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Davos 2019 Day One: Huawei Chairman Said Trade War Is Slowing Sales, Microsoft CEO Talked Tech's Impact on Humanity; Lawyer: Suspected U.S. Spy Had Russian "State Secrets" On Him In Moscow; Macron And Merkel: Nationalism, Brexit, Terrorism And Immigration Are Threats; Film "Apartment 407" Depicts Farrell's Experience Of Trafficking. Aired 2-3a ET
Aired January 23, 2019 - 02:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN VAUSE, CNN ANCHOR (voice-over): Hello and welcome to a special edition of CNN NEWSROOM, I'm John Vause.
BECKY ANDERSON, CNN HOST: I'm Becky Anderson, live in Davos, Switzerland, where we start with another cold day, surrounded by business and political leaders in the Swiss Alps.
Globalization on the agenda but so is deglobalization and the rise of right-wing populism. U.S. secretary of state Mike Pompeo underlined the message. The White House did not send a delegation here. So he spoke to attendees by teleconference.
(BEGIN VIDEO CLIP)
MIKE POMPEO, U.S. SECRETARY OF STATE: In Ohio Rio de Janeiro and Rome people are asking questions that haven't been taken seriously in a long time.
Is economic globalization really good for me?
Are political leaders adequately protecting us from threats like terrorism?
Are they working to secure our national interests abroad?
The central question is this, do they signal fair weather or foreshadow a storm?
Is this pattern of disruption a force for good or not?
I would argue that this disruption is a positive development.
(END VIDEO CLIP)
ANDERSON: Joining me now in Davos is emerging markets editor John Defterios. A poetic Mike Pompeo citing Brexit and Trump and the Five-Star
Movement in Italy, claiming these winds of changes show nations and strong borders matter, which is to all intents and purposes anathema to the globalists scattered here.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Well, there's a lot of subthemes there, Ohio, Rio and Rome. I thought that was an interesting comparison, kind of speaking to his base back at home; Rio de Janeiro because of Jair Bolsonaro.
But Jair Bolsonaro is not in alignment with the America first policy. He's saying I still embrace the World Trade Organization and the World Economic Forum principles, which was music to the ears here. I just want to reform the WTO.
Where he is aligned with Donald Trump is trying to break through all the bureaucracy in the system, tackle corruption going forward, make the market user-friendly for investors.
The CEOs that I spoke to, they really like this, this resonates with them. But he was saying, Pompeo, is globalization good for everybody?
I don't think so. I think in the case of Italy, for example, it would have been OK if they prepared their society for it. This has been the number one criticism in Europe. You open up your borders but you do not train the workforce.
ANDERSON: First line, asking the question, that he believes people around the world are asking, does economic growth matter?
DEFTERIOS: Well, economic growth matters if you have other principles, like labor practices and human rights and fair competition. It is a huge issue in Davos, going back two years. We had Xi Jinping take to the stage and was very poetic, speaking of the language. Let's not retreat to the lakes and streams right now but let's go forward and have very even playing field.
The other issue that has come up here with probably more resonance is the environment, which I think is interesting. I'm not saying they're changing policy right away. But for example the CEO of BP, Bob Dudley, said I have 6,000 people with an oil and gas company and we're diversifying and we're going to renewables.
That's a transition. They talked about the great energy transition. But we heard from one of the most fabled players in the industry, somebody that we've watched in the U.K. television, actually global television, Sir David Attenborough, who gave a wakeup call to WEF to say, come on, let's wake up the realities and get in touch with the impact we're having.
(BEGIN VIDEO CLIP)
DAVID ATTENBOROUGH, NATURALIST AND ENVIRONMENTALIST: We are now so numerous, so powerful, so all pervasive the mechanisms that we have for destruction are so wholesale and so frightening that we can actually just exterminate whole ecosystems without even noticing it.
We have now to be really aware of the dangers of what we're doing.
(END VIDEO CLIP)
ANDERSON: And New Zealand's prime minister, telling delegates here, John, to get on the right side of history by embracing guardianship of the Earth, she said, lots of talk. We've heard it here before. And thinking back to climate change and this discussion was launched at least 10 years ago. That was up here at the World Economic Forum in Davos, lots of talk; action is what is needed.
DEFTERIOS: It sounds almost cliche but if you go around Davos in this beautiful setting, that not one electric vehicle that I saw. The shuttle buses were not full because the A-listers all had their --
DEFTERIOS: -- limousines. This is what Sir David was talking about. You have to connect with your actions and your policies within the company. There seems to be a gap. There's a recognition we need to move forward. It hasn't helped that Trump has gone in the opposite direction with the Paris accord here and he's taken a very hard line.
Europe has stood up but if they stood up enough to keep the momentum going here. The industry is raising money for renewables. This is underway but the transition may be slower than what we need for climate change and the Paris accord.
ANDERSON: Stay with me. We're going to move on and I want you with me.
Egypt launching a plan to boost sustainable tourism. The country highly dependent on tourism, accounting for 20 percent of its economy. With mummies, pyramids, tombs and beaches, it is a treasure trove of ancient artifacts.
But visitors have stayed away in recent years as Egypt struggles to show the world it is a safe, secure place to visit. Just last month four people killed in the attack near the pyramids of Giza.
But Egypt hoping a new museum will help drum up excitement. It will be the largest museum dedicated to a single civilization and will showcase all of the thousands of artifacts from King Tut's tomb.
Egypt's tourism minister, Rania Al-Mashat joining us now.
That's a very exciting project. Tell us more.
When does it open?
RANIA AL-MASHAT, EGYPTIAN TOURISM MINISTER: It's going to open 2020. And part of our campaign for the country is JEM 2020. We're very excited about this project. It is really from the inside. You have all the monuments that are old and ancient. But from the outside it looks very contemporary. And that is the message we want to get to the world, we're a very old
civilization but we do have modernity (ph). We are thinking differently about our sector. We're changing the narrative on tourism.
It is just a fact since we're in an economic forum, 98 percent of the sector is led by the private sector. So we're proud about that. And going forward, we want to enhance that.
ANDERSON: You've embedded sustainable tourism with the body of what you've been doing and you've done the job for year. Just recently you talked about the private sector getting involved. Some controversy about, for example, privatizing natural reserves.
What is going on?
Are we selling off the crown jewels here?
RASHAT: I want to -- I want to take us back a little bit. When I first took on the sector, I really wanted the SDGs, the 17 SDGs to be a key component of our message to the world.
And as you see, I always wear my SDG tourism --
ANDERSON: -- sustainable development goals.
RASHAT: -- and so basically what we're trying to do with embedding these principles with the private sector, for example, is green tourism. We have today 10 percent of the hotel rooms are aligned with the Green Star certification. We're changing the norms of our evaluation of hotels, the stars.
And in the new norms we're going to include environmentally sensitive aspects in hotels. Just last week, one of the biggest hotels in Egypt moved to solar energy generation. That's to allow more resources to be used to the servicing of tourists rather than just going and paying an energy bill.
DEFTERIOS: This represents 20 percent of GDP. It's higher than other emerging markets.
What target audience are you going after here in terms of the income levels?
Before, it was a low cost destination. You're reaching to Latin America and China, which are not big spenders and you say you want to have a green touch for those who care, usually middle class and upper middle class. You're going to try to go for the full range?
What is the new strategy really about?
RASHAT: It is a combination because Egypt -- I know you've visited several times -- it's a destination that tailors to everybody and to everybody's budget, to everybody's interests. For example, there are destination that only has ecologists (ph).
So in this situation, it's not necessarily going to be the low spenders but also there's going to be a tailoring, a catering for the high spenders. So in any continence you have this diversity of spending and what we want to do is to have a message which is modern and exciting. Therefore, you're able to attract as many as the different strata as much as possible.
DEFTERIOS: I was inside the ground Egyptian Museum for one square meter. It's a phenomenal structure.
But is it -- can it be, particularly to modernize the surrounding area of Giza, like the Guggenheim in Spain or the Louvre in Abu Dhabi, that are perceived as profound game changers in the world, do you think it can be at that level?
And how do you let people know what is inside that extraordinary structure?
RASHAT: The -- for the first time, this museum in terms of its management, there has been an RFP globally set. The management would become either international or domestically private. So the government is stepping away from managing many of our sites so that we --
DEFTERIOS: That's a big change for you.
RASHAT: -- that's a big change, even on that, for example, when it comes to transportation, the railway law has been changed so that private sector can come in and help. So we take this very seriously. We want to make sure that everything that would help increase revenue and participation will be put in place.
ANDERSON: Security a significant challenge. You've been in the job a year and it has been, sadly, a very busy one so far as security is concerned.
What is the message to the incoming tourists going forward?
RASHAT: I think it is the government does everything it can and in its power to make sure that your visit is enjoyable and safe. We've seen even from CNN editorials that Egypt is the second highest on the list as a destination in 2019. That's based on people's own experience when they come to the country.
So I feel there's a lot of change happening. People are experiencing it firsthand and to our branding and through our promotions, those aspects will be even more clear to everybody.
DEFTERIOS: There's one final thing on your strategy to get buy-in from the entire government, you worked at the International Monetary Fund before you -- holistic approach. You went to the president and said here's the master plan that you want me to put forward to modernize. You've only been on the job for a year.
Then you went to parliament and said we want this passed so you don't try to shoot it down in the year two and three, which is pretty clever because you could get a lot of resistance going forward.
So this is imbedded for the next five years as a result of the political buy-in?
RASHAT: Yes, so basically as you mentioned, 20 percent of GDP is the fastest growing sector in our plan, which is now transparency on the websites, including the overarching objective that each household in Egypt have at least one individual working in tourism.
So in that situation, we need change in legislation. We need change in institutional setups. We need a modern look for promotion. So all of this requires all the stakeholders to be on the table, to buy in the plan because that's how you generate revenue. That's the way you move to green tourism. That's the way you secure participation of women, et cetera.
ANDERSON: If anybody can do it, you can do it. We've been talking over the past year. You've faced challenges but you're on the road to success. Thank you very much, Minister, for joining us today.
John, for the time being, back to you.
VAUSE: Becky and John, everybody there in Davos, thank you. Catch up with you in a moment.
In the meantime, we'll take a short break. When we come down, the U.S. shutdown's far reaching effects have now extended around the globe. Coming up, the FBI warning the shutdown is impacting national security.
Also ahead, the U.S. vice president makes a direct appeal to the opposition in Venezuela: rise up and overthrow their leader, Nicolas Maduro, calling him a dictator with no legitimate claim to power.
VAUSE: For the first time since the U.S. government shutdown began more than a month ago, it seems Democrats and Republicans have actually agreed to do something. On Thursday, the Senate will vote on competing plans to end the standoff but neither bill is expected to win enough support to move forward.
The president and Democrats haven't spoken for 10 days. It is unlikely the silence would be broken anytime soon as hundreds of thousands of federal ;employees will now miss their second paycheck this week. Abby Phillip reports. (BEGIN VIDEOTAPE)
ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT (voice-over): President Trump and congressional Democrats locked in a game of chicken as the government shutdown drags on.
The president taunting Democrats and promising not to back down, tweeting, "Without a wall, our country can never have border or national security," adding, "The Dems know this, but want to play political games. Must finally be done correctly. No cave."
Trump still plans to deliver a State of the Union address at the Capitol next week, the White House says, even though House Speaker Nancy Pelosi asked him to postpone it, citing security concerns during the government shutdown.
HOGAN GIDLEY, WHITE HOUSE DEPUTY PRESS SECRETARY: She did that without any input from national security. In fact, she even said that Secret Service couldn't protect the speech, which is absolutely ridiculous.
PHILLIP: To make their point, a White House official sending an e- mail on Sunday asking the sergeant at arms to conduct a walk-through for the speech, but that request was rejected.
Officials say Trump speechwriters are still working on his remarks and they are considering alternative venues, including a campaign- style rally or a speech in the Republican-controlled Senate chamber, which could be complicated by Democrats.
Meantime, both sides are still far apart on stopping the shutdown, with neither the Democrat or Republican votes on plans to end the shutdown expected to succeed this week.
And the text of the president's proposal released last night includes provisions advocates and Democrats are calling poison pills.
REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: What the president proposed is granting what he had already taken away. The DACA recipients had their protections. TSP -- the temporary protected status, TPS, had their protection. The president took it away.
And now he is saying, well, I will give this back temporarily, if you give me a wall permanently.
PHILLIP (voice-over): Including a change that would force Central American children to seek asylum in their home country and those attempting to seek asylum at the border would be sent back to the countries they fled.
PHILLIP: Also today the Supreme Court declined to take up a case that was brought by the Trump administration who is seeking to end DACA. That's a program that was aimed at giving relief from deportation to children who were brought to the United States illegally as minors.
Now what that means for the shutdown is that Democrats have very little incentive to accept a deal that gives short-term relief to DACA recipients like the one that President Trump proposed to end the shutdown on Saturday.
That also means that the DACA program will remain in place until further notice -- Abby Phillip, CNN the White House.
VAUSE: As the shutdown drags on, more and more government officials are going on the record, warning about the consequences. About 8,000 men and women of the U.S. Coast Guard's civilian workforce will miss a second paycheck this week.
The Coast Guard chief was blunt in a message to service members.
(BEGIN VIDEO CLIP)
KARL SCHULZ, U.S. COAST GUARD COMMANDANT: We're five-plus weeks into the anxiety and stress of this government lapse and your non-pay. You, as members of the armed forces, should not be expected to shoulder this burden.
I remain heartened by assistance available to you within the lifelines and by the outpouring of support from local communities across the nation. But ultimately, I find it unacceptable that Coast Guard men and women have to rely on food pantries and donations to get through day-to-day life as service members.
(END VIDEO CLIP)
VAUSE: The FBI has warned operating funds are just about depleted and that means national security could be impacted. The FBI Agents Association said the bureau is losing informants and counterterrorism investigations are hampered.
All 35,000 bureau employees will go without a paycheck again this week. And only 5,000 have been told to stay at home.
(BEGIN VIDEO CLIP)
TOM O'CONNOR, PRESIDENT, FBI AGENTS ASSOCIATION: Fund the FBI now. The failure to fund the FBI is making it more difficult for us to do our jobs, to protect the people of our country from criminals and terrorists. This is not about politics or partisanship. As I have said, special agents are working and are committed to protecting our country. But we need --
-- funding to do our work.
(END VIDEO CLIP)
VAUSE: Farmers can't get approval for government loans or the information they need from the Agriculture Department. And then there's the other issue, the trade war with China and all that sitting with the farmers as well. Bill Weir reports now from Iowa.
KATE EDWARDS, VEGETABLE FARMER: But my grandparents were farmers. And I thought my grandpa was the smartest man I've ever met.
BILL WEIR, CNN CORRESPONDENT (voice over): Like most Iowa farmers, Kate Edwards loves the rhythm of the seasons, seeds in the spring, harvest in the fall. But while winter is usually a time to plan, this winter is a time to worry.
EDWARDS: As a farmer, it's kind of the worst time of year for the government to be shut down because --
WEIR (on camera): Is that right?
EDWARDS: Because if it was any other time of year, we'd be too busy in the field to care. In the winter months, you're the business person.
EDWARDS: So this is the time of year we're making these business decisions.
WEIR (voice over): But she says the shutdown makes it much harder to apply for loans, collect checks, or see the Department of Agriculture data needed to plot the next crop.
WEIR (on camera): I suppose you also have to make equipment decisions, right, investments.
DAVE WALTON, CORN AND SOYBEAN FARMER: Oh, that's an easy one. We don't have any money, so we're not investing.
WEIR (voice over): Dave Walton says the shutdown is part of a one-two punch that came when President Trump started a trade war with China. This destroyed his profit margin in soybeans, while raising the costs of his equipment.
WALTON: The cost of a new grain bin went up 15 to 25 percent.
WEIR (on camera): Wow.
WALTON: So things are already tight. And if you're thinking about buying a grain bin, you probably not going to do it now.
WEIR (voice over): But he refuses to criticize the president, who flipped Iowa from blue to red with a big help from farmers.
WALTON: You know, I think there is some growing uneasiness. We're sort of in the middle of the game, so you can't really predict the outcome of the game. We're in the middle.
WEIR (on camera): But you can second guess the coaching if you're down by -- WALTON: Oh, yes.
WEIR: By 50 points at halftime, right?
WALTON: Yes. Absolutely. Yes, absolutely. Yes, we're down by a few touchdowns if you want to put it that way. But he campaigned on a lot of the things that he's doing right now and he's doing it.
BRIAN WOLKEN, FARMER, MAYOR OF MONTICELLO, IOWA: A lot of farmers, big supporters of Donald Trump. Until he's out of office, I don't think you'll hear him say anything bad about him.
WEIR (on camera): Really?
WOLKEN: Bad about the tariffs. I think they're just going to say, it's going to be good for us in the long run.
WEIR (voice over): When he's not growing soybeans, Brian Wolken is the mayor of Monticello. And he says that most farmers he knows will swallow the pain of patriotic pride.
WEIR (on camera): Oh, yes, Iowa soybeans, baby.
WOLKEN: Iowa soybeans.
WEIR (voice over): Oh and a $12 billion bailout doesn't hurt.
WEIR (on camera): By borrowing more money from China to pay you guys a subsidy.
WOLKEN: Yes. He knows that we're taking a hit. He's acknowledging that the tariffs are having a negative impact on the agriculture industry. And so to keep the farmers happy, he's giving us a subsidy.
WEIR: Does that make sense?
WOLKEN: It does, if his plan works out in the long run.
MEL MANTERNACH, RETIRED FARMER, MONTICELLO RESIDENT: It's unbelievable that the farmers in Iowa can still support Trump when it's costing them thousands every week. I can't believe they they're that blind.
UNIDENTIFIED MALE: Yes, but they're being placated with a $12 billion bailout.
WEIR (voice over): Over at Daryl's (ph) Diner in Monticello, Gary the eye doctor tells me after he was critical of Trump supporters, he lost a few regular patients. And while a Democrat won this district in the midterms, political riffs are only getting wider.
UNIDENTIFIED MALE: You've got die-hards. You've got die-hards.
MANTERNACH: I think there's some of them -- some of them -- the diehards are dying harder. EDWARDS: But I think that that piece is really important to what we do. And so I think we're frustrated right now, but I also think that we look to each other to build resiliency in that moment.
WEIR: But Kate believes in the kindness of neighbors and strangers to save the American farm. Like the 9,700 federal Farm Service Agency workers now being called in to work without pay -- Bill Weir, CNN, Monticello, Iowa.
VAUSE: As Venezuela braces for another day of anti-government protests, the U.S. Vice President has told demonstrators there they have Washington's support in their efforts to overthrow leader Nicolas Maduro, who Pence said was a dictator with no legitimate claim to power.
In response, Maduro has ordered a total and absolute revision of relations with the United States. Tensions between Washington and Caracas have been sour for years now. CNN's Amara Walker looks at how we reached this point.
AMARA WALKER, CNN INTERNATIONAL ANCHOR: Venezuela's Nicolas Maduro started his controversial second term in an elaborate ceremony this month. Promising to build socialism in the 21st century. For the country's opposition, this moment marked an unprecedented power grab.
JUAN GUAIDO, PRESIDENT, NATIONAL ASSEMBLY OF VENEZUELA (through translator): Venezuela has a de facto government for the first time since 1958. We have a dictatorship in Venezuela. It's a government which was not elected with sovereignty. Maduro kidnapped the state for his own benefit.
WALKER: The head of the National Assembly, Juan Guaido, said he would be ready to take over as president. A statement --
WALKER (voice-over): -- that led Venezuela's pro-government Supreme Court to nullify the body's power. Still, the opposition appears emboldened. In a fight to unseat Venezuela's president.
A man claiming to be a military sergeant called on Venezuelans to support an uprising. "People of Venezuela, we need your support." He said in a video posted to social media this week. He and a group of soldiers were detained but the message of resistance spread. Protests in the capital turned violent. Officials using tear gas to break up the crowd. Those demonstrations perhaps a preview of mass marches called by the opposition. Which received a ringing endorsement from the U.S.
PENCE: We say to all the good people of Venezuela. Estamos con ustedes. We are with you. We stand with you. And we will stay with you until democracy is restored. WALKER: The U.S. vice president's message receiving an angry rebuke from the Venezuelan president who said Pence was openly calling for a coup. And from others in Maduro's camp, incensed by America show of support to the opposition.
UNIDENTIFIED FEMALE: Yankee, go home.
WALKER: Maduro's government has long blamed the U.S. for stoking anger inside Venezuela. And for sanctions which they claim have damaged the economy. But critics point to corruption and failed policies for the difficulties Venezuelans face. An astronomical inflation rate, chronic shortages of food and medicine and a mass exodus since 2015 of millions looking for more stable conditions. The ones oil-rich country now in crisis. Its citizens desperate for change -- Amara Walker, CNN.
VAUSE: After the break, we'll head back to Davos. Becky Anderson is live from the World Economic Forum. But the British prime minister Theresa May is not there. We'll look at the Brexit impact on Davos when we come back.
Also later this hour, fans left devastated. Football star Emiliano Sala was about to begin a new challenge with a new club. Instead, his plane is still missing.
ANDERSON: Welcome back to Davos, Switzerland, live from this year's meeting of the World Economic Forum, the business and political elites are here, tearing into topics like the environment and investment and globalization.
We expect to hear from more leaders in the coming hours. They include Japan's prime minister, the Ethiopian prime minister, German Chancellor Angela Merkel, China's vice president and the Italian prime minister, Giuseppe Conte.
Joining me now in Davos is my colleague, John Defterios. What can expect to hear from these headliners today? It's quite a
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Yes. I was going to say this is primetime Davos. There's been a lot of criticism because President Trump didn't come and Theresa May of course, Britain didn't come as well. As one very prominent golf businessman told me, it's quieter and colder in Davos. But it doesn't mean it's not a good World Economic Forum because this is a good lineup. I think primarily we're going to listen very carefully to Angela Merkel as Chancellor of Germany.
And I think it will have a lot to do with Brexit as well. She said there's more time to negotiate. And she's thinking about her own legacy, Becky, which I think is interesting. She doesn't want to be in office for 12 years and watch Humpty Dumpty come apart. She takes that very personally. Yes. That being (INAUDIBLE) the European Union, oh, that's a boat. That's fair enough for -- good point, both Britain and the European Union because it's a $2.5 trillion economy.
I think that's critical. Prime Minister Conte has no power in Italy and I thought it was interesting that Mike Pompeo, the Secretary of State of the United States was suggesting like, look, this is a good populist movement. Conte doesn't have the powers, the northern league (INAUDIBLE) movement and the IMF was suggesting that's the next big risk in Europe right now is Italy.
ANDERSON: We heard from Huawei and you've been -- and this is a Chinese company. And we've been -- you've been talking to a bevy of business leaders from the U.S. and around the world. We'll hear from the Vice President of China today. What's going on with regard to this U.S.-China spat at present?
DEFTERIOS: Well, Xi Jinping is not here. But Wang Qishan is a very powerful player in China. So I expect something quite strong on the discussion with the U.S. and China, and combating the slower growth, slower at 6.6 percent. One very powerful investment banker said to me yesterday he had briefings with the Chinese and they're not going to give up on a lot of the issues that Donald Trump is pushing for in particular intellectual property rights and all the market access that the U.S. is looking for.
ANDERSON: This is roiling these global stock markets, isn't it?
DEFTERIOS: And that's the problem, Becky, because last year Donald Trump is on the stage (INAUDIBLE) 30 percent gain and I've done the tax reforms and I'm going to keep America growing. The year before Xi Jinping was on the stage and saying something poetic, let's not retreat to streams and rivers. Let's stay in the oceans and find a consistent gain against globalization here and collaborate. The bottom line is as one source was telling me they're going to go head- to-head for the next couple of months realize it's not good for the global economy.
And they're going to try to let Donald Trump come out with a face saving win here or at least he's going to do what he did with NAFTA, and say, look what I did to NAFTA. I renamed it and I got so much more out of it. So I think watch that space carefully and the language from the Chinese. I thought the fact that this rotating Chairman of Huawei who was here and I met at the opening reception just by accident was willing to speak up and say this is not good for the global economy and Huawei is not, you know, spymaster in telecommunications as well.
We need more transparency with China. I mean and I think China this action and their C.O. says they're glad Donald Trump is pushing on the issue of access and intellectual property rights as well. ANDERSON: As we get into real day two, what's the overarching theme
that we are beginning to hear here do you think?
DEFTERIOS: Well, the number one is that looking at the United States and all the excess energy Donald Trump is spending on the wall and the gridlock and the government shutdown, again, some business leaders from both Europe and Asia were suggesting this is a waste of time and not U.S. leadership. They thought it would be better than this for the greater good. The State of the Union that may not be taken place at all. There is concern, not dramatic concern.
This is not 2009 and 2010 in the global financial crisis. Well, you get a shock in the second half of the year, we don't solve U.S. and China. China slows down even more. I don't see it just yet. But the bottom line is we're carrying a lot of public debt. And as a result of the public debt, what happens if a crisis hits? Do the central banks come together? And with this confrontational approach by Donald Trump, remember during that crisis, the G20 came together and the emerging markets were helping to put liquidity into the system.
Do you think China is going to step up in a big way and say I'm here to help, if you're fighting with me on trade, I don't think so?
ANDERSON: John Defterios in the house. Thank you, sir. See you next hour. Well, with British Prime Minister Theresa May, a notable absentee. She's back home in London. Trade Minister Liam Fox will be her Brexit point person here in Davos. Now, Fox says, he will meet with trade ministers from around the world. He hopes to replicate existing E.U. agreements with about 40 countries by the Brexit deadline. The U.K. to leave the European Union on March the 29th regardless of whether the British Prime Minister can get a Brexit deal through parliament or at least that is the intention at present.
[02:35:01] Well, the front page of The Economist magazine this week calls Brexit, "The mother of all messes." Patrick Foulis is the Business Affairs Editor for the magazine and he joins me now. There is no doubt that Brexit will go down to the wire. In fact, the head of Citigroup used that very term here yesterday. He went on to say that he hopes reason will prevail and that parties will strike a balance on the outcome. Do you buy that?
PATRICK FOULIS, BANKING EDITOR, THE ECONOMIST: Well, it's interesting that the mood here about Brexit is terribly glum. So we spoke to a Wall Street chief who called it the biggest exercise in brand destruction in history as Britain kind of implodes. You know, I think it's going to be delayed. That's the bottom line. You know, the government -- Theresa May are sticking with this rigid plan that no one really wants.
Parliament is going to overrule her and come up with something else because the European Union is becoming more worried about a chaotic Brexit. They're likely to compromise and allow a delay.
ANDERSON: What are business leaders telling you about what they want? I mean for example the Citigroup (INAUDIBLE) are warning that Brexit means his firm will be doing less work in London going forward? FOULIS: Well, I think, you know, there are two ways of thinking about
that. The first is that no one obviously wants a chaotic exit. I think the reality is a protracted negotiation which under any circumstance is probably what's going is a nightmare for Britain. It means a sort of slow drip feed of businesses and companies leaving over the next couple of years. And I think that surprise we're going to pay whatever the politicians come up with.
ANDERSON: Liam Fox here, a delegation of seven apparently much criticism back at home. They have to be here. Don't they? I mean this is the -- this is -- he's here talking as his cabinet colleagues here talking to people who will make a difference for Britain going forward.
FOULIS: Well, I think there's a damage to limitation exercise which is probably worth doing. But, you know, the idea that Liam Fox is big play here who's going to sort of swing the views of, you know, China or India or whatever on trade deals is completely implausible frankly. I mean Brexit is a kind of side show and rather a nasty and unpleasant one. But it's certainly not the dominant theme of this meeting and I doubt people anyone is going to be queuing up here when --
ANDERSON: -- discussing what the dominant theme is. Very briefly, what do you think the dominant theme is here?
FOULIS: I think the dominant theme is that the trade war didn't really have an impact last year in 2018. It just didn't hurt. This year, it's going to hurt and investment flows by companies are beginning to fall. So the system is beginning to adjust to a world without American leadership and where trade deals and the rules of commerce are breaking apart.
ANDERSON: Just briefly before I leave you, the line I went in with which is that Liam Fox says that he hopes to replicate around 40 E.U. free trade agreements with their countries for the time Britain leaves the block. Is that feasible?
FOULIS: No. I mean, you know, if you take a big economy like India, it's got countries queuing up who want trade deals. They take years to negotiate. The idea of Britain as top of the list and has some kind of priority call in most countries as a total --
ANDERSON: (INAUDIBLE) at best when this was the sort of line that those who voted for Brexit voted for and a downright lie at worst?
FOULIS: Well, I think there's a couple of places like, you know, Australia or New Zealand where historical links are very strong and where a different set of rules might apply and we might be given priority. But the idea that big emerging economies think Britain is absolutely central to the trading strategy is just complete --
(CROSSTALK) ANDERSON: Well, that has (INAUDIBLE) said so here. But let's see how
things go. Always a pleasure. Thank you, Patrick.
FOULIS: Thank you.
ANDERSON: Be sure to stay with us. When Tunisia's head of state joins us here in Davos, we're going to ask about his call for secular progressive alliance for the future of his country. For the time being, though, Mr. Vause, back to you.
VAUSE: Becky, we'll be sure to tune in for that. Thank you. I will take a short break. When we come back, after his plane vanished of the English Channel (INAUDIBLE) a football star, Emiliano Sala will be found alive. Details on a moment. Also, a Moscow court (INAUDIBLE) for an accused American spy. But some details have emerged of the prosecution case against Paul Whelan.
[02:41:50] VAUSE: Well, hopes of finding survivors are fading after a plane vanished mid-flight over the English Channel with Cardiff City's star new recruit, Emiliano Sala, on board. A little more than an hour after takeoff, the small engine -- single engine (INAUDIBLE) disappeared from radar. Sala was travelling from France to Cardiff making his club debut. "WORLD SPORT" Anchor Don Riddell has details.
DON RIDDELL, CNN INTERNATIONAL SPORTS ANCHOR: Signing for a Premier League club is a dream for many football players. But it turned into a nightmare for one Argentine striker and his family, friends, and fans across two continents. Emiliano Sala joined Cardiff City at the weekend, but he's now missing after his plane disappeared from the radar over the English Channel on Monday night. When he spoke with Cardiff on Saturday, he was really excited about the new challenge ahead.
(BEGIN VIDEO CLIP)
EMILIANO SALA, PROFESSIONAL FOOTBALLER (via translator): It gives me great pleasure and I can't wait to start training, meet my new teammates and to get down to work.
RIDDELL: (INAUDIBLE) his former team, they are devastated. When they -- Wednesday night's cup game has already been postponed and a vigil was held on Tuesday.
(BEGIN VIDEO CLIP)
(END VIDEO CLIP)
RIDDELL: You can see the emotion of the fans here. Even though he had left the club, Sala remains very popular back home in Argentina. His family are anxiously awaiting news. On Tuesday, (INAUDIBLE) caught up with his father, Horacio.
(BEGIN VIDEO CLIP) HORACIO SALA, EMILIANO SALA'S FATHER (via translator): I found out
this morning around 6:00 or 6:15 a.m. I received a call from a guy from Esperanza. I was petrified. Then I spoke to several people. But this inexplicable. It is inexplicable.
(END VIDEO CLIP)
RIDDELL: And an extensive search and rescue operation has so far turned out nothing and that search has now been suspended until Wednesday morning. Police in Britain say that if the single engine plane crashed into the sea, the chances of survival would be slim. Sala spend Monday back in (INAUDIBLE) tragically, this is one of his last social media posts, the last goodbye. Nobody wants to think the worst. But with the passing of time, it is getting harder and harder not to.
Authorities checked in with local airports in the Channel Islands to see if the plane had landed there. But they turned up nothing. Sala should have been training with his new teammates on Tuesday. That training session was canceled. Incredibly, this is the second aviation incident to have affected the Premier League this season. In October, Leicester City's owner was killed in a helicopter crash. Back to you.
VAUSE: Don, thank you. We also have this. Authorities (INAUDIBLE) to search for that missing plane will and in fact has resumed. Well, an American security consultant being held in Moscow on charges of espionage made a brief court appearance on Tuesday. Well, Paul Whelan's application for bail was denied that prosecutors did reveal some of their evidence. The latest now from CNN's Fred Pleitgen.
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: American Paul Whelan remains in Russian detention. Forced to stand in a glass cell as a judge shot down his request for release on bail while he awaits his espionage trial.
Are you being treated OK, Mr. Whelan?
Paul Whelan, not allowed to answer CNN's questions behind bulletproof glass in the high-security courtroom. Whelan was detained by Russia's intelligence service, the FSB in his hotel room in central Moscow in late December and charged with espionage. His lawyer saying, he was given a classified flash drive.
VLADIMIR ZHEREBENKOV, LAWYER FOR PAUL WHELAN (through translator): Paul received information. And I confirm, the information is classified as state secret information on a flash drive. In reality, Paul was expecting to receive from an individual information of a cultural nature. Him attending one of the cathedrals, Paul's vacation photos.
PLEITGEN: Paul Whelan's lawyer, says he was misled into taking the classified information. But the attorney defending the investigation.
So, do you think it's going to be a fair trial?
ZHEREBENKOV: The process was very constructive and professional. Whelan's rights were observed.
PLEITGEN: But the attorney also admitted that so far, the defense has only been able to see about five percent of the evidence available in this case.
ZHEREBENKOV: The investigators failed to disprove Paul's position. Specifically, that he did not view this information as state secrets.
PLEITGEN: Some are speculating Russia may have taken Paul Whelan as a possible bargaining chip. Perhaps to exchange him for a high-profile Russian in American detention. Like Maria Butina who has admitted to working as a foreign agent inside the U.S.
Russia vehemently denies the allegations. But Paul Whelan's family continues to call for his release. "While we still lack any details from the Russian government about why Paul is thought to be a spy, and who provided him with the alleged state secrets," a family statement reads. "We are certain that he was entrapped and is not guilty of espionage."
After being denied bail, Paul Whelan's hardship in a Russian jail continues. His attorney saying, it could be months before his trial even begins. Fred Pleitgen, CNN, Moscow.
VAUSE: When we come back, she went in from modeling job but ended up trapped in a nightmare of sex slavery. Now, one woman is taking her horrific experience to that extreme trying to raise awareness. More on that in just a moment.
VAUSE: France and Germany have renewed a friendship pact, first ratified in the 1960s in an effort to deal with rising populism on the continent. Now, during appearance, the French president and the joint councilor have warned nationalism is the threat to all of Europe. CNN's Jim Bittermann has more.
(BEGIN VIDEO CLIP)
JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: It was like an old married couple getting together to renew their wedding vow at France and Germany getting together, 56 years after they signed what was called the Elysee Treaty. A treaty that showed that they could cooperate after World War II.
The bitter enemies getting along in terms of culture and economics, and security, and those kinds of things this time around. It was to intensify those kind of links that Emmanuel Macron and Angela Merkel got together and signed a treaty in Aachen, Germany.
And basically, the treaty provides for all kinds of different lengths to be strengthened. It's a very generalized term not big on specifics. Although, the one that's being cited most often here is this mutual defense treaty which provides for Germany to come -- become to the defense of France and perhaps to become to the defense of Germany should they be attacked. Jim Bittermann, CNN, Paris.
(END VIDEO CLIP)
[02:50:41] VAUSE: Now, the CNN's ongoing "FREEDOM PROJECT" which highlights the epidemic of human trafficking around the world, and the latest U.N. report is warning this billion-dollar industry has taken on horrific dimensions. Warning the number of victims is on the rise, while armed groups and terrorists are trafficking women and children to generate funds and recruit.
The report notes globally more victims are being found and more traffickers sent to jail. But at the same time, there's been a big increase in the number of children being bought and sold, and far more girls are being trafficked than boys.
As shocking and as depressing as this report is in many ways, it fits in with the perception most have of human trafficking. Victims who extra been vulnerable, living in poverty, and conflict zones.
But human trafficking is a crime which could happen in a market part of London, and the victim can be a model turned aspiring actress.
(BEGIN VIDEO CLIP)
FRIDA FARRELL, FILM ACTRESS: Are you going to kill me?
UNIDENTIFIED MALE: (INAUDIBLE). You're far too beautiful. Congratulations you're in order.
UNIDENTIFIED MALE: Our client is coming back a few days.
FARRELL: Why are you doing this to me?
(END VIDEO CLIP)
VAUSE: As part of the trailer from Apartment 407, based on the true story of actress Frida Farrell, who wrote and stars in the movie which has just had its worldwide release.
And as part of this, Frida joins us now from Los Angeles. Thank you for coming in. Thank you for being with us.
FARRELL: Thank you for having me, John.
VAUSE: I want to start with the news from the U.N. First thing about the surge in the numbers of trafficking victims. As a survivor of the sex trade industry, as a survivor as someone who is kidnapped, that is must be especially disturbing.
FARRELL: Yes, very disturbing. The fact that is rising and rising and rising, and it never ends. So, we need to find an end to this. And I believe that education is one of them. We need to educate our youngsters and show them red flags and how not to get into it. It's a serious subject that is not talked about enough. So, I'm glad talking about it.
VAUSE: We treated to see your movie basically because you didn't talk publicly about your ordeal for years. Was there one moment, an incident which you know, made you decide that after 14 years, staying silent was no longer an option.
FARRELL: It was no longer an option. We were making a film and I was basically talked into making a film about my own story. Which I was hesitant about since I hadn't told anyone at all. And going from telling zero people to telling the world, basically, felt very intimidating.
But I felt if I can do this, and instead of thinking about myself and my story help other women. Either get over what happened to them or make sure they don't end up in a situation that I was in, then my job is done. And my -- and I'm -- you know, using the film in my story for the right reasons.
VAUSE: So, for all these years, there were so many people out there, people who were close to you that they had no idea of this trauma you'd gone through that -- you know, that essentially, you were a young model, it was back in London's a guy approached you about -- you know what, a modeling job and you can't over a bit suspicious but you followed through on it. And that's when you were taken at knifepoint, right?
FARRELL: Yes, I did go for a casting in London. I was a student at a time. I just finished drama school. And I went for a casting thinking it is good money, and I had been modeling. So, it wasn't something new to me.
And then, he called me back. He said, "The client loves you, you want to come back and did the job?" Then I was like, "Yes, I would love too, its great money. I went back to the same place, and the same person opened the door and I stepped into the place where -- you know, the day before had been people, fruit, coffee, tea, a backdrop photographer, and today, nobody was there, it was dark and cold. And I stepped in and he quickly locked the door behind me and pulled out a knife.
VAUSE: And you managed to get out what, after three days because of the slip-up, right?
FARRELL: Yes, I did. I was --
VAUSE: Did he left the door unlocked?
FARRELL: He did left the door unlocked. And I was -- I consider myself one of the lucky ones.
FARRELL: Because the escape rate right now is less than two percent.
FARRELL: So, I'm really lucky.
VAUSE: Well, unlucky and lucky I guess, but all at the same time. You know, this is not an easy movie to watch and that's how it should. Here's one part which shows this total inverse power relationship which exists between the kidnapper and victim.
(BEGIN VIDEO CLIP)
[02:55:07] UNIDENTIFIED MALE: I'd like it. If I don't have to don't have to do this again. OK? (INAUDIBLE). Look at -- look at. OK, there you go.
(END VIDEO CLIP)
VAUSE: How does it feel for you to watch that back, and how do you describe that a feeling of being totally helpless?
FARRELL: I say it makes my heart beat faster. Yes, it's hard to watch.
VAUSE: OK, yes.
FARRELL: I was very hard. It was hard to edit the film, took years to edit because it was hard for me to watch the scenes over and over and over. It was hard enough to film it. But then, just sit and watch everything again and again and again, it just, I had to take years to do it.
VAUSE: You know, there's a feeling of being totally helpless and being powerless. And did you have that when you went to the police after you escaped and you tried to report what had happened and they didn't believe you?
FARRELL: No, unfortunately. And I don't like to paint out the police in London to be anything but good because they're great. And they have changed the ways there are now. I suppose to --
VAUSE: It is just 14 years ago, we should say.
VAUSE: But at the time, though.
FARRELL: Yes, at the time, I ended up with two young guys who -- it was in the evening and I walked in, and I was telling them my story. And they kind of went "OK, let's come and sit in this room and talk about it." And I told him the whole story and they're like, "Well, did he force you in? Did he grab you? Was he physical and forced you in?" And I was like, "No, no, he didn't. I walked in on my own but under false pretenses." So, I was trying to defend myself in the matter but I just -- it was hard as a woman on my own sitting there trying to retell my story. And then, I wasn't believed. I think that was a huge part of why I was silent for so long too. I was embarrassed and ashamed.
VAUSE: And we will just finish up here for you. But look, the point is the things have changed, the police take a different approach now.
VAUSE: But they take a different approach because people have spoken out like you.
VAUSE: So, things are changing. And hopefully, they continue to change especially -- you know, in light of this movie. So, thank you.
FARRELL: Thank you.
VAUSE: And thank you for joining us. I'm John Vause. After the break, Becky Anderson will continue our special coverage from the World Economic Forum. And Kristie Lu Stout in Hong Kong will have all the day's news from around the world. You're watching CNN.