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First Move with Julia Chatterley

NATO Chief Speaks After Meeting Of NATO-Russia Council; UK PM Apologizes Over Lockdown Garden Party; Djokovic: Broke Isolation Rules After Positive COVID Test; Chinese Port City Begins New Round Of COVID Testing; U.S. Diplomat Speaks After Meeting Of NATO-Russia Council; U.S. Judge Rejects Prince Andrew's Bid To Dismiss Sex Abuse Accuser's Lawsuit. Aired 9-10a ET

Aired January 12, 2022 - 09:00   ET



JULIA CHATTERLEY, CNN ANCHOR: Jens Stoltenberg speaking a lively, punchy press conference, I would go as far as calling it that, reaffirming the

core principles of NATO and their open-door policy saying that they will stand by the alliance. Also pulling no punches as far as Russia is

concerned too at certain points saying point blank over arms can control Russia violated the INF Treaty. That they have a track record of

intimidation on their neighbors. That Russia is the aggressor as far as Ukraine is concerned. At the same time, they said while there are -- is a

huge bridge to try and divide here, NATO's allies are willing to do it.

Much to discuss. CNN's international diplomatic editor Nic Robertson is in Brussels for us.

Nic, what do you make of that press conference?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yeah. This sounds like a rerun of the meeting in Geneva, doesn't it, between U.S. and Russian

officials. That one lasted seven hours. This one lasted about four hours.

And what Stoltenberg said was that he told the Russians very clearly that what Russia is demanding from their security guarantees as they call them

that Ukraine cannot become a member of NATO, that is a nonstarter, that they should roll back NATO's presence in the east of Europe. That is a

nonstarter. Where, again, in this -- it was again typical of what we heard from the U.S. delegation, their meeting with the Russians on Monday in

Geneva that they offered the possibility of discussing arms controls agreement.

As you say, the INF Treaty abrogated as Stoltenberg said by Russia is fallen by the wayside in 2019. So, an offer here potentially to get it back

on track, the potential to talk about military training exercises, troop numbers involved, the transparency that that would bring if there was an


But, you know, without saying explicitly, Stoltenberg essentially implying that Russia was not willing to even count on its discussion on that. When

we heard the Russians after the meeting on Monday in Geneva, and saying no, we're not going to talk about any kind of compromises and arms limitations

agreement because you're not addressing our central agreements.

Stoltenberg saying, and I think this was important, there's a possibility of more talks, the importance of having these talks, that NATO will wish to

continue talking. But a sense as well, and I think we got this a little bit on Monday as well, that coming from the Russian side -- and we haven't

heard them speak about it yet so we have Stoltenberg's impression here -- that this notion that there could be more rounds of discussion isn't

something that these particular Russian negotiators, the deputy foreign minister, deputy defense minister can sign off on. This is something that's

going to have to go back to Moscow very likely for President Putin to make a call on.


CHATTERLEY: Yeah. And he was specific to reiterate that point as well, Nic. And I think that's a really important point because he was asked that again

in the Q&A, are they not willing to engage on future discussions or at least lock in dates, and he said that look, you have to ask them.

Nic Robertson, great to get your insights.

Let's go there and get the view then from Russia. CNN's Matthew Chance is following all this from Moscow.

Matthew, great to have you with us.

And as Nic said there, the guys in the room there were not the decision makers over any of these negotiations, including signing off on future


MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yeah. I think that's true. I mean, and one of the problems facing, you know, people,

diplomats who are engaged in this negotiation, from the western side, from the U.S. side, from the NATO side.

Is that, you know, the people they said are opposite are on none of these occasions, the people who are going to be making the final decision. I mean

that, that decision the way Russia operates will rest with one man, Vladimir Putin, the Russian president. And he's kept his cards, as usual,

very close to his chest.

So, in other words, you know, this core -- this core demands that the Russians have put on the table saying that they want you know a guarantee

that NATO wouldn't expand eastwards anymore. And the weapons will be drawn back from NATO countries that joined the alliance after the fall of the

Soviet Union.

You know, they're saying that these are not really negotiable. They're not saying there is no ultimatum, but if you don't give us what we want, you

know it could have profound consequences for European security.

They're deliberately ambiguous as well when it comes to what will happen with Ukraine. On the one hand, Russian negotiators are saying, look, you

know we have no intention or no plan to invade Ukraine or to annex anymore territory. At the same time, there were tens of thousands of troops that

have gathered near the border of Ukraine. And you know, and that is obviously, you know, creating threatening facts on the ground. So, there is

sort of deliberate ambiguity that the Russians are using to try and get what they want.

And so, we won't find out. And the Russians are spot to say actually, they are not going to make any pronouncements of whether they think this process

has been successful or not. Until after all these rounds of negotiations are through. This is NATO round now. They're moving to Vienna tomorrow,

where they will be discussing security with the Organization for Security and Cooperation in Europe, the main European security agency.

And then we just simply don't know what -- what the next steps of the Kremlin is going to be. Are they going to agree to more talks? And perhaps

try and see what compromises they can get from the United States and from the west, issues like missile defense there, missile defense or missile

deployments in Europe.

That is a range of other issues as well, which you know the secretary general of NATO there spelled out. That NATO allies were prepared to

discuss or whether the Russians are going to be hardline about this and say, no, you give us what we want or, you know, that's it. You know we're

going to impose these military technical solutions as they call them. Which nobody really knows what that means exactly. And so, there is ambiguity

here and there is confusion about what Russia's next steps are going to be.

CHATTERLEY: Yes. As Jen Stoltenberg said there, progress requires de- escalation, and the next steps are hard to judge. Very hard to judge at this stage. And I think Russia likes it that way.

Matthew, stay right there. I just want to bring Sam Kiley because he is in Kyiv for us too.

Sam, I know you are listening to this as well. And I think as far as Russia is concerned, however intimidating, the prospective Ukraine and NATO is,

nothing is more intimidating than having 100,000 troops on your border. Do you think those listening from Kyiv have anything to be comforted by -- in

listening to that press conference there?

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: I think the comfort will definitely come in the very straight line that NATO has drawn across these

issues offering -- as we've already heard from Nic and Matthew, perhaps some opportunity for Russia to continue negotiations with NATO, which from

the Russian perspective might be seen as some kind of success anyway, since they are getting issues onto the agenda, that NATO have flatly rejected.

Namely, rolling back the expansion east of NATO back to pre-1997 levels.

But here in Ukraine, they are dealing with an occupation. They have an illegal annexation of Crimea by Russia into the motherland of Russia under

Russian law, illegal under international law. They also have tens of thousands of rebels backed by Russia, with Russian troops alongside them

inside Ukrainian territory. And as Stoltenberg was saying there, 100,000 at least gathered around the eastern (inaudible) of the country. And they are

-- the Russian forces are now poised in a sort of encirclement. They have the potential to encircle.

Remember also, the Crimea is pretty much due south of where I am standing here in Kyiv. We're not talking about the idea that Russian troops are

miles away on a far-flung corner of the country. There is a sense here that the Russians might well invade in perhaps using some kind of minor pretext

an event in the dumbass.


Ukraine in saying that they would fight to their sort of very last of their blood and so on. But at the same time, they are reassured by this NATO

statements. And also, they are getting further physical reassurance with additional training and weapons that are being delivered to Ukraine. Julia?

CHATTERLEY: Yeah. Nic, come in here. Because as some was saying there, I mean the reason why we haven't had discussions in this forum for what, over

two years now since July 2019, was as a result of the annexation of Crimea. There's still and has been violence over the last eight years, and nothing

on that fact really has changed. And yet, here we are trying to hold diplomatic talks and push forward. What next?

ROBERTSON: Yes. This Russia-NATO forum which was always designed to sort of have the two countries be able to discuss their differences. Three meetings

in 2016, three in 2017, two in 2018, two in 2019. And then completely ran out of track. It really does highlight the way that the relationship and

the fact that the representations Russia here and Brussels and NATO, the NATO in Moscow have closed as well, it really does just underscore how much

trust has run down between -- between NATO and Russia over the issue of the annexation of Crimea and Russia's influence in the dumbass in the east of


You just get a sense of these talks at the moment that both sides are sticking to their lines. I wouldn't say that they're talking past each

other. They're definitely talking to each other and in the context of the NATO-Russia Council as we are saying here, that hasn't really met for over

2.5 years. That is -- that is something in of itself.

But as Matthew was pointing out, it really, the constructive ambiguity that Russia creates around this. And the fact that all decisions lie with

President Putin, this is all in a way just a holding pattern. So, perhaps President Putin and this will be the concern of some NATO members.

President Putin can really sort of scope out where the soft spots are in this sort of NATO alliance, particularly with relation to the United

States, particularly that Russia has chosen to negotiate directly with the United States as well.

And if you are in Warsaw, in Poland or Vilnius in Lithuania, you will be worried potentially down the road that the United States through some piece

of diplomacy, remember President Biden on the 30th of December, after his second phone call with President Putin, said that if Russia does de-

escalate, then these talks can make progress.

Where is the compromise that this progress can be made? That Putin can take away as positive and can actually not worry countries like Poland who

depend on this robust NATO presence and Lithuania that depends on it as well, for their comfort and wellbeing as if you will fully paid-up members

of NATO.

Really, we're at such a stage in this, that the open ground between both sides remains just as opened and as strong as just as many landmines in

terms of points of conflict and contention.

CHATTERLEY: Yeah. It was interesting because Jens was asked that, of course, as well.

Alex Marquardt asked him about whether or not and to what degree NATO allies are all on the same page or thinking different things. And he

responded at least as far as Ukraine is concerned, we are all on the same page. And Russia doesn't get the say.

But Matthew gets the final word here. Matthew, just comment to Nic's point there. The key question here is how far is Russia prepared to go? We don't

know the answer, but I'm asking you.

CHANCE: Well, I mean, speculation, isn't it? But I mean, look -- I mean, in order to get these negotiations in the first place, Russia had to present a

credible threat. It represents one, of course. It's invaded Ukraine in the past. And it has a willingness, I think, in principle to do it again. And

it's backed that up by the presence of, I think, somewhere in the range of 120,000 troops that are on the border.

And you know, there are couple of things I want to say, is that look, if one of the big foreign policy objectives of Russia over the course of the

several years or many years I have been watching this country is to get a seat at the top table diplomatically, to sit face-to-face with the United

States, its old superpower rival to be you know affirmed as you know a major player on the international stage.

And that already happening. Not just the bilateral summits, the presidential summits, but you know the fact that NATO is sort of bending

over backwards as well to talk to the Russians? So that's already a diplomatic success.

That also it looks like they're going to get some compromises from the United States, from the NATO western military alliance, from others as

well, things like you know a new treaty about missiles, things like more transparency when it comes to NATO exercises. They might not get their core

demands but they are going to get a bunch of other stuff.

And so, one strategy looks like it could be, they're shaking the diplomatic tree. See what compromises fallout. Pick them up, declare a victory. That's

what could be happening.


The alternative is they are genuinely a hardline about these demands that they've put out there about no further NATO expansion. And if they don't

get that, they're going to take military action. I mean, and the question of which way will they go is one that we can only speculate on at the


CHATTERLEY: Yeah, or somewhere in between. Matthew Chance in Moscow. Nic Robertson in Brussels. And Sam Kiley, live for us there in Kyiv, Ukraine.

Guys, thank you so much for that.

I want to bring in a former U.S. ambassador to NATO, Kurt Volker, who was also the U.S. special representative for Ukraine negotiations from 2017 to

2019. He is currently a distinguished fellow at the Center for European Policy Analysis. And he joins us now from Washington, D.C.

Ambassador, fantastic to have you with us. Your thoughts, firstly, on this press conference and what you think came from this meeting?

KURT VOLKER, FORMER U.S. AMBASSADOR TO NATO: Well, I think first off, this was a necessary step. It's important that we had the NATO-Russia meeting,

so it's not just a U.S.-Russia discussion. But we bring the allies in as well.

Secondly, I think it was completely predictable. Russia had already put out these excessive demands in advance, things that it knew in advance, NATO

could not agree to. And so, what they got from NATO, what we heard from Secretary General Stoltenberg was exactly that. That what Russia is asking

for is not something that NATO can do now. And it does go back now to President Putin to decide, is he willing to risk the use of military force

again in Ukraine and see what NATO may or may not do.

At this stage, sadly, I think it is more likely that he will use military force than not. I don't believe that NATO is ready to defend Ukraine

militarily, which is what President Putin is probing. And as a result, I think he will launch new military action against Ukraine, take something

and try to re-establish a different order in Europe than what we've seen to this point.

CHATTERLEY: I mean, that's a bold statement. What's the probability of that? If you're talking about --

VOLKER: Yes, you can't put a number on this. You can't say, oh, it's 70 percent or 40 percent or whatever. But you just have to look at what's

happened. Putin has put out a massive military force surrounding Ukraine, three sides, from the water, in the Black Sea, from the east, from the

north. He has put out demands to both the U.S. and NATO that he knew would be rejected.

And it appears that he wants to use that rejection as a pretext for taking a further step and what those demands included was specific language that

would overturn the security order in Europe. We've seen since 1975 in the Helsinki Accords. These are the right of states to choose their own

alliances. The commitment not to threat or use force, the commitment not to change borders by force.

He is actually trying to take it back to Yalta, where you divide your (audio gap) between a Russian sphere of influence and a western sphere of

influence. And he has laid down the marker that he's going to create that Russian sphere of influence with military force and back it up with

military force, challenge the west to do anything about it.

CHATTERLEY: Ambassador, President Putin has proved to be a master of brinkmanship in the past as well. And you said coming into this, ask not

what Putin is asking for, but why. And it feels like he is testing to see whether NATO and its allies have the will to stop him. Are you saying

coming out of this meeting and admittedly it's early days, they're not showing enough commitment that they're willing to stop him, in whatever


VOLKER: Well, I think there is a difference here that we have to respect. NATO does mean collective defense and an iron clad commitment to defend

members. And Ukraine is not a member. So, allies will want to maintain that distinction. What I think we have done however is not allow enough

ambiguity to what else we may do to help Ukraine, to help defend Ukraine, support Ukraine.

And I think Putin is seeing that there, as your correspondent indicated, there are divisions among allies in that respect. Not divisions about

Ukraine's ultimate NATO membership, or not divisions about NATO defending its own members. But what we do now in the face of a possible new Russian

invasion in Ukraine. There I think is a lack of unity among the allies.

CHATTERLEY: So immediate steps that the west should take in order to reaffirm, I think, that commitment, more military aid to Ukraine, would you


VOLKER: Absolutely. Absolutely.


VOLKER: I think we have this backwards, is that we are saying that if Russia invades again, then we will react in some way. I think we need to

turn it around and start doing things now to penalize Russia with sanctions to support Ukraine militarily now in advance of any possible invasion in

the hopes of deterring that invasion. If we don't do that, I think Putin will conclude there is a lack of resolve and it increases the risks that he

will, in fact, invade.

CHATTERLEY: Yes. Jens, in fact, said in that press conference, he called it a strategic mistake, further aggression is a strategic mistake. Let's act

before we get that rather than after.


Former ambassador to NATO, Kurt Volker. Sir, thank you so much for speaking to us.

Stay with CNN. More to come.


CHATTERLEY: OK. Welcome back.

And let's bring it up to speed now with some of the day's other news and there's plenty to get to this Wednesday, including fresh political peril

for UK Prime Minister Boris Johnson who apologized today for attending a 2020 party at Downing Street during COVID lockdowns. More on that in just a

few moments.

But first, let me give you a look at the stock market picture. And we remain on track for a solidly higher open.

Futures are advancing even after the latest read on U.S. inflation showing prices rising at a 7 percent year over year rate for the month of December.

It's the hottest inflation read in some four decades. But it did come in as expected. Investors, I think, breathing a sigh of relief to some degree

that prices didn't take an even more substantial jump. The number pretty much priced into the markets I think already, too.

That said, Fed Chair Jay Powell warning Congress yesterday that rates may have to rise at a faster pace than markets are currently expecting and

anticipating if inflation does not call from here. He says higher inflation threatens the ongoing U.S. jobs recovery. And we're going to cover all of

that now.

So, first, rage and regret. The British prime minister has apologized for a garden party at 10 Downing Street, which he now admits he went to while the

country was under lockdown. Boris Johnson said he understands the anger people are feeling and that he must take responsibility.


BORIS JOHNSON, BRITISH PRIME MINISTER: I want to apologize. I know the rage they feel with me over the government I lead when they think that in

Downing Street, itself, the rules are not being properly followed by the people who make the rules. I know I cannot anticipate the conclusions of

the current inquiry. I have learned enough to know that there were things we simply did not get right.


CHATTERLEY: Salma Abdelaziz joins us now from London. Salma, the key with apologizing is you have to actually admit that you attended something in

order to do it, which for the first time actually, we have got here. I am almost tempted to take cover before you give me your views. What do we make

of what happened today?


SALMA ABDELAZIZ, CNN REPORTER: Look, Julia, finally -- finally, after weeks of controversy, weeks of reports of garden parties and Christmas parties,

and bring-your-own-booze parties, the prime minister has said sorry, sort of. Here's the thing.

He hasn't admitted any wrongdoing. He hasn't admitted that COVID rules were broken. In fact, he said that that even he attended is within the framework

of what's allowed. It was a matter of public perception and that he is leaving it all up to the inquiry. This is a contradiction that the

opposition Labour leader was very quick to call out. Take a listen.


KEIR STARMER, BRITISH LABOUR PARTY LEADER: After months of deceit and deception, the pathetic spectacle of a man who's run out of road. His

defense -- his defense that he didn't realize he was at a party is so ridiculous that it's actually offensive to the British public. He's finally

been forced to admit what everyone knew that when the whole country was locked down, he was hosting boozy parties in Downing Street. Is he now

going to do the decent thing and resign?


ABDELAZIZ: There you hear it, Julia. A call for a resignation and a very boisterous prime minister's questions stay. These are often quick and witty

sessions. But this one was particularly difficult for the prime minister. You could see him at moments flinching as yet again MPs pointing at him,

saying he was hosting boozy parties while people were dying of COVID-19.

It is a terrible allegation, a terrible accusation. But it's not just now about how many parties there were, who was in attendance, where they took

place. It's about how the prime minister has handled this. Because yes, he's apologized. But again, there is no admission of wrongdoing.

And he has apologized for one incident, one event. You still have that dizzying array, that dizzying list of accusations of parties ranging from

the holiday season of 2020 to the summer of 2020. All of that, of course, putting into question whether or not the prime minister is fit to lead.

Does he have the moral authority to rule the country when in the first instance his government is being accused of violating those rules. And in

the second instance, he's being accused of outright lying to the public about them. Julia?

CHATTERLEY: You know, it was funny, Keir Starmer, the leader of the opposition actually was very punchy today. You played that little clip of

him, too. The quote that I pulled was when he said the only question is will the British public kick him out? Will his party kick him out? Or will

he do the decent thing and resign. And I know you have been testing the pulse of the British public here as has a recent poll by YouGov. Talk me

through what we've seen in terms of popular opinion of this prime minister now.

ABDELAZIZ: I can tell you, in the last few weeks, Prime Minister Boris Johnson has provided a great deal of material if you want to have some

memes on social media. Just do a quick Google, of Twitter. And there's plenty of jokes there.

But this is not just a laughing matter. We are really talking here about the moral authority of the prime minister to lead during a public health

crisis. The opposition has said he is a threat to public health and safety because of this controversy. The latest snap poll, the one that you

mentioned, it showed that two-thirds of adults in the UK would like to see the prime minister resign.

Again, this is a snap poll, a small sample, only about a thousand people, but it gives you a picture. And what stood to me, Julia, is that that was

an increase of 12 percent from a snap poll that happened when this controversy first broke out in December. So, you can see that outrage, that

anger, it is growing.

Now the technicalities. How does Prime Minister Boris Johnson step away from office? How would that playout if it did playout? It would take a

mutiny within his own party, Julia. We take his own party members turning against him and choosing to push him out.

Right now, that is very far from a likely scenario. The question is also who would replace Prime Minister Boris Johnson. So, there is really the

wheels of politics here that might keep Prime Minister Boris Johnson in seat in his office for longer, but you just can't imagine how on earth he

could win back hearts and minds after this controversy. Julia?

CHATTERLEY: Yeah. You know I was thinking about last night, the picture of the queen at Prince Philip's funeral when she was on her own. I think we've

got the image here. Yeah.

Say no more.

Salma Abdelaziz, thank you so much for that there.

Game set in a matter of growing urgency. Novak Djokovic is admitting he did not immediately isolate after testing positive for COVID last month. And

he's also apologizing for the debacle involving an apparently false travel declaration.

Paula Hancocks is covering every twist and turn from Melbourne. And the twist and turns keep coming. And the latest we now and have an apology from

Novak Djokovic that he should have been isolating and didn't.

PAULA HANCOCKS, CNN CORRESPONDENT: That's right, Julia. It was an apology of sorts. He actually started this statement on social media with pointing

out he was going to clarify some -- some misinformation where in actual fact what he admits to is pretty much what had been reported anyway.


But he does narrow down on that timeline that we have been looking at when he tested positive for COVID-19. Pointing out that on December 14th in

Belgrade, the Serbian capital. He went to a basketball match and said that many people tested positive after that. So, he then decided to have a PCR

test on December 16th and December 17th while he was waiting for that result. He said he took a rapid antigen test, which was negative.

Saying he then went to a number of public events. We saw photos of him maskless at those events. And then said after those events, is when he

discovered that he was, in fact, positive. But on December 18th, the next day, he still went ahead with a photo shoot and a media interview pointing

out that he didn't want to let the journalists down.

Now he does point out in his statements that on reflection, this was an error of judgment. And then when it comes to the travel declaration that

you have to fill in coming into this country, there was an error. He admits, once again and saying that it wasn't him that filled it out. It was

his support team. But what it was the part where it asks if you're going to travel or have traveled in the 14 days before arrival in Australia, and the

no box was ticked. In fact, it's understood that he was in both Spain and in Serbia during the two weeks before he came here.

Now he said on that one, it was a quote, "human error and certainly not deliberate."

Now, we do know, also, that the Australian Border Force is expanding its investigation into this issue. This is according to a source close to the

investigation, looking at possible inconsistencies in documents related to the PCR results. And also, Djokovic's movements in the days after testing

positive. So, as the ABF is expanding its investigation into this, remember, we're still waiting for the immigration minister Alex Hawke to

decide whether he personally will get involved and revoke Djokovic's visa. Presumably, he will wait until the ABF investigation is complete. We don't

know that for sure, but it would make sense. So, we could be waiting even longer to see what exactly is going to happen with this.

CHATTERLEY: An apology of sorts, and an agent who might need an eye test, apparently.

We await what they find in this.

Paula Hancocks, thank you so much as always.

Now, authorities in Tianjin, China have tightened COVID restrictions began a new round of mass testing. It comes days after the country's first

community transmission of Omicron was confirmed in the city of 14 million people. Tougher measures are now triggering fears of economic disruption.

CNN's David Culver joins us from Beijing.

David, great to see you. We can talk about the restrictions, but we have become very familiar, I think, with China's zero-COVID policy. What I want

to ask you is whether you are hearing any rumblings of perhaps changes that are going to need to be made to the Beijing Olympics and concerns

surrounding the safety there?

DAVID CULVER, CNN CORRESPONDENT: Hey, Julia, good to be with you. As far as the Olympics are concerned, I mean, this is a show that must go on. That's

certainly how Beijing has portrayed it. When you look at the past two years, and now recovering this virus and this outbreak. China has tried to

demonstrate really to the rest of the world that they're handling this zero-COVID approach is the right way.

And the way that they wanted to capture all of that was through the Olympics. This was going to be their opportunity to demonstrate to the rest

of the world that they've got it under control, that the contact tracing, the mask testing, the heavy lockdowns and targeted ones that are playing

out right now are worth it. But they were hoping that by this point there were no outbreaks outside of what might be coming in through athletes and

staff and media for the Olympic bubble. They're dealing with a worst-case scenario.

You mentioned Tianjin. That's about 80 miles from where we are. It's too close for comfort. You've got folks who commute back and forth. That has

basically come to a halt. The government is very careful with their wording. They don't want to demonstrate that this is a country that in its

entirety is shutting down travel, but travel is heavily restricted.

Earlier this week, I flew in from Shanghai happening is high, I got multiple tests to do that. You are constantly checking in with local

community and health officials to make sure they're aware of your negative test results and you have QR codes that could potentially change if you

perhaps come into contact with somebody who is a confirmed case. That's how strict this is. If are you in a district or a city that has one local

confirmed case, Julia, then you are not allowed to enter Beijing for 14 days.

Now, the timing of this is also concerning because we're not only a few weeks away from start of the Winter Olympics, but we're also a few weeks

away from the Chinese New Year. The Lunar New Year is when you have hundreds of millions of people traveling, the largest annual human

migration. And so, they're putting out a lot of cash incentives and bonuses in trying to keep people from leaving their workplace cities and going back

to their hometown.


It's really quite sad because this is now at least the second year that they see these restrictions. And these folks, many of the migrant workers,

they only get one time a year for the most part to go back home and see their families. And here we are in the midst of another in which they'll

probably have to stay put.

So, it's concerning for a lot of those individuals who really feel like they're becoming more and more disconnected from family. But it's also

concerning for the government here. Beijing wanted this to be a performance that many would be talking about. Instead, now they're dealing with Omicron

as well as Delta and trying to extinguish the many outbreaks that are keeping folks in some cases locked into their homes. We have 20 million

targeted lockdown playing out right now. And you have 20 million people who are just confined. I mean, Xi'an is a city, Julia, that they have had 13

million who for the past three weeks or so have not been able to leave their homes. It is a really difficult situation. And one that Beijing is

not happy with, no question.

CHATTERLEY: Yeah. So much attention and for all the wrong reasons.

David, great to have you with us as always. David Culver there in Beijing.

We are back after this with the market open.


CHATTERLEY: Welcome back to "FIRST MOVE."

U.S. stocks are up and running on this Tuesday. And the high consumer prices not spoiling the party.

Wall Street rising for a second straight day with technology stocks. The Nasdaq, they're up some 1 percent in early trades. The U.S. reporting

before the bell that consumer pricing inflation rose at a 7 percent year over year rate last month. That's the hottest read in almost 40 years. The

numbers though were pretty much piped in.

And as expected, that said, Fed Chair Jay Powell warning yesterday that prices could remain elevated for some time.

Christine Romans joins me now.

It makes me laugh, Christine, when investors go yeah, yeah, it was not what we expected. It's like yes, but it is 7 percent price rises year on year.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: I know. Don't you love how Wall Street works. You know, are you baked in. They already knew it was

going to be awful and terrible.



ROMANS: Right? They knew it was going to be awful and terrible and now it is, like, oh, I'm so glad it wasn't more awful and terrible.

But look, for so many families, these are real numbers when you dig in these numbers here. And I'm looking at used car prices just from November

to December, you saw a 3.5 percent pop in in used car prices. I mean, that's amazing for a one month move.

So, we're still seeing these disruptions and this pent-up demand from consumers really driving these prices higher. The question, though, Julia,

is where do we go from here?

I mean, the big debate among economists this morning is what are the signs of peaking, will it peak next month? Are there signs in here that it is

peaking? We know it would have been worse if it hasn't been for falling energy prices in the month, and those that picked up again in the beginning

of this year.

So, that could be --

CHATTERLEY: Christine, I'm just going to have to stop you there because Wendy Sherman is speaking. She's the deputy secretary of state of the

United States in her follow-up to the meet this morning. Let's listen in.

WENDY SHERMAN, U.S. DEPUTY SECRETARY OF STATE: We can identify solutions that enhance the security of all.

We are in the midst of an intense week of diplomatic engagements in multiple forums across Europe. On Monday I led the U.S. delegation to an

extraordinary session of the bilateral U.S.-Russia Strategic Stability Dialogue in Geneva. Yesterday I met here in Brussels with NATO allies and

EU partners and again this morning to share what we heard from the Russians at the SSD. I assured them, and I want to repeat now again, that the United

States holds firmly to the policy of "nothing about you without you" when it comes to our allies and partners, including Ukraine. We will not make

decisions about Ukraine without Ukraine, about Europe without Europe, or about NATO without NATO, or the OSCE without the OSCE.

Today the NATO-Russia Council met for the first time since 2019, and I was honored to lead the U.S. delegation to this important forum for discussion.

As Secretary General Stoltenberg said earlier, it was a very serious and direct conversation. Russian Deputy Foreign Minister Grushko and Deputy

Defense Minister Fomin both spoke extensively and shared Russia's proposals and perspectives around European security and the future of NATO.

The United States and our NATO allies were united in our responses to Deputy Foreign Minister Grushko and Deputy Minister of Defense Fomin and

their comments, including when it comes to certain core Russian proposals that are simply non-starters. Together, the United States and our NATO

allies made clear we will not slam the door shut on NATO's "Open Door" policy -- a policy that has always been central to the NATO Alliance. As a

defensive alliance solely -- NATO is a defensive Alliance -- NATO exists to protect its member states. NATO has never expanded through force or

coercion or subversion. It is countries' sovereign choice to choose to come to NATO and say they want to join. And NATO has repeatedly affirmed, most

recently in June 2021, that, quote -- quote, "The Alliance does not seek confrontation and poses no threat to Russia," unquote.

The United States and our NATO allies reiterated our shared commitment to diplomacy as the most durable path for building lasting security, and our

willingness to engage Russia on security issues in a meaningful and reciprocal process. In today's meeting, the NATO allies offered their views

on areas where NATO and Russia could make progress together in a way that strengthens security for all of us -- and indeed, for the world. These

include reciprocal actions around risk reduction and transparency, improved communication, and arms control.

We told the Russian delegation that we are united in our position that escalation does not create optimum conditions for diplomacy, to say the

least. That is now the situation we face. As we speak, Russia has amassed more than 100,000 troops along Ukraine's borders in an unprovoked military

buildup. Moscow is using increasingly aggressive rhetoric and spreading propaganda and disinformation, claiming that it is Ukraine seeking

conflict, not Russia. Untrue. It bears repeating that it was Russia that invaded Ukraine in 2014, it is Russia that continues to fuel a war in

eastern Ukraine that has claimed nearly 14,000 Ukrainian lives, and now it's Russia's actions which are causing a renewed crisis not only for

Ukraine, but for all of Europe and for us.


As I noted, we and our NATO allies believe there are some areas where we can work together with Russia and make real progress. At the SSD in Geneva

on Monday, the United States raised several preliminary ideas where our two countries could take reciprocal actions that would be in our security

interest and improve strategic stability. We told the Russian delegation we are prepared to discuss those ideas in greater detail at any time.

Secretary General Stoltenberg opened today's meeting by expressing his hope that the NATO-Russia Council could convene again soon to have deeper

discussions on the areas where we can make progress together to strengthen security for all. That is a position shared by all the NATO allies.

If Russia walks away, however, it will be quite apparent they were never serious about pursuing diplomacy at all. That is why collectively we are

preparing for every eventuality. We have made it clear, and we told the Russians directly again today, that if Russia further invades Ukraine,

there will be significant costs and consequences well beyond what they faced in 2014. In my meetings yesterday with our EU partners, we discussed

our work together, and with the G7 to prepare coordinated economic measures, measures that would exact a severe, ongoing price for Russia's

economy and financial system should Russia take that fateful step. Russia's actions have caused this crisis, and it is on Russia to de-escalate

tensions and give diplomacy the chance to succeed.

Informed by the meetings we've held so far as well as by tomorrow's OSCE Permanent Council meeting in Vienna, governments in all three diplomatic

tracks -- the bilateral track, the NATO track, the OSCE track -- will reflect on these weeks' discussions and determine appropriate next steps.

We remain ready to continue to engage with Russia. The heavy pace of bilateral and multilateral engagements this week demonstrates that the

United States and our allies and partners are not dragging our feet. It is Russia that has to make a stark choice: de-escalation and diplomacy or

confrontation and consequences. We expect and had expected that the Russian delegations at the SSD here at the NATO-Russia Council and tomorrow at the

OSCE will have to report back to President Putin, who we all hope will choose peace and security.

Thank you again for your attention. Happy to take your questions.

MODERATOR: All right.

CHATTERLEY: We're going to leave the U.S. deputy secretary of state there speaking and answering questions.

In the meantime, I want to bring in Ambassador William Taylor, in charge of affairs in Kyiv in 2019 and 2020 and served as ambassador to Ukraine in

2006 to 2009.

Ambassador, great to have you on the show with us. Once again, we heard it from the secretary general of NATO this morning and again there from the

United States side. Punchy comments saying, quite frankly, Russia's demands are not on the table. And yet Russia stayed for over four hours. Is that a

positive sign in your mind?

WILLIAM TAYLOR, FORMER U.S. AMBASSADOR TO UKRAINE: Julia, I think it is a positive sign. As you say, the United States, Deputy Secretary Wendy

Sherman, has been very clear to rebuff and just entirely reject the main demand that the Russians have been laying on the table. That is to never

allow Ukraine into NATO. They've just flatly denied that, rejected that.

And the Russians continue to be there, which I think is continuing to participate in these conversations both on Monday and today and we hope

tomorrow. And we hope they will come sit down and talk about the areas that are available to talk about. So, I think, yes, Julia, it's a good sign that

they're still engaged.

CHATTERLEY: You said coming into these meetings too, Ambassador, the west must bolster its defenses, it must prepare sanctions. Do you believe that

should be going on at the same time even while they wait for President Putin and the Russian side to decide on next steps continuing talks?

Because at that stage, we don't have covers on that yet.

TAYLOR: You are exactly right. You are exactly right. And yes, I think we should be preparing the consequences as Secretary Sherman just said, there

are consequences that President Putin has to take into account, if he decides to invade. So, these are determinant measures, the measures that

will deter President Putin from making that decision to invade Ukraine.

So, these measures are both economic sanctions that we've heard about that will be severe, that the Russians are clearly concerned about as well as

military options. Which is to continue to provide Ukraine with the means to defend itself and to continue to bolster, reinforce the NATO allies on the

eastern flank of NATO.


So, yes, I think it's very appropriate to try to indicate to President Putin as he is making this decision whether or not to invade that there

will be severe consequences.

CHATTERLEY: Deputy Secretary Sherman was quite clever there, she threw the gauntlet down to some degree, because she said if you walk away now - walk

away from these talks, then we'll assume that you were never serious in the first place. What's the risk of that to build up troops on the Ukrainian

border was for a greater purpose and further aggression will happen irrespective with the debate and the diplomacy that's taking place this


TAYLOR: That's exactly the worry, Julia. You are exactly right. It is possible, we don't know what is in President Putin's mind, no one does,

only he does. But it is possible that he has all along decided that he is going to invade Ukraine one way, sooner or later, probably sooner because

you got all these troops poised on the border. You can't keep them there long without damage, major costs, so he may have already decided he's going

to do that in any case.

In which case, it's good that we have done the preparation, we, NATO, we, the United States, we, the Europeans have made the strong coordinated

preparations for economic sanctions, for military response, so this has both effects. It has both, the effect of deterrence in the hopes that he

hasn't made up his mind. But it also plans for what we will do if he does invade, if he's already decided to do that.

CHATTERLEY: Ambassador Taylor, fantastic to speak to you and get your wisdom today. Thank you so much. We'll speak to you soon.

Now breaking news into CNN.

A judge in the U.S. has rejected Prince Andrew's bid to dismiss Virginia Giuffre's civil lawsuit. She's accusing him of sexually abusing her when

she was 17.

Max Foster joins us now. Max, how much of a surprise is this? This means that Prince Philip is going to face a civil sex case.

MAX FOSTER, CNN CORRESPONDENT: Prince Andrew, yes. It's a major development. Prince Andrew had tried consistently on various levels to get

this case thrown out of the U.S. court. Prince Andrew very much engaging in this case. Initially, he wasn't engaging at all. So, then we got to this

latest attempt how the case turned out based on a 2009 agreement between Giuffre and Epstein where she agreed not to pursue cases like this, that

was the interpretation at least on Prince Andrew's side.

Giuffre side said that 2009 agreement doesn't apply to this New York case. The judge appears to be saying there are various interpretations of this

2009 agreement. The upshot is, Julia, that they have to proceed with the case in order to work out all of the legal ramifications of that 2009


The upshot ultimately is this now goes to depositions. Both sides will ask for witness statements effectively. Prince Andrew will certainly ask to do

that for Giuffre's team and potentially go to trial in September, October, around that time.

So, Prince Andrew has lost in his attempt to get this case thrown out. It proceeds. It's a huge problem for him. It's a small shot for Giuffre.

Although she ultimately wants justice, she says. It's a huge problem as well as you can imagine for the royal family.

CHATTERLEY: I was going to ask you that next, Max. The ripple effect on the Royal family at this moment.

FOSTER: Well, what they got here is a situation where Prince Andrew's trials and tribulations of the most sordid kind allegations at least are

reflecting on the Royal brand. Because he's integral to the Royal brand. He's stepped back for Royal duties, but he's a senior role. Whatever way

you look at it, very close to the queen. And it's been tarnished that brand, the longer it goes on. So, it would have worked for the brand if

this case was thrown out. At the same time the monarchy can't seem to be interfering in the legal process. (INAUDIBLE)

CHATTERLEY: OK. I think we've lost Max there. Thanks, Max Foster there. As you saw there, the U.S. Judge - a U.S. judge rejecting Prince Andrew's bid

to dismiss the sex abuse accuser's lawsuit. More to come on that, stay with us. We'll be back.



CHATTERLEY: Welcome back to "FIRST MOVE."

Mistakes and misinformation, Novak Djokovic says he wants to clarify events around his positive COVID test. And his immigration saga in Australia. In a

social media statement, the tennis star now admits a mistake was made in the declaration he made to enter Australia saying his agent filled it in

and got it wrong.

Djokovic still hopes to compete in the Australian open which begins on Monday. But Australia's immigration minister is still considering whether

to cancel his visa and have him removed from the country.

Amanda Davies here with us. And Amanda, one of the joys as many of them of being in London is to actually get to speak to you off air as well as on

air together. You and I were discussing not only the current situation surrounding Novak Djokovic but given his ongoing unvaccinated status. And

we're not making a judgment about that. But is this kind of the future for most of the opens that he tries to attend around the world, there is going

to be challenges?

AMANDA DAVIES, CNN SPORTS CORRESPONDENT: Yeah. And I think, Julia, from what we've heard of Novak Djokovic over the last 18 months, what we saw in

terms of the printout, the documentation around the interviews with the Australian immigration process, you have to presume that his stance on

vaccination isn't going to change and he is going to stay unvaccinated going forward. So, then you suspect we're going to be having these same

conversations that are playing out in Australia when he, if he wants to take part in the French Open or Wimbledon or the U.S. Open.

And Novak Djokovic is a player who has never been afraid to carve his own path in life. And you have to argue on the tennis court, it's been very

successful for him, hasn't it? You know I remember speaking to him and his wife Jelena in Belgrade. And they talked about their fight against the odds

growing up amidst the Yugoslav War and the conflict in that area and having to fight against that to become a professional tennis player.

He was struggling with his fitness not that long ago in his career and he decided going vegan and gluten-free was the way forward in that. He's not

afraid to do that but what we're talking about here is trust and the relationship with the tennis community and it's one thing saying you are

not going to be vaccinated. It's another perhaps putting down the wrong tick in a box and an immigration form.

But the point we've got to now is where he's admitted he tested positive for COVID and despite that, went and conducted an interview with one of the

members of the tennis community, that is an issue of trust amongst journalists, amongst players. This is a very tight knit community. And they

rely on each other, particularly over the last 18 months to be keeping each other safe.

We already had Rafael Nadal speaking out, didn't we? Saying it's very simple. Novak Djokovic could be vaccinated, and this problem goes away. But

we seem to have crossed the line now. And it will be very, very interesting to see what happens moving forward.


CHATTERLEY: Do you think they'll see it as a betrayal and the way he perceives himself above them? Or do you think it was just an honest

mistake, Amanda? Do you think he will be forgiven because of his status and because of his skill?

DAVIES: I don't think he will necessarily be forgiven. What you can't take away from him is what he has achieved and what he has done in tennis. There

is no doubt you look at the facts and the figures. He has been the best player on the men's tour for a consistent period of time. And if he was to

win this Australian Open, it wouldn't only be a record 10th Australian Open, it would see him become the most decorated men's player of all time,

with that 21st Grand Slam title. That cannot be denied. What happens off the court in terms of his relationships is a very different matter.

CHATTERLEY: Some legacy. Amanda, great to have you with us. Thank you. Amanda Davies there.

That's it for the show. Stay safe. "CONNECT THE WORLD" with Lynda Kinkade is next.