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Quest Means Business

Least 229 Dead in South Asia Quake; WHO Report Says Processed Meat Causes Cancer; As Chinese Workforce Shrinks Robots Fill Factories. Aired 5- 6p ET

Aired October 26, 2015 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[17:00:00]

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RICHARD QUEST, CNN HOST: And there goes the closing bell. Dow Jones closed off just a smidgen, down 23 points when trading came to an end. On

Wall Street, the market was in the red all day, ah, start them young, is what I say.

One gavel, hand over ears, on Monday, it's October the 26th.

Tonight: doctors claim processed meat causes cancer. The meat industry says it's hogwash.

Catastrophe awaits. Jack Lew tells Congress raise the debt ceiling now.

And Microsoft has some more windows to play with -- quite literally -- its brand new flagship store in New York. I'm Richard Quest. We start a new

week together and I mean business.

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QUEST: Good evening. I'll bring you the business news of the day in just a moment. We must start, however, with events concerning the earthquake.

Panic, destruction and a death toll that's almost certain to rise after a powerful earthquake struck northeastern Afghanistan on Monday. Officials

say at least 229 people have been killed.

The quake's epicenter is in a mountainous region of the country and that makes it much more difficult for rescuers to reach those that have been

hardest hit.

I'm showing you exactly where we are. This is the area, the epicenter. You can see Afghanistan.

But the significance of this quake, which was huge, is that the Earth was rattled in Pakistan, India, all the way to North Tajikistan and Kyrgyzstan.

The tremors were felt as far away as New Delhi.

This is the epicenter and you see here Islamabad. You see Delhi and all our correspondents and teams in Afghanistan, Pakistan, India all say they

felt the tremors. Hundreds of people have been injured, overwhelming hospitals in Pakistan and in Afghanistan.

For a full look at what's been happening, Saima Mohsin has more on this unfolding disaster.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The 7.5 is a deadly earthquake. It's a monster.

SAIMA MOHSIN, CNN CORRESPONDENT (voice-over): Scenes of devastation from Afghanistan, buildings leveled and homes reduced to rubble following

Monday's massive earthquake. Among those killed, 12 young girls. They died in a stampede to escape their school building in northern Afghanistan.

The quakes struck near the city of Jarm near the Afghanistan-Pakistan border but was felt in cities hundreds of kilometers away. Aftershocks

continued to shake the capital of Kabul and residents remain on edge.

UNIDENTIFIED FEMALE: It definitely threw a lot of people into panic especially because it seemed to go for a lot longer than the normal, just

jolts that we would sometimes get.

MOHSIN (voice-over): In Afghan cities like Jalalabad, hospitals are overrun with the injured.

Across the border in Pakistan, an emergency has been declared at hospitals in Peshawar (ph). Dozens have died there. But that number is likely to

increase. The military and national disaster management authority have been activated.

Buildings also shook in India, sending office workers into the streets. The quake was felt as far away as Tajikistan. People in the capital there

also seeking safety outdoors. With communications down, little is known about the fate of rural communities where the quake was centered.

UNIDENTIFIED MALE: It's a very difficult terrain. So to get information and to get it to some of the more affected areas is going to be difficult.

MOHSIN (voice-over): The last time a quake of this magnitude struck the region 10 years ago, more than 80,000 people were killed -- Saima Mohsin,

CNN.

(END VIDEOTAPE)

QUEST: Our correspondent Ivan Watson is in Hong Kong and watching events from there.

Ivan, we almost certainly know that the death toll will rise. That's pretty much a given between the early stages.

But do we have any idea whether it is going to be as dreadful with all the numbers involved as high as previous cases?

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: I think it's very hard to predict right now. It's been a little bit less than 12 hours,

Richard, since the Earth shook. With the epicenter in northeastern Afghanistan and this mountainous, rather isolated region and then shook for

thousands of miles, as you just saw in that report, both north and south, north as far --

[17:05:00]

WATSON: -- as Kyrgyzstan, one more country removed past Tajikistan from Afghanistan, the Afghan authorities have been announcing from Kabul that

they are mobilizing disaster management teams they've been getting messages of support from the U.S. military, which does have a presence in

Afghanistan.

It does have helicopters and planes and lift power that could presumably be of great assistance as rescue efforts unfold and particularly for this

initial key phase of just trying to figure out the extent of the damage.

The Badakhshan region where the epicenter was focused, it is a highly mountainous region, Richard. I've been traveling in that place 10-15 years

ago. There weren't any paved roads in that entire province. Roads have been paved since then but to give you a sense, there are mountains passes

there that would be snowed in at -- by the end of November and that could not be crossed overland.

So you have a lot of rural communities. You have a lot of mud brick homes that people rely on to build their homes, their barns. And those are very

susceptible when the Earth shakes with this kind of force. An additional risk factor here are the risks of landslides and avalanches in areas that

had suffered heavy rains and downpours in recent days and now our active tectonic zones as well.

QUEST: So obviously all the major organizations and the aid organizations will be getting themselves ready and preparing to move in.

There is a window of opportunity, a window of moment when those who may be under rubble can be rescued. So from what I understand you telling me, is

that extra aid, that military power, that assistance and support had better move fast.

WATSON: Absolutely. That's going to be essential, not only to help people from -- who may be trapped under rubble -- and on the Afghan side of this

border, it's important to note we're not talking about densely populated areas with high-rise buildings.

We're talking for the most part about one-, two-, three-, four-story structures. So there's a little less worry of people pancaked between,

below many story buildings.

But then there's the need for medical attention, to make sure injuries can be treated within those first very critical hours after somebody is hurt.

Then there's a further complicating factor is it's starting to get cold in these parts of Afghanistan and the Hindu Kush and there's going to be

concern about providing some kind of shelter, tents, warmth for people, who are mostly likely sleeping out under the stars tonight after what has been

a very scary day. There are still aftershocks shaking this region which are likely to be terrifying for people who just endured what many residents

of this region, which is prone to earthquakes, are saying it was the scariest earthquake that they'd seen in 30 years.

QUEST: Ivan Watson; Ivan, do come back when there's more to report for them, the moment there's more and more. We'll get an updated death toll,

please, let's hear from you.

Ivan Watson starting work early in Hong Kong, where, if I'm not mistaken, it's about 5:00 in the morning.

When we come back after this short break, think about it as a group of materials that can cause cancer. Cigarettes, asbestos and, oh, yes, bacon.

The meat industry fires back after reports link processed meats to cancer. QUEST MEANS BUSINESS, the start of a new week together.

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QUEST: "Alarmist and theoretical," that's the meat industry's response to a World Health Organization report that links processed meat to cancer.

Well, the only way to find out more about it -- join me in the QUEST MEANS BUSINESS diner, where clearly everything is tonight on the menu.

Let us begin with what the report says. First of all, we're talking about unprocessed red meat. You're talking about steaks or lamb shanks. Now

according to WHO report, it's probably, that's the key word, probably, carcinogenic to humans. But, of course, it still has nutritional value.

Then you end up with processed meats, carcinogenic to humans without doubt, they say. We're talking here about any type of sausage, cured or smoked

meat.

And the result of hot dogs is that they put hot dogs in the same category as smoking and asbestos.

According to this new report, eating 50 grams, which is just two slices of ham every day, increases the risk of colon cancer by some 18 percent.

They say around 34,000 people a year are believed to have died from cancers as a result of meats, which, of course, is a small fraction of the annual 8

million cancer deaths, many as a result of cigarettes.

So we needed to actually find out fact from fiction, myth from reality. And I asked Dr. Kurt Straif, the section head at the WHO's International

Agency for Research on Cancer, who told me the findings as reported by the vast quantity of research, he was not being alarmist.

(BEGIN VIDEOTAPE)

DR. KURT STRAIF, SECTION HEAD, IARC MONOGRAPHS: From more than 800 studies that the working group has looked on, there is a clear link saying that

processed meat causes colorectal cancer.

Now the other question is the second question, how big the risk is. And there it is indeed very different from tobacco smoking. Tobacco smoking

has a very high risk of lung cancer but is also associated with some other 20 emphasites (ph).

QUEST: Obviously, you've done a lot of work on this but you really do have to be very sure of what you're saying because you're talking about a

multibillion-dollar, tens of billions of dollars' worth of industry that you could be doing some serious economic damage to.

STRAIF: Well, this is a purely scientific evaluation of all the scientific literature published and the working group was pretty sure that this is a

group 1 carcinogen and in the more than 40-year history of the IARC Monographs, such a group 1 carcinogen has never been refuted.

QUEST: What to I do with this information when I'm in the supermarket?

And do I shun it?

Do I reduce the amount I eat of it?

What practical help can you give me with this science?

STRAIF: Well, as a said, this is a scientific evaluation in terms of cancer risks related to the consumption of processed meat and then this is

from the IARC Monographs not immediately turned into recommendation. This is up to other national, international bodies that come up with dietary

guidelines.

But I would also like to remind you that there have already been --

[17:15:00]

STRAIF: -- guidelines to reduce the consumption of red meat or processed meat because of strong concerns of other health outcomes, like

cardiovascular, diabetes and the like.

So our evaluation shows adds with the cancer risk the concern that one should perhaps reduce the consumption of processed meat if one is concerned

by cancer risk.

(END VIDEOTAPE)

QUEST: Not surprisingly the meat industry has reacted with apoplexy and fury. The WHO's report has the potential to upset an industry that's

growing rapidly. Here in the U.S., the meat industry's value is up more than 50 percent in the last 13 years. It's worth nearly $100 billion at

retail prices.

Joining me now is Dr. Shalene McNeill, the executive director of Human Nutrition Research at the National Cattlemen's Beef Association and she

says her nutrition advice hasn't changed.

Doctor, I'm not surprised that you reject this study and you don't believe the science is good.

But you heard the doctor say there this is based on science.

DR. SHALENE MCNEILL, EXECUTIVE DIRECTOR, HUMAN NUTRITION RESEARCH, NATIONAL CATTLEMEN'S BEEF ASSOCIATION: Absolutely. And we've taken a look at these

800 studies. And what we see is we have a weak association that's weakening over time and about half of the time these studies don't even

find an association.

So this is not a link, a causal link between red and processed meat and any type of cancer.

QUEST: Well, the audience watching tonight will say she's from the National Cattlemen's Beef Association; she would say that, wouldn't she?

MCNEILL: Well I'm, first of all, a registered dietician and nutrition scientist and I'm a mom. I'm feeding beef and red and processed meats to

my children all the time. And I see them building healthier diets with beef.

(CROSSTALK)

MCNEILL: So I think it's about the science and our interpretation of the science. And that advice would not change if I was working for the

National Cancer Institute or academia or for beef farmers and ranchers. This is an interpretation of the science available today.

QUEST: So are you saying when they put processed -- we'll deal with processed first, then red meat.

Are you saying with processed meat that it is not, in your view, carcinogenic?

MCNEILL: I don't say that it supports a sufficient relationship. The reality is that these studies are looking at unhealthy diets and lifestyles

that have processed meat in them.

They are looking at individuals who are more likely to smoke. They're less likely to be physically active. They're more likely to be overweight.

And all of these issues really complication our ability to interpret this science and draw causal relationships.

Remember, these studies are looking at correlation, not causation. They're not really designed to test cause and effect.

QUEST: Now, obviously, you -- any form of eating of meat, like any food, has to be part of a regularly balanced nutritional diet. I'll beat you to

the line on that one before you even say it, since I suspect that's where we're going to end up.

But would you recommend reducing meat intake?

MCNEILL: No, not at all. I mean, I think for most people what I see as a registered dietician, most people are not overconsuming red or processed

meat. That's a big myth about meat consumption.

What I often see as a registered dietician is people are falling short on high-quality protein. They're filling in their diet with refined

carbohydrates and they could actually benefit from including lean sources of proteins throughout the day in their diet.

QUEST: So, Doctor, I am confused and I suspect the viewer is as well and I make no apology for it.

Here we have a -- somebody from the WHO saying it is carcinogenic. Now we have another doctor and dietician, saying, no, it is not.

How on Earth is the viewer suppose to make sense of all of this?

MCNEILL: Well, you heard Dr. Straif say that these are theoretical hazards, that the -- this panel is evaluating. I'm a registered dietician.

What I try to do is help people put science into context.

How do they help build a healthier diet with all the different conflicting science reports that we have out there?

And the common key is is we know what we can do to reduce our risk for cancer. We can manage our weight, we can get physically active. We can

eat a balanced diet and, for sure, we can stop smoking. So those are the things that we can try to help people do and lean red meats are a great

source of protein that can actually help people build healthier diets today.

QUEST: Thank you for coming on the program and joining the debate. I appreciate it --

(CROSSTALK)

MCNEILL: Thank you.

QUEST: Thank you very much.

With this one, methinks you pays your money, you takes your choice.

As the Chinese government is making plans for its future of the economy, we're going to look at the country already getting a new workforce in the

form of robots -- taking over.

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QUEST: Strong words from the Chinese government: "We have never said that we would defend a certain percentage point to the death."

That's how China's premier is playing down his government's growth target. The Communist Party is meeting this week to form its blueprint for the

next five years.

Five years could bring about a remarkable change to the Chinese workforce. As Andrew Stevens found out, automation is ruling the nation.

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ANDREW STEVENS, CNN CORRESPONDENT (voice-over): This is the new face of China's workforce. The rows and rows of low skilled workers working long

hours for little pay could soon be a thing of the past.

There's a quiet revolution going on on China's factory floors and that revolution is robotics. China is now the biggest user of industrial (ph)

robots in the world. It took that position last year from Japan.

China's workforce is shrinking as the population ages and interest in low level jobs is waning. It's pushing up labor costs and eroding China's

competitiveness after decades of breakneck growth.

To maintain their edge, many companies are turning to automation.

Three years ago before robots arrived, a production line of 40 people would produce about 800 of these, the computer mouse, every hour.

Now, with robots, 10 people can produce about the same amount.

General manager Pboll Deng tells me he bought the first robots to cut down on mistakes and to eliminate problems caused by high staff turnover. It's

been so successful that Rapoo's robots now make robots for other factories, cutting people out of the equation almost entirely.

PBOLL DENG, GENERAL MANAGER, RAPOO TECHNOLOGY COMPANY (through translator): As long as the price of robots is decreasing more and more and as long as

the cost of labor continues to rise, then this investment is worth it. And more and more automation will happen.

STEVENS (voice-over): The local government here is offering subsidies totaling $150 billion over the next three years to entice companies to

replace workers with robots and under Beijing's grand plan for the Chinese economy, those workers will be reemployed in the country's growing service

sector-- Andrew Stevens, Shenzhen, China.

(END VIDEOTAPE)

QUEST: Erik Brynjolfsson is a professor at the MIT Sloan School of Management. He's also the author of --

[17:25:00]

QUEST: -- "The Second Machine Age," joins us now from Cambridge, Massachusetts.

Professor, your book, by the way, is one of the most popular on our "Reading for Leading" segment that people always say that they are enjoying

and usually reading the hardback version, not an online version.

But that's another matter for another day.

ERIK BRYNJOLFSSON, MIT SLOAN SCHOOL OF MANAGEMENT: Glad to hear it.

QUEST: When you hear what Andrew Stevens was talking about, in a country like China, that's now discovering and using robots to more and more fill a

very large lower class population, there are some very serious consequences about that.

BRYNJOLFSSON: Yes, there are huge consequences. And in many ways China and the Chinese workers are even more in the bull's eye of "The Second

Machine Age" than America, Japan and Western Europe.

QUEST: In that sense, what do you mean?

Because I can certainly see how jumping to robots negates the industrialization, if you like, of a workforce and, therefore, leaves it

questionable as to where they go next. The card suddenly goes -- or can they go straight to the digital age?

BRYNJOLFSSON: It's a hard leap to make. And that's the real challenge. I mean, the good news is that robots and their ilk have helped lift millions

of people out of poverty. It's part of an industrialization process that's been overall very beneficial for the world economy.

But if you're one of those workers in those factories, doing the routine, repetitive work of the kind we've been seeing, then you're very much

vulnerable to having your job automated by robots. And then you do have to make that leap to new skills, new types of work.

In the United States and Europe you see people shifting into the service industries, doing more creative work, getting more education and the same

thing's going to have to happen in China.

QUEST: Right. But that issue -- but that's a classic problem with which we are relatively familiar, the idea of job losses because of robotics.

In the case of China, you may end up with a situation where there are jobs available and you're having to leap those industrial jobs. They never got

there in the first place, if you like.

BRYNJOLFSSON: Yes, it's an even bigger challenge for them because they've been using low wages to do manufacturing that used to be done in other

countries but low wages isn't a very good way to compete against robots. Robots are getting better and faster than anything else and that means you

need to develop new skills and do something else.

QUEST: Now, Professor, finally, the whole question of artificial intelligence, I know a massive question for a very simple answer.

Are you encouraged by the way we are handling the whole issue of A.I. at the moment?

BRYNJOLFSSON: No, I'm a little discouraged. I'm delighted that the technologists are developing some wonderful new technologies. But I don't

think we're grappling with the opportunity there to create shared prosperity. It's too often led to elimination of a lot of low-skilled jobs

and concentration of wealth and it doesn't have to be that way.

QUEST: Professor, thank you for joining us tonight from MIT. Thank you.

I was just thinking while talking to the good professor, used to be a Fiat Strada advert, a commercial advert for a car. And it always used to say,

"Hand built by robots."

Jack Lew and the U.S. treasury are running out of money. And now the Treasury Secretary says if you don't raise the debt ceiling, we literally

won't be able to pay the bills. QUEST MEANS BUSINESS.

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[17:31:56] RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: Hello, I'm Richard Quest. Yes, there's more

"Quest Means Business" in just a moment when the head of the World Trade Organization tells me about a deal which should boast - or boost even -

global growth.

And we'll go inside Microsoft's new Fifth Avenue flagship store, and it's a stone-throw away from Apple's. Before all of that, this is CNN and on this

network the news will always comes first.

Officials now say at least 229 people have been killed after a 7.5 magnitude earthquake struck Northeastern Afghanistan on Monday.

Hundreds of people were injured, hospitals have been overwhelmed in Afghanistan and Pakistan.

The White House says the United States is ready to provide aid to the countries affected.

(BEGIN VIDEOCLIP)

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: We offer our deepest condolences to all those who were affected by the earthquake in

Afghanistan, including the families of those who died in Afghanistan and in Pakistan.

The U.S. government has been in touch with the governments in Afghanistan and Pakistan and we stand ready to provide any additional support that may

be needed.

This is an area of the globe that is plagued by these kinds of incidents, so it's not the first time that these governments are responsible for

responding to these kinds of situations.

The one thing that is relevant here is that there is a substantial USAID presence in both of these countries who try to assist their needs.

(END VIDEOCLIP)

QUEST: European prime ministers have met behind closed doors and they're trying to put a new plan on refugees into action.

The leaders agreed on new measures over the weekend to house migrants from North Africa and the Middle East. The leaders now say they'll open up to

an additional 100,000 spaces in migrant reception centers.

Search efforts are continuing off Canada's western coast after five British tourists died when a whale-watching boat capsized. Twenty-one people were

rescued from the frigid waters off Tofino in British Columbia. One person remains missing.

The meat industry has sharply criticized a report which says processed meat causes cancer. The World Health Organization now classifies sausages, ham

and bacon as carcinogenic.

Speaking to me on "Quest Means Business," one of the authors said the findings were not trying to scare people.

(BEGIN VIDEOCLIP)

DR. KURT STRAIF, SECTION HEAD, IARC MONOGRAPHS: We are not alarmists as some other media say. We clearly say yes we know it's causing colorectal

cancer and then we also continue that the risk increases there but it's not very high like for tobacco smoking.

(END VIDEOCLIP)

QUEST: Russia says its warplanes bombed 94 targets in Syria in the past day alone. Defense ministry says the attacks destroyed both ISIS and other

terrorist facilities.

Russia described this latest round as the most intense 24-hour period of airstrikes since its campaign began last month.

[17:35:09] A failure to raise the debt ceiling in the United States would have a devastating impact on the world economy. That's the warning from

the U.S. Treasury Secretary Jack Lew as the deadline for Congress to act fast approaches.

Now, Secretary Lew says there are just eight days - November the 8th - before Treasury reaches the end of its borrowing authority.

November the 3rd - next Tuesday - the government will be forced to operate on only the cash it has on hand -- $30 billion is the amount he says.

It risks default and it's a prospect that Jack Lew calls irresponsible. He says, "There is no way of knowing the full extent of the damage defaulting

on our obligations would cause for the U.S. and the global economy."

Manu Raju is our senior political reporter. He joins us now from Washington. Manu, look, let's put this in context.

Lew back in March told Congress that he was now having to use extraordinary measures to create - what the correct phrase is - "room under the ceiling"

so that they could rob Peter to pay Paul, and he's been doing that for months from the trust funds and moving money around.

Congress has refused to act. Why?

MANU RAJU, CNN SENIOR POLITICAL REPORTER: Well, this is just the way Congress is. They really wait until the last possible second in order to

cut a deal.

And we're seeing that happen today. Now November 3rd is just around the corner, and lawmakers are actually moving very close today into reaching a

big budget deal that would actually raise the national debt limit until March of 2017.

Now, part of the reason why that they're able to do this is because John Boehner, the house speaker, has announced that he is going to resign

Congress and he is free from the political pressures from folks on the right wing of his party who do not want to move on the debt ceiling unless

they get major, major concessions that the White House is not prepared to give.

QUEST: Right -

RAJU: Now -

QUEST: -- but let me jump in here because the White House, in fact every administration as far as I can remember, has always said there has to be a

clean bill. It has - the raising of the debt ceiling cannot be conditional on anything.

So by putting it into a bigger budget bill, you're basically saying they're going to do a deal?

RAJU: Well, yes. And this deal that's emerging is giving both sides something to point to. Now, the White House is able to say well we're

going to raise the debt ceiling all the way until March 2017 and we didn't negotiate on the debt ceiling, but there are other budget measures that are

going to be included as part of this deal.

And the White House and the Republicans can say, well we got these concessions from the White House and they - we - forced their hand on this.

So both sides are kind of being cute about this, but the end result could be the fact that we could take the threat of a default off the table over

the next year and a half.

Now I should caution, --

QUEST: Right.

RAJU: -- this is not final yet. Congress still needs to vote and anything can go wrong.

QUEST: I notice you said until '17 - basically Spring '17. Is it in both parties' interests not to have a debt ceiling debate or issue in the final

crucial days or months of the presidential election?

RAJU: Well I can tell you Republican leaders are particularly nervous about having this debate next year. They know it will get harder and

harder and harder to cut a deal and get their party onboard because it's been a particularly divisive debate within the Republican Party.

Mitch McConnell who runs the Senate - the Republican majority leader - has said there will be no defaults in his tenure that would hurt him as he

tried to - went into 2016 and try to preserve his senate majority and that's very important for them is one reason why we're seeing this deal

come together today.

QUEST: The mere thought of a debt default by the United States is enough to send tremors. All right, sir, thank you for joining us.

RAJU: Thank you.

QUEST: I noticed the young girl walking through Congress while he was talking. Wonder what he had to bribe her with to get her to walk and visit

Congress?

Stocks started the week slightly lower at the corner of Wall and Broad - posh way of saying the New York Stock Exchange.

If you take a look at the market, well it likes (AUDIO GAP) very craggy- like here (ph). Sort of hills upside down. The energy shares were down, Apple is a day down before the results and the Fed meeting starts on

Tuesday - two-day meeting - nobody pretty much is expecting any movement by the Fed.

The consensus is everything stays the same. December seems to be the date when everybody's looking at potential moves for the Fed, particularly since

of course there does seem to be a bit of a split amongst the board members.

The World Trade Organization says it can move the needle on global growth by cutting out tedious customs checks and red tape and bureaucracy, and the

WTO's been looking at what would happen if a trade deal was signed in 2013 had been fully adopted.

Now the whole thing is called Trade Facilitation Agreement. It's a very long-winded way of saying it could add a trillion dollars in experts every

year. It would boost global growth by around half a percentage point.

[17:40:12] And those countries that would benefit most would be the developing countries. The director-general of the WTO says lift shifting

from a dialer to a broadband - that would be the equivalent.

But the WTO itself is under threat. You have mega bilateral deals like the Trans-Pacific and the Trans-Atlantic trade relationship.

I spoke to Roberto Azevedo earlier and he explained how providing aid for trade can give a lift to the global economy.

(BEGIN VIDEOCLIP)

ROBERTO AZEVEDO, WTO DIRECTOR-GENERAL: We have clearly established that if you help the developing countries in particular, that's where most of the

trade facilitation hurdles are, they benefit immensely and that's not so difficult to do.

We found out for example that $1 spent on our programs of aid for trade, that means $8 in additional exports from developing countries and $20 from

least-developed countries.

So, yes, it's not very sexy to be true. But at the same time the impact is fantastic.

QUEST: With the agreement for the Trans-Pacific which I know you have welcomed -- the Trans-Pacific partnership - and of course as the

negotiations go on for the Trans-Atlantic trade partnership , these large bilateral negotiations although with multiple partners, they are

supplanting the WTO's role in all of this, aren't they?

AZEVEDO: No, they are building on the WTO's outcome. So at the end of the day, we checked actually and the WTO DNA is there in all these agreements.

They have built on what we have.

Of course there are some areas which are new, for example - environment, labor, investment, competition policy - those are new areas and we have to

acknowledge that and that is good because those are elements - those are areas which we have never dealt in the multilateral system.

And history tells us that before anything is discussed in the WTO, it usually begins outside the WTO. They want us to have critical mass and

common thinking about these things, then they come to the multilateral system. So that's the natural way of progressing.

What is the problem, Richard, --

QUEST: Right, but -

AZEVEDO: -- is not that these things are being negotiated, it's that the WTO is not talking about them or hasn't been talking about them.

QUEST: Because the WTO and as a forum for negotiation most recently has shown itself to be unwieldy and unsuccessful.

And the ability to get a large-scale multilateral agreement is now no longer possible, is it?

AZEVEDO: On the contrary. We've shown in the last two years that we are able to deliver. We just delivered a trade facilitation agreement which is

the first multilateral agreement since the WTO was created. It injects $1 trillion of new exports in the world every year, 20 million new jobs.

That's not minor, Richard. On top of that we have the information technology agreement.

That covers trade of $1.3 trillion in 200 information technology products.

These are huge agreements - they're not minor at all. Now, can we do more? Should we do more? Absolutely we should do more. But we have done quite a

bit over the last two years only. I'm pretty optimistic about the future of this organization.

(END VIDEOCLIP)

QUEST: Just as well really, he's the head of it. The TalkTalk hack may have put the information of millions of people at risk. Now police have

made an arrest. We'll have the details after the break. (Inaudible).

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[17:46:39] QUEST: The police in Northern Ireland have arrested a 15-year- old boy in connection with a hack attack on the British telecom group TalkTalk.

Now last week TalkTalk admitted that customer data may have been stolen and it had received a ransom note. Laurie Segall who's been covering the story

joins me now from London.

So let's start with the arrest and what we know.

LAURIE SEGALL, TECHNOLOGY CORRESPONDENT FOR CNN MONEY: Right. What we know right now, a 15-year-old arrested Northern Ireland this afternoon.

You know, we know that he has not been charged yet.

Unclear what his involvement is. I want to make this clear that he could have been a kid that sent the letter for ransom or he was just playing

around or he could be directly involved in the hack - we really don't know so we can't report that yet.

What we do know, Richard, is that this hack has had real human impact. I had the opportunity to speak to a woman, her name was Barbara Manley.

She's a retired nurse, elderly woman.

She had her whole bank account drained by a hacker pretending to be a TalkTalk employee who called her up and convinced her to hand over those

bank details.

She described that experience to me. List to this.

(BEGIN VIDEOCLIP)

BARBARA MANLEY, RETIRED NURSE; HACK VICTIM: They took one lot of $4,900 and a second lot of $3,800.

SEGALL: And, Barbara, it seemed completely legitimate. You thought this was a TalkTalk employee.

MANLEY: Did think (ph) it all seemed feasible. Everything that they said seemed all sensible. It all seemed so genuine. And it's now gotten to the

state that you don't know who to believe.

SEGALL: What is this feeling like? I mean, I can imagine you feel very violated.

MANLEY: Well look, we're both - I'm 82 and my husband's 83 -- and it's a thing that we're not sleeping properly. My husband had to go to the doctor

on Friday because he wasn't very well.

It's just knocked the stuffing out of everybody.

(END VIDEOCLIP)

QUEST: That's appalling. Now, do we know in that case that it was a result of the hack? Because here we have a situation where you have a

hack, you had the allegation that - you had the ransom note - but now you have extortion and criminality and theft.

SEGALL: Sure, this - it's -- a complete disaster when you look at it. But if you look at this, Richard there have been multiple hacks, right?

I actually spoke to a TalkTalk spokesperson, I asked them that exact question - can we connect this particular hack to what happened to this

couple? And what she said was it might not have been the last hack, but it could've been the hack before because the hack before that happened in

December, there were a lot of personal details out there.

And they said that they've seen hackers socially engineering - a couple - socially engineering people - calling them up, using those details.

So whether or not it was this hack or the hack before, this is now happening more and more. People are seeing opportunities. So that ransom

note that was sent to the CEO, we don't know for sure whether or not that was from the hackers or someone else - a kid who maybe thought they could

try to make an extra dime on this hack.

So the idea that there have been multiple hacks really has made this company vulnerable to this kind of thing, Richard.

QUEST: All right. Excellent reporting as always from you. Thank you. There's a new player in Apple's neighborhood. We'll take you inside

Microsoft's new Fifth Avenue flagship store after you've enjoyed a moment to "Make, Create, Innovate."

(COMMERCIAL BREAK)

[17:52:39] QUEST: Yes, those are computers, and Microsoft - Windows computers - and Microsoft has opened its very own flagship store here in

New York. In doing so, it's a battle brewing for Manhattan's Fifth Avenue.

Microsoft is going head to head with Apple's own flagship store, and it's all happening on Fifth Avenue. Our business correspondent Samuel Burke has

been to look.

SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: Fifth Avenue is famous for retail shops from all types of companies, but Microsoft's new flagship shop

just happens to be a stone-throw away from Apple.

The products in her are different but the glass floors look somewhat familiar to Apple's. The first floor is all Microsoft products but right

in the center here is the HoloLens. That's the virtual reality headset that Microsoft is producing and this is actually the only place in the

world that it's on display for the public to see.

Not everything in the Microsoft shop is all about Microsoft. The whole third floor here is dedicated to some of those old partnerships like the

one with Dell.

KEVIN TURNER, COO, MICROSOFT: We've got a premium line of products. We've got the HP Spectres, the Dell XPSs, the Yoga line from Lenovo as well as

our own premium products.

So we're not trying to go for opening price point or value products per se, we're really trying to showcase the best of innovation and that's what

we've been able to do in this particular store.

BURKE: One of Microsoft's best known products right now is the Surface, but it's so packed in Microsoft's new shop, you can barely find any surface

to walk around.

UNIDENTIFIED MALE: I love the product. It allows me to do more stuff than I can do with Apple. I can anything that I want with this device versus

the Apple. It's a little bit more limited versus a Windows P.C.

BURKE: So given that you're a big Microsoft guy, --

UNIDENTIFIED MALE: Yes.

BURKE: -- is it important to you there's a shop like this? Does it make it better for you?

UNIDENTIFIED MALE: It's ridiculously important to me. I'm glad that they made one right around here. I can go get it fixed or do whatever.

(END VIDEOCLIP)

QUEST: Microsoft on Fifth Avenue. And Microsoft wasn't the only titan - corporate titan - making news today. Volkswagen - you're familiar with

their problems related to emissions scandals - well their terrible year just got a whole lot worse.

The company has been overtaken in the race to be the world's top automaker. Competition is stiff. Recently Toyota had dominated the title.

Historically it had been General Motors.

Now this is the way the biggest car company in the world the race has run. Back in 2010 Toyota was in the top spot. Then the following year General

Motors took the lead. Toyota production was hurt by the Japanese Tsunami and the earthquake.

However, proving you can still do it again, Toyota regained the lead in 2012 and was cruising at number one. That is until VW raced ahead earlier

this year.

And now - and this has got nothing to do with the problems of emissions scandal - these numbers are before the emission scandals. Toyota is back

on top.

It beat VW in sales from January to September. The scandal happened too late to have an huge impact on -- (CAR HORN HONKS), thank you - September

sales.

That's the way it is. Toyota, VW, General Motors. We'll have a profitable moment after the break.

(COMMERCIAL BREAK)

[17:59:29] QUEST: Tonight's "Profitable Moment." Does it or doesn't it? Red meat, process meat - are they all carcinogenic? It's very simple. The

WHO says yes, the meat industry says no, and you and me have to decide what we're having for dinner.

And that's "Quest Means Business" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable,

maybe healthy. I'll see you tomorrow.

(END QUEST SHOW)

END