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QUEST MEANS BUSINESS

Voting Almost Over in Alabama; Macron Pushes Eco-Agenda at Climate Summit; North and South Korea Clash Over Bitcoin; U.S. Aims Criticism at World Trade Organization;

Aired December 12, 2017 - 16:00   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 HOST: From Greece, the closing bell. With the Dow and the S&P both at record highs. Over 100 up for the market.

Come on, minister. See what you can do. I think that's a ministerial gavel to Bring trading to a close. It's Tuesday, it's December the 12th.

Tonight, it's the last few hours of polling in Alabama. We take a look at business in the state.

Green is good. Emmanuel Macron is wooing corporate leaders at his climate summit.

And it's a crypto clash on the Korean Peninsula. North and South are at logger heads. And it's all about, of course, bitcoins.

I'm Richard Quest live in the world's financial capital, New York City, where I mean business.

Good evening. In a busy hour tonight, you're going to hear my exclusive interview with Sir Richard Branson and St. Lucia's Prime Minister.

They're unveiling their plan to overhaul a Caribbean infrastructure. You're also going to hear from Michael Bloomberg, who spoke at the same

climate summit in Paris. And the former head of the WTO, Pascal Lamy, you'll hear from, as he discusses the U.S. decision to basically ignore, or

at least not take part in the World Trade Organization.

Tonight, we begin in Alabama. Weeks of controversy and campaigning. It all has come to a head. Today, the voters are going to the polls in this

extraordinary election. The polls close in just around four hours from now. And on the right, literally and figuratively, Roy Moore, the

Republican accused of sexual misconduct and assault. He has the firm backing of President Trump, who is eager to protect his legislative agenda

by the majority that the Republicans have in the U.S. senate.

And on the left, Doug Jones, a Democrat, who was never supposed to win in this deeply Republican state. Now he is in with perhaps more than just a

fighting chance. In the final hours of the campaign, the candidates made their final pitches. Jones is concerned the impact on the state's economy.

Moore still wants to drain the swamp.

(BEGIN VIDEO CLIP)

ROY MOORE, REPUBLICAN CANDIDATE FOR U.S. SENATE: We're up to our neck in alligators. We're up to our neck in people that don't want change in

Washington, D.C. They want to keep it the same, keep their power, keep their prestige and keep their position. And we have got to change that.

DOUG JONES, DEMOCRATIC CANDIDATE FOR U.S. SENATE: It is time that we go ahead and say, enough is enough. We want to make sure that when a CEO from

another part of the world or a CEO from another part of this country is looking for a place to land, that they have somebody sitting on the table

across from them, talking to them about the state of Alabama and how welcome we are to all people.

(END VIDEO CLIP)

QUEST: Let's talk about that aspect of it. Let's leave the politics perhaps to one side and talk the business. Politicians and business

leaders are desperate to avoid the headaches, say, North Carolina faced after passing its so-called bathroom bill. Alabama is a manufacturing

powerhouse. And it does this through a combination of the location, down in the south. Loose, relatively loose labor laws and low property taxes.

There is steel manufacturing, auto plants, Hyundai, Honda, Mercedes an Toyota are all there. You've got ships, planes, and rockets, Austal,

Airbus. Nasa has a massive facility down in Huntsville, Alabama. And as the politicians, of course, and everybody is looking to get Amazon, so

Amazon has the technology bid in and Alabama has put their bid in as well.

This broad range of industrial conglomerates gives the states -- perhaps some would say disproportionate power. But of course, we need to talk

about this election. Joining me now, Susan Pace Hamill, professor of law at the University of Alabama. She ran for the Alabama House seat as a

Democrat in 2009. What is your fundamental fear here? I assume, obviously, you're supporting Doug Jones. But if Roy Moore is elected,

what's your fear?

SUSAN PACE HAMILL, PROFESSOR OF LAW, UNIVERSITY OF ALABAMA: My fear is that our wonderful -- you could say we're on a blitz in bringing new

business to the state. This blitz could be seriously slow down or perhaps stopped entirely. Any CEO, whether it's from another state or another

country, who would look across the table and say Roy Moore is one of our two Senators, now that would have to give him or her a great deal of pause.

[16:05:00] And I believe it would be a serious con in the pro con list as far as Alabama winning the race for new business to land here. And those

of us who care about business, and I'm among them. I taught business organization for 24 years here at UA, and I was involved in the early

development of LLCs, and I care about business and jobs. And I'm afraid that we're going to lose them, frankly, if Roy Moore wins.

QUEST: But why? I mean, come on. A state is more than just one of its senators. And the other senator, Richard Chaffy, of course, has made it

clear that he did not support Roy Moore. Voting for a write-in candidate. Do you not think that this is an extreme reaction to the vote of one --

albeit important statewide politician?

HAMILL: You know, under normal circumstances I would agree with you. My fears would be quieted a great deal. But Roy Moore is quite exceptional,

and in the wrong sort of way. He has been kicked out of being Chief Justice of our state Supreme Court twice for failing to obey the U.S.

Supreme Court. This is the Chief Justice of our state laws. Not some person on the street who doesn't understand law. Kicked out twice. And

then on top of that -- he has credible accusations of sexual misconduct with teenage girls. These are extreme character flaws. And I fear -- this

is what I fear, that even though he is just one out of two senators and one out of many political leaders, that the -- that the extreme horrible

example that he sets could really drag us down in the state as far as our business in economic development. And, you know, there are many, many

Republicans that I've spoken to.

QUEST: Let me jump in here. Because if we look at what the state does, and look at those areas that you've got. You've got steel. You've got

autos. These massive Airbus, Austal, and NASA. And you're hoping to go for the -- well, the state is going for the technology bid by Amazon. The

level of state -- the level of the state's ability to attract high-tech -- because we often don't think of Alabama in the same sense of high-tech.

But it is a high-tech state, with a hugely beneficial opportunity in the future.

HAMILL: That's correct. And those of us who care about business, we want that to continue. And Roy Moore poses a significant risk of dragging us

down. He is extreme. He is not just a bad politician. I mean, we just got over a bad governor who had to resign. And while that was regretful, I

don't think many of us had this fear that Governor Bentley having to resign over his scandals was going to drag us down. Perhaps a little speed bump

to apologize for it.

QUEST: All right.

HAMILL: But Roy Moore is in a completely different category.

QUEST: Good to see you, professor. Thank you.

Joining us tonight, and it is, of course worth mentioning, the professor joining us did stand as a Democrat in 2009. We must turn to Wall Street.

Where the FANG index was slightly down. Could say hello to you on the way.

PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: Thank you, sir.

QUEST: Don't go too far, guru.

LA MONICA: I will stay right here.

QUEST: Please do. Because we're going to see exactly what happened with the markets. There are records tonight on the Dow and the S&P 500. Both

of whom came to a record high. Not a particularly big gain for the S&P. Bigger gain for the Dow, half a percent. Nothing there -- we managed to

get -- let's all look at this. There we go. I'm sure I'm doing this wrong, but -- there we go. So, oh, I need to do this. Let's do this

properly tonight.

So, we have 60 and 67 for those. You can start to see, this is so far, this year, 67 Dow records, 60 S&P, 70 Nasdaq. No records after that, and

none in Europe, too. From the trading post, we go to the Westfield Shopping Mall. It's the malls themselves that are being sold. Dozens of

them are being sold. Here is the Westfield Mall. That we are showing you. And the Westfield Mall, suitable muzak, as well, has $15.8 billion of sale.

The buyer is Unibail-Rodamco. It's adding stores to its gigantic global shopping mall. Westfield already has 17 European shopping centers. Add

Westfield U.K. and U.S. properties, and Westfield is now focused on high- end shopping, combating the rise of online retail.

[16:10:00] So, you've got the shopping physical presence, and you've got the battle against the muzak and online. Paul La Monica is watching what's

happening. Why has Westfield been sold now?

LA MONICA: I think there is a recognition, Richard, that the retail environment, the landscape, is not going to get any easier globally.

Obviously, you have the threat -- as you already mentioned -- from Amazon. But there are other retailers, Walmart, which is not a mall, that is doing

well also. So, companies may feel the need to bulk up to combat these competitive threats.

QUEST: Right. But let's take Walmart for example. Walmart has Walmart.com. So Walmart is the retailer and has its own physical

infrastructure. Westfield doesn't sell anything per se.

LA MONICA: No.

QUEST: It only sells what other people have put into its own stores. So, there is a huge difference, isn't there? Westfield has to rely on shops.

LA MONICA: Exactly. And the problem --

QUEST: The difficulty is for it to have a digital strategy. There can't be.

LA MONICA: Right. I think that problems that the malls are facing is that obviously tenants in malls will have a digital strategy, but that does not

do the mall owner itself any favors. The issue with the malls, particularly in America, you go to a mall now, and the landscape has really

changed. All of these department stores that are struggling, your Macy's, your Sears, your J.C. Penney, anchor tenants are now suddenly H&M and

Zahra and other fast fashion retailers. You Apple increasingly dominant in many big American malls as well. So, I think the mall is just not the same

as it was years ago. And that's something that these companies have to contend with.

QUEST: I you still like going shopping the mall.

LA MONICA: I do also. But I -- it's not the same. I grew up on Long Island. So, shout out to the Sunrise Mall, Sbarro and the arcade right

next to it.

QUEST: A misspent youth it sounds to me.

LA MONICA: Teenage waste land as Roger Daltrey once sang, yes.

QUEST: Good to see you, Paul. Thank you.

Coming up, as we continue tonight on QUEST MEANS BUSINESS, businesses our pledging to come clean on the risks of climate change. President Macron is

urging investors to turn their back on polluters. Will have that story as we continue.

(COMMERCIAL BREAK)

QUEST: Hundreds of companies, including BlackRock and Burberry say they'll come clean about climate change. Signing up to a disclosure company led by

Michael Bloomberg and the governor of the Bank of England, Mark Carney. New signatures were revealed in Paris today. The French President is

hosting world leaders. Two years since the landmark Paris Agreement was signed. Melissa Bell is our correspondent. She joins us from Paris

tonight. What is the purpose of this Paris Summit? Bearing in mind, the Paris deal has been signed and the U.S. isn't involved?

[16:15:10] MELISSA BELL, CNN PARIS CORRESPONDENT: The Paris deal has been signed two years ago today. And, of course, since then, as you say,

Richard, so much has happened. So much to bring into doubt that might have brought into doubt the fact that the world was likely to meet these very

ambitious targets that were fixed here two years ago. The message from today, Emmanuel Macron clearly wanted to keep the momentum up. He's really

invested a lot of political capital into keeping the Paris Accord alive.

But more than that, this was really about saying it isn't just about what heads of state have to say. It isn't just about the commitments of

companies, of countries, rather. It is about the commitments of individuals. It is about business. Business understanding that the future

is green, and they have every incentive, really, to try and seek it out themselves.

It was also about a series of financial commitments. It is all about the money, Richard, and trying to find the money that is needed to meet those

ambitious targets. Now, Emmanuel Macron believes it still can be done, and he told his audience today that although the American president hadn't been

invited to the summit, he was delighted to see a large American delegation. And it was fairly eclectic. There were a number of actors, Leonardo di

Caprio, Arnold Schwarzenegger, but also the mayor of New York, the former Secretary of State, John Kerry all there to say, look, the American

administration may have pulled out, but we believe that this still can be done. Have a listen to what the former mayor of New York had to say a

short while ago.

(BEGIN VIDEOTAPE)

MICHAEL BLOOMBERG, CEO, BLOOMBERG: It's embarrassing for the country, and I wish he hadn't done that. And I hope that one of these days he looks at

the evidence and changes his mind, and there's nothing wrong when people change their mind. You'll make fun of them, but I think it's a sign of a

mature, intelligent person that when the facts they have at their command change, they reevaluate and change the decisions. But the truth of the

matter is, climate change in America has little to do with the federal government. The effects are there today, a warming earth. In fact, 16 out

of the last 17 warmest years in the history of the world since we've been keeping records, have been since the year 2000.

BELL: Given all that, it seems extraordinary the decision was made by Donald Trump. Is there any chance --

BLOOMBERG: Well, because Donald Trump has not been watching your television. And if he was watching CNN and watching your reporting, I'm

confident he would have made a different decision.

(END VIDEOTAPE)

QUEST: Absolutely. No question about that. But Melissa, I watched today, and I wondered -- I saw the great and the good, and I heard the speeches.

But I wondered where it's going. I mean, this is a time to get on with it. Rather than just make more promises and high-sounding noises.

BELL: It is a time to get on with it. From the very start, the French authorities have said, look, the idea of today is not just words. It is

not declarations. We want firm commitments. In fact, the only heads of state of government that were allowed to speak today -- and this is most

unusual -- Richard, where those that were actually making pledges. And a series of commitments were published today by the French government.

Twelve in all and they each included a number of different measures that concretely, they say, will bring us closer to finding the money that is

still lacking. And you're right. We are still a long way from achieving what needs to be achieved.

And Emmanuelle Macron put it very plainly. He said, look, we are losing the battle against climate change. But it wasn't just about that. It

wasn't just about the sorts of warnings that we have heard for so many years. This was really about getting many different actors together and

saying, look, it is in your financial interest to make that transition now to start looking towards all the possibilities of the green revolution has

to offer your companies. It is about your money and your profits, not simply about making the world a better place.

QUEST: Melissa, good to see you. Thank you. Melissa Bell joining us from Paris.

Sir Richard Branson was one of the dignitaries there. He along with the Caribbean leaders have been talking about efforts to rebuild a region after

the recent hurricanes. Of course, Sir Richard has his own home there. And was stranded, caught up, whatever you want to say, in the recent hurricanes

when the island where he lives was completely devastated. He took shelter in the basement in the wine cellar.

The leaders launched a climate smart zone aimed at reducing the Caribbean's dependence on fossil fuels. Mr. Branson's resort, that we were just saying

on Necker, was devastated by the hurricane Irma in September. He hopes to reopen sometime next year. He spoke at the -- Prime Minister of St. Lucia

earlier today about the region's future.

(BEGIN VIDEOTAPE)

ALLEN CHASTANET, PRIME MINISTER OF ST. LUCIA: Well, as everybody knows, the Caribbean was badly hit this summer. And clearly, we see this as a

growing trend. And the leaders of the Caribbean, 11 of us, have come together, to form a coalition. And we were so grateful that Prime

Minister, Keith Mitchell, was able to use his relationship with sir Richard, who also brought in -- we brought in the world bank, the IDB and

CDB as development agencies, along with some of Richard's friends.

[16:20:04] And what the Caribbean is offering is to become an incubator. That we have been hearing all this talk of all these great ideas that are

out there. But right now, the Caribbean is poised to be able to a change. Countries like Antigua and Dominica have made the decision that are going

to be built back better and smarter than they were before. And so, the entire Caribbean now wants to come together in a partnership with Sir

Richard and his group to create the Climate Smart Coalition, in order to now bring these ideas to the forefront. See how they can work and what

works well in terms of building resilience, and also sustainability for this region. Which we believe now can be transferred to cities across the

world, and eventually to countries.

QUEST: Sir Richard, what will the areas that the Smart Coalition, the Climate Smart Coalition, be focusing on?

RICHARD BRANSON, FOUNDER, VIRGIN GROUP: Well, there's a lot of different areas. First of all, resilience. It's learning from what happened in a

200-mile-an-hour hurricane. What buildings survived, what buildings didn't survive. And then making sure that the -- when we build the buildings

back, that they're built back strongly so that they can survive in the future. Secondly, to try to move the Caribbean into an area that is

powered by clean energy. It's very expensive for people in the Caribbean to get dirty energy. And so, if we can actually power it by clean energy,

we can also set a good positive example to the rest of the world.

QUEST: Richard, when would you expect to see the first projects being explored and experimented with?

BRANSON: The first projects already are being experimented with. First of all, we haven't got commitments from the World Bank and International

Development Bank and others for quite a lot of money. We're now talking to the OECD about trying to get the Caribbean recategorized. At the moment,

they are categorized as sort of middle income countries. But when you get hit by a hurricane every now and again, and you take a couple years to get

tourists back or a couple -- or you lose your main industries, we believe that categorization is wrong. So, we're trying to get the OECD to change

that categorization so that the money that the Caribbean gets doesn't cost them so much. And comes much quicker. And we're hopeful that that can be

done. So anyway, I think most of the Caribbean leaders want to get on with it fast. And obviously there are some countries that have been completely

decimated and need to be got back on their feet as quickly as possible.

(END VIDEOTAPE)

QUEST: There's a nasty row between Britain's Brexit minister and the European Union that is throwing the U.K.'s divorce deal into question, the

deal only announced late last week. The EU's chief negotiator is now warning the U.K., he won't accept backtracking on Fridays agreement. Now,

the sticking point, of course, is the Irish border that we talked about last week. The deal reached in Brussels offered a guarantee that the hard

border would be avoided.

This is what they say, The United Kingdom remains committed to protecting North/South cooperation and to its guarantee of avoiding a hard border.

It could not be clearer, the words, guarantee. On Sunday, the Brexit secretary, David Davis, suggested a guarantee may not be legally binding.

(BEGIN VIDEO CLIP)

DAVID DAVIS, BREXIT SECRETARY: We want to protect the peace process, and we also want to protect Ireland from the impact of Brexit for them. So, we

-- you know, this was a statement of intent more than anything else. It was much more than a legally enforceable thing.

(END VIDEO CLIP)

QUEST: Unacceptable, those comments were called by the European Parliament's top negotiator, Giva Hashtag. And today Minister Davis

responded by tweeting, they must work together now to ensure that text becomes law. Joining me now from London is Lord Nigel Lawson, former

chancellor of the Exchequer and a member of the leave campaign. Lord Lawson, is it -- whether legally enforceable, do you recognize that that is

a guarantee, not a statement of intent but something higher than that? A guarantee of no hard border?

NIGEL LAWSON, FORMER BRITISH CHANCELLOR OF THE EXCHEQUER: Look, there is no problem about the Irish border. For different reasons, the government

of the Irish Republic, and the European Union are playing this up to make life easy for them, the Irish government and our domestic Irish politics,

and for the European Union to drive a hard bargain with the United Kingdom.

[16:25:03] There is -- the border will be the most unobtrusive border. It won't change much. It will be unobtrusive, and the hard border, so-called,

has not been defined at all. So, I don't see how law comes into that. We will -- we will -- both sides, both the United Kingdom and Irish Republic,

will do their best to make the border as on unobtrusive and inconspicuous as possible. That is perfectly manageable with goodwill and with modern

technology.

QUEST: I hear what you say. The ultimate position, though, is one of regulatory alignment if a deal cannot be done. And the U.K. has now

committed itself to remain -- at least as far as the Northern Ireland is concerned, to remain aligned. What is your understanding of regulatory

alignment?

LAWSON: Well, I am not a lawyer, and I don't know what it means. But I can tell you one thing. That it is of supreme importance for the United

Kingdom to have complete regulatory autonomy. We have taken a decision to become once again an independent nation state, an independent democracy.

And that means we are responsible for our own laws, and that includes our own regulations. And there could be no question of compromising that.

QUEST: Which, of course, will always bring us back to this idea. I know you believe that the U.K. can revert to WTO terms for its trading as it

does with the rest of the world. But if it does, there is no doubt that that trade with Europe, which is a large part of the U.K.'s trade and

services, will be on worse terms if it has to rely on WTO terms and conditions.

LAWSON: I don't think there's anything to be worried about falling back to WTO trade. That is the basis, for example, which the United States and

most of the rest of the world trades with the European Union now. And they do very well. They trade very successfully. There is no problem at all.

And as for the so-called service sector, the idea that there will be a single market in services was an aspiration. It's never been realized.

Even today, different European countries have different regulations for services.

QUEST: On this question of WTO terms, because it does go to the heart of the whole debate, I can see what you're saying as it relates to the United

States. But -- and other countries that the U.K. trades with. But as it relates to the EU, do you accept that the terms of trade with the EU will

necessarily not be as favorable if you have to rely on WTO terms?

LAWSON: I certainly accept the fact that if we could get a zero-tariff agreement with the European Union that would be better. But I doubt very

much that the European Union will agree to that. We will agree to it. I doubt whether they will. WTO terms is a very good second best. As I say,

that is the way that most of the world trades with the European Union. And trades with it very successfully. And, of course, if we are independent of

the European Union, we will be able to say our trade agreements with other countries all over the world.

QUEST: Lord Lawson, good to see you, sir. As always, thank you for taking the time to join us. I appreciate it. Thank you.

As we continue tonight, on its surface the senate race in Alabama has turned into a referendum on Roy Moore and the accusations against him. In

truth, the issues and the economic picture in Alabama are more complex. And we will get to grips with them after the break. It's QUEST MEANS

BUSINESS live from New York.

[16:30:00] (COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. When the former head of the WTO tells me, he has some

sympathies with the American complaints about his old employer. We'll take you to Seoul, where casual investors are falling over themselves to buy

bitcoin.

As we continue, this is CNN, and on this network, the facts always come first.

Authorities now say Akayed Ullah posted the message, Trump, you failed to protect your nation, on Facebook before he carried out Monday's New York

terror attack. They say Ullah has admitted he built and detonated the homemade explosive device. The explosion caused minor injuries to some

five people.

Voters are at the polls in the crucial senate election in the U.S. state of Alabama, where voting is brisk. The outcome could impact the balance of

power in Congress. In the short and long-term Republican candidate Roy Moore has been accused of sexual misconduct, including the molestation of a

14-year-old girl.

An explosion at the gas plant in Austria killed one person and injured 18. The plant is located near the border with Slovakia. Authorities say

technical are the most likely cause. It was not terror-related.

In France, President Emmanuel Macron is hosting more than 50 heads of state and global leaders. It's a one-planet summit and it's aimed at taking a

closer look at the climate change. Donald Trump wasn't invited. After all, he pulled the U.S. out of the 2015 Paris Agreement on climate change.

The Russian Olympic committee says it will support Russian athletes who want to compete in 2018 Winter Olympics in South Korea. Last week Russia

was banned February's games for manipulating anti-doping rules. Russian athletes who can prove they're clean will be allowed to compete under the

Olympic flag.

Turning to our top story. The landmark senate race in Alabama polls due to close in three-and-a-half hours from now. Chris Cillizza, is here with me.

Sir, good to see you.

CHRIS CILLIZZA, CNN POLITICS EDITOR-AT-LARGE: Thank you for having me. In person.

QUEST: Thank you for making time for us. Absolutely.

Tonight's vote, how close is it going to be, do you think?

CILLIZZA: Truthful answer no one knows. Alabama hasn't had a close election, Democrats and Republicans, since 1986. This is a special

election, so an election outside of the normal time frame when voters are used to voting. And is 13 days before Christmas. So, my expert analysis

is it will be relatively low. 5, 600,000 people.

QUEST: Really?

CILLIZZA: Yes, it could get upward of that, because it's gotten a lot of attention. But to be honest, Richard, we just do not know. There is no

way you can look historically back and say, well this number of people are coming.

QUEST: So, the traditional view that I've read is, whatever happens tonight, it's good for the Democrats. If they win the seat, then they

pulled off a massive gotcha.

CILLIZZA: Yes.

QUEST: If Roy Moore wins, then they have a punching bag for the next however many years. Do you buy that wisdom?

CILLIZZA: Sort of true. Look, I think moral victories aren't great victories. Would you rather have a United States senate seat, meaning that

Democrats would control 49 seats. Yes, you'd rather have that than a moral victory. Will Roy Moore be a problem for Republicans if he gets elected to

the Senate? Yes, he will be. But I guarantee you, you would rather have a U.S. Senate seat all the way through 2020, by the way -- remember, this is

the unexpired term of Jeff Sessions.

[16:35:00] He's not up for re-election until 2020. So, you've got three years of another seat, 49 seats, at least for Democrats. So, I think

they're both victories of a sort. But winning the seat outright, be a rejection of Donald Trump -- would be a bigger deal. QUEST: Let's talk on

the big issue. I want you to listen to Steve Bannon, who's been talking on economic nationalism, which is something of which he is so keen at the

moment. Have a listen.

(BEGIN VIDEO CLIP)

STEVE BANNON, EXECUTIVE CHAIRMAN, BREITBART NEWS: What do you see every day you read the "Wall Street Journal," "The Financial Times" every country

in the world is complaining and belly aching? You know why? There is finally somebody standing up for the United States of America. You all

talk about hate speech. What about the economic hate crimes the establishment has foisted on the workers of the United States of America?

(END VIDEO CLIP)

QUEST: Chris?

CILLIZZA: Not surprising. Look, this is who Steve Bannon is. And I think it's important to remember that Steve -- the architecture of Steve Bannon's

beliefs, economic nationalism, anti-trade, have been assumed by Donald Trump. These are views that Donald glommed onto during the campaign. So,

when you hear Bannon speak, a lot of what he says is what has influence Trump to get to where he is.

QUEST: But we look at Donald Trump, and I was reading a fascinating piece concerning this idea of Donald Trump the counter argument.

CILLIZZA: Yes.

QUEST: Whatever seems to be the prevailing wisdom, he says, look, it worked for me in the election, I'm going in the opposite direction. Paris,

the TPP.

CILLIZZA: Yes.

Roy Moore. He's almost perversely going opposite.

CILLIZZA: Yes, is the answer. The best way to think about Trump is this. For his whole life, he believes himself to have been someone on the outside

looking in. His father was a developer in Queens, not Manhattan. He developed in Manhattan, but the elites there and the old money never

allowed him in. He came to Washington in 2011. President Obama and Seth Meyers, the comedian, made jokes at his expense in the idea he was running

for president. So, he distrusts anyone who he believes is in the room. And as you point out, Richard, the 2016 campaign was the absolute capper of

that blue system. Everyone said he had no chance. Then everyone said he had to drop out after the "Access Hollywood" tape. He didn't do any of

those things. He denied all the allegations. He did the exact opposite of what conventional wisdom would dictate. And he won.

QUEST: Even at 32 percent or 33 percent, the lowest in the polls --

CILLIZZA: Yes.

QUEST: It's working for him.

CILLIZZA: It works for him to an extent. I think that just going counter for the sake of going counter is a tactic, not a strategy. And I think the

problem with this administration is, if you try to find a narrative arc of any sort, there isn't really one. There is a series of dots. Because,

again, he's just doing the opposite. Doing the opposite is not a proactive agenda. I think that's why he's struggling. In polls, at least.

QUEST: As I -- I've got a lot of e-mails from a lot of viewers who consistently say to me, why can't you say a good thing about Donald Trump?

Not you personally.

CILLIZZA: No.

QUEST: No, about Donald Trump, and what he's done for the economy? Stock market at record highs. Unemployment at --

CILLIZZA: Record lows.

QUEST: 17-year lows. Confidence at record highs. Do they have a point?

CILLIZZA: Yes. I always think any president -- I said this with Obama, I said it with George W. Bush. Any president gets too much credit when the

economy is doing too well and too much blame when the economy is doing bad. That's just the nature of American politics. The average person has no

real understanding of how the economy works, other than say, the stock market is up. Things are good.

He deserves some credit in that his election convinced corporate America that there would be -- there would be less regulation. It would be a

businessman White House. So, a lot of what they're doing is acting on that. And the tax cut, without question -- take the corporate tax rate

from 35 to 20, and you do engender confidence among corporate America. So, he does deserve credit for that. Does he deserve as much credit as he's

taking? Probably not. But he wouldn't have deserved as much blame as he was getting if the economy wasn't doing well.

QUEST: Good to see you, sir.

CILLIZZA: I'm always happy to be here at the bell.

QUEST: To encourage you, he gets one. Just one as in encouragement.

CILLIZZA: Is it like a free one? How is that? I was mediocre, C-minute. I'll take it. I haven't had practice with it.

QUEST: You wanted another one. No, get away.

As we continue tonight, making global trade free and fair for the former head of the WTO tells me, the U.S. may have a point about how to improve

the system. This is how you do it.

[16:40:00] (COMMERCIAL BREAK)

QUEST: QUEST MEANS BUSINESS. The former head of the World Trade Organization tells me, the United States has a point when it criticizes the

group for being too focused on legal action. U.S. trade representative told the WTO's meeting in Argentina they should concentrate more on getting

results from countries that are gaming the system. I asked Pascal Lamy if the USTR was right.

(BEGIN VIDEOTAPE)

PASCAL LAMY, FORMER DIRECTOR GENERAL, WTO: There is something true in that. We choose that if the WTO has a function for regulation, monitoring

and dispute, regulation hasn't done much in recent years. Monitoring is OK. In this is going full speed. So that's not a bad way of presenting

things. Where I totally disagree with the U.S. stance is that the WTO system would be biased against the U.S. That's absolutely untrue. The U.S.

were one of the architects -- one of the builders of the WTO. And mind you, they built a system that served them pretty well.

QUEST: Qatar and Singapore as developing countries, two -- in fact, Qatar is the richest country per GDP per capita and Singapore isn't very far

behind.

LAMY: That's right. But Singapore does not benefit from any privilege for developing countries in WTO. Nor does Qatar, by the way. So, in WTO,

there is a regime for rich countries. There is a regime for developing countries, and emerging countries, like China, for instance, are somewhere

in between poor countries and rich countries. And we know that there's been a dispute for a long time between the U.S. and China and the WTO.

U.S. says China is a rich country with many poor. And China says, no, we are a poor country with many rich.

QUEST: How damaging is it to the WTO, this lack of involvement or this willingness not to engage by the United States do you think?

LAMY: I think it's a worrying trend. It did not start with Donald Trump. It was already there in the previous administration with Barack Obama. And

it's a warning stance. The question which other members than the U.S. have to discuss in Buenos Aires is are we ready to push back. Are we ready to

run -- we, members of the WTO, are we ready to run the organization with the U.S. sitting on the fence? That's a big question for them. If I was

to answer this question, if I were Europe or China or Africa, I would say, yes. But that's for them to decide.

QUEST: That would be a tremendous break with history and with precedent, which is no reason not to do it. But as you say, going back to the GATT

and the start of the WTO, the U.S. was there to basically say we're continuing without or at least ignoring the U.S. until they are prepared to

join in, would be a major development.

LAMY: I agree with you, Richard. It would be a major development. But U.S. turning protectionist would also be a major development. It hasn't

happened for the last 60 or 70 years. So, if the U.S. administration is ready to take a U-turn against globalization. The sort of de-globalization

led by the U.S., that would also be a big change.

(END VIDEOTAPE)

[16:45:36] QUEST: Pascal Lamy talking to me from Paris. As we continue tonight, we have covered it a lot this week, few understand it, the masses

seem to want it. It is the bitcoin enigma, and it is a gold rush everywhere, even in North Korea. After the break.

(COMMERCIAL BREAK)

QUEST: So, as if the situation on the Korean Peninsula was not fraught enough, North and South Korea are now divided over, of course, bitcoin.

South Korean exchanges are saying they'll cooperate with regulations. The country is amongst the world's biggest bitcoin markets, with many ordinary

citizens getting involved. According to coin market cap, South Korea accounted for 15 percent of global trading over a 24-hour country. The

hype is hitting North Korea, too, which is reportedly to be aggressively mining and, of course, hacking bitcoins. Seoul is accusing Pyongyang of

outright stealing the cryptocurrency. They want to do it and they want to regulate it. They are mining it, and seemingly stealing it. Our

investigative reporter, Jose Pagliery says it is all very strange. Why this part of the world more than most?

JOSE PAGLIERY, CNN INVESTIGATIVE REPORTER: Consider this is the hermit kingdom and they are starving and starved for cash. For the most part, the

U. N. And international community have locked them out of banks. So, where they used to hack into the swift system and banks, there is also

reason for them to hack into the mining of bit coins and steal those bitcoins, as well, because the price has been skyrocketing. There is value

in this stuff.

QUEST: So, when you say they're stealing them, I mean, the mining of bitcoins as such is a fairly robust infrastructure and architecture. Seems

to work. But stealing or breaking into somebody's bitcoin wallet --

PAGLIERY: Sure.

QUEST: -- or making off with the bitcoins is more difficult.

PAGLIERY: But this is North Korea and they're known for having incredible hackers. Remember Sony? The same way North Korea found it profitable to

hack into the Bangladesh Central Bank, they're finding it profitable to hack into computers and steal people's bit coins because this is quite

liquid. They can cash those bitcoins out on the market and get dollars.

QUEST: Let's talk about this. I think it's good back to basics with bitcoin. If I have a bitcoin wallet, my bitcoin wallet is my computer.

Correct?

PAGLIERY: Sort of. I mean, you can -- your wallet lets you access what is listed on the ledger of bitcoin.

QUEST: Right. But in terms of how I keep track of it all, it is on my computer.

PAGLIERY: Sure.

QUEST: If I lose the key to -- if I lose the password --

PAGLIERY: You lose it all.

QUEST: What happens if my hard drive goes up in smoke?

[16:50:00] PAGLIERY: You better have written the password and the public address of that wallet somewhere else. This is what makes bitcoin so

tricky.

QUEST: So, there is a public address. It is not just purely on this machine.

PAGLIERY: No, the way it works, you have a public address that everyone can see. So, you can send or receive bitcoin, right? But you have a

private key that lets you unlock your wallet and actually send money. And that's what hackers are going after. That's what apparently these North

Korean hackers are going after. They're breaking into people's computers and stealing their bitcoin wallets. But they're also hacking into

computers and demanding ransoms, so people send them bitcoin. They are a criminal enterprise.

QUEST: When we are talking about the private key that unlocks the wallet, is this a bitcoin thing? Or is this key that will be given to you by the

exchange from what you have bought your bitcoins or the app where you're holding them? Who gives you the key?

PAGLIERY: No, this is very much a bitcoin thing. It's integral to the design of that currency, which is why it's so empowering to individuals.

You control your money. You can also lose.

QUEST: Right. But if my bitcoin gets -- once I have sold my bitcoin to you.

PAGLIERY: Sure.

QUEST: You have now got my bitcoin.

PAGLIERY: I do.

QUEST: There's a transaction and it's now in your wallet.

PAGLIERY: Yes.

QUEST: Even though your wallet is anonymous, the authorities can find out that bitcoin from Quest went to this account.

PAGLIERY: Yes. I know what you're getting at.

QUEST: Why can they not freeze it?

PAGLIERY: Well, they can't freeze it because the system is independent. No one has any authority over the bitcoin system. However, it's trackable.

So whatever North Korea thinks it's doing by getting away with this, the amount they have stolen is quantifiable.

QUEST: So, every time bitcoins are stolen, hacked, as they were recently from that exchange, as they were, we know where the bitcoins have gone.

PAGLIERY: Yes. But because there aren't sufficiently strong anti-money laundering laws being applied to the bitcoin industry, we don't know when

the criminals are cashing out. And that's the loophole.

QUEST: We need to talk more about this. You've written a book on the subject, haven't you?

PAGLIERY: I have.

QUEST: I don't see it around here. Not on my desk.

PAGLIERY: I'll bring it to you.

QUEST: Promises, promises for Christmas.

South Korea's prime minister has called for tougher government action. Even calling bitcoin mania a potential pathological phenomenon if left

unchecked. CNN's Paula Newton is in Seoul.

(BEGIN VIDEO TAPE)

PAULA NEWTON, CNN CORRESPONDENT: Bitcoin may be a virtual currency, but here in South Korea, the kimchi premium is all too real. So, this is

kimchi, spicy, fermented cabbage. It's a staple side dish here. So, what's the kimchi premium? Bitcoin is in such high demand on Korean won

exchanges, trader say South Koreans can pay a 15 to 25 percent premium on global prices just to get a piece of it.

UNIDENTIFIED MALE: They see as gambling in some ways. They try to -- earn more money by using exchanges.

NEWTON: So, to understand the bitcoin frenzy, South Korea is a good a place to start as any. Virtual currencies might be a fringe play

elsewhere, and South Korea their mainstream. At least 1 million people buy it, trade it, cash it in. It's everyday banking and investing for everyday

people. And none more enthusiastic than college students like Isaac Chung. He's in between classes right now, checking his virtual currency portfolio.

He has made thousands of dollars already.

ISAAC CHUNG, STUDENT: It's like the stock market, hundred times faster.

NEWTON: Is it more addictive.

CHUNG: Definitely. The emotions related to this, it's more inflated than what you get in a normal stock market. Because it's on, like, 24/7. You

have to be constantly on the radar of what's going on.

NEWTON: How popular is it on campus right now?

CHUNG: The speculative frenzy is pretty huge right now. Bitcoin price is this right now. Bitcoin price is that right now.

NEWTON: Bitcoin prices are so obsessively tracked here, bitcoin exchanges like bit thumb have open store fronts and customer service space to make

trading and virtual money much easier.

Three of the top 15 virtual currency exchanges are located here, and on any given day, South Korea accounts for more than one fifth of all bitcoin

trades done around the world. The government says it worries that virtual currencies are corrupting the country's youth with so many small investors

all then there could be a crash out.

[16:55:00] So just like the kimchi, this is a made in Korea problem. The government is already working to ban new virtual currencies.

Ban the sale of bitcoin futures contracts and other derivatives, and maybe in future, taxing virtual currency transactions and profits. And there are

other uniquely made in Korea problems. South Korean government fears virtual currencies are arming North Korea with new financial weapons,

making it easier to hack or launder money. And it warns North Korean hackers will aggressively target virtual currency exchanges in the year to

come. All good reasons to keep a keen eye on Korean exchanges as virtual currency goes from market niche to market obsession. Paula Newton, CNN,

Seoul.

(END OF VIDEOTAPE)

QUEST: We'll have a Profitable Moment after the break.

(COMMERCIAL BREAK)

QUEST: Let me be clear, I'm absolutely fascinated by bitcoin and the cryptocurrency world. Because this is clearly the future, and how the

traditional monetary systems and commercial environment handles this is of fascinating importance. A cryptocurrency of one description or another

will be with us forever. Whether it's bitcoin or some other, it doesn't matter. It's the issues that we are dealing with that have to be handled

and dealt with if this mainstream. We're going to cover it more on QUEST MEANS BUSINESS.

And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead I hope it is profitable.

END