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HALA GORANI TONIGHT
European Summit In Brussels, Trump Hits China With Trade Tariffs, Dow-Jones Stumbles, Brexit Taking Another 21 Months Before Full Transition. Aired 4-5p ET
Aired March 22, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HALA GORANI, CNN HOST: Good evening, everyone. I'm Hala Gorani. A special program coming to you this evening from Brussels. There is an
important European Summit going on.
Tonight, a number of issues on the table for leaders gathered here. There's obviously, Brexit. There is also Russia trade. And of course,
Facebook data scandal.
But first, I want to bring you Breaking News. Trump is fulfilling a campaign promise ordering new tariffs on China sending the Dow-Jones
Let's talk a look at the levels here for you. And as you can you can see in that graphic there on the lower right-hand corner of your screen, the
Dow in the final minutes of trading settling at more than 700 points lower just a few ago as I mentioned, the American President Donald Trump
announcing new tariffs on goods imported from China.
China likely to retaliate. Investors certainly don't like this kind of talk. Paul La Monica is joining me from New York with more. A bad day on
Wall Street, Paul?
PAUL LA MONICA, CORRESPONDENT, CNN: Yes, it goes without saying, Hala. Clearly, investors very nervous about the possibility of a trade war
between the United States and China. Most people recognize that you don't win trade wars, no matter what President Trump might say about that, and
the companies in the Dow, many of them like Apple, Boeing, Caterpillar, 3M -- they have exposure to China.
They are trying to capitalize on the emergence of a middle class in China. Nike, they are going to be reporting earnings any minute now. They also
have about 15% of their sales from China, that's a stock in the Dow and they got hit as well today.
GORANI: All right, Paul La Monica, thanks very much. We'll be checking in with you throughout the hour with more from New York with, as we mentioned
there, a pretty steep decline for the Dow Jones on Wall Street.
Well, I am here in Brussels as you can see. Right now, EU leaders are meeting. They're having what's called a working dinner. It might gone on
quite late in the night possibly up until midnight or later.
A lot of talking points, among them trade with President Trump's decision to slap tariffs on China. There is the fact that the EU and other allies
are exempt, so you can imagine potentially that here, countries are breathing a sigh of relief, but you really never want to be in a situation,
as far as investors are concerned, where two of the biggest economies, or the two biggest economies in the world are engaged in a trade war.
That could be worrisome for everybody, including corporations. Then there is the topic of data. What can Europe do amid the scandal involving the
harvesting of Facebook information? And a topic that's raising increasing concern across Europe: Russia.
Theresa May arrived here, clearly wanting to talk about that and the poisoning of a former Russian spy in Salisbury in England.
THERESA MAY, PRIME MINISTER OF UNITED KINGDON: Now, Russia staged a brazen and reckless attack against the United Kingdom when it attempted the murder
of two people on the streets of Salisbury.
I'll be raising this issue with my counterparts today, because it's clear that the Russian threat does not respect orders, and indeed, the incident
in Salisbury was part of a pattern of Russian aggression against Europe and its new neighbors from the Western Balkans to the Middle East.
GORANI: Well, we've seen a divide of sorts over Vladimir Putin's election victory. The head of the European Council, Donald Tusk said he was in no
mood to congratulate Mr. Putin while the President of the European Commission, Jean-Claude Juncker sent a letter and issued a twit doing just
I asked Mr. Juncker about that letter when he arrived here today.
GORANI: You heard criticism of the letter that you sent Vladimir Putin congratulating him on his reelection. One British (inaudible) that it was
nauseating. How do you respond to that?
JEAN-CLAUDE JUNCKER, EUROPEAN COMMISSION, PRESIDENT: I am responding that I sent a letter to Putin in exactly the same terms that other Prime
Ministers did. It was really (inaudible) who was congratulating (inaudible). He is not criticizing the (inaudible)...
GORANI: You don't regret it.
GORANI: Lots of pressing topics to talk about. I am going by Margaritis Schinas, he is the chief spokesman of the EU Commission and Mr. Schinas, as
far as Russia is concerned, they are discussing this right now. You told me you don't want to get ahead of what the leaders are discussing until an
announcement can be made, but there's still a lot that we can talk about.
Facebook -- let's talk a little bit about data protection because Facebook is a global company with huge revenue here in Europe.
MARGARITIS SCHINAS, CHIEF SPOKESMAN, EU COMMISSION: Well, if confirmed, the misuse of personal data by Facebook, it's simply not acceptable. This
is not the European way of doing things. For us, data protection is a fundamental right and cannot be harvested...
SCHINAS: without the consent of the persons.
GORANI: Do you need new laws? Do you need new rules to compel corporations to behave differently in Europe?
SCHINAS: We have new rules coming into force in May and this is a general data protection regulation that would allow everybody in Europe to get
protection from unlawful or misuse of personal data.
GORANI: Will they be effective?
SCHINAS: Well, they have to be because that's the way we do things in Europe, you know. Our laws reflect our values. For us data protection is
not simply a means to make money, it's part of who we are.
GORANI: But a means to make money would be to tax these tech companies more, yes? Not just based on their revenue in each country but their
Pierre Moscovici, one of the top EU officials is floating this idea.
SCHINAS: I'm delighted that you follow our proposal so closely, indeed.
GORANI: While I'm here in Brussels, I thought I would make that special effort, but at the same time not all countries are happy. Ireland, for
instance, which has lower corporate tax rates, are saying this will hurt them.
SCHINAS: Our proposals are two days old. We presented them yesterday, actually, and we have to align the digital economy whilst at the same time
addressing the fiscal distortion.
Digital companies in Europe pay a tax rate of 9% of average and traditional companies in Europe pay more than 20%. This is not acceptable, but this is
not an anti-US tax, this is not anti-platform tax.
GORANI: But most of these tech companies are American.
SCHINAS: Yes, but this is about alignment of technological process of the digital economy with fiscal justice. So, it's not against anyone, it's a
question of fairness and efficiency.
GORANI: Brexit obviously -- we had an announcement that a transition deal, so the two -- almost two-year period between March 2019 and the official
date where the UK will exit the EU, that some sort of agreement is in place.
GORANI: Where are we going now?
SCHINAS: Well, we are finalizing the divorce proceedings, and then we are also about to agree, I think tomorrow, on the terms of a transition that
would allow us to bridge the moment where the United Kingdom will depart from the Union with the moment that the new relationship will enter into
SCHINAS: That's for tomorrow.
GORANI: So, can I ask you just one question that I hear a lot? Do you think Brexit is going to happen?
SCHINAS: This is not for me...
GORANI: Because I hear a lot of people say, the UK will realize how expensive it is going to be and it won't happen.
SCHINAS: This is not for Brussels. This is something that the sovereign British people and voters would have to drive themselves. This is not for
GORANI: I won't draw you out on that, Margaritis Schinas, the chief spokesman of the EU Commission. Thanks so much for joining us here live in
Brussels as we continue our special coverage.
And as we were discussing with Mr. Schinas, there is a working dinner going on where important topics like Russia, trade tariffs where we heard from
the President of the United States were being discussed as well, and Europe is exempt. Are they happy? Are they satisfied? Not sure.
And by the way, I would also like to mention once again what's going on with the Dow Jones industrial average right now, and it appears as though
we are finishing the day with a decline of almost 3%, that's more than 700points.
All right, let's move on to our next topic, if we could. Let's bring in a man who knows about Brexit better than most because he was a big supporter
of it from the beginning, and he is the former UKIP leader and...
CYRIL VANIER, ANCHOR, CNN: All right, we're joined by UKIP Brexit leader, I believe we've lost that signal, but we're going to keep abreast of --
we're back with our guest, Mr. Farage can you hear me?
NIGEL FARAGE, UKIP LEADER: I can, yes.
VANIER: Absolutely. All right, great to have you with us. We'll get that signal back up and running between you and Hala in just a moment, but for
the moment, you've got me.
Look, tell us what your ambitions are going into the summit.
FARAGE: Well, it's a summit. For people who back Brexit, it is very difficult because at breakfast tomorrow, what is going to be discussed is a
Now, bear in mind, we triggered something with Article 50. That was the method by which we were to leave the European Union and that was a two-year
negotiating period to sort everything out.
I have to say, I thought that was the transition period. Now the Prime Minister is citing us out to a further 21 months of full transition.
So, basically Brexit is taking a very long time.
VANIER: Nigel Farage, thank you very much. We'll have more with you in just a second. We're going to come back after the break. Before we do
though, just a reminder and let's put those numbers on the screen again, the Dow...
VANIER: .... taking a hit today in the wake of the announcements by Donald Trump that he is going to impose up to $60 billion worth of tariffs on
And I don't know if you can make this out on your screen, but you can actually see the hours, the time at which the Dow took a hit, so you're
seeing middle of the day it starts really plummeting. Right now, it's down almost 3% again on the back those announcements by the US President that he
is going to use Section 301, I believe it is, of a little-used US Trade Act in order to impose those trade tariffs.
That's not happening yet. It will be a couple weeks, but the announcement was made today. We go to break. You're back with Hala Gorani this.
GORANI: Welcome back. We lost our connection with Nigel Farage just a few minutes ago, but we are back. The ex-UKIP leader is here in Brussels in
front of the Parliament building here in the Belgian capital and you can join me now, live once again.
Nigel Farage, I heard that you were speaking with my colleague, Cyril Vanier there that you were unhappy with the length of the transition
FARAGE: Well, let me begin, Article 50, it took us nine months after the referendum to trigger Article 50. Article 50 was an up to two-year period
to sort everything out. That was supposed to be the transition period and now we have another 21 months topped on top of that.
So, it will be at least five years from the date of the referendum before we get any fundamental change in our country at all. And I can promise you
there are millions of Brexit voters who feel very frustrated by that.
GORANI: Well, yes, but why rush into this when you can spend a few years getting it right? I guess, people would also ask you that logical
FARAGE: Well, they might, but I sense that we might get into the end of that 21 months and say, "Oh, you know what? Let's extend it for a few
Look, the British people voted because they've had enough of paying very large sums of money into this club. They were sick to death of open
borders and no discretion as to who came in from the rest of Europe.
And you know, we voted for independence and it's not reasonable, in my view, to keep people waiting too long.
GORANI: Right. But I mean, every time I interview you, Mr. Farage, you mention the open borders and the that is money pouring into EU coffers with
the UK getting nothing in return. But the facts don't match up to that, do they?
The UK had control of its borders and you need to provide passport documentation to come in this country and the UK economy gets a lot from
this relationship within EU and access to a free and open market.
Yes, but if you only use the facts that you presented, that is an incomplete picture.
FARAGE: Wow. Well, don't tell me it's a free trade deal if we're paying net 10 billion pounds to be part of it. That is not free. That is no
doubt -- and in terms of yes, you have...
FARAGE: ... to show a passport to come into the country, but look, the fact is that we have an open door to almost half a billion people. Of all
the European countries, we have managed immigration...
GORANI: But that's just partially incorrect, you do not have an open border for half a billion people. You just do not.
FARAGE: Oh, yes, we do. Yes, we do. And that's why of course...
GORANI: But how? It doesn't match the facts.
FARAGE: Because any single individual from a European state can come into Britain, work in Britain and bring their extended family. One of the big
issues about transition is that that free movement for people to come into Britain during that period and for decades to come perhaps bring in family
members, that stays in place.
GORANI: I get that, but is the net contribution economically from EU migration to your country a positive or a negative?
FARAGE: You know, the House of Lords Committee did a big inquiry into this, and they said it was about neutral. But I will tell you something,
when you have a population exploding the way ours is directly as a result, and not just EU, by the way, but by government policy for the rest of the
world, nobody (costs) in extra roads, extra schools.
So, I would actually say I believe that it's a net loss, but you know, some things aren't just about money, aren't just about GDP figures. They're
about society and about integration, and I promise you that is much worse in the UK than it was 15 years ago.
GORANI: I believe perhaps that's the crux of it, but one of the things you said about Ireland as well, I want to push you on a little bit, do you
believe the Republic of Ireland should consider Brexiting? You were quoted as saying just a few weeks ago that you believe the Irish and their
majority would be open to their own Brexit.
FARAGE: Well, I think Brexit is a debate that should happen in Ireland, and don't forget that in the last 20 years, there have been two referendums
in Ireland where they have rejected European treaties.
So, you know, the Irish media, the Irish political class may be sold on EU membership, they are now a net contributor to the European Union budget.
They have a currency which really isn't much use to them because most of their overseas trade is denominated in Sterling or in dollars.
And I think there will be a genuine debate happening in Ireland. I'm not suggesting our exit is going to happen quickly, but I think it will become
GORANI: Because right now, according even to the latest poll, 78% of the Irish say Ireland and the EU is better off even with a hard border.
FARAGE: Yes, you know, and I heard that before the referendum on the Lisbon Treaty. Vast majority in favor of the Lisbon Treaty and do you know
what? People went out, picked up their pencils and voted and they rejected the treaty.
GORANI: So, let's talk a little bit about Russia sanctions as well. We heard from the Prime Minister of the UK, Theresa May that she wants unity
from her partners here in Brussels to really make it clear that Russia she believes is behind the poisoning, the attempted murder of Sergei Skripal
and his daughter in Salisbury. Do you agree with the sanctions? The 23 Russian diplomats expelled from the UK? Do you believe that's the right
way to go?
FARAGE: It's very interesting. I mean, I don't doubt that it's a Russian actor because we've seen too much of this sort of thing happening on the
streets of British cities over the course of the last few years.
Whether this was directly sanctioned by Putin, frankly, I have absolutely no idea as to what the answer to that is.
But she has made a decision. She and the Foreign Secretary, Boris Johnson have said it was the Russians that did it. And I think she expected today,
coming to Brussels, to find EU solidarity behind that position, and you know what? It's not happening. She's not going to get that support from
Greece. It isn't going to come from Hungary. It isn't going to come from Italy.
And generally, I would say, that other European countries are saying, "Look, please give us the proof before asking us to take any action." So,
she's having a very difficult day on the Russia issue.
GORANI: She's got a lot of -- although, I have to say I spoke with leaders and representatives, the President of Lithuania was very clear, even she is
considering expelling Russian diplomats from her own country.
So, there is solidarity here expressed in the rhetoric, but I agree with you, obviously, leaders are not coming out and saying that they are going
to match the sanctions of the UK, but my question was, do you approve of how Theresa May has handled this situation?
FARAGE: I think it's the first time in her premiership that she's looked strong. The constant accusation is that she's been a weak prime minister
that has not led from the front, and certainly in terms of the Brexit negotiations, it feels like we're being bullied by an elected Brussel's
So, in terms of our own standing, it...
FARAGE: ... you know, taking a tough stand has done her a lot of good.
GORANI: All right, and I asked this of the chief spokesperson for the Commission about Brexit. Do you believe that Brexit is going to happen in
the next two or three years?
FARAGE: Well, March 29 of next year is the really big day, because that is the day that we are supposed to leave the Treaty of Rome and that is the
big historical moment.
There will be lots to clean up afterwards, but do I think that will go through? Well, we have a Supreme Court judgment that said the Parliament
had to have a meaningful say of whatever the final deal she gets here. My guess right now is yes, it will go through.
But it's going to be by a very narrow margin, so there's still a lot to play for.
GORANI: Nigel Farage, thanks for joining us on CNN this evening, live from Brussels.
Minutes to go, the Dow Jones closed more than 700 points lower as we mentioned that's because we could be on the verge of a trade war between
the world's two largest economies that would of course hit people in the wallet especially people who buy Chinese goods in America for instance if
The US President Donald Trump has announced a host of economic measures in to China, including tariffs on goods coming into the US worth about $50
Now, as I mentioned, if China retaliates and it is already hinted that it probably will, it could mean higher prices for consumers on a lot of
For his part, Mr. Trump says he is simply delivering on a campaign promise.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We are doing things for this country that should have been done for many, many years. We've had this
abuse by many other countries and groups of countries that were put together in order to take advantage of the United States, and we don't want
that to happen. We're not going to let that happen.
It's probably one of the reasons I was elected, maybe one of the main reasons. But we're not going to let that happen.
GORANI: We have correspondents covering all angles here as CNN Money's Paul La Monica is with us again here from New York. Matt Rivers is
standing by in Beijing.
I'll start with you, Matt, because I was telling our viewers that there is a high chance that China will retaliate. Is that the expectation from
MATT RIVERS, CORRESPONDENT, CNN: Yes, absolutely. We have heard a consistent message from Beijing that they will not take tariffs from the
United States lying down. So, they will retaliate in some way.
The big question though is how they retaliate, because they have a wide range of tools that they could use with a varying range of effectiveness in
terms of their ability to hurt the United States' economy.
Should they choose to really go hard though, they could look at something like agricultural exports from the US to China. Take soybeans for example,
2017, American farmers shipped $12.4 billion worth of soybeans to China. Let's say China says, "You know what? We're not going to take anymore US
soybeans. We're going to cut that number in half and we're going to buy our soybeans from Brazil or Argentina." That will hurt people in some
countries. Eight of the top 10 producing -- soybean producing states voted for Donald Trump in 2016.
China knows that. So, will they -- could they do that? Absolutely. But do they want to do that is the big question because China doesn't want a
trade war either. So, Hala, I don't think they are going to want to escalate this situation, but at the same time, they are going to retaliate
in some way.
GORANI: And Paul La Monica, I mean, tariffs have been tried in the past. They are never effective, really. It's a political tool more than
anything. And one good way to gauge whether or not markets think it's a good idea is to look at the Dow Jones Industrial Average Index for
instance. Today, where we're down more than 700 points.
Is the expectation in New York among traders that we're about to see a trade war between the world's two largest economies?
LA MONICA: I think there are increased worries that -- at the very least, we will have trade skirmishes if not an all-out trade war and companies in
the Dow are extremely exposed to the Chinese market.
They are trying to do more business in China. Those are companies like Apple, Boeing and definitely want to do more business there. Nike is
another one that just reported their earnings after the close. They are selling a lot of sneakers and athletic apparel.
As Matt points out, it's not just these big giant conglomerates. It's also going to be an issue to see how Trump responds if there are pressure from
some of the constituents in the states that he won in the 2016 election because there are states like Iowa and Indiana and Nebraska and North
Carolina that are big producers of things like these agricultural commodities that are going to be sent to China that could...
LA MONICA: ...get hit by tariffs. Soybeans and pork for example. Will there be a backlash from some of the Trump voters if their wallets start
getting hurt because of a potential trade war.
GORANI: And Matt, what -- how much would it hurt the Chinese economy, these tariffs on steel and aluminum?
RIVERS: Steel and aluminum, not really going to hurt the Chinese economy in any sort of substantive way. And that's kind of what we were talking
about when those tariffs were first announced.
If the Trump administration really wanted to hit China, steel is aluminum is not the way to do it. We're still waiting for the details on what this
new tariff package is going to include, but if it is worth $50 billion or $60 billion, well that is obviously going to have a stronger effect on the
Do they look at things like apparel? Do they look at things like furniture and bedding? The kind of exports that the Chinese economy really relies
on. China needs to sell stuff to the United States. The economy here is starting to slow down.
You want to avoid a hard-landing, the Chinese government knows that. They need to keep selling these products to the United States, so they are very
much aware of that -- these tariffs depending on what they include in the end could very well have an impact on the Chinese economy.
GORANI: I have to ask Paul this. Because the Chinese needs to sell bedding and t-shirts, but the Americans need to buy bedding and t-shirts, I
mean, consumer spending is a majority of the American economy, so one side hurts and the other side hurts too.
LA MONICA: Yes, that is a great point and I think that is why Hala, you've seen many big US retailers that have been also very worried about the
possibility of a trade war because companies like Walmart and Target obviously sell things that are made in China, not just in America and I
think it will be naive to suspect that you're going to go to big box US retailers and just find American made goods or goods made by our so-called
We know that Chinese goods are something that often people like to buy in America because they're cheaper.
GORANI: Paul La Monica, Matt Rivers, thanks very much for joining us from New York and Beijing. Still to come tonight, more on our top stories.
We'll have the latest here from the Summit in Brussels and also the Dowd's pretty dramatic drop amid fears of the trade war. We will be right back.
Stay with CNN.
[16:30:04] HALA GORANI, CNN INTERNATIONAL ANCHOR: Welcome back, live from Brussels. Now to a major shake-up in Donald Trump's personal legal team
and possibly in his strategy for dealing with the Russia probe. President Trump's lead lawyer John Dowd has resigned. Dowd had urged Mr. Trump to
cooperate with the special counsel's investigation and to avoid attacking Robert Mueller publicly. But sources say the president thinks you should
take charge of strategy.
Let' get more on the significance of this now. CNN legal analyst, Michael Zeldin joins me from Washington. He's a former federal prosecutor and who
was special assistant to Robert Mueller at the justice department. Thanks for being with us. What do you make of this John Dowd departure?
MICHAEL ZELDIN, CNN LEGAL ANALYST: It was a bit predictable once they brought Joe DiGenova in. Joe represents a wholly different approach to the
special counsel, much more belligerent. And John Dowd, as you indicated in the set-up was much more conciliatory, so the two of them were not
compatible and Dowd was the one who's left. The leaves the president now essentially without a lead trial lawyer, someone who can really take the
case as a legal proposition. He's got two more or less communications lawyer, DiGenova and Jay Sekulow as outside counsel. He's going to need to
butt first that relate that team in some significant way.
GORANI: What do you think of that strategy?
ZELDIN: I think it's a mistake. I think that Dowd and the in-house counsel, Ty Cobb, are correct to say that they're better off cooperating
with Mueller, sitting down for an interview and hoping that in the end, there's no evidence of criminal wrongdoing that surfaces. I think joining
a fight with Mueller is a losing proposition because Mueller holds essentially all of the cards in that as an ongoing grand jury investigation
and the law of the United States is pretty clear that the grand jury has the right to every person's evidence.
GORANI: And you know Robert Mueller obviously. Where do you think he is in terms of where his investigation is headed now?
ZELDIN: What we have seen in recent times is two things. One is that it has been reported that he has had a conversation with John Dowd about the
scope of the interview, and that scope focuses on obstruction of justice and coordination between his campaign and Russia.
We also have seen that Mueller has issued a grand jury subpoena to the Trump organization for financial crimes-related material. So we have two
indications that Mueller is fully investigating his full mandate of coordination, obstruction and other collateral matters that may have arisen
out of the course of his inquiry and I think that's what upsets the president.
GORANI: Lastly, the president and some Republicans are saying, basically, this is over, we're done, no proof of collusion. But this is not over by a
longshot, is it?
ZELDIN: Correct, it is not over by a long shot and what the house Republicans have to say about it is really factually irrelevant to the only
person that really does matter, and that's Robert Mueller and his investigations team. They are the only ones who can determine whether or
not crimes have been committed, and if crimes have been committed what action is appropriate in response thereto.
GORANI: Michael Zeldin, as always, thanks so much for joining us on the program this evening.
ZELDIN: any time, Hala.
GORANI: And we continue our coverage live from Brussels, thank you.
And I've been telling you, the American president, Donald Trump's announcement that he's slapping more than $50 billion U.S. in tariffs on
Chinese imports, sent investors into a tizzy on Wall Street. The Dow fell more than 700 points. The fifth largest single day point drop in history
as a close. CNNMoney's Clare Sebastian is in New York.
You've been talking to traders there on the floor. What are they saying? What's their concern? What's going on?
CLARE SEBASTIAN, CNN CORRESPONDENT: Well, it's a double whammy, really, Hala. It's the concern that these tariffs could increase prices for
consumers and businesses, $50 billion. It's about 10 percent of the total amount of imports that the U.S. imported from China last year. It's about
two percent of overall imports.
But the concern is that this could spiral as well, that China could retaliate and hits products that the U.S. export to China. China in fact,
hinted today that it could do that. And we see that reflected in the stocks that suffer the heaviest lost for today. Boeing which is the
biggest U.S. exporter fell more five percent. Caterpillar and 3M which also heavily exposed to China fell. All three indices had their worst days
since February 8th. So this isn't just to the trade.
Well, Facebook also fell over concerns that the apology that we got from Mark Zuckerberg wasn't enough. And we can still see more regulations and a
bigger exodus of users there. Trade war has been a lingering fear on these markets throughout the past year, and we really saw that explode today.
[16:35:10] GORANI: All right, Clare Sebastian, thanks very much.
And Clare was mentioning that Facebook stock once again lost ground. Now, for days, Mark Zuckerberg said nothing as lawmakers, investors and Facebook
users were really demanding some answers. Well, last night the Facebook CEO finally spoke in an on-air exclusive interview with CNN's Lori Siegel
about the Cambridge Analytica scandal.
LORI SIEGEL, CNN CORRESPONDENT: Facebook has asked us to share our data, to share our lives on this platform, and wanted us to be transparent and
people don't feel like they've received that same amount of transparency. They're wondering what's happening to their data. Can they trust Facebook?
MARK ZUCKERBERG, CEO, FACEBOOK: Yes. So one of the most important things that I think we need to do here is make sure that we tell everyone whose
data was affected by one of these rogue apps. All right? And we're going to do that. We're going to build a tool where anyone can go and see if
they're data was a part of this.
SIEGEL: The 50 million people that were impacted, they will be able to tell if they were impacted by this.
ZUCKERBERG: Yes. We're going to be even conservative on that. So we may not have all the data in our system's base so anyone who data might have
been affected by this, we're going to -- we're going to make sure that we tell. And going forward, when we -- when we identify apps that that are
similarly doing sketchy things, we're going to make that we tell people then too. Right? That's definitely something that looking back on this, I
regret that we didn't do at the time and I think we got that wrong, and we're committed to getting that right going forward.
SIEGEL: I want to ask you about that, because when this came to light, you guys knew this a long time ago, that this data was out there. Why didn't
you tell users? Don't you think users have the right to know that their data is being used for different purposes?
ZUCKERBERG: So yes. And let me tell you what actions we took. So in 2015, some journalists from "The Guardian" told us that they had seen or
had some evidence that data that this -- app developer, Aleksander Kogan, who built this personality quiz that happened. A bunch of people used it
and shared with it had sold that data to Cambridge Analytica and a few other firms. And when we heard that, and not against the policies. You
can't share data in the way that people don't know or don't consent to. We immediately banned Kogan's app.
And further, we made it so that Kogan and Cambridge Analytica and the other folks who with whom he share the data, we asked for a formal certification
that they none of the data from anyone in the Facebook community that they deleted, if they had it and that they weren't using it. And they all
provided that certification. So as far as we understood, around the time of that episode, there was no data out there.
SIEGEL: So why didn't Facebook follow up? You say you certified it. Why wasn't there more of a follow-up? Why wasn't there an audit then? Why
does it take a big media report to take that proactive approach?
ZUCKERBERG: Well, I don't know about you, but I was amused to when people legally certify that they're going to do something that they do it. But I
think that this was clearly a mistake in retrospect.
GORANI: Well, there you heard it. Mark Zuckerberg apologizing. But as I was saying before we play this clip from this interview. Some investors
are saying perhaps it wasn't enough. Tech and data very much on the agenda in Brussels today with new laws coming into effect in the European Union in
Let's talks more about this, Claude Moraes is a British Labour member of the European parliament here in Brussels and the chairman of Civil
Liberties Justice and Home affairs Committee. Thanks for being with us. What do you think of this whole Facebook situation? And Europe has a new
set of rules and legislation coming into effect in May.
CLAUDE MORAES, CHAIRMAN, CIVIL LIBERTIES JUSTICE AND HOME AFFAIRS COMMITTEE: I mean, it's an extraordinary moment, the first time up against
like the EU has got rules in data, GDPR is called. And this GDPR is the first time that any country said they need protection. They don't exist in
the United States where Facebook is located. They don't actually exist in places like Japan at the moment. So the EU is quite far ahead. And this
is happening just about time.
GORANI: How do you police this? How completely does this work? Because we're talking about two billion users and companies that have only virtual
presence as in many hits.
MOARES: The answer is the size of control. And this is a tipping point. I don't believe it's business as usual. I don't believe that this is
something that we'll forget about and everyone will start looking at cats and puppies again on Facebook again in few weeks. I think people realize
now the potential damage that can be caused by social platforms. It does need regulation. But the regulation is not necessarily an evil thing,
regulation is actually necessary. Why is it necessary? Because you need to create balances between where these social platforms live and the kinds
of people that use them.
[16:40:06] But at the end of the day, if you have millions and millions of people who feel that their most intimate data has been taking from them and
use our money --
GORANI: I actually understand that, but in the real world, how do you police it? How do you force corporations to guard, to safeguard the
private information of their users? After all, there's this contract between when you use Facebook, it's a free service, but there's this kind
of unwritten contract that that means they can kind of know who you are, where you live, how old you are.
MORAES: Yes. You can no longer do it in just one country. So trying to pull in Facebook in the UK or just in the US won't actually work. You will
need transnational agreements. It's something that's called adequacy agreement and you will need these agreements across the world and that's
why I think the GDPR is quite a good thing, because it --
GORANI: What does stand for?
MORAES: It's General Data protection Regulation so it's very boring, but it's the first time that any continent has ever tried the regulation. It
sounds boring, but the point is that you're acknowledging that this is a global problem. You said it. This is how you have to do to this. When
Facebook is taking in most of the kind of computer users around the world.
GORANI: But it's not just data. It's using these platforms for the propagation and the dissemination of fake news, of certain forms of
propaganda. That too, when you have troll factories and box and the rest of it, it seems, from my perspective, and I'm not an expert, it almost
virtually impossible to control.
MORAES: First, these big companies have to feel there is a regulation there. The moment, there isn't in the U.S., OK? Here in the EU, we now
have GDPR coming in which, at least, begins that regulation. And that's why this is so frustrating, because the data protection standards in the
U.S. are very, very low. We know this, because when we have international agreements with the U.S. from privacy shield, you've heard of that, safe
harbor. We have problems with the U.S., because we have higher data protection standards, so we know that's the case.
So first, get that sorted out. Secondly, the finer problems you're talking about, which soundly be misunderstood as easy to solve. And that is the
politics morality of how you deal with data. But believe me, we're going to have to do it, because if we don't do it, this kind of standard will be
GORANI: You don't trust Facebook will self-police, self-regulate?
GORANI: No. Why not? They're promising. They're making their promise today.
MORAES: Because it's about monetizing information. You know, cuddly cats and lovely videos and so on. No, sorry. It's about making money at the
end of the day. They have to push some morality and some innovation there, also some wonderful things, of course, we know that. That's why everyone
is attracted to these kinds of platforms. But at the end of the day, your information is being monetized. And that needs regulation for the win-win
situation for everyone, for business, but for the individual who wants to use Instagram or WhatsApp. I'm using WhatsApp now. I communicate with
your team on WahtsApp and all the rest of it.
GORANI: Based on the understanding --
MORAES: Owned by Facebook.
GORANI: But it's owned by Facebook.
MORAES: Owned by Facebook, as is Instagram. The point is nobody is attacking the innovation and the wonderfulness of these things. What we're
saying is, if you don't have that global regulation, we're going to be in trouble.
Claude Moraes, thanks very much. British member of the European parliament. Always a pleasure having you on the program.
Still to come, there has been progress on Brexit this week. But one of the issue is still to be decided is this, the Irish border. I'll speak to,
[16:45:43] GORANI: Welcome back. Now, these buildings around me, and the one I'm in, in fact, have seen quite a few meetings in the last year with
one topic in mind, Brexit. A few days ago, we finally saw some tangible progress with a transition deal announced. So between the official date
that the EU will exit the treaty of Rome and the day it will fully Brexit.
But one big important issue is still on the table. What do you do about the border between Ireland, the republic of Ireland, a member of the EU,
and happily a member of EU it seems according to polls. And Northern Ireland, which is part of the U.K.?
I'm joined live now by Helen McEntee. She's Ireland's minister for European Affairs. Thanks for being with us.
So, what do you do about this border thing?
HELEN MCENTEE, IRELAND'S MINISTER OF EUROPEAN AFFAIRS: We've actually made significant progress on the Irish border this week following on some
progress that was made before Christmas. So before Christmas specifically, the joint reports aligned a number of ways that we could ensure that there
was no hard border on the island of Ireland to opposed the peace process, to fight the agreement, and all of this was agreed but it would be the
backstop. So it would be the scenario and of course our preference, the Irish preference, the U.K. and the EU preference is that we would have a
scenario which is that close relationship which will avoid having to put this in place.
GORANI: So no hard border. That's the guarantee you've been given or not?
MCENTEE: So following on from the joint report after Christmas, the withdrawal agreement was set into legal terms. The Irish issue was put
into a protocol and it was, I suppose, turned into a legal document. What we've had since then is the U.K. Prime minister's full commitment that the
issues that were specifically addressed in the protocol would have to be translated into a legally operational solution.
GORANI: So forgive me, but in plain English, does that mean no hard border? Because then if you'd come to an agreement, wouldn't we have had
an announcement on Monday?
MCENTEE: So what we have now is that we have to take what was agreed. Basically the essence of the issue and that is avoiding the border,
opposing the peace process. We have to put that into legal text that is operational. But that is still to be done. What's happening now on Monday
is that intensive negotiations between the U.K. and the E.U. will begin. There is a timeline. So while we've moved on and see it transitionally
under the periods and the withdrawal agreements the Irish issue will have to be completed by October when the withdrawal agreement is finally
GORANI: But basically, how does it work? If you have Brexit, if Brexit happens and the U.K. leaves the EU, how can you have no border between the
country that's left the EU and the country that's in the EU?
MCENTEE: So the backstop position, how we've outlined this and how we've suggest on the EU and the UK have agreed that we'd work is that there will
be full alignment in areas linked to the single market, connected with the Good Friday Agreement, area of cooperation north and south of the border
and the whole island economy.
GORANI: So northern island will be separate from the rest of the UK in terms of the rules and its access to the single market?
MCENTEE: Well, of course, this means is that there will be full regulatory alignment. And those words were used specifically because when you have
regulatory divergence, obviously, that's where you have the introduction of barriers, that's where you see introduction of tariffs and barriers so
whether it's physical or not and blockages north and south.
GORANI: What about access to the Irish market, which would mean access to the EU market from Northern Ireland? Would that be on impeded?
MCENTEE: So what we're talking about then is the future relationship. So what the future relationship between the U.K. and the rest of the whole of
the EU look like? And that's something that's going to be moving on after tomorrow. So tomorrow, the 27 remaining member states will agree to
essentially set out a framework and start discussing with the U.K. what that future relationship will look like. It's the both of these will move
in tandem with each other and obviously the backstop for us is very much the last resort. This is the C scenario. But what we want is the A
scenario, so close, either a free trade arrangement, a customs union arrangement --
GORANI: But then that's not Brexit. People are saying that's not really Brexit. And one portion of the UK plays by different rules.
MCENTEE: We have a different, I supposed, scenario in Northern Ireland and the commitment that has been given by Theresa May, by the EU and obviously
a request. And that what is extremely important to us is that there is no border north and south.
[16:50:02] GORANI: Got it. So I've asked all my guests this evening the same question. The only person to answer me was Nigel Farage. Do you
think Brexit is going to happen? Or do you think that at some point, the UK will come to some sort of realization that it's too costly and too
MCENTEE: We have to operate on the fact that Brexit is happening. We're 19 months on now. A lot of work has been done. The UK government have not
said otherwise that we are preparing for Brexit in Ireland. We are preparing for Brexit and obviously the EU were here, as you said, many
meetings have taken place. And as far as we're concerned, things will continue, that's what we want. And certainly what the Irish government
wants is to make sure that after Brexit we have the closest possible relationship. And we get the best out as well.
GORANI: Helen McEntee, thanks very much. The European Affairs minister for Ireland. Thank you very much for joining us on CNN. We appreciate
Earlier, by the way, I spoke to Xavier Bettel, the prime minister of Luxembourg about how negations are going. This is his take.
(BEGIN VIDEO CLIP)
XAVIER BETTEL, PRIME MINISTER OF LUXEMBOURG: We're moving in the right direction and I see also the guidelines. I think they are good and also
the position in the UK getting --
UNIDENTIFIED FEMALE: Getting what?
BETTEL: More understandable for us.
(END VIDEO CLIP)
GORANI: The French president, Emmanuel Macron was also here in Brussels, is facing a stern test back home. Air traffic controllers, train
conductors and teachers took to the streets today to protest Mr. Macron's sweeping labor reforms. There were significant travel disruptions with
nearly a third of flight out of Paris canceled.
All right. Check out our Facebook page, facebook.com/halagoranicnn and check me out on Twitter, @HalaGorani for more of the show's content. We'll
be right back.
GORANI: Welcome back. This week, we have special coverage taking us to India in this edition of "Destination India." We travel to a capital city
actually shared by two states. We gained exclusive access to the capital complex. Take a look.
SUMIT KAUR, FORMER CHIEF ARCHITECT DEPARTMENT OF URBAN PLANNING: Chandigarh was planned on a (inaudible) it didn't have a history of its
own. Soon after Partition in 1947, Punjab had lost its capital, Lahore to Pakistan. The central government headed by our Prime Minister Jawaharlal
Nehru had a great vision. Celebrate independence, build a modern India.
Chandigarh was supposed to create a blueprint, for this, they wanted to engage the best of talents and (INAUDIBLE) has the first choice. The
architectural genius create such magnificent buildings. The monumental edifices of Chandigarh this speak of the democracy of the country. You
have the high court legislative assembly and secretariat. All these prior functions uplift us the head of -- the city is designed on the anatomy of a
[16:55:15] The city central is actually the heart of the city, and then you have the limbs, the working areas. And the lungs are the green bells that
A small infrastructural feast, I would say, manhole cover would normally people would neglect. So think of that as an important element of design.
And to project the plan of (INAUDIBLE) we emboss it so that whenever you're walking those streets of Chandigarh or even right in front of your house,
you are reminded that you are part of this larger vision.
This was a new model. This was architecture. In fact, spell out the new social order. Buildings can't have a big role to play in how we nourish
and cultivate human life and human beings. I think this is what makes Chandigarh unique.
This is so dear to so many people, particularly to my. The city and me have grown up almost together. I owe the city immensely.
GORANI: Before we go, an update on one of our top stories, the Dow Jones falling more than 700 points amid fears of a global trade war after the
American president, Donald Trump, announced that he's slapping more than $50 billion in tariffs on Chinese imports and investors were a little bit
rattled by that. The Dow fell more than 700 points.
Now, although it is the fifth largest single point drop in history and percentage terms of less than three percent. Not utter panic, but a day
I'm Hala Gorani. Thanks for watching our special programming live from Brussels. Do stay with CNN, "QUEST MEANS BUSINESS" is coming up next.