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Quest Means Business
Obama Reflects in Final News Conference; Trump Demands Credit for U.S. Jobs; London Mayor Warns Over "Hard Brexit"; HSBC Moving Staff to Paris After Brexit; Polish Deputy Prime Minister: Nothing Wrong with Our Democracy. Aired 4-5p ET
Aired January 18, 2017 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] MIKE PENCE, U.S. VICE PRESIDENT-ELECT: -- a lot of great ideas.
DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: But there's no plan? You guys don't have legislation that you're going to --
PENCE: Dana, it's being crafted right now. We're working with the leadership of the House and the Senate and our team, and we're getting very
close. And as the President-elect said last week, we expect to have that plan come forward in the early days of the administration. Take it to the
Congress and take it to the American people. I'm very confident that we'll have the kind of alternatives to Obamacare that will really unleash the
potential of the American economy and the American consumer to take greater control of their own healthcare, improve their lives, improve their health
and lower the cost of health insurance.
RICHARD QUEST, CNN ANCHOR: Dana Bash talking there to the vice President- elect. And there are we leave our colleagues at CNN in the United States with their coverage of the transition for President-elect Trump as we go
our own way with QUEST MEANS BUSINESS. It is Wednesday. It is January the 18th.
Tonight, the outgoing president reflects. His press conference on eight years in office. Donald Trump demands credit for bringing back American
jobs on this program. The CEO of Renault Nissan agrees. And the Mayor of London, he believes Theresa May's Brexit will rip Britain apart. He's live
on our program tonight.
I'm Richard Quest live at the World Economic Forum where, of course, I mean business.
Good evening from Davos, at the World Economic Forum. We begin in Washington with his legacy under threat within the last couple of hours
Barack Obama said he expects Donald Trump will push his own agenda. It was President Obama's final press conference before the inauguration on Friday.
He issued a veiled rebuke to Donald Trump. Defending the role of a free and skeptical press corps. Don't be sycophants, you are expected to be
skeptical, he said.
He also stood by his decision to commute Chelsea Manning's sentence saying the prison term was enough of a warning to potential leakers. And he
acknowledged the new administration would pursue its own vision. He pledged to speak out if necessary and needed. However, on an optimistic
note did Mr. Obama end. Saying he still believes in America.
(BEGIN VIDEO CLIP)
BARACK OBAMA, U.S. PRESIDENT: I believe in this country. I believe in the American people. I believe that people are more good than bad. In my
core, I think we're going to be OK.
(END VIDEO CLIP)
QUEST: Now Ron Brownstein is a CNN senior political analyst and a senior editor at "The Atlantic." Ron joins me. You have heard many of these
sorts of last ditch press conferences.
RON BROWNSTEIN, SENIOR EDITOR, "THE ATLANTIC": Yes.
QUEST: It wasn't as long as some. It was longer than others. What did you make of what he said, how he defended his legacy, if you like?
BROWNSTEIN: First of all, welcome to Davos, man. It was shorter than I expected. I thought he would go on a little bit longer. I thought it was
interesting in the specifics and in the broad thematics. In the specifics as you noted he gave us a remarkably detailed road map for when he may feel
it is appropriate to speak out more than former presidents usually do against the policies of his successor. And he said essentially, focused on
issues of inclusion and treating all Americans equally under the law.
He specifically talked about the young people brought to the U.S. in an undocumented status by their parents who are called the dreamers here in
the U.S. and that kind of tied in with the big thematic at the end. Because I think that president Obama will be remembered by history above
all for both personifying and accelerating America's historic demographic change into a truly world nation.
It was under his presidency we crossed an historic landmark with the majority of our public-school students now, Richard, in the U.S. are now
kids of color. Sometime after 2020 a majority of the under-teen population will be kids of color. We are transforming who we are. He both symbolized
that and then through a variety of policy means trying to build a bridge to that.
[16:05:00] And yet ultimately saw an election in which it was partially turned by anxiety in certain portions of the country about what it means
for them and whether they will be eclipsed.
QUEST: He also gave us just a vague hint of what he says or what he's been talking about with Donald Trump. Refusing to give details, but he said the
conversations had been frequent and they have been lengthy. And then he gave -- listen in with me, Ron. Then he gave some advice of the sort of
things he'd been telling to the President-elect.
(BEGIN VIDEO CLIP)
OBAMA: I think it is right and appropriate for a new president to test old assumptions and re-examine the old ways of doing things. But if you are
going to make big shifts in policy, just make sure you have thought it through.
(END VIDEO CLIP)
QUEST: Now it's difficult. If you think back to that first meeting the two men had in the oval office, the body chemistry spoke all. Is it your
understanding that there is any genuine warmth between the two of them?
BROWNSTEIN: I think warmth is too strong. But I think there could be respect around the reality that few people have held this job. In my
experience interviewing presidents over the years almost all of them are very compelling talking about the process of being president. That's where
President Obama really leaned in today. He acknowledged that he has big differences. Two that he specified I thought in unusual detail with Donald
Trump on Israel and the prospect of lifting sanctions on Russia in return for a nuclear arms deal. A concept that Donald Trump has floated.
But Richard, as you noted he said he didn't have much hope that Donald Trump was going to agree with him on his substantive views. Where he might
have, more influence was on the process of how you organize the presidency. So, that you are presented with opposing views and a full range of
information. And on that front, this is something Donald Trump has not really thought about a vast amount. And you can imagine that someone been
in the job for eight years could have some influence on him.
QUEST: Ron, Good to see you, sir. Thank you, from Davos.
BROWNSTEIN: Thank you, Richard.
QUEST: Donald Trump insists he deserves the credit for companies deciding to keep jobs in the United States. He was criticizing a news report that
suggested many of the jobs that car companies and others have announced would have been created anyway regardless of Trump's policies. The
President-elect tweeted, "Totally biased at NBC News went out of its way to say the big announcement from Ford, GM, Lockheed and others are jobs coming
back to the U.S., but had nothing to do with Trump, is more FAKE NEWS. Ask top CEOs of those companies for real facts. Came back because of me!"
We decided to do just that. Spoke to the boss of Renault-Nissan and he told me, the President-elect's message is very clear. According to Carlos
Ghosn, companies like his and indeed his are adjusting to the new administration's policies. He says what he really needs to know -- pardon
the pun -- is the rules of the road when doing business in the United States.
(BEGIN VIDEOTAPE)
CARLOS GHOSN, CHAIRMAN AND CEO, RENAULT-NISSAN ALLIANCE: Look, Richard, so far, what were the rules? So far, the rules were NAFTA. OK. So, all car
manufacturers adapted NAFTA. There was an agreement signed between the United States, Mexico and Canada. NAFTA determined the rules for car
makers. If there is a change to NAFTA and it may be changed. For the moment, we don't know it. If there is a change to NAFTA, were going to add
that to the change to NAFTA.
Well obviously, we suppose there will be changes. Because the President- elect has said two things, which are very clear for us. Is America first and jobs in the United States. OK, it's very clear. You want to sell in
the United States, you're going to have to produce more in the United States and invest more in the United States. Very clear.
QUEST: Knowing that, have you already started to change your plans for the future? Knowing that.
GHOSN: Without any doubt. I think any car manufacturer who is not starting to revise his plan because we are moving from a situation where
you had NAFTA to a new situation, we don't know, but where the President- elect of the United States is saying clearly, America first, jobs in the United States. And you see that most of the carmakers have already not
only listened and understood, but integrated the message into decision. You've see how many decisions of investments have been made already in the
United States. So, the message is clear.
QUEST: When will you make your announcement. You knew that question was next. When will you make your announcement? Ford has made theirs. GM
made theirs yesterday.
GHOSN: When we will be announcing additional capacities for North America. This would be the time. Unfortunately for us, we have the luxury to be
able to wait until the administration takes responsibility, which is in a couple of days.
[16:10:00] They are going to addict policies and then things are going to be very clear.
QUEST: But you are going to move capacity back into the United States.
GHOSN: I would say the capacity in the United States for any carmakers from now on are going to increase.
QUEST: The scale of uncertainty. Choose your color pen. You could have a green or a red color pen.
GHOSN: What's the difference between a green or red?
QUEST: You choose.
GHOSN: I'll take red.
QUEST: If that's what you feel you're going for red.
GHOSN: Here we go.
QUEST: This is the most uncertain, this is the least. How uncertain is it at the moment with this being the most uncertain?
GHOSN: Ok. Let's put technology here. Because this is a time where --
Right?
GHOSN: Yes, and a lot of set --
QUEST: And across?
Yes.
QUEST: Right. Thank you very much. Exciting times. How do you decide between all of the things you have to do where you spend most of your time?
This is on the new stuff like autonomous vehicles, driverless cars or is it on the political, the big heavy lifting?
GHOSN: Product and technology without any doubt.
(END VIDEOTAPE)
QUEST: Carlos Ghosn. Now America's global trading partners are on notice to play fair or be punished. We've reported on this many times. And
Donald Trump's choice for Commerce Secretary, Wilbur Ross, told his confirmation hearing the U.S. will not put up with malicious trading
tactics by state-owned companies or subsidized production. The billionaire's remarks are read as an indirect swipe -- actually it wasn't
that in direct, it was fairly blunt and obvious -- but the country he had in mind was China.
(BEGIN VIDEO CLIP)
WILBUR ROSS, U.S. COMMERCE NOMINEE: I'm not anti-trade. I am pro trade. But I am pro sensible trade, not pro trade that is to the disadvantage of
the American worker and the American manufacturing community.
(END VIDEO CLIP)
QUEST: China is Australia's largest trading partner. The Australian trade minister, Steven Ciobo, joins me now. Minister, how very good to see you.
STEVEN CIOBO, AUSTRALIAN TRADE MINISTER: Great to see you, Richard.
QUEST: We have a fascinating situation. President Xi here yesterday talks about free trade. And Wilbur Ross today basically says, we are in favor of
free trade. Perhaps the Chinese should practice it.
CIOBO: From the Australian perspective, we, of course, wanted to make sure that we are icons when it comes to free trade. We are a trade exposed
nation. We have done well off the back of free trade. We want that to be the prevailing global sentiment.
QUEST: Do you find the Chinese to be free traders or is there a healthy or unhealthy dose of protectionism, the sort of thing that Donald Trump is
talking about.
CIOBO: Well, no one's pure. No one is pure around the world. What we find though is that China has been very willing to engage in trade with
Australia. We of course, have always historically found the United States a terrific trade partner with us. We want that to continue.
QUEST: On the United States, TPP is dead. Can you accept it is dead and it is not coming back?
CIOBO: Absolutely not. The simple fact --
QUEST: Why?
CIOBO: Well, because the TPP is such an important document. Not only in terms of trade implications, but also because of its strategic
implications. What I would encourage President-elect Trump to do, what we encourage the Americans to do, is to consider that there may be aspects of
the TPP they don't like. But this is not a deal to be junked. This is a deal that should continue because it will be good for all 12 countries.
QUEST: I can understand you put a lot of political capital into TPP. You, New Zealand, everyone put political capital in and you were shafted when
the U.S. decided at the last moment to ditch it.
CIOBO: I will just make the point again. We believe this is strategically important and trade important document. A trade deal that's going to be
doing great things for all 12 countries. I recognize that President-elect Trump had it as part of his mandate to say he wants to see the TPP changed.
We can work with America on that.
QUEST: If the U.S. doesn't come on board, would you proceed with a TPP minus U.S.?
CIOBO: Well look, that's got to be plan B. Our preferences is we're 11 months into a 24-month process. If the Americans say want more time and I
know there are a number of senior Congressional Republican leaders who want it. That's our first preference. But if we can't get it, well then, we've
got to look at plan B.
QUEST: Brexit.
CIOBO: Yes.
QUEST: Now clearly the moment the Brits can do a deal, whether during the Brexit process if they are allowed or immediately after, they going to be
knocking on your door. Australia, your Prime Minister, already made clear that you are very welcome and open to doing a quick deal.
CIOBO: Absolutely, for sure. We want to make sure we can do a deal with the U.K. We are currently having discussions with the U.K., looking at the
arrangements might be. Scoping out what we can do in terms of a free trade agreement. So were very keen to conclude one. Liberalizing trade deals
between the U.K. and Australia as soon as possible after they exit the EU.
[16:15:00] QUEST: Do you envisage that deal to be difficult? Obviously, there is also the Canadians have done a deal with the EU and have
prioritized that. New Zealand is scoping out the deal with the EU, and they probably would prioritize that over the U.K. Where would you stand on
this?
CIOBO: We can walk and chew gum at the same time. So, the fact is we're more advanced in terms of the discussions we have been having with the
European Union. We nearly finished a scoping study. I hope we'll commence formal negotiations around the beginning of the year. Likewise, though,
were going to be having conversations with the U.K.
QUEST: The rise of protectionism. Even saying that I can feel your trade hackles rise because it is a pejorative way of putting that. But there is
now a feeling that globalization has not provided the benefits for all. You have to agree with that.
CIOBO: Certainly, I respect the fact that there are constituencies out there who feel globalization has not served them well. I absolutely
respect that point of view. That makes it more incumbent upon people like me to be stronger advocates about the benefits of free trade. The fact is
protectionism --
QUEST: Free trade isn't fair trade always though, is it?
CIOBO: Look, and that's the case. What we know, Australia has enjoyed 26 years of continuous economic growth. The reason we have enjoyed 26 years
of continuous economic growth, is because we've been willing to embrace the benefits of competition, of open trade, of subjecting marketplaces to
competition. The fact is that protectionism, in whatever form it takes, does nothing except consign you to lower living standards in the future and
ultimately destroys jobs, doesn't create them.
QUEST: Now, sir, choose your pen, a red or a green. What color would you like?
CIOBO: Well, I'll go green.
QUEST: You're going to go green. These are the issues. This is our new cleaner chart from earlier. You can either write something extra or just
go from here. But where on the chart are you in terms of uncertainty. You keep telling me how uncertain everything is. So, how uncertain?
CIOBO: There is a high degree of uncertainty now. But I'm going to say that it's trending down. When the administration takes place, I'm going
with the collective around about here. But turning that way.
QUEST: Fascinating. Thank you very much. Good to see you minister.
CIOBO: Thank you.
QUEST: Keep warm. As we continue, were going to be continuing this theme, which is so important and prevalent on the issue of trade. The new
Canadian trade minister will give us his view, not only on NAFTA, which could be up for renegotiation, but also of course, Brexit.
(COMMERCIAL BREAK)
QUEST: Oh, the cheery music once again distorts the freezing temperatures. It's -19 Celsius, which I make about -7 or 8 Fahrenheit. So, I think we
can call it jolly parky.
Canada's new trade minister tells me his country wants a win-win situation on NAFTA. The free trade agreement that Donald Trump wants renegotiated or
withdrawn.
[16:20:00] Wilbur Ross, who is the Commerce Secretary said on Capitol Hill today, Wilbur Ross made it clear reforming or dealing with NAFTA would be
one of the first priorities of the new administration. Francois-Philippe Champagne, of Canada, says his country is open to a review of the deal.
(BEGIN VIDEOTAPE)
FRANCOIS-PHILIPPE CHAMPAGNE, CANADIAN TRADE MINISTER: Our economy are integrated. I mean, you have 2.4 billion of goods and services crossing
the border every day. You have 35 states in the United States who have Canada as their biggest export market. You have 9 billion jobs which
depend on Canada. So clearly, you look at that, or you look at the backdrop of a very integrated economy.
QUEST: Do you think that Canada vis-a-vis the United States, is in a better position when it comes to a renegotiating NAFTA versus, say, Mexico
and the United States.
CHAMPAGNE: I would say, it's different. Most of goods that you find in Canada sometimes would cross the border up to six times before they get to
the consumer. When you put it in perspective and you look at any renegotiation and any position, you have to understand this very integrated
model we have in North America.
QUEST: A review doesn't necessarily mean renegotiation in your language.
CHAMPAGNE: Well, a review means that we're going to sit down, we are going to look at that, but that doesn't mean that, you know, we're look for a
win-win situation. We have an integrated economy. They understand that. Because we are the biggest trading partner of the United States. So
therefore, when you sit down, you say, let's review the agreement. Let's look at things that we can abate. I mean, this is the 21st century. Let's
look at things. This was thing negotiated. Let's look at where we are. And, you know, were going to obviously, put forward our vision. They're
going to put there's, but we start from a very, very strong base.
QUEST: On the other side of the Atlantic you've concluded the negotiation and the deal with the European Union. It got there in the end.
CHAMPAGNE: It got there and the U.K. was very instrumental. A number of countries have really helped us to move it to the mark and we are very
happy. You ask my priority, CETA. You know, the free trade agreement with Europe. I think, you have been in Davos, just like me. We talk a lot
about uncertainty. I think when you look at the trade agreement like CETA, which is a gold standard in the world, I met a number of counterparts, and
we need to get there.
QUEST: Right. You have done the deal. CETA is done.
CHAMPAGNE: Well, it needs to be ratified.
QUEST: Yes, but it's going to be ratified. It's signed. It going to happen.
CHAMPAGNE: Yes.
CHAMPAGNE: Next the U.K., the post Brexit U.K. What's your message to the U.K. about Canada's willingness to sign a free trade agreement?
CHAMPAGNE: It is in the interest of the United Kingdom but also Canada. We have very strong ties. People understand that. The good thing that we
enjoy with the U.K. today, we'll want to enjoy after for both countries.
QUEST: You mentioned uncertainty. Choose the color of the pen you will use, red or green.
CHAMPAGNE: I'll go red, you know.
QUEST: Of course, there we go, right. On the scale of uncertainty, everybody's telling me how uncertain. So, how uncertain do you think this
year and next year is going to be on a scale of 1 to 10? How uncertain?
CHAMPAGNE: I will be optimistic. I'll be around here.
QUEST: So, optimism is that way.
CHAMPAGNE: Exactly, but If this is uncertainty and certainty I will be probably around here. Because I have always been optimistic. Common sense
prevailed. Obviously, there is uncertainty. But people will work to tackle these uncertainties. The global order that we have today has serve
people well. And I think people will realize that.
(END VIDEOTAPE)
QUEST: The Canadian Minister talking to me earlier.
Now Joseph Stiglitz has been warning the number of jobs back to the United States is tiny compared to the number that could disappear as a result of
Donald Trump's policies. Professor Stiglitz is a Nobel Prize winning economist, who has warned of the negative effects of globalization over
many decades. He told me Donald Trump's policies will hurt the very people who voted for him.
(BEGIN VIDEOTAPE)
JOSEPH STIGLITZ, PROFESSOR, COLUMBIA UNIVERSITY: Unfortunately for them, I believe he's going to fail. The reason why I say that is take the core of
what he promises, which is to bring back the jobs that have been lost through trade. The trade deficit, which he's criticized strongly, is
basically determined by macroeconomic forces. Because of his proposed and likely to be passed tax cut, the deficit will get larger and the result of
that will be the trade deficit will get larger. That means overall, we may save 100 jobs in Carrier, but the overall job picture in these
manufacturing industries that we lost, looks worse.
QUEST: You have been in a strong but nuanced way, you have gone against the excesses of globalization for many years.
STIGLITZ: Very much so. In fact,
QUEST: Donald Trump has stolen your clothes.
[16:25:00] STIGLITZ: He's stolen the notion. I wrote a book called, "The Globalization and Its Discontents" in 2002. Now that discontent family is
much, much larger than it was in 2002. But I said we had not to with draw from globalization, but we had to manage it better. And what he is doing
is trying to create a protectionist wall, not to manage it better.
QUEST: I'm going to push you on this, sir. He's not creating a wall. He's managing it, but he's managing it in the only way possible when you
are not dealing with a level playing field.
STIGLITZ: No, I mean obviously, he's trying to create an unlevel playing field. Building the wall between U.S. and Mexico is a wall. Physically a
wall. And the 45 percent tariffs against China are a wall. He doesn't even seem to understand that China in recent years has actually been trying
to keep the currency from falling. It's been lifting up the currency. If he had just left it -- if China just left it to market forces, their goods
will be even more competitive than they are today.
QUEST: Choose a red or a green pen and join me at the scale of uncertainty. Everybody is telling me how uncertain everything is. This is
the most uncertain. This is the least uncertain. How uncertain do you think everything is this year and next year?
STIGLITZ: I would say it's very up here towards the ten scale.
QUEST: Yes.
STIGLITZ: Very high uncertainty. The real problem is that the upside risk is very, very low. The down side risk is very high. We were almost
certain things would not be doing as well as they should be.
(END VIDEOTAPE)
QUEST: Professor Stiglitz on the scale of uncertainty.
We talked about Brexit and the British Prime Minister is hoping it is not the start of an exit, even though HSBC says, it will move jobs out of
London after Brexit. The Mayor of London, Sadiq Khan, is with me after the break. And the mayor is very concerned that it will be a lose-lose
situation and it will rip Britain apart. We'll hear from you after the break, sir.
(COMMERCIAL BREAK)
[16:30:00] QUEST: Hello. I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. And we'll talk to the Mayor of London. Before
we get to that, this is CNN. And on this network, the news always comes first.
In his final White House news conference President Barack Obama defended his decision to commute Chelsea Manning's prison sentence. The President
said it was appropriate as she had served a tough sentence. Manning, a former army soldier was convicted of disseminating highly classified
information to WikiLeaks.
The former U.S. president George H.W. Bush is recovering in intensive care at a Texas hospital. After doctors performed a procedure to clear his
airway. His office says the 92 -year-old has an acute respiratory problem stemming from pneumonia. He had already decided to skip the inauguration
of Donald Trump because of poor health.
A South Korean judge has told CNN, he has rejected a request to arrest the vice chair of Samsung group on corruption charges. Prosecutors accused Lee
Jae-yong of bribery, embezzlement and perjury in relations to payments and return for government support. Lee and Samsung have denied wrongdoing.
HSBC is the first major U.K. bank to confirm it will move jobs out of London after Brexit. Possibly up to a thousand traders. And they'll be
going to Paris. UBS is also telling CNN it's moving perhaps up to 1,000 jobs, U.K. staff, but they haven't said where. The Mayor of London, Sadiq
Khan, has already said a hard Brexit could rip the country apart. The mayor joins me now. Good to see you, sir.
SADIQ KHAN, MAYOR OF LONDON: Good to see you again.
QUEST: You heard what the Prime Minister said. You'd argued against a hard Brexit. But that does appear to be the case, bearing in mind the need
for immigration borders and the like. So, you're going to get a hard Brexit, whether you like it or not.
KHAN: What's really important is that sensible minds try to put pressure on the Prime Minister to ensure we maintained privileged access to a single
market. London is a great place to do business over the last year. We have seen Google, Apple, Facebook, Snapchat, Invested and expand in London.
But if we have a hard Brexit it could lead to lost jobs being lost.
QUEST: She said they are not going to seek single market membership, but she wants the best deal. It is no use still arguing for single market
membership. That's off the table now.
KHAN: I'm not arguing for membership of the single market, I'm arguing for access. Privileged access to a single market.
QUEST: She would agree with you I could imagine.
KHAN: What's really important though, as you understand why it's so important for our city and our country. The reality is our future
prosperity depends on us being able to attract talent to London and the U.K. And us being able to have access to a single market. I'm afraid
talking tough to our friends and our allies could lead to a hard Brexit. The reason why I say it's a lose-lose is because if jobs leave London,
although a small number may trickle to Paris or Berlin or Madrid, the vast majority will leave Europe. That's bad for London, bad for the UK, but bad
for Europe as well. It's a lose-lose.
QUEST: This passporting -- standing where you were yesterday, the chief executive of Lloyd's of London, who you'll be well familiar -- she pretty
much admitted passporting is gone and it's not going to come back.
KHAN: Well, I think there's a discussion to be had with our European colleagues about the passport and financial services. As far as I'm
concerned, the two key things we need is a continued ability to track talent and privileged access to a single market. There are other issues
the Prime Minister has 12 separate issues she was keen to make sure she prioritizes. The key we have as a leading global financial center of
Europe is the ability to attract talent, privileged access to a single market.
QUEST: Do you fear that because you have talked about the country being ripped apart. Now, is this a reference to Scotland and the first
minister's comments which basically she's pretty much said, the first minister, Nicola Sturgeon, that she'll go for another referendum. She
didn't quite put it in those blunt terms, but that's the gist.
KHAN: While look, I think we've got to respect the democratic will of the British people. The British people voted to leave the European Union
structures and legal institutions. They didn't vote to make us a poorer country. If we want to have growth to have money to have money to spend on
public services, like the health service, schools, police officers. We need to recognize that our future lies with access to a single market and
the continued ability to attract talent. And my concern is that the decisions we take over the course of the next few months could lead to
future generations being poor rather than richer.
QUEST: Is anybody listening to you, do you think?
[16:35:00] I mean, this question of the city of London, the financial industry, passporting, single market access or privileged access. These
are issues that you need a seat at the table. Do you have that?
KHAN: We do. I've got access on a regular basis with David Davis, the Brexit secretary, with seating members of the government. I'm asking
business leaders, chief executives, leaders of cities across Europe to argue and lobby national leaders in countries across Europe to recognize if
there is a hard Brexit, London loses. So, does Europe.
QUEST: Choose a color of pen and join me, if you be as kind to --
KHAN: No expense spared by CNN. Marker pen and white paper.
QUEST: Excellent, excellent. You should be impressed and pleased.
KHAN: I think as far as this scale of uncertainty, we are around here. I'm an optimist. That's why it's crucial going forward we don't have a
hard Brexit. We maintain privilege access to the single market. We maintain the ability to attract talent. We recognize actually, the vote on
the relationship to the European Union was a proxy for the concerns people have.
QUEST: Good to see you.
KHAN: Take care.
QUEST: Thank you very much. We are proud of our pen and our white board.
KHAN: No expense spared. I love it.
QUEST: It gets the job done. Thank you.
Now, Sweden says that Brexit negotiations should not be punitive. The Prime Minister, Stefan Lofven, said while he welcomed Theresa May's exit
plan, the EU would never accept a deal that's close to the status quo.
(BEGIN VIDEOTAPE)
STEPHAN LOFVEN, SWEDISH PRIME MINISTER: First, she was clear, which is good before you start a negotiation. She also wanted a prosperous U.K. as
well as a European Union, which for me is a basis on negotiating so that we reach a deal that's good for both parties. I would say though that I think
the timetable is quite optimistic. Concluding all of this in two years. Actually, we only have one and a half year to negotiate. And both to
withdraw from the European Union and the new agreement in one and a half years, I think that's very optimistic.
QUEST: You can understand, obviously, from the British point of view, the so-called cliff if there is no deal in place, no transitional arrangements.
But also from EU companies' point of view, it is in your interest as well to have either transitional or a free trade deal in place at the end of
Brexit.
LOFVEN: It has been our position the whole time that we need to find a solution that's pragmatic, working for both. Because this is a problematic
situation, no doubt. We have to respect what's happening now. There is no good in arguing just against the other. We have to find a solution.
Because the U.K. will be there after this agreement. EU will be there after this agreement. We have to find a pragmatic way of handling of this.
QUEST: Do you think it is reasonable for the U.K. to expect access to the single market as close as possible to membership.
LOFVEN: Of course, they want it as close as possible. That's natural. But we have stated the whole time, and this is very crucial, you cannot
have access to this market on the same conditions as if you are a member, without being a member.
QUEST: But you can get close.
LOFVEN: That's what the negotiation will be about. Because the Prime Minister May, she said she wanted as close as possible. We have to decide
what's close enough. Because if you allow an agreement that's so close that it doesn't make any difference if you're a member or not that will be
a bad deal. And EU will never accept that kind of deal.
QUEST: Are these talks going to be brutal?
LOFVEN: I'm not sure. It depends on how we handle it. And that is why we've been towards both Prime Minister Cameron and Prime Minister May from
the Swedish point of view that we want a pragmatic, stable, calm negotiation. But of course --
QUEST: Nonpunitive.
LOFVEN: Nonpunitive. Because once again, the U.K. will be there. Sweden wants a good relationship with the U.K. We want the EU to have
relationship with the U.K., because we will be there after this agreement. So, let's think not only for these two years of negotiations or one and a
half years, but let's think beyond that and see what we can do.
(END VIDEOTAPE)
QUEST: That's the Swedish Prime Minister.
Now, we've had a mixed day. Let's have a look at the European markets. The FTSE was higher, having recovered after PM's Brexit speech. Remember,
the FTSE and the pound are now sort of going in opposite lock step. With the FTSE was sharply down yesterday as the pound was sharply up. Now you
are starting to see a reversal of both of those.
You had three up and one down. Pearson was down 29 percent. That's a lot. Pearson used to own, they don't anymore, they used own of course, the FT,
but they described and unprecedented changes in publishing. You can say that again.
[16:40:00] Goldman Sachs reported a surge in quarterly revenue and profits early today. Easily beating the forecasts. The shares in the Wall Street
giant Goldman Sachs were up 30 percent since the election. They were half a percent lower and that was reflected across the board with the Dow
falling 22 points, although it had been much sharply down.
Netflix has reported just after the bell. Netflix added 7 million subscribers in Q-4. A stonking large number, and it was well higher than
had been expected. Netflix is about 7 percent up in the afterhours.
Now, Russia will hack your elections and try to dissolve your democracy. That was a somber message from Joe Biden, the outgoing U.S. vice president.
We'll going to hear from the Deputy Prime Minister of Poland, another country in the democratic spotlight.
(COMMERCIAL BREAK)
QUEST: In his final speech as U.S. Vice President, Joe Biden is warning that Russia will use cyber-attacks to influence European elections in 2017.
Mr. Biden delivered a keynote address here at Davos and he warned that liberal democracy itself is under threat.
(BEGIN VIDEO CLIP)
JOE BIDEN, U.S. VICE PRESIDENT: With many countries in Europe slated to hold elections this year we should expect further attempts by Russia to
meddle in the democratic process. It will occur again, I promise you. And again, the purpose is clear. To collapse the liberal international order.
(END VIDEO CLIP)
QUEST: The Polish Deputy Prime Minister says that nothing is going wrong in Poland. And this is despite allegations of anti-democratic forces in
the country. What are those? For example, the EU Commission is investigating allegations that the rule of law is not being followed.
There are accusations that the Constitutional Court is being packed with loyalists and, indeed, that media laws have been changed and regulations to
make it -- to put threats to the freedom of the press. The Deputy Prime Minister rejected all of this and said we are listening to our people.
(BEGIN VIDEOTAPE)
MATEUSZ MORAWIECKI, POLISH DEPUTY PRIME MINISTER: I'm absolutely convinced nothing is going wrong. We are the first in the line. The second was
Brexit. The third was the referendum in Italy. The next one before the referendum in Italy was elections in the United States. I hear the same
voices, similar as us now against the United States.
QUEST: You are cloaking yourself in this populist movement. Correct?
MORAWIECKI: Not populist movement. This is hearing the society.
QUEST: Same thing, differently expressed.
[16:45:00] MORAWIECKI: No, no. Completely different. I mean, like the elites or the business establishment lives in a very different space than
the 90 percent of the population. We have to take this into account.
QUEST: You have changed rules on the constitutional court.
MORAWIECKI: We have not changed the rules of the constitutional court. Our predecessors did it.
QUEST: You have changed rules on media ownership.
MORAWIECKI: We have not changed the rules of media ownership. The United States can confirm this.
QUEST: There are regular demonstrations in your country complaining of the changes the government has made.
MORAWIECKI: Ten times less populous. Ten times less participants of those demonstrations than three years ago. You have not been asking our
predecessors about this. Why is that?
QUEST: So, we can go backwards and forwards, I say, he says, they say, we say. The
reality is the perception in Brussels and outside --
MORAWIECKI: No.
QUEST: Is that Poland has taken a nationalistic turn to the right.
MORAWIECKI: The reality is we were listening to 90 percent of the population. It was a victory a year ago, in terms of the elections. We
had to perform according to our program. We take this seriously. By the way, here in Davos, I spoke to 20 or 25 people. Nobody asked me those
questions. They are not at all concerned. They are coming with investments. Lots of green field, brown field investments. Everything is
very well -- everybody was well prepared for investment in Poland.
QUEST: Final question. Where do you see Poland's position in the EU?
MORAWIECKI: I think Poland will go the middle route. One extreme is the United States of Europe. Some utopian politicians believe -- we should go
desegregation. We should not because it is utopia. Another fragmentation of the European Union, let's go back to protectionism and nationalist
states. We want to preserve the unity of the united Europe and the Atlantic community as well. It will be the best ally of the United States
for the next decades.
(END VIDEOTAPE)
(BEGIN VIDEO CLIP)
QUEST: Now that, gentlemen is not only the deputy prime minister and the finance minister of Poland joining me. Donald Trump, we have certainly
seen he can move companies to change their plans to stock market up some, whatever it is since the election coming off highs. The dollar tumbled
after Mr. Trump said it was too strong. He's complaining that a strong dollar is actually anti-competitive for U.S. corporations. Larry Summers
is the former treasury secretary. Donald Trump's comments break with decades of tradition. He was treasury secretary under president Clinton.
He had the national economic council under President Obama. Warning Donald Trump that his strategy of talking down the dollar is risky.
LARRY SUMMERS, FORMER TREASURY SECRETARY: I think such market commentary on the part of presidents or President-elects is very rare. And usually
does regret it. I think it is best for presidents to stay out of market commentary and indeed the formulation we used when I was treasury secretary
that Secretary Ruben used as treasury secretary that's generally been followed since is not a commentary on a specific market level. Rather an
indication of a general principle that a strong dollar is good. The commentary is not something I would recognize as a general practice.
QUEST: Did you interpret what he was saying as the beginning of a change in policy designed to push the dollar down?
SUMMERS: I wouldn't want to jump to that conclusion. I will leave it to others to interpret the President-elect's comments. In general, I think
policy is more important than rhetoric. I do have considerable concerns about the protectionist policies being embraced by the administration.
What they will mean for U.S. consumers? What they will mean for the competitiveness of U.S. producers who import inputs into whatever they
produce? And more generally, you know, the Mexican exchange rate has depreciated 15 percent relative to where it would otherwise be because of
all of the rhetoric.
[16:50:00] That makes Mexico 15 percent cheaper relative to Ohio. It is hard to see how that will be a good thing for the U.S. economy.
(END VIDEO CLIP)
QUEST: Larry Summers talking to me earlier. Sharp-eyed viewers will notice you see different takes on the scale of uncertainty tonight. What
happened was as the week went on and it got messier and messier and we couldn't work out what anybody was saying we decided just to update it and
make it clear. Transparency and clarity is everything. Talking of that Donald Trump dismissed the proposed merger of AT&T and Time Warner saying
it is an example of power structure and he's fighting. I will hear from the chief executive of AT&T who has since paid Mr. Trump a visit.
(COMMERCIAL BREAK)
QUEST: The chief executive of AT&T said he's ready for the spotlight if they acquire CNN and Time Warner. Donald Trump threatened to block the
merger of Time Warner and AT&T. Randall Stevenson said he's used to the scrutiny and has no intention of spinning off CNN just so that Mr. Trump
approves the deal.
(BEGIN VIDEOTAPE)
RANDALL STEVENSON, CEO AT&T: It's not the first time that we'll have been in a controversial area. We are a large company. We face hundreds of
thousands of consumers every day. Media isn't something new to us. I'm not dismissive. I understand there will be a lot of attention. A
spotlight. Not the first time we'll face this. And are we prepared for it? Yes, I think we are prepared for it. Only time will tell.
QUEST: What is your gut feeling now for what happens next. The transition has been -- I don't say the word rocky. There has been turbulence, lots of
tweets and comments. What's your feeling for it?
STEVENSON: I met with him the one time, as you said. I walked away saying this guy is a CEO. The President-elect is a CEO. If you ask what do I
expect after inauguration, I expect a CEO behavior. He has an agenda. He's been clear about the agenda. You meet with him. He talks about the
agenda. He'll act like a CEO and begin pushing on tax reform. I left his office feeling a conviction that it was critical to him. I would tell you
he seems to have an agenda that is rationalized regulation. He was clear. He said that doesn't mean no regulation. He said we have to get regulation
right though. I think that will be a high priority of his. I expect to see him execute on that. The one I think we should all execute on but most
of us don't know exactly what it means yet is trade. You should expect to see him go work trade aggressively.
[16:55:00] QUEST: Choose your color and head to the scale of uncertainty.
STEVENSON: So how uncertain.
QUEST: Everybody is saying things are very uncertain. So, that is things are certain, this is towards uncertainty. How uncertain do you think this
year is going to be?
STEVENSON: I don't mean to administer editorial privilege to CNN --
QUEST: Do whatever you like.
STEVENSON: I'm going to use the word predictability. All right? Which some could say is synonymous. What is the ability to predict out into the
future based on what we have seen? I would say our ability, just based on the last 12 months is probably somewhere here.
QUEST: Very predictable.
STEVENSON: Oh, very. Excuse me. Somewhere over here.
QUEST: Highly unpredictable?
STEVENSON: Highly. 12 months ago, who would have predicted this election cycle.
QUEST: You are ruining my chart.
STEVENSON: Improving it.
QUEST: Of course, great improvement you have made.
(END VIDEOTAPE)
STEVENSON: After so many squiggles from so many guests we had to make it clearer. We'll have a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: A very brief profitable moment tonight. So many superb guests on the program, we'll leave it right there. That is QUEST MEANS BUSINESS.
I'm Richard Quest in Davos. Whatever you're up to in the hours ahead, I hope it's profitable. See you tomorrow.
END
