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Special Relationship Tensions At A Critical Time For U.K.; Boris Johnson And Jeremy Hunt Face Off In Live Debate; Trump Praises Labor Secretary Amid Epstein Scandal; Loud Calls for Labor Secretary to Quit Over Epstein Case; Australian Released By North Korea Denies Being A Spy; Sigley's Release by North Korea Draws Warmbier Comparisons. Aired 1-2a ET
Aired July 10, 2019 - 01:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[01:00:00] JOHN VAUSE, CNN INTERNATIONAL ANCHOR: Hello everybody! Thank you for joining us. I'm John Vause, you're watching CNN NEWSROOM. Ahead this hour, he's the Commander in Chief, he holds a grudge, and there still no end to the presidential insults of the British ambassador in Washington who the president now says is a very stupid guy and a pompous fool.
He's now U.S. Secretary of Labor but years ago Alex Acosta was a prosecutor who struck a sweetheart deal with a wealthy well-connected child predator and that deal now under fire. Trump insists a cost of doing a fantastic job.
And round one to the protesters in Hong Kong. But as the clock ticks down to a full takeover by Beijing, this struggle for civil rights and freedom is only just getting started.
The diplomatic blow-up between the U.K. and the U.S. showing no signs of easing and the timing is especially bad for Britain. The country is divided over Brexit it and the Conservatives are in the midst of deciding on a new leader.
Even before the latest diplomatic crisis, the so-called special relationship had taken a beating, but it seems is even worse to come with the U.S. president on the attack over those leaked British memos. CNN's Nic Robertson begins our coverage.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: The fallout continues. Liam Fox, U.K. Trade Secretary on his way to meet Ivanka Trump without embattled British ambassador Kim Darroch. Kim Darroch's leaks cable critical of Trump proving diplomatic dynamite earning a presidential rebuke.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We're not big fans of that man and he's not served the U.K. well.
ROBERTSON: And getting him disinvited from a diplomatic dinner at the White House. UK's former diplomats closing ranks behind Darroch.
CHRISTOPHER MEYER, FORMER U.K. AMBASSADOR TO THE U.S.: It just shows president Trump's sensitivity, his insecurity which Sir Kim himself bore witness to and it is a typical reaction via president when anybody disrespects him as he sees it. And I'm afraid that the consequences are entirely predictable.
ROBERTSON: Two big questions now, Darroch's future as ambassador to D.C. and who leaked is incendiary comments. P.M. Theresa May is standing by her man defending Darroch. But in two weeks, she is gone giving her replacement an opportunity to clean house in D.C. and possibly appoint a more Trump friendly ambassador.
Who dumped Darroch's private thoughts likely has its roots in Brexit. Britain's top tier civil servants, the oil that Greece the government smooth-running finding themselves caught in the cross-currents of rivalries coursing through U.K. politics.
Darroch a former ambassador to the E.U. may be no exception perceived at home as pro-E.U. His exit potentially clearing the way for a pro- Brexit ambassador.
MEYER: You always have to ask yourself the question who benefits. And here there is a possible range of villains who come into the frame. I'm not going to name anybody but it was clearly somebody who's set out deliberately to sabotage Sir Kim's ambassadorship.
ROBERTSON: In the meantime, Trump has flip-flopped again on his handling of Brexit.
TRUMP: I believe the Prime Minister has brought it to a very good point where something will take place in the not-too-distant future. I think she's done a very good job.
ROBERTSON: Replacing recent praise with a Twitter tirade. I told that Theresa May how to do that deal but she went her own foolish way and was unable to get it done, a disaster. I don't know the ambassador but I'm told is a pompous fool.
Friends describe Darroch as a tough man with a cool head who won't be easily panicked. How quickly the diplomatic damage can be patched up depends a lot on Trump and the next British Prime Minister likely Boris Johnson who as a friend of the U.S. President will hope to clean the slate fast. Nic Robertson, CNN Gibraltar.
VAUSE: Meantime, the last three candidates standing in the race to be leader of British Conservative Party and by default, the next British Prime Minister came face to face Tuesday night in the first and only leadership debate.
During a heated moment, Boris Johnson refused to say whether he'd keep Kim Darroch as the UK's ambassador in Washington following the leak of those different cables in which Darroch called the Trump administration inept. Jeremy Hunt for his part attack Johnson for sidestepping the issue.
(BEGIN VIDEO CLIP)
BORIS JOHNSON, LEADERSHIP CANDIDATE, CONSERVATIVE PARTY: It is vital that our civil service is not politicized by ministers leaking what they say.
[01:05:05] UNIDENTIFIED FEMALE: Will he still keep his job --
JOHNSON: Whoever leaked that deserves to be eviscerated.
JEREMY HUNT LEADERSHIP CANDIDATE, CONSERVATIVE PARTY: Boris, just answer the question. Go on, tell us if you'll the ambassador.
JOHNSON: On whether -- on whether --
HUNT: I will keep him until he's due to retire and I think we'd like to know if you would.
JOHNSON: Well, I'm not going to be so presumptuous as to --
UNIDENTIFIED FEMALE: Thank you. OK.
(END VIDEO CLIP)
VAUSE: Journalist Josh Boswell joining us this hour from Los Angeles for more on the leadership debate, the diplomatic spat, and that eternal question, will Britain ever actually leave the European Union or just talk about it until the end of time.
OK, Josh, if there was a moment in this leadership debate which sort of revealed who won, who lost, and why, I'll bet real money it was this moment here. Have a look.
(BEGIN VIDEO CLIP)
HUNT: Being Prime Minister is about telling people what they need to hear not just what they want to hear. And the difference between you and me as you are peddling optimism and I'm saying we can make a tremendous --
HUNT: Boris, why don't you --
VAUSE: You know, it seems Johnson, he's gauged the mood of many not just in the audience there but within the Conservative Party. They don't want to hear how difficult or how complicated something is they just want reassurance. It'll all work out. They're warm and fuzzy, good feelings, and the man who came with the platitudes and no plan was the one who emerged the winner.
JOSH BOSWELL, JOURNALIST: That sounds about right to me. And it's interesting, you look at the response from political pundits and you know and political reporters who were monitoring those debates and reporting on them as they happened, their hot takes from it mostly were that Jeremy Hunt came off best. He had the detail and you know, he had the clearest answers to questions whereas Boris blustered prevaricated.
But I'm not sure that matters for two reasons. Firstly as you say, people want that clear line on Brexit especially and Boris has the clearest line, we're leaving on October 31st. Now, whether the details actually pan out that way or whether it makes sense his position, that's another question entirely, something that the Jeremy Hunt kind of prodded him on there and did land a few blows.
But the other part of this is that as your reporter correctly pointed out, we -- this may not even matter because a lot of conservative members have already voted. They got their ballots last week and quite a lot of them research shows and when it's an election like this will just post their ballot back the same day and have already made their vote.
So this debate may -- although it may have changed people's minds, it may not have changed their votes and Boris is way ahead in the polls.
VAUSE: Absolutely. And so on that issue of Brexit which you mentioned, Hunt he seems cautious. He didn't want to make specific comments about an exit deadline. As you say not so Boris Johnson and here it is.
(BEGIN VIDEO CLIP)
JOHNSON: I think it's absolutely vital that we come out on October the 31st otherwise we will continue to hemorrhage trust not just in the Conservative Party or indeed the Labour Party but in politics generally.
And to make our friends and partners across the channel concentrate and to understand our seriousness, we must simultaneously prepare to come out without a deal.
(END VIDEO CLIP)
VAUSE: So you know, Britain as a whole, the rank-and-file members of the Conservative Party, the only ones who get a vote here because they're voting for party leader, you know, how important though is this difference that Johnson you know, he staked out this territory on Brexit and you for those party members, this seems to be you know, the one big issue which they are united on.
BOSWELL: That's correct. There's 160,000 Conservative Party members. Those are the ones who are voting as to whether Boris Johnson or Jeremy Hunt will be the next prime minister of the U.K. And they care -- their number one issue that they care about is Brexit and is getting Brexit done as soon as possible.
Boris Johnson has the clearest message on that, the hardest line message on that, and in fact, has always been pro-Brexit whereas Jeremy Hunt was previously a remainer. And so this support is overwhelmingly for Boris Johnson and I think we're going to see Boris Johnson elected as prime minister in a couple of weeks' time. VAUSE: And on that diplomatic spat between you know, the U.S.
President Donald Trump, the British Ambassador in Washington, the outgoing British Prime Minister, Johnson wobbled and avoided saying anything which could be seen as you know, support for the Ambassador while you know, Hunt to a very different approach. Here he is.
(BEGIN VIDEO CLIP)
HUNT: Leadership is also about your values and that is about being prepared to do the tough and difficult things, sometimes the things that aren't popular, sometimes things that you have to say to your friends that you rather not say like I said to President Trump today because I think his comments about Theresa May were unacceptable and I don't think he should have made them.
(END VIDEO CLIP)
[01:10:03] VAUSE: (INAUDIBLE) but it seems you know, Hunt was trying for his Love Actually moment. If anyone who knows the movie, that's when Hugh Grant was playing the role of Prime, smacks down an arrogant bullying U.S. president and here's a reminder.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We may be a small country but we're a great one too. The country of Shakespeare, Churchill, the Beatles, Sean Connery, Harry Potter, David Beckham's right foot, David Beckham's left foot, come to that. And a friend who bullies us is no longer a friend. And since bullies only respond to strength, from now onward I will be prepared to be much stronger. And the President should be prepared for that.
(END VIDEO CLIP)
VAUSE: You know, who doesn't love a scene from The Love Actually. OK, Hunt tried to kind of pull it off, didn't quite get there. What is interesting though is this seems to me you know, just you know, as far as Boris Johnson is concerned, you know, this would be a quintessential moment for him giving his persona, his image and all that kind of stuff you know, putting the great --- back in the Great Britain and he you know, he shied right away from it. Why is that?
BOSWELL: Well, there's this thing coming up on the horizon which is a potential no deal Brexit. And once that happens, if it does happen, the U.K. government is going to be scrambling to get a good trade deal or as good a trade deal as they can get with as big a country as they can get and that is America most likely.
You know that's their number one goal is to get a great trade deal announced after Brexit with the USA. And this whole spat with the Ambassador is going to throw a big spanner in those works. And Boris Johnson, you know, thinking OK, I'm going to be Prime Minister. I'm going to have to be negotiating this with Donald Trump. I do not want to be coming out and saying that I support this ambassador criticizing Trump's administration and Trump personally as well. He's having to toe a very fine line here and you know, it's costing
him a little bit. You can see that big applause there from the audience. I think Brits really do identify with that Love Actually scene and they're you know, it made me think about when I -- when I saw the debates.
But Boris Johnson just can't cross that line because he knows that he's got to stay on the right side of Trump for a variety of reasons as well, not just that trade deal but also you know you've got the negotiations with Huawei. Donald Trump wanted to press the advantage but you know, with the position with Huawei and with the deal with Iran.
You know, the U.K. and the rest of Europe wants this deal with Iran to go through and Trump is against it.
VAUSE: Very quickly, you know, Johnson said there'll be an investigation into -- to try find the leaker but what would be the motivation behind leaking these diplomatic cables which was so critical of Donald Trump and his administration?
Well, I think there's two possible culprits here. A foreign state actor which I think isn't less likely but you know, it could be that perhaps Russia or a country like that has managed to get hold of these diplomatic cables through hacking perhaps and then have you know, given them to the mail on Sunday that British newspaper who published them to sow discord.
But I think what's more likely it is that it's a Brexiter, you know pro-Brexit faction who you know, someone who has access to these cables and wants to get rid of a remainer or somebody who's seen as a Europhile ambassador and put in in his place someone who is more pro- Brexit, someone who's going to be really pushing for this U.S.-U.K. trade deal in the event of a no deal Brexit or Brexit that allows us to make deals with the U.S.
VAUSE: You've covered a lot of ground there, Josh. Thanks for being with us. I appreciate it.
BOSWELL: Thank you very much.
VAUSE: And the U.S. President trying to distance himself from child sex offender Jeffrey Epstein while defending a member of his administration caught up in the multi-billionaire's scandal. Labor Secretary Alex Acosta is under pressure to resign over an unprecedented lenient plea deal he stuck with Epstein in 2008 when Acosta was a U.S. attorney in Florida.
CNN's Kaitlan Collins has the latest now from the White House.
TRUMP: He's done a fantastic job.
KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: President Trump coming to his labor Secretary's defense today. TRUMP: I feel very badly actually for Secretary Acosta.
COLLINS: Praising Alex Acosta amid growing calls for him to resign over the role he played as a federal prosecutor 11 years ago in overseeing Jeffrey Epstein's lenient plea deal. A roll Trump downplayed in the Oval Office.
TRUMP: I do hear that there were a lot of people involved in that decision not just him.
COLLINS: Trump making no mention of the alleged victims. And though he once described him as a terrific guy, Trump distance himself from Epstein today.
TRUMP: Well, I knew him like everybody in Palm Beach knew him. I mean, people in Palm Beach knew him. He was a fixture in Palm Beach. I had a falling-out with him a long time ago. I don't think I've spoken to him for 15 years. I wasn't a fan.
COLLINS: His own words tell a different story. In 2002, he told New York magazine "he's a lot of fun to be with. It is even said that he likes beautiful women as much as I do and many of them are on the younger side." Several Democrats are demanding Acosta, step down.
[01:15:11] SEN. CHUCK SCHUMER, (D-NY): If he refuses to resign, President Trump should fire him.
COLLINS: Acosta defended his actions in a series of tweets today, and said he is pleased that the New York prosecutors are moving forward with the case based on new evidence.
TRUMP: Secretary of Labor to say a few words --
COLLINS: People, close to Trump, say his future depends on how loud those calls for him to go, become. The White House has faced questions about his role before, and claimed they were looking into it.
SARAH SANDERS, THEN-WHITE HOUSE PRESS SECRETARY: It's currently under review, because of that, I can't get in to a lot of specifics, but we're certainly looking at it.
COLLINS: But they never offered an update on that review.
UNIDENTIFIED MALE: The United States --
COLLINS: And sources say it was a strategy to buy time until the controversy died down.
Now, the President is defending Alex Acosta but our sources close to him, tell us that that could change, that support, if the coverage over the next day continues to be negative and whether or not he starts to view him as a political liability.
One thing that could be telling of that is next week's cabinet meeting here at the White House, which our source said would be a good indication of whether or not Acosta's standing in the west wing is still good. Kaitlan Collins, CNN, the White House.
VAUSE: Democratic Strategist and Former U.S. District Attorney, Susan Jerich, joins us now from Los Angeles, Susan, thanks for being with us. What -- I just (INAUDIBLE) with, what did you make of the President's answer, you know, in Kaitlin's report, you know, defending Acosta.
So, he even felt bad for him. Yet, didn't have a word to say about the victims, do not feel bad about the young girls who've been sexually abused.
SUSAN JERICH, DEMOCRATIC STRATEGIST: Well, yes, I think that's an excellent point. And I think President with a problem with women, I mean, let's not forget the support he voiced for Judge Roy Moore back in the Alabama special election, and now we have this situation with this labor secretary.
It's a sad commentary on how he views, I think, women, and here, victims of this child predator, who is just a disgusting person by all accounts from everything I've read in the news cycle.
VAUSE: You know, a few hours ago, the Speaker of the House Democrat, Nancy Pelosi, tweeted out. Secretary Acosta must step down as U.S. Attorney. He engaged in an unconscionable agreement with Jeffrey Epstein kept secret from courageous, young victims preventing them from seeking justice. This was known by POTUS when he appointed him to the cabinet.
So, with the growing number of Democrats calling on Acosta to quit or be fired, White House aide Kellyanne Conway hit back with this. Listen to what she said.
(BEGIN VIDEO CLIP)
KELLYANNE CONWAY, COUNSELOR TO THE U.S. PRESIDENT: It's classic her and her Democratic Party to not focus on the perpetrator at hand, and instead, the focus on a member of the Trump administration. They're so obsessed with this President that they immediately go to Alex Acosta rather than Jeffrey Epstein.
Why are you talking about Alex Acosta not Jeffrey Epstein? Jeffrey Epstein is the pig. Jeffrey Epstein is the one raping young girls.
(END VIDEO CLIP)
VAUSE: So, from what is known about this case, so far, the evidence collected, for example, of Epstein's New York apartment, his home, you know, the images of young girls or women who looked young, at least, there are some serious questions about what, you know, happened with this unprecedented sweetheart deal, this plea bargain which was overseen by Alex Acosta at the time.
It seems that that allowed Epstein out to, you know, if you (INAUDIBLE) carry on with this sort of behavior. JERICH: Right. Well, I think, you know, Miss Conway is right, Epstein is a victimizer of children, but Mr. Acosta facilitated that victimization by cutting the sweetheart deal, it's unprecedented, you know. I was both a D.A. and a federal prosecutor who handled, you know, large scale child sex trafficking cases, not unlike this one.
And the idea of, you know, the U.S. attorney being involved at the level of Mr. Acosta was, is very unusual to say the least. The idea that Mr. Acosta was holding private meetings, 70 miles from the U.S. attorney's office, was defense counsel is highly unusual.
The idea that prosecutors would hide the agreement, the sweetheart deal is, as we're referring to it, which it was, from victims who have a right to be advised of every critical step of the process, violating federal law is, you know--
I can't even imagine what the justification might be that Mr. Acosta could offer, where he to be able to offer one or called upon to do so. It's outrageous. Mr. Acosta, in my view, is just as guilty allowing Mr. Epstein to continue victimizing these girls for the last 10 years as he did. That's exactly what this agreement did.
VAUSE: Yes. This, sort of, decision by Acosta or (INAUDIBLE) however you want to call it, not informing the victims is a violation of federal law, you know, a (INAUDIBLE) prosecutor would know better than to do something like that.
[01:20:00] Also, Acosta agreed to a deal that granted immunity to unnamed co-conspirators. Why would he do that?
JERICH: I have no idea. I've never heard of such a thing. That's absurd. And again, these cases are treated very seriously by the Department of Justice. They were when I was a prosecutor, and to my knowledge the other day.
In fact, we have an entire dedicated unit in Washington D.C., main justice called CEOS, The Child Exploitation and Obscenity Section, whose job is to be experts in these cases and fly around the country assisting U.S. attorneys like myself, prosecuting these matters.
So, to answer your question, I have no idea, I've never heard of this, this is completely unusual, and the secrecy under which it was conducted is, you know, raises alarm bells obviously, as do everything about this.
VAUSE: Yes, there are a lot of alarm bells going off right now, I think, you know, five-alarm fire. On the one side of (INAUDIBLE) you know, Democrats are demanding Acosta to resign. On the other side of the Republicans when it comes -- when they're asked about Acosta's fate, there's combination of I don't know, nothing to see here, and not my job. Here they are. Listen to this.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Do you think Secretary Acosta should resign over this Epstein matter, the plea deal that he runs with him? TEXT: I don't know enough about it to say anything.
SEN. JOHN CORNYN (R-TX): I think there's nothing new that we didn't know before he was confirmed by the senate.
SEN. MITCH MCCONNELL (R-KY): As to Secretary Acosta's continued service, he serves at the pleasure of the president, and I'm inclined to defer to the President to make that decision.
(END VIDEO CLIP)
VAUSE: To that last point by Mitch McConnell, unless Acosta resigns, and it's up to the President to ultimately decide Acosta's fate, does that mean that Trump will remain loyal to Acosta for as long as the scandal does not impact Trump's poll numbers?
JERICH: Probably. I mean, Trump seems to be a man, driven by poll numbers. And again, though, my view is, Mr. Trump -- President Trump has an electability issue with women in this country, including young women. And this is going to do nothing to repair that image. And it's just the wrong thing to do to support an agreement like this and a person who was behind it. We could talk for hours about this --
JERICH: -- the proprieties and the questionable illegal and unethical conduct here. And how can we empower a person whose service Labor Secretary, whose giving favors on the one hand to the wealthy and influential like Mr. Epstein.
What's he doing for the, you know, average working men and women in America? Do we think he's being fair to them as he is the wealthy and powerful business -- but, I mean, I doubt it.
VAUSE: Well, there are reports out there that the White House Chief of Staff Mick Mulvaney wants to get rid of Acosta, not because of this scandal, but because he hasn't reversed enough labor laws put in place during the previous --
JERICH: Oh, there you go, OK.
VAUSE: -- administration, so that's what the -- you know, some report stand with the -- you know, the inner workings of this White House. Susan, thanks so much, good to see you, appreciate it.
JERICH: Thank you.
VAUSE: Well, freed from North Korea and insisting he was not a spy, but that allegation against an Australian university student may have been what spared him the fate similar to another student, Otto Warmbier, will explain in a moment.
Plus, she is the sister of the Saudi Crown Prince, accused of ordering an assault on a plumber in her Paris home, as this trial gets underway, she doesn't have to be there. We will tell you what reportedly prompted the attack. (COMMERCIAL BREAK)
[01:25:00] (COMMERCIAL BREAK)
VAUSE: An Australian student held by North Korea is a free man and insisting he's not a spy. Alek Sigley was attending Kim Il Sung University when he was accused of spreading "anti-government sentiment." CNN's Brian Todd has more on this case and how it compares to the fate of U.S. college student, Otto Warmbier.
BRIAN TODD, CNN CORRESPONDENT: Alek Sigley was in the grip of Kim Jong-un's regime, detained for about a week, then deported, and accused of being a spy. Now, the 29-year-old Australian student denies the accusation, tweeting that the charge is "pretty obviously false."
GREG SCARLATOIU, COMMITTEE FOR HUMAN RIGHTS IN NORTH KOREA: Alek Sigley is very lucky to have come out unharmed and alive.
TODD: Sigley had been a student at Pyongyang's Kim Il Sung University, studying literature. He ran a tour company in Pyongyang. He was a voracious blogger, posting pictures of his experience seeing sites and visiting restaurants in North Korea. And he wrote six columns about food and fashion for the publication N.K. News which the regime cited.
Alek Sigley was spared the final outcome of Otto Warmbier, the American student convicted of stealing a propaganda sign from a hotel in Pyongyang. Warmbier was put on trial, detained for a year and a half and ended up in a vegetative state.
SCARLATOIU: Of course, the last thing, perhaps, that the regime wants under current circumstances is another tragedy on par with what happened to Otto Warmbier. Another Otto Warmbier case could deal a deadly blow to the regime's attempts to sanitize its own image in the eyes of the international public opinion.
TODD: President Trump has said Kim Jong-un told him he felt very bad about the Warmbier case.
TRUMP: He tells me that he didn't know about it and I will take him at his word.
TODD: Another possible difference between the Warmbier and Sigley cases, experts say, Sigley's spying charge is actually less serious in the eyes of Kim's regime than what Warmbier was accused of doing.
SCARLATOIU: Otto was accused of having committed the ultimate crime and affront to the very honor and dignity of the supreme (INAUDIBLE) leader he attempted to take away, to steal a poster, allegedly, inscribed with the words of the great leader.
TODD: That's worse than spying?
SCARLATOIU: Absolutely. That is worse than spying.
TODD: Warmbier's parents have kept this case in the headlined by trying to collect on a $500 million-dollar judgment against North Korea for their son's death, their target, North Korea's second largest ship, the Wise Honest, now in U.S. custody on allegations of evading sanctions.
The Warmbiers have filed a claim on the vessel. Analysts say it's possible the Wise Honest could be awarded to the Warmbiers than sold. But they say it would only fetch a fraction of that $500 million. Will Kim Jong-un ever pay a prize that would really hurt for Otto Warmbier's death?
ELIZABETH ROSENBERG, FORMER U.S. TREASURY DEPARTMENT SANCTIONS OFFICIAL: It's hard to see how there will be any major financial payout that they would be compelled to pay in the future. I think the most likely scenario that will occur is North Korea's price, the price that will be paid will be reputational.
TODD: Analysts say that by filing this claim on the cargo ship, whether they win any money or not, what the Warmbiers could also be after here, is to send a message, a message to people like Alek Sigley, a message to people like their own son, that whatever romantic ideas they have about visiting North Korea, whatever diplomatic overtures are going on right now, that this regime is still very dangerous to deal with. Brian Todd, CNN, Washington.
VAUSE: Well, promises made, promises broken, how Beijing slowly reneging on a long list of commitments made in the lead after the handover of Hong Kong, and how that slow erosion of civil rights has led to this latest massive protest.
[01:31:59] VAUSE: Welcome back everybody. You're watching CNN NEWSROOM. Thank you for staying with us.
I'm John Vause with the headlines this hour.
British Foreign Secretary Jeremy Hunt says the U.S. President Donald Trump is disrespectful and wrong after Mr. Trump called the British ambassador Kim Darroch wacky and very stupid. The tit-for-tat started over the weekend when comments were leaked that Darroch described President Trump as inept ad incompetent, among a lot of other things.
U.S. Labor Secretary Alex Acosta defending a 2008 plea deal which he cut with the multi-millionaire and child sex offender Jeffrey Epstein even as Acosta faces growing calls to resign he praised New York prosecutors for moving ahead with charges against Epstein who's accused now of running a sex trafficking ring involving underage girls.
An Australian student briefly detained by North Korea has tweeted he's obviously not a spy. Alex Sigley was freed by the north to say he was studying at Kim Il-sung University. (INAUDIBLE) are two operations with North Korean state media being with supporters for spreading anti-government sentiment.
When Britain handed Hong Kong back to China in 1997, it was a moment of celebration and pride for Beijing. Britain seized Hong Kong from China during the Opium Wars where their colonial rule was extended for 99 years when Beijing leased the (INAUDIBLE) to the British. And under British rule Hong Kong developed into a global financial center with an independent court, civil liberties, the rule of law, and aspirations for democracy.
(BEGIN VIDEO CLIP)
CHRIS PATTEN, FORMER GOVERNOR OF HONG KONG: Our own nations contribution here was to provide the scaffolding that enabled the people of Hong Kong to ascend. The rule of law clean and light handed government, the values of a free society, the beginnings of representative government and democratic accountability.
(END VIDEO CLIP)
VAUSE: On that night, 22 years ago, when the Union Jack was lowered and the soldiers of the People's Liberation Army came marching in, many were fearful that Beijing will not keep its promise of one country, two systems. In other words Hong Kong would be another China but still it would be Hong Kong, a promise guaranteed for 50 years in Article 5 of the basic law of the city's mini-constitution.
The handover deal between Britain and China went to great lengths to detail where Beijing's authority ended and Hong Kong's began. Foreign affairs, national defense -- issues for the mainland. But in recent years Hong Kong's control over its own affairs especially when it comes to direct representation, as well as law, order, and justice are slowly being eroded to the point now that millions of protestors have taken to the streets to say enough.
But then the come has time to make a stand because with 2047 fast approaching there is a growing chance time is running out.
[01:04:59] China political commentator and columnist Frank Ching is with us now from Hong Kong. Frankie -- thanks for taking the time for coming in. Appreciate it.
Ok. So among the big --
FRANK CHING, CHINA POLITICAL COMMENTATOR: Hi, I'm here.
VAUSE: Oh, is Frank ok. Have you got me? Frank can you hear is ok, no.
CHING: No. No. You're not coming through. Frank apparently can't hear us right now. So we're going to try to get these issues worked out because we will get back to Frank in just a moment because this is an important story about where Hong Kong will actually be heading hopefully, maybe we will see in the coming years as this, you know, 2047 deadline approaches.
In the meantime we will move on. We'll move back because Frank can actually hear us. I'm glad you got us Frank. Glad to have you back.
CHING: Thank you.
VAUSE: Ok. So when it comes to this issue of backsliding, when it comes to this issue of erosion of Hong Kong's, you know, autonomy here. It seems that one of the biggest issues that has happened is the question of, you know, self-determination, direct representation.
And it seems that you know this has been sort of indefinitely delayed if not completely broken as a promise. And the walking, talking, breathing symbol of all that is Carrie Lam, the current chief executive.
You know, by now the people of Hong Kong should be able to choose their own leaders but Carrie Lam was chosen from a list of candidates hand picked and approved first by Beijing.
CHING: Yes. Well, I think China will have a problem with the word self-determination, because self-determination will include the possibility of deciding to be independent and that is a no-no where China is concerned.
As far as China is concerned Hong Kong is part of China and self- determination would only go as far as say choosing your own local leaders but not in terms of determining whether Hong Kong is part of China or. So there is a difference.
But I think that one country, two systems has changed a great deal over the last 22 years. In 1997 when it started, one country, two systems was essentially two systems. Hong Kong was different from China.
Now it is one country Hong Kong is part of China and Hong Kong is under the direct rule of China. Autonomy is much less emphasized than previously.
VAUSE: And this is where, you know, we are seeing the changes. And this is where the concern is growing among the eight million residents of Hong Kong because they were promised that there would be two systems on issues like the freedom of the press. It was guaranteed in the handover. But newspapers are reporting that, you know, that Beijing is sort of leaning on companies to withdraw their advertising if that newspaper is critical of the communist rule on the main land. Recently the "Financial Times" editor was expelled.
So how much have the screws have been tightened on reporters in recent years.
CHING: Oh, I think the tightening of press control has been very obvious. All you have to do is buy any newspaper in a newsstand and leaf through it and look at the ads in it. Any newspaper with no ads from Chinese organizations like the Bank of China and so forth you can -- you will know that this is not a paper that the Chinese government likes.
On the other hand papers that are full of ads from Chinese companies will be papers that the Chinese government favors. So China by exercising its economic power is able to a large extent to influence the media.
And this is something that is very difficult to fight against. This is not direct control of the press but it is putting pressure on the owner of the newspapers. And the owners on their part would then put pressure on the reporters.
VAUSE: And then there's also the judiciary. It's been a very proud institution in Hong Kong, the independence, you know, the judges in the court system but, you know, back in 2014 Beijing made it very clear that, you know, judges must be patriots, love their country.
And that's where we get to this extradition law which seems to be the trigger -- you know, this is where you see (ph) Hong Kong residents sent to the mainland for trial. So why is it that a one law caused such widespread outrage?
CHING: Well I think that judges being patriots should not be a problem. I mean in the United States would any judge saying I'm not a patriot. I think it is the result of being a patriot means. Being a patriot, as a judge should means doing our job properly, being independent, not being on the side of the government or being on anybody side.
And as far as this one law is concerned, the extradition law, I think to many people this was the last straw. They have seen the Hong Kong government taking China's side more and more. And they have seen Hong Kong being changed over recent years so that Hong Kong has become almost unrecognizable and -- sorry go ahead. [01:40:01] VAUSE: Oh no. I just -- I didn't mean to interrupt but I just was about to say, you know, your definition of patriot and my definition is very different than Beijing's definition of patriot.
I just want to pick up on this because in the early days after 1997 Beijing had this almost hands-off approach. And it seems that has changed significantly with the rise of Xi Jinping. He's now the most powerful ruler in communist China since Mao Zedong.
Ultimately what do you think his plans are for Hong Kong?
CHING: Oh, I think ultimately the plan is that Hong Kong will be integrated into the mainland system. But we don't really know when that will happen. The agreement with Britain was that once country, two systems would continue for at least 50 years, that is until 2047.
But it doesn't mean that it will have to end that year. After that year, Britain will have no role but it will be up to China to decide whether to continue one country, two systems or not. And if it is to continue, what will it look like at that time?
But what Xi Jinping has been saying about China by the middle of the century makes it look unlikely that he will want Hong Kong to remain separate for long.
Let me just add one point --
CHING: Xi Jinping has said that the Hong Kong model, one country, two systems will be applied to Taiwan. He very badly wants to reunite Taiwan with the mainland. Taiwan has been clear that it has no interest given the way China is treating Hong Kong. So this is the incentive for China to treat Hong Kong a little better.
VAUSE: Well, we'll see. Frank -- thank you so much. Really appreciate you being with us. It was great to have you.
CHING: Thank you.
VAUSE: Thank you -- sir.
VAUSE: Well, the sister of the Saudi Crown Prince being tried in absentia in Paris, accused of ordering a bodyguard to beat up a worker who took photographs inside her luxury apartment back in 2016. We have details now from Melissa Bell.
MELISSA BELL, CNN PARIS CORRESPONDENT: Hassa bint Salman herself has not set foot in France since an arrest warrant was issued against her in 2017. Today the allegations against her were finally tested in a court of law.
The judge was faced with two very different versions of what happened on that day back in 2016. On one hand, a plumber who alleges that after he tried to take photographs of a room on which he was due to do work his phone was captured by the princess' staff. He was tied up and beaten, threatened with both rape and death and made to kiss case the princess' feet. It was only, he says. after several hours that he was allowed to leave.
On the other hand, the princess through her lawyers and her entourage vehemently deny that version of events saying that far from that they've that they've simply seized the footage captured by a workman intent on capturing pictures of the princess. They say he managed to get some footage of her, some video of her wearing clothes that allowed her figure to be seen. That was why they say the photo was taken and destroyed.
The judge today in the case regretted that saying that it was a shame since that would have finally cast light on precisely whose version of events should be believed. It is now up to the judge to decide in the princess' absence whether indeed her entourage, that they overstepped the mark, or in fact whether they were simply protecting themselves from a man unscrupulous enough to seeking to gain footage from inside her residence.
Melissa Bell, CNN -- Paris.
VAUSE: Still to come, raising the economic red flags, warnings of recession and the impact on the U.S.-U.K. diplomatic spat on Britain's much hoped for free trade deal.
All that and a whole lot more.
You are watching CNN NEWSROOM.
[01:43:45] (COMMERCIAL BREAK)
VAUSE: The diplomatic spat between the U.K. and the U.S. /raising some concerns about how this free trade agreement that London wants after Brexit with the U.S. will actually play out. Along with that there are warnings about the U.S. economy, a key recession tracker has hit the highest level since the global final crisis a decade ago.
The Federal Reserve probability model touched the 33.9 percent in June, the most you had across the 30 percent threshold before every recession since 1960. (INAUDIBLE) also warning about the impact of Donald Trump's trade war with China.
Ryan Patel, global business executive who joins us now -- Big Bear in California. You have to love it. Ok.
We will get to the bigger picture of the global economy in a moment but first, you know, last December the U.S. ambassador in London, he tweeted out this, "I cannot over-emphasize the willingness of President Trump and the American people to make a strong free trade agreement between our two countries. It will be the standard bearer for all future trade agreements."
And you know, we talk about another tweet on valentine's day, "Roses are red," same ambassador by the way, "Roses are red but they soon fade away for romance that lasts, sign a new FTA."
Ok. So in line of the new diplomatic spat between the President, the ambassador and the outgoing British prime minister, can we now say "Roses are red, now Trump is really mad. Sorry Great Britain your FTA will be really bad."
RYAN PATEL, CNN CONTRIBUTOR: Leave it up to you to get those puns, I tell you.
VAUSE: Yes. But, in other words, you know, the man, you know, has been called "Trumpelthinskin (ph) is going to punish the U.K. because of the criticism of its administration.
And to answer your question, absolutely. He has shown that and that is where you saw over the weekend, U.K. officials all got together and they are going to have to control this rhetoric through a funnel. I don't think they wanted this spat and as you mentioned what happened from the December (ph) tweet is the U.K. wants to have a trade deal with the U.S. It gives them leverage. And they know that they need -- I mean, well right now, the U.K. needs the U.S. a little more further to get a deal done quicker. The U.S. now to your point when Trump has these antics or politics on the side he uses his leverage.
He will use this as a leverage. I mean they iced ambassador today from the Qatar visit and dinner so trust me there will be more coming.
VAUSE: Ok. So let's get more serious -- I guess that is serious but, you know, I guess it's more serious the way he measures for the rest of the world.
As far as the U.S. economy is concerned for the past 50 years what they call an inverted treasury yield curve which lasts for more than a quarter has been the single most reliable indicator that a recession is coming. And here it is.
What it means is that a dead marker has been sort of turned upside down, usually long term U.S. government bonds offer a high yield than short-term ones because buyers command high interest rates in return for locking their money up for a period of time.
Only now that's inverted. So explain why that all means that a recession is likely.
PATEL: Well it means it' more likely that a recession is going to hit in the next 12 months. You've seen those indicators over the past 50 years only once there's been a false negative per se and it's been five or six it always hits that piece.
What this actually means is that investors are looking -- using the longer-terms or looking for a longer return. But in this case as we sit today, investors are fearful that the outlook it's really gloomy and they're going to take their money and not have that risk and put it in the short term which shows as inverted yield curve which is a strong indicator.
It doesn't mean that recession will happen tomorrow but if you've seen the last five or six recession curves the yield curve when it stays inverted like this the average is like 311 days.
So to your point, could it occur faster? Sure. Are there other ways that could kind of put a band-aid on it? It can happen as well. This is data cannot ignore. People need to be paying attention to this because these are facts.
VAUSE: Yes. And speaking of facts, Doctor Doom is back with facts warning of a global recession.
Nouriel Roubini, the economist who pricked the housing bubble, he's warning the Trump administration's trade war with China could actually be the tipping point which sends the world into a recession. This is what he said.
(BEGIN VIDEO CLIP) NOURIEL ROUBINI, ECONOMIST: We have now a global rivalry between U.S. and China about who is going to be controlling the industries of the future -- AI, automation, 5G and all the other bigger industries better than (INAUDIBLE) in a cold war between U.S. and China.
[01:50:03] And it's not going to be easy to find a solution to this problem and the consequences of this trade and fact war -- and cold war, the beginning of the globalization, balkanization and decoupling of the global economy. That's to redo the entire global tech supply chain.
(END VIDEO CLIP)
VAUSE: And this is a warning which has been acted (ph) by JP Morgan Asset Management global market strategist Carey Craig (ph) who said the difference between the next recession and the ones before it would be the politics behind it, quote, "If there is anything to worry about, it's that the next recession will probably be caused by a political error, so moving on the trade war when it's detrimental to growth."
So even the central banks, you know, start taking interest rates, for example -- it seems unlikely that that's going to avoid the inevitable here.
PATEL: Well, in those scenarios the Central Banks are just cutting a rate which most people are expecting with what the theorists are saying is that if there's like extreme trade war that means that supply change, investment changes away the flows of how businesses control capital. All changes.
So it doesn't matter what the Fed does because the whole globalization changes. Now again, that's an extreme piece and were hoping that we don't get to that point. But we are in this whole trade war, it changes the way the economy works right now as of today, we haven't seen anything like that in the past recession.
VAUSE: Very quickly, the reality for a first term U.S. president hoping for a second term -- it's all about the economy. The economy is bad but the (INAUDIBLE) is getting better. If the economy is good, reelection is a certainty.
Coming into 2020 though if the perception is of darker day ahead, Donald Trump is looking to be a one term wonder?
PATEL: Well, Donald Trump has put himself as the economy is his strongest indicator. If the election was today he would be hooting his horn and saying that I can give you another four more years.
But in the next 12 months -- there's a lot of times until 2020 and I think for him it'd be really clear to be able to get maybe at least a trade deal with China -- not to get int trade wars with other countries like India or the U.K. But really at this point, if there is this downturn of the yield curve continues to go down where money is coming out and market has these bad months -- that will determine what goes into 2020 election because I think people will pay attention to that versus just the rhetoric.
VAUSE: Ok. Yes, there's been a lot of talk, a lot of cheerleading for the economy from the President. Facts are a different matter.
Ryan -- thanks so much. Good to see you mate.
Coming up next, the booming film industry taking a booming hit. Why production stopped. The state of Georgia asking Hollywood to rethink plans for a boycott.
VAUSE: When the creators of "The Walking Dead" first got a location for the TV show producers chose the town of Senoia because it looked completely dead. It looked that way pretty much because it was. Now almost nine years later "The Walking Dead" brought the town back to life. The film industry has been a huge money spinner for Georgia.
In 2016 more movies were shot in the Hollywood of the South in California. But now several big Hollywood production companies and some big name stars are boycotting the state because of its controversial abortion laws.
CNN's Robyn Curnow reports now on what this means for the communities which are now dependent upon the entertainment industry.
MATT SCHEIB, STUNTMAN AND OWNER, ATLANTA JUDO MIDTOWN: Ducking this way, out, and down.
[01:54:50] ROBYN CURNOW, CNN CORRESPONDENT: A body slam, throws, and a fake jab, this group of Atlanta-based stunt professionals are perfecting film fight scenes. They and thousands of others who work in Georgia's film industry have also though found themselves in the middle of a political fight between Hollywood and the state's lawmakers.
When Georgia's Republican governor signed one of the strictest abortion laws in the nation, major film and television companies threatened to end productions in the state if the law goes into effect next year.
Stuntman Matt Scheib, has worked on movies like "Avengers: Endgame". He and many others in the industry here are worried about the unintended consequences of a boycott of Georgia's thriving film industry.
SCHEIB: So, most people are transplants from other places. So, if work goes away, that creates a real issue.
Yes, keep people working, keep the jobs here, don't yank that rug out of all these people here. CURNOW: Celebrities like Spike Lee and Alyssa Milano are calling for a boycott to defend women's rights. It's a call that many women in the film industry agree with in principle, but disagree with in practice.
KALENNA BOLA, HELPS COMPANIES FIND BEST LOCATIONS TO FILM: Any major production that's come to Georgia, you name it, it's been shot here on Broad Street.
CURNOW: Kalenna Bola, helps companies find the best locations to film. She shows us that Atlanta's City Center has been used as a backdrop for everything from bank heist thrillers to the zombie apocalypse. Like this street seen in "The Walking Dead".
"Fight, but in a different way" is her message to Hollywood.
BOLA: Put money behind interest groups that support left-leaning policies. Instead of boycotting, money talks at the end of the day, right? And I think that people who are conservative look at the bottom line a lot more.
CURNOW: No matter where you stand on the politics of this, there is no denying that money is also at the heart of this issue. That's because here in Georgia, the state offers massive tax breaks to production companies and film studios.
And then in return, Hollywood invests heavily in the local economy. Investing billions and billions of dollars.
This is one of these facilities where you can see this massive investment. This is Black Hole Studios where the most recent "Godzilla" movie was filmed.
MICHAEL MOSHER, MAKEUP ARTIST FOR FILM AND T.V. SHOWS: I have really mixed feelings because boycotts can work.
CURNOW: Michael Mosher does special effects makeup like this for the T.V. show, "Legacies".
MOSHER: Laws like this directly affect me because it may put my business out of state. But I always have supported women's right to choose.
CURNOW: Men and women across the political spectrum urging the Hollywood power brokers to make a statement without hurting their jobs.
Robyn Curnow, CNN -- Atlanta.
VAUSE: Thank you for watching CNN NEWSROOM.
I'm John Vause.
Please stay with us. The news continues with Paula Newton after a very short break.
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