH: Well, privately they say that this has to be a sequenced negotiation, that the U.K. can't run off and decide deals with the German

automotive industry, with the Indians, as you were saying, that former Commonwealth, as well as getting out of some kind of financial settlement

from the EU. They can't have it all. That's always been the U.K.'s problem from the EU's continental perspective. And they're not going to

allow that to happen.

At the same time, they don't want markets falling off a cliff. They do want the rights of their citizens secured. I think both sides recognize

there needs to be a positive signal before people go away for their summer holidays, that there are grownups in the room trying to sort this out.

QUEST: Isa Soares back at Westminster, grownups in the room, but that doesn't allow for the fact that Theresa May is fighting on all fronts.

Let's face it. She's fighting against Brussels in the negotiations. Now she's got Scotland. There will be Northern Ireland not far behind. And

she's got her own party, the rump of her party that are trying to hold her feet to the fire to make sure Brexit means Brexit.

SOARES: Absolutely, Richard, spot on. Because after four decades, really, of member with the biggest trading bloc, she's leaving that union, at the

same time she's trying to deal with her own union, keeping that union together. Today we saw in Scotland an overwhelming vote there to have a

second referendum. That's despite the fact, Richard, that Theresa May went to Scotland several times over the last few weeks and pleaded for a closer

union. In fact, today, a spokesperson told CNN, that it's not the time to be drifting apart, it's a time to be working together. But it seems

they're really not seeing eye to eye on this, Richard.

QUEST: Finally, to you, Ryan, when we look at what is happening, I need a feeling, I need an understanding from you about what people are saying in

Brussels. Is there this feeling of momentous change, of uncharted waters? I can pick any cliche I like, but you know what I'm saying. There is a

feeling that tomorrow --

HEATH: Yes.

QUEST: The feeling that tomorrow, nothing is going to be quite the same thereafter.

HEATH: It's absolutely a turning point. And people do worry that somehow with Marine Le Pen as a follow-up to this, there could be a great

unraveling of the EU. But people are also moving into a quite clinical crisis management mode. They're saying things like, it's time to forget

about Britain, we need to focus on the 440 million now. We can't worry about Britain and all of its concerns and psychoses around the European

Union. I think they're going to put on their stern face, not quite a stiff upper lip, and really protect their interests in these negotiations.

That's what you're going to see rippling throughout Brussels tomorrow. People starting to see the 27 have to act together or be crushed by the

momentum of Brexit.

QUEST: What a day. All right, thank you to both. We've got Ryan and Isa, the London story and the Brussels story.

Later in the program, I'll be talking to the head of the International Air Transport Association, I asked her about what Brexit means for airlines in

Britain and across Europe. We'll also talk about the electronics ban. And we'll have time to ask about travel ban in the United States.

Article 50 of the Lisbon Treaty would not even exist were it not, ironically, for a British diplomat living in Brussels. Nina dos Santos

went to meet the man who unwittingly created Britain's exit route from the European Union.

(BEGIN VIDEOTAPE)

NINA DOS SANTOS, CNN EUROPE EDITOR: At the heart of Europe, five floors down on five miles of shelving, thousands upon thousands of containers. A

row of red tape that Brexit supporters want Britain to leave behind.

[16:25:00] Here in the archives of the council of the European Union, you get an idea of the sheer scale of the paperwork that's involved with being

a member of the EU. Each of these boxes contains hundreds of legal documents, various texts and policy papers. And as the U.K. leaves, it

will have to decide which ones it wants to keep and which it wants to lose.

But for all the millions of words stored in Brussels, only 255 are needed to start that decision-making process. The five brief paragraphs of

Article 50 provide the blueprint for exiting the European Union and will define any future relationship with the bloc. In London, there's a small

sense of irony in that Article 50 was penned by a Briton.

JOHN KERR, AUTHOR, ARTICLE 50: The first draft that I wrote at home in the little flat I had in Brussels. I also had a minuscule staff, mainly

brilliant lawyers. And they -- of course they were lawyers, they were terribly irritating. I would draft beautiful, fine prose and they would

cross it all out and say, you can't say that.

DOS SANTOS (voice-over): Britain and the remaining 27 EU countries have two years to complete negotiations.

KERR: Article 50 is not about trade at all. It's purely about divorce. It's the division of the assets, dividing the property. It talks about

paying the bills, debts, pension liabilities and so on.

DOS SANTOS: And unlike conventional divorce proceedings, these will be far from private.

KERR: The European parliament are fully involved, the article says. Which means that Mrs. May can't conduct all this behind closed doors.

Everything is going to be public.

DOS SANTOS: With everyone watching, both the EU and the U.K. are hoping for a speedy, harmonious conclusion so that the writing of different laws

and agreements that will eventually line these shelves, can begin. Nina dos Santos, CNN, Brussels.

(END VIDEOTAPE)

QUEST: Article 50 of the Lisbon Treaty. We'll be having full coverage of the statement by the British Prime Minister, Theresa May, the letter being

delivered, and any response or any statements that we do get a course. We've got lots of coverage tomorrow here on CNN.

European stocks rose. The FTSE was boosted by the falling pound. Once again were back to that situation. The Brexit uncertainty causes the pound

to fall, which is good for British exports. So, shares rise. The Dax is now at its highest level since 2015, it was the best performer of the major

indexes.

Now the question of the band on the new electronics for some Middle East flights. IATA's head says you got to point when you look at the logic of

what's been decided in the new measures that don't make sense. And the group's director general, wants to see urgent changes. Alexandre de Juniac

of IATA, is with me after the break.

[16:30:00] (COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. Alexandre de Juniac says the airline electronics ban is

unsustainable. And the Samsung galaxy note 7 that was hot for the wrong reasons, but the company may be trying again. On this network, the news

always comes first.

President Donald Trump has signed an executive order on Tuesday allowing for sweeping changes to climate regulations. The move essentially rolls

back a number of policies from the former administration. Mr. Trump signed the order at the Environmental Protection Agency in front of a group of

coal miners, saying it will put miners back to work.

The remnants of cyclone Debbie are hanging over Queensland in Australia. Queensland's premier says tens of thousands of people are without power.

A showdown is stalling the U.S. house investigation of alleged ties between Donald Trump and his allies in Russia. Intelligence committee chairman

Devin Nunes is rejecting demands from top lawmakers that he recuse himself. The Democrats believe Nunes is too close to the White House to lead the

probe properly.

The top U.S. commander in Iraq now says there's a fair chance the U.S. air strike hit a site in western Mosul. More than a hundred bodies have been

pulled from the rubble. The commander said ISIS was fighting from inside the building. Investigators are working to determine if they used

civilians as human shields.

South Africa is mourning the loss of a beloved anti-apartheid activist Ahmed Kathrada who died Tuesday after a short illness. He was a close

associate of Nelson Mandela. Many south Africans referred to him affectionately as "uncle." he was 87 years old.

It was unlucky, the number 7, for Samsung. The galaxy note 7 was meant to be the company's flagship smartphone. Instead it was a fire-prone device

that ignited a huge crisis and an embarrassing global recall last year that cost the company billions. Now Samsung is hoping for better results with

its new model, the s8, unveiled on Wednesday in New York. Samuel Burke is looking into his magic 8-ball for a look at Samsung's changed fortunes.

(BEGIN VIDEOTAPE)

SAMUEL BURKE, CNN BUSINESS AND TECHNOLOGY CORRESPONDENT: Who could have predicted the challenges for Samsung as it launches the new s8? Samsung

needs a picture-perfect debut to close the chapter on one of the most disastrous product launches in technology history, the complete recall of

the fire prone Galaxy note 7. Is the outlook good for Samsung or should we concentrate and ask again later?

PETER SHANKMAN, ENTREPRENEUR MARKETING CONSULTANT: Samsung needs to come out in full force and says, we are fine, everything is great, this is not a

problem. If they have even so much as one issue with that phone that gets made public, they're over.

BURKE: Samsung was riding high when it launched the note 7 back in August. Reviews were rapturous. But almost immediately, reports began surfacing of

phones heating up and bursting into flames.

MAX WOLFF, MARKET STRATEGIST, SS CAPITAL: It ended up costing them $6 billion. The worst part is, they released it, got into trouble, recalled

it, it was fixed, it was recalled again.

BURKE: Samsung said the fault was in the batteries made by outside suppliers which have never publicly acknowledged responsibility. The

uncertainty has cost Samsung badly. Apple's smartphone shipments have outpaced Samsung's for the first time in years. Artificial intelligence is

one way for Samsung to fight back. The s8 has a virtual assistant called Bixby which will compete with Apple's Siri and amazon's Alexa.

WOLFF: We think the personal voice activated assistants are huge. AI is going to be the definitive feature, what cameras once were.

BURKE: Samsung has another thing going for it. Brand loyalty and the fierce allegiance of Android customers.

WOLFF: Consumers are very forgiving in product failures. If you're a fan of the android operating system, you're going to go back to Samsung because

Samsung is the leading maker of android-based smartphones.

[16:35:00] BURKE: Samsung doesn't want to get behind the 8-ball in the battle with Apple. Will the technology world watch the battle of the 8's

closely? You may rely on it. Samuel Burke, CNN Money, London.

(END VIDEOTAPE)

QUEST: In questioning the new ban on electronics on some middle east flights, IATA's director general wants to see urgent changes. He joins me

after the break.

(COMMERCIAL BREAK)

QUEST: The world's airline trade group says the electronics ban on some flights is not a long-term solution. IATA's director general Alexandre de

Juniac joins me from Montreal. Good to see you, sir. I read your comments in your speech, that this is unacceptable. Yet at the same time, one

wonders what you propose as a solution if the countries involved believe that there is a security risk.

ALEXANDRE DE JUNIAC, Director General, IATA: What we said is any country has the right to regulate or to take security measures. But these

measures, they have to be, first, appropriate. So, giving the right answer to the threat, if there is any threat. And secondly, these measures, they

have to be taken in full collaboration with the industry. We can bring operational experience. We transport millions of people, tons of freight,

so we know, we say we know how to protect passengers and goods against a threat. And what we want is to collaborate with public authorities, with

governments to find the appropriate measure.

QUEST: Do you find it odd that, for example, Dubai, Abu Dhabi, and Dohar are on the U.S. list but not on the British list? And I guess what I'm

asking you, do you think there's an element of protectionism in that decision?

DE JUNIAC: We do not have any position on the intentions. What we say is that if there is a threat, you must take the appropriate measure. And

frankly, the measure that has been taken by both governments raised a lot of questions. The first one is the discrepancy between the U.K. approach

and the U.S. approach regarding the countries of origin.

[16:40:00] You have another question, why a passenger with a laptop would be a danger coming directly from a country to the U.S. and not a danger

coming indirectly from the same country to the U.S., but connecting in Europe. So, there are a lot of questions that are raising some doubts on

the efficiency of the measures.

QUEST: Those measures are in place. And are you hearing from your members what effect -- I know it's early days, but is there any suggestion that

those big six freedom carriers, Qatar, Emirates, Turkish, are seeing reservations or bookings disappear?

DE JUNIAC: It is clear that any ban targeting a country or an airport has significant negative consequences on bookings for the affected airlines.

It has been the case with the first ban, which was on people, not electronics, and for the electronics, it has created some difficulties.

Because the measure has been taken without any prior -- real prior consultation or information of the involved carriers. So, these carriers

are complaining about the negative effects. And they have written to us. They are issuing some public statements saying that this treatment is

unfair.

QUEST: It's unfair, and it looks like it's going to last until at least October if not beyond. So, since the governments won't tell us -- I mean,

is this one more anti-globalization measure dressed up, do you think, under the guise of security, when other -- I'll give you -- I suppose it's this

discrepancy, isn't it, between, for example, the Germans not having a problem, the French not having a problem, but all of a sudden, the Brits

and the Americans have a problem.

DE JUNIAC: You know, for us, the point is to know whether or not there is a threat. We do not ask for state secrets, but the nature of the threat or

the consequence of the threat, to be able to put in face of this threat the appropriate protective measure. And for that, what we are asking to the

U.S. government and to the U.K. government, is please, work in advance with us. Consult, discuss, and prepare and collaborate and prepare the set of

measures you want to implement with the professionals of the air transport, the affected airlines.

QUEST: Finally, tomorrow --

DE JUNIAC: But we do not see --

QUEST: Sorry, I just wanted to move on to article 50 before we finish. Article 50 is going to be triggered. Brexit will begin. How worried are

you? Last week Jean Claude Juncker and several other European commissioners said aviation could be badly disrupted if a proper agreement

isn't put in place between the U.K. and the EU.

DE JUNIAC: I think it's true that if nothing new is negotiated between the U.K. and Europe for the Brexit, we will have a big problem. For the U.K.-

based companies to have free access to Europe and for the European-based companies to have access to the U.K. So, something has to be negotiated to

maintain traffic rights and to maintain the connectivity between the U.K. and the continent. IATA is strongly advocating and strongly pushing

governments, the EU governments, to maintain and improve if possible connectivity between the two areas. Otherwise, otherwise the air traffic

could be seriously harmed.

QUEST: Alexandre de Juniac joining us from Montreal, thank you, sir, good to see you, as always, I appreciate it.

Francois Fillon's campaign to become the next president of France appeared to be petering out, earlier today his wife, Penelope, appeared before

French judges for pocketing money for work she did not do. Does Fillon have a chance in the elections?

[16:45:00] (COMMERCIAL BREAK)

QUEST: News just in, the wife of French presidential candidate Francois Fillon is under formal investigation by authorities. This follows an

appearance before judges to answer allegations she and her children were paid for work that they never did. Melissa Bell is in Paris. If it's one

thing I've learned over the years, Melissa, it is that the French judicial investigative process is extremely complicated. So, this development

tonight, she's already appeared before judges, and is now under formal investigation. What does it mean?

MELISSA BELL, CNN PARIS CORRESPONDENT: Essentially, Richard, that she has spent the day in front of these $, investigating judges. And they did have

the option until the very end to say, OK, we've charged her husband in the context of this investigation, this inquiry into allegedly fictitious jobs,

we could decide not to charge his wife who is at the center of this and instead choose to give her the status of witness in this investigation.

No, they've charged her in three counts, things like embezzled of public funds and abuse of corporate funds, very serious charges in French law.

Of course, this scandal has really overshadowed not just Francois Fillon's bid for the presidency, and he's now far behind in the polls, but about the

entire campaign for presidency that's been so compromised by allegations of corruption. We've looked back at the investigation that led to Penelope

Fillon's appearance before the investigative panel today. For weeks, protesters have greeted Francois Fillon wherever he goes. On Saturday, it

took an umbrella to protect him from their eggs. I play on the French word which means the cooking utensil and a scandal.

(BEGIN VIDEO CLIP)

FRANCOIS FILLON, PRESIDENTIAL CANDIDATE, FRANCE: These demonstrations are an insult to democracy. It's an insult to the millions of French people

who support me. And the more they demonstrate, the more the French will support me.

(END VIDEO CLIP)

BELL: Even as he continued with his visit at this farm in south France, his position in the polls was at an all-time low. Francois Fillon emerged

as the unexpected winner of the Republican primary in late November. At the time, his campaign looked unstoppable, his lead in the polls

unshakeable. But then only two months later, the scandal dubbed Penelope- gate changed that. Allegations that his wife and children were paid for work never carried out led to charges that include misuse of public funds.

Some within the Republican party ranks wanted a new candidate.

[16:50:00] But Fillon refused to stand aside, saying he had done nothing wrong, and maintaining that the investigation is an attack by political

opponents. But a steady drip of newspaper reports about expensive gifts now means the candidate's troubles and the inquiry go beyond the question

of Penelope's work. Fillon says the press reports are also part of a campaign against him.

(BEGIN VIDEO CLIP)

FILLON, (through translator): How do you explain the fact that there are hundreds or in any case dozens of journalists who go through my bins to

take an interest in my suits and tomorrow my shirts, and why not my underwear as well? At some point the French people can see perfectly well

that there is one person in this presidential race who is the target of every attack.

(END VIDEO CLIP)

BELL: Before his visit to the farm on Saturday, Francois Fillon was at a rally, keeping up a frenetic pace that shows a candidate determined to

overcome the din of scandal. And many do seem to want to give him the benefit of the doubt.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE, (through translator): To be honest, I think all politicians do it a little bit. So, with regards to him, I think we need

to see what happened. We really need to understand the context to be certain.

UNIDENTIFIED MALE: At this stage, he hasn't been found guilty of anything. Therefore, there's always a question mark of doubts. So, I think he should

really go ahead.

UNIDENTIFIED MALE: He was certainly the best candidate for the French people. But due to this very bad news, now it's not exactly the same

Francois Fillon as four or five weeks ago.

(END VIDEO CLIP)

BELL: The damage has already been done, with Fillon trailing a distant third behind the two candidates looking to make it to the runoff, the far

right's marine le pen and the centrist, tied in their substantial lead in the opinion polls. What's been so interesting, Richard, is to see the

extent to which over the course of the last few days and even before these fresh charges faced by his wife, Francois Fillon has been adopting the tone

of a populist, saying he's the victim of a conspiracy perpetrated by the socialist government and the media, and his electorate needs to fight back.

The trouble is that narrative really plays into that of both the far right's marine le pen and the centrist who says, look, we're a fresh start

for France, we're going to sweep away this corrupt political class and give France the political class it deserves, a fresh start, if you will. With

every day that passes, you get a sense that their narrative grows stronger, Richard.

QUEST: Thank you.

The European central bank has been pushed to the breaking point. A new report says the bank is trying to do too much and get too political without

having the safeguards to protect it. The report says urgent action is need such as no longer playing a role in bailout talks and giving oversight to

parliament and make sure all opinions are published. Transparency international's EU director joins me from Brussels. Not entirely sure what

it is that the ECB has done wrong, bearing in mind, bearing in mind they were the only game in town when it came to having to put together many of

these deals or bailout plans.

CARL DOLAN, TRANSPARENCY INTERNATIONAL'S EU DIRECTOR: Yes, that's quite right, Richard. The ECB had to walk a very fine line during the euro

crisis. As a result of operating in a political vacuum, that's why it had to stretch its mandate to the breaking point on a number of occasions. For

example, just as some examples of that, there was secret letters sent to the prime ministers of Italian and Spain which laid out the conditions

under which the ECB would provide financial support. The conditions including things like labor market reforms and budget cuts. Things which

go far beyond traditional monetary policy. So, what we are saying is that these are political decisions, and it's time for EU and national

politicians to stop hiding behind the technocrats of the ECB and reform how the euro is run.

QUEST: I would argue or perhaps suggest that it's entirely proper for the ECB to be involved in a bailout. You're wanting to restrict its remit

tightly to monetary policy and the issuance of currency. But in terms of managing a European-wide economy, surely, it's entirely proper that they

come up with recommended policies.

DOLAN: Well, the ECB can have an advisory role, and I think that's something that has been recommended by the European parliaments and the

body that audits the EU as well, it does have an advisory role. The question is whether it should be involved formally in negotiations.

[16:55:00] The question is whether it should be making political decisions which essentially would mean whether a country can be part of the euro or

not. For example, during the handwriting of the Greek crisis in 2015, while the ECB was part of the negotiations, part of the troika of

institutions that was monitoring the economic reforms there, it was also in a position as a result of its monetary policy functions to put pressure on

the Greek banking system by limiting the amount of liquidity assistance that could be provided to the Greek banked sector. I think these are

incompatible roles. We would like to see them separated. And I think the issue is that it's not a question necessarily of stopping the ECB from

doing these things, but when the ECB does stray into this political territory, there should be much more Democratic oversight, much more

Democratic control of these issues.

QUEST: Fascinating issue. Thank you for joining us from transparency. We'll have our Profitable Moment after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's Profitable Moment. Tomorrow, Theresa May hands over the letter that will start the Brexit negotiations. It's very tempting to see

this as part of a process we knew was going to happen, it's no big deal, if you like, firing the starting gun in a race that's been on the cards for

the last nine months. I think that ignores the point. Tomorrow is significant because we go into uncharted territory. It means article 50

for the first time, that process has begun. No one knows how article 50 is supposed to operate. Once it's started, how you can stop it, short of

leaving the European Union. Tomorrow is significant not only for Britain but also for the European Union and for the global economy. A two-year

race is about to begin. And that's QUEST MEANS BUSINESS for tonight. I've Richard Quest in London. Whatever you're up to in the hours ahead, I hope

it's profitable. See you tomorrow at Westminster.

END