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QUEST MEANS BUSINESS

Trump Team Warns of Trade War in Davos; Merkel and Macron Defend Globalization; Mnangagwa Says Zimbabwe is Open for Business; Interpol Says Cybercrime is Our Turf; Saudi Aramco CEO Sheds Light on IPO Decision. Aired 4-5p ET

Aired January 24, 2018 - 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: Closing bell ringing on Wall Street. Records on the Dow and the S&P. No record on the Nasdaq. Topsy-turvy day.

The gavel gets hit. Trading is over for today. It is Wednesday, it's the 24th of January.

Tonight, deep into the trenches. The battle lines on trade get ever clearer. Merkel and Macron, Europe has its day in the trade sun. You'll

hear what they had to say. And Zimbabwe's president tells me tonight why his country is open for business. Live from the World Economic Forum, in

Davos. I'm Richard Quest. I mean business.

Good evening. Warning shots are being fired metaphorically between Davos and Washington as leaders here at the World Economic Forum set out their

positions amid talk of a potential trade war. Opening salvos fired ahead of President Trump's arrival tomorrow. The U.S. Commerce Secretary, Wilbur

Ross, says a trade war is already under way and U.S. troops are coming to the ramparts. The Treasury Secretary, Steve Mnuchin, adds the weakening

dollar is boosting America's fire power.

And on the other side here in Davos, anti-war talk from the French President, Emmanuel Macron, backed up by --

ZAIN ASHER, CNN HOST: All right, it looks as though we have lost our Richard Quest who was there explaining what his show had for the rest of

the hour. We will try our hardest to get him back. Our crew and the producers in the control room are working on it as I speak.

In the meantime, Anthony Scaramucci briefly served as president Trump's communication director -- as I'm sure you remember. And remains a very,

very strong supporter of the president. He insists Mr. Trump's America First approach is not protectionist. And that's the message the president

will bring here to Davos. Take a listen.

(BEGIN VIDEOTAPE)

ANTHONY SCARAMUCCI, FORMER WHITE HOUSE COMMUNICATIONS DIRECTOR: I think he sees it as an opportunity and a platform to express why his policies are

not only good for America, but they're good globally. And so, I think this is an interesting opportunity for him to do that.

QUEST: This America First policy is being seen here as a protectionist policy.

SCARAMUCCI: Yes, well you see, I don't see it that way. And I think what sometimes happens is because of our world history, when you bring up the

word nationalism or being a nationalist, it speaks of like the old Barbara Tuchman book. You know, "The Guns of August" and so forth. I don't think

the president means that at all. He more or less means a nation-first policy. His idea is that each nation's leader should take care of their

own citizens first, but then also be part of the global community.

QUEST: Nobody would disagree with that. It's when you take a very narrow definition of what a trade policy should be. In other words, almost and I

have a trade deficit with you, it must be bad. Whereas here, of course, people like Angela Merkel today and Justin Trudeau yesterday said all said

globalization is at risk.

SCARAMUCCI: Yes, I don't believe that. I mean that's also politics on their part. I think what is totally true if you look at the trade over the

last year, if anything, the U.S. economy's strength has led to more global trade as opposed to less global trade versus 2016. So, for me, I think the

president's message is I'm working on building aggregate demand and purchasing power for working-class families and middle-class families.

That is a positive engine for growth for the world and it will lead to more global peace and global prosperity. But I do think that these guys are not

being fair if they don't really be honest about the trade deals. They are asymmetric. You and I know that because we've studied trade. Since 1946

they've been asymmetric. The president just wants to make it more symmetrical and more fair.

QUEST: On the tax cut, it's been widely welcomed by just about everybody here. We're starting to see the U.S. corporations, obviously, give some of

it back by way of bonuses and increased investment.

SCARAMUCCI: Raising minimum wages.

QUEST: Raising minimum wages in many cases, as Oxfam pointed out and as the unions pointed out it still has this effect of minor gains for the many

and major gains for the few.

SCARAMUCCI: Some people are going to be billing it like that, but I don't --

[16:05:00] QUEST: But it's true.

SCARAMUCCI: No, but if you really look through the whole thing, yes, there are a lot of different people that are benefiting. Unfortunately, the

people who live in the blue states like myself, the state of New York, where not actually benefiting. My tax bill actually went up, because of

the way the deductibility works. But if you go through the whole thing, his point is I'm going to incentivize corporations large and small to give

more back to their workers.

Henry Ford once said -- and a lot of people don't like Henry Ford understandably -- but he did say I'm going to give my workers enough money,

so they can buy the things that are manufacturing. And I think that's really the message that we have in the society now. Teddy Roosevelt -- the

word progressivism got hijacked by the left, but Teddy Roosevelt was the father of progressivism making life easier for lower and middle-class

people, and I think that's what President Trump stands for.

QUEST: What do you regret about your whole time with the administration?

SCARAMUCCI: It's 954,000 seconds. If you like reframing it that way. It makes it feel a little longer. You know, there's nothing for me to regret.

I obviously made a mistake. I apologized for the mistake. I was accountable for it. I got fired for it. I wish I was on the inside

helping the President? Sure. But I've got a great life outside the administration.

QUEST: Do you keep in touch with the president at the moment?

SCARAMUCCI: I do. I mean, I don't talk to him regularly. I'm not one to exaggerate my relationship with the president, but I've had several

conversations with him since I left.

QUEST: And if he asked you, if he said, Anthony, give me a bit of guidance here, please. I'm going to Davos.

SCARAMUCCI: He would tell me to change my last name to Quest and probably lead to $1 billion of net worth accretion for me. That's what he would

probably say to me. But he would --

QUEST: Flattery will get you everywhere, except an easy question.

SCARAMUCCI: You know what he would say thing. And I think this is the most interesting thing. He would say, I've got this. He wouldn't have to

get any advice from me. He would say I've got this. Because he has a duality in the personality. He wants to part of the world system, and he

wants to protect American workers. And if he does both of those things he's going to win a resounding reelection in 2020.

(END VIDEOTAPE)

ASHER: Gosh, he is quite the smooth talker. Anthony Scaramucci there speaking with our Richard Quest, despite a very brief and tumultuous tenor

at the White House. He did talk about the fact that he certainly does have the president's back and that is what I found quite surprising and he does

keep in touch with the president. And he supports the president especially when it comes to trade. And speaking of trade, the WTO is the world's top

arbiter of trade. President Trump has criticized it saying it's biased against the U.S. The WTO's director general said America First has shaken

the conventions of global trade. Take a listen.

(BEGIN VIDEOTAPE)

ROBERTO AZEVEDO, DIRECTOR GENERAL, WORLD TRADE ORGANIZATION: People are coming to grips with the fact that there are different perspectives. And

these different perspectives are translated into action on the ground. And I think that most people now are concerned with the direction that this has

taken and whether we are going to remain in control of the situation or not. I think that's the major question.

QUEST: The argument or the issue, of course, becomes America First and whether in your view -- he says he just wants a level playing field. He

just wants to rebalance the trade imbalance. Do you see the measures as protectionist?

AZEVEDO: It's interesting that you have to look at both the rhetoric and the actions. For example, we are in Buenos Aires, and the Ministerial

Conference of the WTO, the United States was engaging. They were negotiating. They were talking. They actually signed up with 70 other

countries and a declaration for conversations and electronic commerce and eventually negotiations. That's not really the way that people would see

as matching to the rhetoric. I think we have to understand that the message is firm. Clearly there is a firm message. We don t like it. We

are unhappy with the situation. And we want to do something about it. Others are measuring up how to handle that.

QUEST: OK. You talked about the meeting in Buenos Aires, the U.S. made it clear and you picked the one good spot on everything else. It was failure,

you know. There was no meeting of minds. The negotiations weren't able to come to the conclusions. And Europe described it as a missed opportunity.

But the U.S. maintains this view that it will not be business as usual.

AZEVEDO: But you cannot make the filler a U.S.-led failure. It was difficult already in the WTO. We had very good outcomes in both Bali and

Nairobi, you couldn't expect to have it every two years. The U.S., for example, was not blocking any major outcomes in Buenos Aires. Others will,

too, it was difficult to come together. Did the U.S. help? Were they a championing in causes? Were they making it work? No. I can't say that.

But were they the cause of the impasse? I think it will be simplifying things too much.

[16:10:00] QUEST: Right, and if we take, for example, the washing machines and solar panels of the last 48 hours, yes, they are relatively small beer

as we say, in terms of tariffs. They may be meaningless in economic terms, but it's symbolic, is it not?

AZEVEDO: I think it is. It shows that there is a concern and that they are going to take action.

QUEST: So, how can the multilateral system, how can the WTO, how can you respond to this concern?

AZEVEDO: I think by providing a framework to handle those issues. These actions, they underwent an investigation. They went through all of the

procedures that the rules require them to undertake. They did it. Now, others may not like it and they may contest. That's what had been

happening before. My concern is not that. My concern is when people throw away the book and decide to do things by themselves.

(END VIDEOTAPE)

ASHER: All right still to come here on QUEST MEANS BUSINESS. Zimbabwe's new president is making his Davos debut Emmerson Mnangagwa, as a member of

the country's old guard. Next Richard asks him why anyone would trust him with investment? That story next.

(COMMERCIAL BREAK)

QUEST: Welcome back to Davos. Thank you, Zain, for stepping in.

Donald Trump's economic team is here and already insisting America First doesn't mean America alone. European leaders who spoke here are clearly

looking at President Trump's actions. Angela Merkel spoke this morning. She called for more cooperation, especially on trade. And climate change

the German chancellor warned of populist poisoning Europe. And then Emmanuel Macron spoke later. He said holding the world together requires a

strong Europe. And a strong Europe is crucial for France.

(BEGIN VIDEO CLIP)

EMMANUEL MACRON, FRENCH PRESIDENT: My first message is that France is back. France's back at the core of Europe. Because we will never have any

France success without a European success.

(END VIDEO CLIP)

QUEST: Joining me now Pascal Cagni, the chairman of Business France. Good to see you, thank you.

PASCAL CAGNI, CHAIRMAN, BUSINESS FRANCE: Good to see you, Richard.

QUEST: What happened with Macron's speech today? Where is he positioning himself between Europe and the United States with an America First policy

since he has the best seeming relationship with the U.S. President?

CAGNI: He has a very simple agenda, is to be getting friends, being competitive. And if we're getting competitive will get back to a great

economy. If we've got a good economy we can create a more faired world, right. And we need for that you have a France which is strong, but we

understood a long time ago, actually, that we cannot make France strong if it doesn't have a good Europe. Now all of that doesn't mean that America

could be first, we need to cooperate and to find these key consensuses on several issues.

QUEST: Do you believe or does the president believe that America First is a protectionist or potentially protectionist policy? Obviously, every

leader, Macron is France first, May is U.K. first, but they don't espouse the same protectionist policies.

[16:15:00] CAGNI: I will not talk for President Macron, but for what I am concerned with is being the ambassador for foreign investment. I can tell

you that objectives are that investors choose France. And that we believe that for the investor to choose France, we need to continue to have a big

trade with the Americas, and also with China. So, in this debate that you are trying to put on the table, we strongly believe that we've never said

France first. The opposite. We said France needs to succeed with Europe, and we maybe consider that the America First is really short, right?

QUEST: OK, so, the reforms that President Macron is introducing, zero to 100 percent how far are those reforms --

CAGNI: Richard, just only 120 days that this passed by. We have been physically changing the political landscape and 75 percent of the new MPs

are here, 40 percent are ladies and member of the parliament. We've got a new social change, which is bringing what you and I as businessmen what we

want. We want flexibility of the world's credit for business. We've got a better tax regime, which is going to incentivize to have investment. And

we basically defining the rule in the next six months to do what? To essentially address the fundamental issue. Governments, ecology

transitions and the key word that needs to be raised. And that's actually the subject of Davos. So, I think what has been accomplished is incredible

and there say lot more to come.

QUEST: I will be in Paris next Thursday and Friday.

CAGNI: Welcome, welcome.

QUEST: QUEST MEANS BUSINESS comes live from Paris as we are going to take the temperature of the Macron changes. Hopefully you might even join us.

CAGNI: You should join, and you should most importantly, ask some of the10,000 new staff of which are there. You should ask the 18 to 25 years

old. The would say no, they want to become interpreter. Five years ago, less than 10 percent wanted to say they were interpreters. So, you're

going to get a sense of the cultural shift. You're going to sense that this kind of word is ours. Going to be a golden one, but I think just a

start.

QUEST: Choose a color.

CAGNI: I will not take red. Green

QUEST: Fine come over here. We're told by WEF that we're fractured. This is not fractured at all. This is very fractured. How fracture is the

world? A circle and the line, which way? Where would you say? How fractured are we in the world?

CAGNI: We are here. We give you a long fracture. We have a long way to go to basically address. We were two fractures and that's why we need to

have a fair world. It looks too alone, right?

QUEST: Thank you very much, sir good to see you

CAGNI: See you in Paris.

QUEST: As we continue tonight, Zimbabwe's new president is telling Davos and the world that the corruption of the Mugabe era belongs in the past.

Emmerson Mnangagwa was Robert Mugabe's vice president and close ally. The new president assumed power last year. Now he is here urging foreign

investors to support one of Africa's poorest countries. At his inauguration in November, Mnangagwa promised sweeping reform, an end to

corruption and business-friendly policies. When I spoke to the president, I began by asking what his message was and why he thought he should be

believed.

(BEGIN VIDEOTAPE)

EMMERSON MNANGAGWA, ZIMBABWEAN PRESIDENT: Zimbabwe is open for business. We are keeping all our old friends onboard. We are also determined to

embrace new friends across the world and say come to Zimbabwe. It is open, and in the legislation of the status which constrains business in Zimbabwe

we have no more.

QUEST: May I ask, Mr. President, your understanding if I ask some fairly blunt questions?

MNANGAGWA: You're welcome.

QUEST: Why should anybody believe you? You were part of the previous government that mismanaged the economy for three decades. Irrelevant of

land, whether it's currency, why should anybody believe you, Mr. President?

MNANGAGWA: I have put on new rules for business, so that we become competitive. Capital goal want you to feel safe and the capital now will

be safe in Zimbabwe. We opened up in terms of legislation and in terms of policies I believe business always wants to look where there is the least

risk and we say what is it? That will be constraining business or capital to come to Zimbabwe and those are the renew.

QUEST: Transparency.

MNANGAGWA: That is one of issues is of doing business.

[16:20:00] QUEST: Never mind ease of doing business, they all come later. You first, of all, got to make sure that the economy is free of corruption,

free of bribery.

MNANGAGWA: This is one of the primary things I pronounced. Zero tolerance on corruption. If you've been following the activities in Zimbabwe today,

there are so many high-profitable places now in relation to those who committed acts of corruption.

QUEST: Why should we believe you, with respect, about the rule of law on your economy now?

MNANGAGWA: Those who want to live in the past can continue to live in the past. But those who want to see the future, where we are going can look at

what we are doing. And make judgment on what we are doing not on the issues of the commissions or omissions of the past.

QUEST: It's convenient to say that, sir. It is convenient to wish to put aside the past saying that we'll only look to the future. But as South

Africa discovered with its truth and reconciliation commission, dealing with the past is essential if you want to have a future

MNANGAGWA: Now we can have lessons of the missteps of the past. It's for us in the future, but all that which we feel is not what we cannot carry

into the future. The ideal position for us is to say why are other economies in our region progressing? Why are the economies growing? Why

do we not have fine, direct investment coming into Zimbabwe? So, when we identify those issues, also we must have dialogue with people like you,

with people who want to come into Zimbabwe. Have dialogue and say what do you see which constrains you to come into our environment and when to do

so, if we are able, then to have the legislation and laws to make sure that is behind us.

(END VIDEOTAPE)

QUEST: The president of Zimbabwe, and you can hear more of that interview later in the week.

An exclusive event attended by some of the wealthiest and most powerful businessmen, and I mean businessmen, and bankers in London has been exposed

as a hot bed of sexism, harassment and misogyny. It's called the presidents' club and now it says it's closing after on undercover

journalist from the "Financial Times" reported demeaning and sexist behavior at the men-only charity gala at the Dorchester Hotel.

The female hostesses were told to wear revealing outfits and similar underwear. One of them, a "Financial Times" reporter said, she and other

young women, hired so-called hostesses, were groped repeatedly. Events stated purpose was to raise money for worthy causes. And that it did set a

couple of million pounds. Items being auctioned included lunch with the foreign secretary, Boris Johnson. Tea with the Bank of England governor,

Mark Carney. Both men have distanced themselves from the event. The bank says Carney is dismayed at the report. Several hospitals are also

returning hundreds of thousands of dollars that were raised by the event. I am joined by Inga Beale, chief executive of Lloyd's of London. When I

read this story this morning, knowing this event had only happened last week in the era of #metoo, it does blow the mind.

INGA BEALE, CEO, LLOYD'S OF LONDON: It does, indeed, and in fact when I saw the headline, I didn't bother to read the article. I thought, I just

can't believe it. I have got to move on from this. The world has got to move on. And I think now we are seeing some pretty stark reactions to it.

Whether it's Great Ormond Street giving back the money -- and this is a lot of money we're talking about here. A lot of money. So, they thought long

and hard about this and they've given that money back.

QUEST: The idea the organizers say and various of the sponsors say they had no idea that this was as gross as it was, this event. It was an open

secret what this event was like.

BEALE: I don't know whether it was an open secret. I'd never heard of it, but obviously, I was never invited, and --

QUEST: It's grubby. It's dirty. It's unpleasant.

BEALE: Yes, it does certainly sound like that and feel like that. But you know, there were probably people associated with it who did not actually

realize what it was like. They'd never been there. They thought it was raising money for good causes. Now it's all being revealed. And I think

what is interesting of course, it's very difficult to lead secret lives these days, isn't it? Look how easy it was actually to uncover that and

reveal it within days and it's all fallen apart.

QUEST: As we say here, skate to thicker ice, and talk about Lloyds. Well, maybe it wasn't that thick. There was a lot of thin ice, in the sense of

claims last year with hurricanes were very high. And that took its toll and there's been a bit of recapitalizing.

BEALE: Yes, so the tragic events is that it wasn't just the U.S. that was affected. We had a Mexican earthquake. We had tragic flooding in South

Asia. So, lots of natural catastrophes happened last year, but that's what Lloyd's is all about. That's what we are here for. We are here to step in

when something goes wrong. So, we've paid out already $3 billion for those hurricanes in the U.S. We've got several billion more to go. But yes, we

have to be capitalized, because you've got to put that money to one side to pay for the claims as they come through this year.

QUEST: You and I have talked about your Brexit plans, Brussels. How's the Brussels plan coming along? Project Brussels?

[16:25:00] BEALE: Yes, Brussels is beginning to bloom. We are -- we've got a plan in and application for approval with the regulator. We are full

steam ahead. We're going to be up and running by January 2019 regardless of what's going on at the current level in terms of negotiating the Brexit

terms. We are moving ahead. We've got to provide certainty to our customers, policyholders, brokers and members.

QUEST: In that environment, the level of uncertainty remains? And I suspect it's going to get worse before it gets better as we get closer to

various deadlines that seems about right.

BEALE: We've been promised that by the end of the first quarter we will actually have a bit more certainty about the implementation period, the

length of an implementation period and what state the nation will be through that implementation period. That could mean we don't have it

actually move as quickly as many of the businesses. Don't have to move quickly.

QUEST: But as a good insurance, you are always prepared.

BEALE: We are always prepared. Lloyd's is always prepared.

QUEST: Choose a color

BEALE: Oh, well, I'm going to go for red. I know my predecessor didn't, but red is my color.

QUEST: How fractured in society do you think we are? WEF says it's a shared future in a fractured world. That's were not fractured at all.

That's the middle line. This is we're very fractured.

BEALE: Can I put two on here?

QUEST: Why not. Coca-Cola did. You are more than welcome.

BEALE: OK. So, what I think at the moment is if you take the whole world as it is, we are over here, right? We are here. And we're going to move

this way.

QUEST: Getting worse.

BEALE: But what's happening is that there are small microworlds within this world that are getting closer together and less fractured. So, I

think the smallest groups are actually about here and they're going to go that way and that's what's happening with populism and all of the groups

that are getting together. So, I have two.

QUEST: Have you ever thought about a career in diplomacy?

BEALE: I don't think that would be the game for me.

QUEST: Really good to see you. Thank you very much.

BEALE: Thank you.

QUEST: As we continue tonight, after the break, a whirlwind day on Wall Street we saw stocks hurt by comments made by the U.S. trade secretary, and

then helped by remarks by the treasury secretary and the dollar was somewhere in the middle. It's QUEST MEANS BUSINESS live from WEF.

(COMMERCIAL BREAK)

[16:30:12] QUEST: Hello, I'm Richard Quest, there is more QUEST MEANS BUSINESS in just a moment. I'll be joined here in Davos by the head of

Interpol, Jurgen Stock. And the chairman of UBS, Axel Weber, will also be with us. And New York or London, New York or London or where? Saudi

Aramco's chief executive says the price of oil will not dictate where the company's shares are finally listed. As we continue tonight, you are

watching CNN and here on this network, the facts always come first.

In Jalalabad in Afghanistan ISIS militants attacked the offices of the Save the Children charity, killing at least four people, dozens were wounded

during the ten-hour siege. All five attackers were eventually killed the aid agency has temporarily suspended operations in Afghanistan.

A few hours ago, the Turkish and U.S. presidents spoke on the phone about Turkey's attacks on U.S.- backed Kurdish fighters in Syria. According to

the White House, Donald Trump urged Turkey to de-escalate and avoid any actions that could risk conflict between their two countries. President

Erdogan reportedly told him the U.S. must stop harming Kurdish militia.

A judge in the United States has sentenced the former USA gymnastics and Michigan State doctor Larry Nassar up to 135 years in prison for sexual

abuse, it comes after a week where more than 150 women and girls told the court how Nassar sexually abused or assaulted them over two decades.

A roller coaster day on Wall Street, and it ends with the Dow at a record high with comments from the U.S. Trade Secretary that hurt the stocks,

Wilbur Ross hinted an action against China over infringement of intellectual property. Those losses, though, were mitigated by the falling

dollar, the dollar is down sharply, and it fell after Steve Mnuchin said a weak dollar was good for U.S. trade.

Now GE shares also fell, it revealed it was under FCC investigation, and it took a hefty charge as you'll note yesterday, its results. The chief

executive of Coca-Cola is praising the U.S. tax cuts saying they'll lift the economy and therefore open up new opportunities, Coke operates nearly

every country on earth, and I asked of lower taxes would persuade them to bring more overseas profits back to the United States?

(BEGIN VIDEOTAPE)

JAMES QUINCEY, CEO, Coca-Cola: Well, we've got overseas money, but we've also got debt and we are in a net debt position and part of it is a

tradeoff and a simplification of the system so there's not money trapped in places and that will certainly help us, and we're working through how to

upgrade our investment plans and we will come with that with our earnings in February, and we are still working through the details on exactly how to

use those resources.

QUEST: As a matter of principle, would you say that the tax, the corporate tax changes introduced by the administration, the Trump administration,

obviously benefits you and you're going to take advantage of them.

QUINCEY: they benefit us, and they also have a cost. There is a one-off tax charge too.

QUEST: Right, we are seeing that in everybody and their earnings and we can see that immediately in banks, but the benefit of the lower tax rate

will still be going in five years, six years, seven years, long since we have forgotten the charge.

QUINCEY: absolutely, it will come through and we will, clearly at a lower tax rate in the U.S., more opportunities will be attractive in the U.S.

because you will make a greater return ultimately or you will be able to chase other opportunities.

So, I think over time it will lift the economy and we will see more opportunities to invest in the U.S. than we did before.

QUEST: As chief, how do you view Coca-Cola? A U.S.-based company with truly global reach. Are you a U.S. company? Are you a British company?

Are you a German company, are you an Asian company? What are you?

QUINCEY: We are a local company that is actually global. Because virtually everything we sell in each country is made in their country, so

we are predominantly physically local with factories in every country we operate in, but we are global for the iconicity of the brand and we truly

mix the two.

[16:35:00] QUEST: Would you perhaps agree with some of the comments that it has not punched its weight in previous years and now it needs to do so.

QUINCEY: Totally agree, we have been clear that while we've done well locally, it hasn't translated into good dollar earnings and part of it has

been strength in the dollar and we see the combination of having executed our strategy of selling the bottling assets and focusing on the total

portfolio, we'll be able to turn the local global growth into U.S. earnings so a better future to come.

QUEST: Pick a color

QUINCEY: Only one? I better take the red one.

QUEST: Of course, of course, all right. Where are you on the fracture board? That's not fractured at all for the world and you can define that

however you like, and this is fractured and that is the midline.

QUINCEY: I will put up a slightly different answer to everyone else. I will give a short explanation because I'm actually going to put two dots

on. I told you I would be tricky. So, here's the first dot and what I mean by that is actually some of the fracturing in global geopolitical terms is because many developing

countries have done a great job the lifting people out of poverty.

That brings more countries to the global table and makes geopolitics harder and it's fractured and it's the result of a good thing, but there is

another dot over here which what is happening within the countries, within each country it's getting more fractured and not everyone is benefiting

from the growth that's around, so I think the problem is not one thing, but a combination of things.

(END VIDEOTAPE)

QUEST: And with that, Coca-Cola, Mr. Quincy started a trend of two and the rest, as they say is history.

Mexico's economy secretary has told us he feels positive about the prospects of renegotiating NAFTA the talks are taking ways on how to

rebalance the trade back, and the sixth round of talks is due to start next week, Donald Trump has famously threatened to pull out of NAFTA.

Ildefonso Guajardo Villarreal also had some very firm thoughts about Mr. Trump's proposed border wall and the very idea that Mexico would pay for it

indirectly.

(BEGIN VIDEOTAPE)

ILDEFONSO GUAJARDO VILLARREAL, ECONOMY SECRETARY, MEXICO: Let me tell you that a negotiator is never optimistic, I am positive that they can reach a

very nice result, I hope, but let me also tell you this that it is normal for a negotiation to be a roller coaster and sometimes it's up and

sometimes it's down.

QUEST: Where are you now?

VILLARREAL: I think we are on the way up.

QUEST: Is that good?

VILLARREAL: Depends how the fall is coming after that?

QUEST: I was about to say, on the roller coaster, the way it is usually not necessarily the best way.

VILLARREAL: Well, we hope this is the end of the roller coaster and we get to a stable finish.

QUEST: It also raises the question of the wall now, President Trump has said that he expects Mexico to pay for the wall indirectly, through NAFTA.

Now, obviously, he is banking on a reduction on the bilateral deficit which he can claim is a subsidy towards those and you are already not having it.

VILLARREAL: Let me first remind you that it has been very clear the wall is not a negotiation for Mexico, it is not a negotiation, the president of

Mexico said clearly there is never going to be a single penny paid for the wall, let me also tell you that probably in this interview in "The Wall

Street Journal" what President Trump meant is that probably in an exchange, a relative surplus or deficit represents indirectly government revenues,

but those are not earmarked and it would depend on the U.S. Congress how they want to use those earmarks.

QUEST: But if there is a relative shift in the deficit towards a surplus or at least the reduction of the deficit and the U.S. says, look, the

deficit has gone down, Mexico is effectively paying more indirectly. They're paying for the wall he wins the PR argument.

VILLARREAL: No. You better than anybody knows that surplus or deficits in trade are not government income it's the private sector that basically is

trading.

QUEST: He says the private sector has benefitted and therefore the government has ensured an indirect payment.

VILLARREAL: Whatever he wants to spin that is his own idea, but the basic thing is Mexicans are not paying for the wall.

Quest: Choose your color

VILLARREAL: Red.

QUEST: Everyone likes red today. Come over here all this is we are not fractured at all, this is -- I was going to say the wall, but this is the

fracture, and this is the middle point, and this is we are very fractured in society, where would you go?

VILLARREAL: I think that we are here, but we are moving in this direction.

(END VIDEOTAPE)

[16:40:00] QUEST: Minister Ildefonso Guajardo Villarreal talking to me earlier and on the wall. Saudi Aramco is closing in on what could be the

biggest-ever IPO, two things we don't know and they're rather significant, when it will take place and which exchange, where? After the break the man

who knows more than most, the chief executive and the question is, does he tell us? What a glorious night in Davos.

(COMMERCIAL BREAK)

QUEST: The chief executive of Saudi Aramco says the company's IPO will go ahead when the time is right and won't be driven by what happens to oil

prices, as it comes to market the share sale could be the biggest that's ever been seen, parts of the ongoing overhaul of Saudi's economy. Our John

Defterios spoke to the chief executive Amin Nasser.

(BEGIN VIDEOTAPE)

AMIN NASSER, CEO, SAUDI ARAMCO: The price is not going to be only at that particular because when they will look at the forecast and how much is the

prices over the next couple of years and all of that, but definitely when the prices are higher it will increase the value of the company. There is

no doubt.

JEFF DEFTERIOS: CNNMONEY EMERGING MARKETS EDITOR: Is it important, in your view at this point in time that the IPO should include either a New

York or London listing in your view as CEO? Is that a preference, at least?

NASSER: We have our own views in all these markets and we did an evaluation and we looked at the New York Stock Exchange and in London and

the Hong Kong and the Tokyo Stock Exchange and other exchanges, as well and we did an evaluation and an assessment, and we gave our view, but

ultimately the decision is for the shareholder.

DEFTERIOS: We see a major western market listing with private placement and a domestic listing and that's where we're heading to.

NASSER: Nobody talked about the private placement at this stage, and we will be listing, and we had an evaluation of the increase and that

assessment then given to the shareholder and the shareholder will decide where to list, but nobody talked of what private placement at this stage

DEFTERIOS: The New York Stock Exchange has suggested we shouldn't bend over backward for Aramco or anybody else, do you expect them to make any

sort of special rules for your listing, for example, royalty payments which are special future in the Middle East countries, of course?

NASSER: Well, to bend backward you need to tell me first what Aramco requests of you, first of all. My point is we are not expecting anybody to

bend backward for us when we list we will -- we have certain requirements, if the decision is to list in this country or that country and based on

that, and that will make our -- is any requirement and at the end of the day they can say yes, or they can say no.

(END VIDEOTAPE)

QUEST: CEO of Aramco talking to JD. The secretary-general is in Davos saying it's a chance to get the chief executives engage with global

security threats.

[16:45:00] Jurgen stock, secretary-general of Interpol joins me and good to see you, sir

JURGEN STOCK, SECRETARY-GENERAL OF INTERPOL: Thanks for having me on the program.

QUEST: The biggest threat at the moment besides the usual range of money laundering and nefarious deeds has to be cybersecurity and malware, whether

from government or the other criminals?

STOCK: Interpol is dealing with cybercrime and cybercrime and is now entering, if I might say a new dimension, we are discussing here the fourth

industrial revolution which comes with huge opportunities for the societies and economies, and there is a dark side of the evolution and that's

certainly the development of cybercrime which is entering into a new dimension and that will be even more dramatic in the future.

QUEST: Do you see a part of Interpol's role to also investigate for example, those allegations of meddling and interfering in the elections,

referenda or state-sponsored cybercrime?

STOCK: Definitely not, and this is not Interpol's turf, our turf is cybercrime, traditional cybercrime, cyber enabled crime, we are trying to

provide a platform for our 192-member countries. And provide the capabilities and the technology they need to successfully investigate this

kind of crime, which definitely comes with completely new challenges for law enforcement globally.

QUEST: On that of course, let's take bitcoin scams some of which come from Ukraine, some from Russia, some from South Korea, we are truly global. I

always get the feeling when it comes to cyber and we're one stage behind the criminals, and they're ahead of us.

STOCK: Perhaps we're a little bit behind and we are successfully investigating, for instance in the dark net, which is becoming more and

more a problem and also providing tools and services for those who are not experts, and just buy the tools and services of the internet like a botnet

and ransomware.

QUEST: Have you got the expertise necessary within Interpol? Does -- even national crime fighting agencies tell me, you know, they need more

youngsters that have the ability to really understand this.

STOCK: Definitely the job profile within police services is going to change that's true, it is also true that many of our member countries are

struggling with lacking basic capabilities and well trained and skilled staff to investigate in the cyber arena, and that's definitely a challenge

where Interpol tries to close the gap in providing trainings, for instance darknet trainings, and cooperation with the private sector is of utmost

importance, and we have to bring their cooperation on the next level more institutionalized. We need the private sector to help us in developing

solutions.

QUEST: Choose a color

STOCK: Let's say green it means hope in the country that I come from.

QUEST: So where would you say we are on the fracture board? No fractures in society and overly fractured and that is just a little point, you go

anywhere you like.

STOCK: I like to make my cross somewhere here in the middle because I see a lot of opportunities coming down --

QUEST: Worse or better? Where is the arrow?

STOCK: Think it's getting better because is a huge commitment global law enforcement is united through Interpol and that's a huge commitment of the

private sector to work closely cooperate with law enforcement.

QUEST: Good to see you, sir

STOCK: Thanks for having me joining us.

QUEST: Thank you

As we continue, security, climate, trade and these are the issues where Europe is looking for cooperation from and with the United States.

European leaders have laid out what they want from global partnerships, in a moment.

[16:50:00] (COMMERCIAL BREAK)

QUEST: European leaders here in Davos issued a series of warnings against protectionism and polarization both in the U.S. and Europe, speaking this

morning Angela Merkel called it poison when acknowledging the causes to resistance to migration to the lingering effects of the European debt

crisis. The answer, she said is cooperation.

(BEGIN VIDEO CLIP)

ANGEL MERKEL, CHANCELLOR, GERMANY, (through a translator): We think that shutting ourselves off from the rest of the world, isolating ourselves will

not lead us into a good future, protectionism is not the answer.

(END VIDEO CLIP)

QUEST: Axel Weber is the chairman of UBS he previously served as president of the German central bank and a member of the European central bank's

governing council. Good to see you, Axel.

AXEL WEBER, CHAIRMAN, UBS: Good to be with you, Richard.

QUEST: The environment we're in is economically extremely good.

WEBER: Extremely good.

QUEST: The stock market at record highs with the scintilla of prospect of maybe trade problems, but you are worried.

WEBER: The mood is good. In my view it is too good, and too good to be true if you see what emerged since December in most of the developed

countries there is 150 to almost 200-basis point difference between sentiment and actual data and the real question is what is going to

prevail?

In my view the U.S. has something to show for, so growth is going to come up, and sentiment data are probably tracking that there some dynamics

coming from tax reforms. In Europe, you don t have anything to show for it and so I think Europe has to get its act together, and like the leaders

here said, Europe needs to have a new vision of what holds Europe together.

QUEST: If you are right that there is this disparate between the reality and the prospect. But how does it manifest? Do we see a tumble in stock

markets? Do a series slower growth. No one necessarily forecasts a recession, but a slowdown has been widely spoken about.

WEBER: A slowdown is talked about. If you look at financial markets there is a record low volatility, there is complacency in the market, and I think

at this point in time people are investing in products where they do not get the price for risk. And risk at the moment is completely underpriced

in the market, and when risks do come back, and there are some unpriced risks, the market will correct.

Look at inflation nobody has inflation on the radar screen if the economy continues to improve like it does, inflation will be reemerging, we are

seeing higher wages. And people are simply taken all of these negative potential developments off the table, were in the kind of Goldilocks

environment, but things will correct. I mean volatility is not gone forever, it is just suppressed now.

QUEST: Is this the central banker in you speaking? And I better have an umbrella and I see cloud sort of on the other side of the mountain.

WEBER: No, it's want. I think if you look where financial markets now are, you do see that our clients are engaging, and they are investing and

for the moment, that's all right, but look at the U.S. stimulus, it is producing half a percent to three-quarters of a percent extra growth this

year and next. But it's a short-term stimulus, we haven t fixed the underlying long-term problem.

QUEST: If you end up with the United States growing at 3 percent, 3. 5 percent, maybe 4 percent if Donald Trump gets his ways. You've got the tax

reform, those companies in the U.S., your own included to some extent will benefit for the foreseeable future.

WEBER: Right.

QUEST: This divergence between the U.S. and the rest of the world. Where does that fracture line come into play?

WEBER: So, what is Europe showing for, that will basically leader down the same way as the U.S.? And I think you are absolutely right, the U.S. will

largely grow faster, they will see a positive momentum. What is keeping Europe together? You can't rally a continent around a currency and the

whole project of European integration needs to be reinvigorated. Those what the leaders are here for.

QUEST: Who is responsible for that? Macron seems to be the one leading the way. Angela Merkel, until she gets a new mandate and even if she does

get a new mandate for next time, it will be a weak one, at best project.

WEBER: Sure, but look at the project. Banking union, deposit insurance, capital market union, all of these projections are around financial

integration that's not going to take the people of Europe forward, you need to rally the people about something that creates identity, and cold cash

doesn't create identity.

QUEST: It doesn't, but there are structural fractures come over to the board and choose a color.

WEBER: I'll take black, and if you're fractured --

QUEST: How fractured are we?

WEBER: We are much fractured and we're going to go for more.

[16:55:00] QUEST: Cheerful tonight.

WEBER: I am, indeed, after two days in Davos.

QUEST: Thank you very much. Keep well and --

WEBER: Same to you

QUEST: See you again.

Just look at the chart just to see where we are at the moment, as you can see from the chart at the moment, we are less fractured over here, and more

fractured over there and overall what we are seeing is people choosing basically somewhere in the middle we'll have a Profitable Moment after the

break.

(COMMERCIAL BREAK)

QUEST: Tonight's Profitable Moment, hats off and congratulations to "The Financial Times" for their reporting on the President's Club gala dinner

that was nothing more than a sexual harassment groping abuse event with hostesses being groped by businessmen and bankers that were there. You

know the story, you've heard us talking about it earlier what I found extraordinary is that in the era of #me-too, that the organizers still went

ahead and hired over 100 hostesses and told them what to wear including black lacy underwear, and didn't police the event properly, to the extent

that they even warned about harassment.

It reminds me that the financial world sometimes just doesn't get it, think about it. Even after the financial crisis of 2008 and 2009, three years

later they were at it all over again with the LIBOR and the interest rate swap scandals. This is just another example of the President's Club of

stiffer measures needing to be taken by regulators and by CEOs and by organizers, and it's a good job that this has been brought out into the

open quite so quickly we can no longer hide anywhere.

And that's QUEST MEANS BUSINESS for tonight I'm Richard Quest in Davos, whatever you're up to in the hours ahead, I hope it's profitable, we'll see

you tomorrow when Donald Trump will be here.

END