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Quest Means Business
Britain's Former Foreign Secretary Says The Brexit Dream Is Drying; Stocks Surge As Donald Trump Heads To Europe To NATO And Britain; Chinese Market's Sentiment Is Hurting From Talks Of A Trade War; Another Major Auto Maker Is Getting Caught Up In The Emissions Scandal; Four More Boys Rescued from Cave in Thailand; More than 100 Dead in Japan Floods and Landslides; U.K.'s Boris Johnson Warns Against Semi-Brexit; U.K.: Can't Determine if Novichok that Killed Dawn Sturgess is the Same as One that Poisoned Ex- Russian Spy; Prime Minister May Defends Brexit Plan Amid Cabinet Resignations; John Longworth: Theresa May to Blame for Resignations; Erdogan Names Son-in-Law as Finance Minister; Starbucks, Hyatt to Phase Out Plastic Straws; Trump Defends U.S. Stance on Breastfeeding Resolution; Massive Concert Planned to Commemorate Nelson Mandela's Birthday. Aired: 4- 5p ET
Aired July 09, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN HOST: Madison Newwan ringing the closing bell on Wall Street, the National Summer Learning Association. Nice to see them ringing
the closing bell. Thank you. The bell is over. One, two, three, I think we call that solid gavels to bring trade into a close on Monday, it's the
9th of July.
Tonight, the Brexit dream is drying says Britain's former Foreign Secretary. Boris Johnson quits with a warning for Theresa May.
Stocks surge as Donald Trump heads to Europe to NATO and Britain, and a final straw, Starbucks is getting rid of plastic. They'll tell you why and
how. I'm Richard Quest today live at the CNN Center where of course, I mean business.
Good evening, the British Prime Minister Theresa May is tonight in serious trouble after two Cabinet members resigned in just 24 hours. And now, Mrs.
May is battling the back benches, warding off a potential leadership challenge to save her job. First of all, Boris Johnson, the Foreign
Secretary who famously got stuck on a zipline promoting the London Olympics when he was Mayor of London said the Brexit dream is dying being suffocated
by needless self-doubt.
And the man whose job it was to negotiate and guide Britain through the Brexit, David Davis also announced he was quitting. In Parliament, the
Prime Minister defended her strategy that it was agreed that a meeting her country home Chequers early on Friday, but now though, she faces the
possibility of a challenge if there are sufficient MPs who want her gone.
The pound rose on David Davis's late night resignation and then fell back when Boris Johnson quits. And there are reports tonight that the Health
Secretary, the Health Minister, Jeremy Hunt has been appointed the new Foreign Secretary. Let's go to all of this point-by-point with Nina dos
Santos who joins me at Westminster.
The Cabinet agreed a new white paper and a new formula that was going to be put - published this week. So, why did both men decide to go now?
NINA DOS SANTOS, CNNMONEY EUROPE EDITOR: Well ,remember that that famous meeting that they had on Friday at the Prime Minister's country residence
of Chequers, they reportedly took telephones and all mobile devices from all of these Cabinet Ministers, essentially put them in lock down until the
Prime Minister could get them to agree to her version of a Brexit plan. Obviously, David Davis has the weekend to think about this, and he believes
that the UK is embarking upon its position as it heads into the final stretch of negotiations with the E.U. taking too much of a soft approach.
So, obviously when David Davis decided to step down saying he couldn't present this in all good conscience to Brussels, that set in motion, a
cascade of other high profile lead figures who came under pressure to resign, obviously the most high profile one being Boris Johnson, but
despite all of this, the Prime Minister earlier today in the House of Commons was adamant that her version of Brexit was the best one for Britain
and it was what people who had voted for Brexit in this country had voted for. Here is what she said, Richard.
(START VIDEO CLIP)
THERESA MAY, PRIME MINISTER OF GREAT BRITAIN: In the two years since the referendum, we have had a spirited national debate with robust views
echoing around the Cabinet tables they have on breakfast tables up and down the country. Over that time, I've listened to every possible idea and
every possible version of Brexit. Mr. Speaker, this is the right Brexit. Leaving the European Union on the 29th of March 2019.
(END VIDEO CLIP)
QUEST: Now, she says this is the right Brexit, but as I understand it and having read the documents, this is a Brexit that keeps custom union in part
and would still allow regulatory alignment, so effectively, Britain would still in some - more loose way, but still be tied to the E.U.
DOS SANTOS: And that's a big problem that the Brexiteers had with it, which is why we're seeing this revolt going on at the moment. Again, the
Prime Minister for about an hour and a half in a really feverish debate in the House of Commons was keen to stand her ground saying, well, yes, I know
this confusion surrounding the - for instance the supremacy of the UK in Court of Justice, but now, the UK will have the right to set its own rules.
No, the UK will have the right to set its own deals with other countries and it won't be beholden to the E.U. whilst it's negotiating this
transition phase outside and that now, that obviously is particularly significant because we've got the U.S. President Donald Trump in town in a
couple of days' time and so, obviously the UK will be keen to talk trade with its trading partners, but again, time and time again, she was beaten
back by some people who are just too skeptical of what she's put on the table, Richard.
QUEST: Nina dos Santos in Westminster, thank you. We put it in terms of the clock and there is no escaping that it is ticking the self-imposed
deadline for the talks.
[16:05:15]
QUEST: This has been self-imposed by the British and the Europeans is October of this year. That's because you have to allow for the European
Parliament and the various national parliaments to make any treaty changes or to agree and approve. Brexit itself, the day is March 29, 2019, which
is just 263 days away.
According to an NLRB monthly poll approval of Brexit talks, it is now the lowest, 29 percent of those asked approved the negotiations compared to 36
percent in June. And there are those who hope Brexit will never arrive. Donald Tusk, the President of the Council tweeted, "Politicians come and
go, but the problems they have created for people remain. I can only regret that the idea of Brexit has not left with Davis and Johnson, but who
knows. Now, also, a potential leadership challenge for the Prime Minister."
Carole Walker joins us from Abington Green, our political analyst to put some perspective into this. All right, let's take this point by point at a
fair old clip. Carol, first of all was it that surprising or was there an inevitability that you could only pave over the cracks for so long and
eventually, the Brexiteers like Johnson and Davis would not be able to live within that tent.
CAROLE WALKER, CNN POLITICAL ANALYST: Well, absolutely, Richard. When you saw David Davis's resignation letter, the man who has been leading the
negotiations and he cares into Theresa May's plan which you were just talking about. It makes it a surprise that he stayed as long as he did,
and certainly, there had been rumors that he was going to resign for quite some time.
And certainly, as soon as anyone had a chance to read through that document, this talk of a common rulebook with the E.U. on trade, which mean
that the UK would have to follow many of the E.U. rules if it wanted to keep it open that frictionless trade, then it was really no surprise that
these people walk. I think many people were surprised that senior Cabinet ministers didn't walk out on Friday with that Chequers meeting going on.
But, perhaps it was the fact that they would have lost their government cars and had an awfully long way to walk to get to the mini cabs.
QUEST: The issue of the Prime Minister's own position, now tonight, she's talking to her back benches, the quaintly known 1922 Committee, is she at -
you have been around that building, Westminster long enough to be able to read the tea leaves properly, is Theresa May in trouble tonight?
WALKER: Well, she's undoubtedly in trouble. This is undoubtedly the most serious crisis since the general election two years ago, but what there
isn't is any concerted attempt to oust her. Now, it's very interesting, Richard, tonight there's been a meeting of the group of pro-Brexit
conservative MPs, a bigger meeting than you would expect for that particular grouping, and although speaker after speaker, laid into the deal
which Theresa May had hoped she could get her own proposals, many of them including the key leader of that group, Jacob Rees Mogg said that he would
not vote against the Prime Minister in a confidence vote.
And what we've heard is different views on the Prime Minister's future. We've had ardent Brexiteers all laying into the proposal she came up with,
but only a handful actually saying it was time for the Prime Minister to go, so at the moment, there is not only no concerted attempt to oust her,
there is no prospective challenger to lead an attempt to oust her.
Yes, you need just 48 names for a leadership contest, but for a leadership contest, you've got to have somebody to put up against the Prime Minister,
and at the moment, no one is putting their head above the parapet.
QUEST: All right, but she also needs to have support for the underlying plan that she's put forward. And if the one thing we see from - unless she
seeks support from labor in that sense, she will not get her plan through Parliament.
WALKER: Yes, there is very strong possibility that her plan, which she stuck by today throughout, long session of questions in the Commons, she
was insistent that it was the right plan for Britain, the right plan for the European Union, there is a strong possibility that that could be voted
down.
If you look at the number of potential rebels in the Conservative Party, assuming that the Labor Party decides to vote against it and all the
indications are that it will do so, then that plan would be defeated and that is then a very, very difficult position indeed for the Prime Minister.
She would then face a confidence vote. Of course, she could survive it --
[16:05:16]
WALKER: -- she could survive it, but how does she then stitch together some other new form of compromise that is going to keep both sides of her
divided party on board. There is absolutely no doubt that we are in really uncertain times, and indeed the Prime Minister is shown every chance of
plowing on, but could she really survive defeat on such a fundamental plank of the way she sees Britain going through Brexit.
QUEST: Carole, excellent having you with us tonight. Thank you, I appreciate it. Now, later on, you're going to hear from one of the most
influential Brexit hardliners, John Longwood is the former head of the British Chambers of Commerce and Chairman of the Leave Mean Leave Campaign.
You'll hear him on this program.
European markets, they all closed higher. Now, if you look at the London FTSE which actually finished up nearly 1 percent. The Dow rose for the
third straight day, thanks to strong U.S. jobs report and heightened trade tensions, and the Dow overall - have a look - it rallied. That's a good
strong rally of 320 points, straight out the gate never looked back. Good gains is on track for its biggest one day advance in a month.
And the best performing stocks were Caterpillar, JP Morgan Chase, Goldman Sachs. If we look, there we see, four percent for Caterpillar, three
percent for JP Morgan and even the laagered Coca-Cola and P&G went off just one or two - less than one percent in the case of Coca-Cola and the rest.
Clare Sebastian is with me. Clare, two areas we need to briefly talk about there. Firstly, obviously the Dow, but I also want to get us to the FSTE
on why the FTSE didn't respond more negatively to what we saw with Theresa May and Brexit. Let's start with the Dow. What happened today.
CLARE SEBASTIAN, CNN CORRESPONDENT: Well, Richard, I think this is a classic case of trade wars briefly forgotten about and this was traditional
market fair of the economy and fundamentals. We're still talking about the jobs report from Friday, which was very strong and we're looking ahead to
an earnings season which is likely to be very strong as well. The banks are kicking that off in earnest on Friday, CitiGroup, Wells Fargo, JP
Morgan and as you said, the banks were some of the top gainers as well.
And I think a sign of just how much the trade wars were kind of off the table. Today, it was Caterpillar, so as you pointed out that stock up four
percent. That's one of the stocks that have been hammered the most as we've seen these trade war affairs play out on Wall Street. It is though,
still Richard, down about 10 percent on the year, so still some nerves there, but overall, today, a strong rally and it pushed the Dow up above
its point, which is now positive for the year.
QUEST: In a sentence or two, why was the FTSE up?
SEBASTIAN: Well, that was an overall global rally that it just continued to follow, and Richard, plus the fact that the pound dipped briefly and we
see this inverse reaction, this inverse movement when the pound dipped, then the FTSE rallied. This is an exporting nation, but the pound's losses
they were pretty contained. There were nerves about Boris Johnson resigning, but as you were talking with Carole Walker about still no overt
challenge to Theresa May's leadership, so still treading water there.
QUEST: Clare Sebastian in New York, thank you. As we continue tonight, President Trump is attacking the European Union over trade. We will
discuss the message he'll be sending days after he heads off going to Europe and the NATO Summit and a visit to the United Kingdom. It's QUEST
MEANS BUSINESS tonight at the CNN Center.
[16:15:00]
QUEST: President Trump continues to lash out at the European Union over trade ahead of this week's NATO Summit. Mr. Trump tweeted on Monday about
the E.U. surplus with the U.S. saying simply, "No." Joining me now, the former U.S. Commerce Secretary Carlos Gutierrez who will help us understand
this. We all know that the U.S. has a deficit on goods, but a surplus on services, but I guess the President's point is that you should try and have
more balance manufactured trade even allowing for services. It's not a good thing to be a constant importer, not exporter, and there's a valid
point on that.
CARLOS GUTIERREZ, FORMER U.S. COMMERCE SECRETARY: Well, look, as you well know, Richard, all - just about all developed economies have a low portion
in manufacturing, even lower portion in agriculture and a bulk of their GDP is services. And that's just the reality of being an advanced economy.
So we'd all be manufacturing in the future, but we'd be manufacturing high tech materials, not bringing back manufacturing that we had 20 or 30 years
ago.
QUEST: Armageddon hasn't arrived with these first trade tariffs against China, the $34 billion or so on either side, and I guess - and the same
with the European Union. I guess, the issue is whether or not the next round coming in on automobiles or the $50 billion for the Chinese?
GUTIERREZ: Well, that's - the automobiles is - that's the big move and that would be devastating for the whole world because everyone somehow
makes a part or makes an input. Automobiles aren't made in one country 100 percent, so that would be a big blow. Now, the other day, Chancellor
Merkel took President Trump up on his word at the G-7 where he said, "Why don't we just have a tariff free world, then we'll stop arguing about
this."
So, she came forward and said, "Why don't we have a tariff free automobile market?" Well, that's a pretty good idea and perhaps, that's something
that the President can take on. The issue of course is that he has talked very poorly about bilateral - about multilateral deals, which is what this
would be.
QUEST: If the - I mean, so much has been written on this question and spoken on the question of these tariffs being dangerous, but if they do
lead to a rebalancing of world trade, yes, perhaps in a fair method for the U.S., then that would have been an advantage. Are you still as pessimistic
about the current trade policy of the Trump administration?
GUTIERREZ: Yes, I am. For a couple of reasons. One is if the real target is China as the President has said, then why pick a fight with the rest of
the world? So, that's just one point to the side, but if you look at tariffs as a whole, tariffs are hurting U.S. companies. About 60 percent
of what's come in from - what comes in from China is for U.S. manufactured products.
So, what we're doing is we're taxing U.S. manufacturers; by raising tariff on steel and aluminum, we are making it more expensive to build the factory
in the U.S., which my understanding is that's the goal.
QUEST: Except as the President said to Harley-Davidson, be patient. Is there not an argument that puts forward, Mr. Secretary, look, it's going to
be tough in the short term, but longer term, a rebalancing of global trade will be to everyone's benefit. Everyone knows the Chinese cheat, the issue
is how to get them to stop it. Now, if there is a short term pain for a long term gain, do you accept that?
GUTIERREZ: Well, assuming that this is short term and assuming that there is some short term pain, the problem, Richard is what comes at the end?
How does this end? Is there going to be a surrender ceremony where people sign? Or are we going to admit that there are two systems here, the
Chinese model and say the Western model --
[16:20:15]
GUTIERREZ: -- and the challenge is how do we find a way to co-exist. Under that scenario, I would say China got the best of the deal because
what they want is recognition of their model and not that we constantly be trying to convince them to change their model. But I think that's the key
question. Is we started this war, how does it end and how does the President end it in a way that he can declare victory? That's going to be
very difficult.
QUEST: In a word, Mr. Secretary, having had weeks if not months of semantics and pedantry on whether we are in a trade war or not, are we?
Yes or no?
GUTIERREZ: Yes, we are. We are in a trade war and you'll start seeing it, maybe not in the GDP numbers, but you'll start seeing it in the earnings
releases. This quarter, a little bit, but the next quarter, you'll see it quite a bit and that will hit the stock market.
QUEST: Good to have your analysis, insight and thoughts tonight, sir. Thank you.
GUTIERREZ: Thank you, a pleasure.
QUEST: The Chinese market's sentiment is hurting from talks of a trade war. Xiaomi had a bumpy market debut in Hong Kong. Shares of the Chinese
smart phone maker slipped nearly six percent in early trading. There was a recovery. They were just down one percent at the close. CNN's Samuel
Burke is with me with more. Why is Xiaomi so important?
SAMUEL BURKE, CNN TECHNOLOGY AND BUSINESS CORRESPONDENT: Well, it's incredibly important because it's one of the Chinese tech darlings, one of
the biggest smart phone makers in the world, Richard, but let's call this what it is. It was a flop. The company is only valued at $54 billion. A
lot of money, but the very bottom of the range, though it did make a lot of people very rich including the CEO and founder of the company, his 29
percent stake in the company is now worth $14 billion, though much less than he would have hoped.
(START VIDEO TAPE)
BURKE: His name is Lei Jun, the mastermind behind Xiomi, one of the most influential entrepreneurs in global tech today. Born and raised in China,
Lei Jun is 48 years old that the net worth estimated by "Forbes" at some $12 billion, making him one of the richest people in China.
Lei is no overnight sensation. He's been on the global tech radar for years. "Forbes Asia" named him Businessman of the Year in 2014 under the
headline, "Smart Phone Sensation." He jumpstarted his career much earlier as an angel investor for a whole host of firms and he still hold
investments in hundreds of companies from air conditioners to kitchen appliances.
Lei Jun founded Xiaomi in 2010 with the hopes of getting the likes of Samsung and Apple a run for their money in Asia with competitively priced
phones. The shipment was up more than 88 percent in the first quarter of this year. Xiaomi is Chinese for "little rice," but there's nothing small
about Lei's ambition. His next goal is to sell phones in the U.S. and Lei is not the only one living large after Xiaomi's public debut. The
company's earliest employees, the so-called "Lucky 56" will take home windfalls of millions of dollars and that's a look at Xiaomi's founder, Lei
Jun."
(END VIDEO TAPE)
BURKE: Richard, let's just connect the dots to what your previous guest says. This flop of an IPO not just - it doesn't only show us the
limitations of tech, but your last guest, the former U.S. Commerce Secretary just said you're going to see this in earning report and now,
we're seeing it in an IPO. This is the effect of a trade war on these companies. We are talking about three Chinese telecoms companies that have
now been affected by this - ZTE, Huawei and Xiaomi. These are the results already playing out.
QUEST: Samuel Burke in London. Thank you. And now, another major auto maker is getting caught up in the emissions scandal. Nissan says its work
is in Japan. Falsified emissions and fuel economy results for 19 models. The second time in less than a year that Nissan's inspection process has
come under fire. Shares of Nissan were off 4.5 percent in Tokyo as he details of the scandal began to trickle.
Rebecca Lindland, we need your help. The executive analyst of Kelly Blue Book joins me. Rebecca, listen, they were all at it.
REBECCA LINDLAND, EXECUTIVE ANALYST, KELLY BLUE BOOK: Well, a lot have come to light since the dieselgate scandal of Volkswagen in 2015 and part
of it is just the microscope is on these kinds of processes. It's on how do you count emissions? How do you evaluate emissions? How do you count
fuel economy and so that's why so many of these issues are coming to light.
QUEST: I just wonder how much of all of this was an open secret in the industry, do you think? How much - did all the engineers knew that
everybody was doing something to fiddle the figures?
LINDLAND: Well, it's important to note that each manufacturer has actually had its own special case. So, what happened at Nissan was really confined
to within their plants --
[16:25:16]
LINDLAND: -- where the plant workers, in the first case, they were sealing the stamp and they were not qualified to say these vehicles passed
inspection. In this case, they were falsifying emission standards for a Japanese compliance. These did not - these vehicles did not get exported
beyond Japan. This is very different than what happened at Volkswagen in 2015 where it was really from the root of it, from engineering all the way
up to the top, which is why venture corner (ph) is gone, so it's a very different situation.
QUEST: Is it an indication also that the standards are so high and the compliance requirements are so tough that it has become extremely
difficult. I mean, we hear the argument that if you look at any of our lives, we'd end up finding fault - we've broken the law of done fault
somewhere because it's just almost impossible if you look back closely.
LINDLAND: Right. You know, it's interesting, I was thinking about this question while I was preparing for this, and it's hard to say. I think
part of the reason that we're so challenged in the industry for the emission standards is because consumers particularly in the U.S. are not
buying these types of vehicles. We're not - we're still at two and three percent of hybrid and electric vehicles for new vehicle sales and this has
been going on for years.
Two and three percent - so we can't get the demand in order to justify the investment to make those business cases that say, "Hey, we've got to get
these vehicles. We've got to get the most fuel efficient vehicles out there because that's what consumers are demanding." We're not seeing that
and so then it gets very challenging to invest hundreds of millions, if not billions of dollars in improving and meeting these regulations.
But I think that it's certainly part of it. The regulations are so challenging right now that you just have to meet them and it doesn't
matter. And what's interesting about the Japanese is that they rarely are doing it for personal financial gain, they are doing it to salvage a
reputation of their company that they work for.
QUEST: Good to see you, Rebecca. Thank you for helping us understand this one. I appreciate. Thank you very much indeed.
LINDLAND: Thanks, Richard.
QUEST: As we continue tonight on "Quest Means Business" from the CNN Center, politicians come and go, Boris Johnson and David Davis have gone.
The head of Leave Means Leave says he hopes more will follow. In a moment.
(COMMERCIAL BREAK)
Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. The U.S. government is under fire for protecting companies who
sells baby formula, Donald Trump has joined into the commenting.
[16:30:16] And Naomi Campbell tells us how she hopes to raise a billion dollars for charity and we'll hear from real soon. As we continue tonight,
you're watching CNN and on this network, the facts always come first.
Four more boys have been rescued from a cave in northern Thailand on the second day of rescue operations. It brings the total number to eight that
are being freed after four were released or freed on Sunday. Now, there are four boys remaining and their football coach still inside the cave for
their 17th consecutive night.
Rescue workers are also resting and they need at least 20 hours to prepare for the third operation. At least, a 100 people have been killed in floods
and landslides in western -- the southwestern Japan. Thousands of people and thousands of homes are still without power after a record rainfall over
the last few days.
The Prime Minister Shinzo Abe says evacuation centers temporary housing needs to be improved. Britain's former Foreign Secretary Boris Johnson is
warning that Britain is turning into a colony with a semi-Brexit plan, he will be replaced by the Health Secretary Jeremy Hunt.
The reshuffle comes after David Davis announced he is resigning as the Brexit secretary. British investigators say they can't determine whether
the nerve agent that poisoned this man and woman is the same batch of Novichok used last March against ex-Russian spy and his daughter.
And the woman Dawn Sturgess has died, her partner remains in hospital. Authorities(ph) are saying it's focusing on how the couple came into
contact with the poison. The reason May split with her cabinet has always been over the Brexit plan. Officials in Brussels have described her plan
agreed on Friday with a sort of an association and common rules and the infrastructure for managing, it is a non-starter.
Because behind the plan, always are the four freedoms, the four pillars of the E.U. Now, you'll be familiar, we talked about the many times on this
program, the freedom of goods, freedom of services, freedom of capital and freedom of labor or freedom of people, freedom of movement, it's often
called.
The Chequers agreement keeps the freedom for goods, it puts limits on anything else, recognizing that services are now part of it, recognizing
the same thing for capital and the city of London that London may require different regulatory structure, and most importantly of all, it does not
grant freedom of movement of people to other E.U. citizens.
However, the E.U., perhaps not surprising has won this all or nothing. Theresa May says the E.U. negotiate just chose some flexibility. But
parliament clearly doesn't think that will happen.
(BEGIN VIDEO CLIP)
THERESA MAY, PRIME MINISTER, UNITED KINGDOM: What we are proposing is challenging for the E.U. It requires them -- it requires them to think
again, to look beyond the decision they've taken so far and agree on E.U. fair balance of rights and obligations.
(END VIDEO CLIP)
QUEST: The banks however even with the four foot pillars are not waiting for the British government to sort out its policy. Maybe look already,
BlackRock and Citi are expanding their businesses in Paris. Not abandoning maybe just yet, but they are changing the shift of their priorities.
And they join a host of other financial institutions with Morgan Stanley, Goldman Sachs, famously Lloyd Blankfein has made some very strong comments
about leaving London or adding staff outside the United Kingdom with Frankfurt, Dublin and Paris, the favorite destinations so far.
So now David Davis, the Brexit secretary as was Boris Johnson; the former Foreign Secretary have gone. The co-chairman of the leave-remain -- leave
means leave, campaign tells me. He hopes the pace of resignations will pick up. John Longworth was the head of the British Chamber of Commerce.
He placed the blame on the departures slowly and firmly at Theresa May's feet.
(BEGIN VIDEO CLIP)
JOHN LONGWORTH, FORMER DIRECTOR GENERAL, BRITISH CHAMBER OF COMMERCE: It's rather unfortunate for the Prime Minister, but then she should have thought
of that before presenting the policy that crossed own red lines and went against the conservative party manifesto.
A policy that actually means not Brexit, but Brexit in name only.
QUEST: Shouldn't both of those men have resigned over the weekend after the government puts out its statement.
[16:35:00] That statement, that three-page statement was perfectly clear about what the U.K. policy was going to be in relation to maintaining
Customs Union and to a certain extent single market.
LONGWORTH: Well, I can't speak for the individual's concern of course, and I was hoping that there would be resignations on Friday, but clearly they
have to think about it very carefully about what the impact would be on the conservative party and on the country.
But they have come to the right decision. You know, if the Brexit secretary says that this deal is not actually Brexit, that tells us
something, doesn't it? And I think if the foreign secretary made his points out on Friday and it was ignored, he's right to resign.
QUEST: Would you expect or would you hope for more resignations?
LONGWORTH: I hope for more resignations, whether there will be any remains to be seen. And what happens next is a matter of politics. But certainly,
the best chance, the best hope for the Conservative Party and the government now is that they actually conduct the will of the people and
produce a policy that is in fact Brexit.
They need to declare now for World Trade Organization, global trade system from March next year to leave without a deal and offer the European Union
the possibility, but free trade arrangement like they have with Canada and that will actually provide a better outcome for the U.K. economy and the
U.K. people.
And of course that's the deal under which the U.K. does most of its exporting now under World Trade Organization rules.
QUEST: It does and it doesn't as you're well aware, because the sophistry of the argument is that it ignores the close manufacturing links that are
essential with the E.U., cross-border though within a Customs Union. And most studies suggest that if you disrupt that in the way of a hard Brexit,
it will have very damaging implications for the U.K. economy.
LONGWORTH: No, it's been massively overblown. The economists for free trade have identified that actually by leaving the European Union properly,
the U.K. economy will be boosted by 7 percent of GDP, that's like an additional 139 of growth rate every year for 15 years.
Only eight percent of U.K. businesses export to the E.U., that represents only 13 percent of the economy. Most trade with the E.U. takes place in
the WTO rules without any trade arrangements or whatsoever is perfectly possible to do so. And Customs arrangement with the rest of the world
which operates without any trade arrangements work perfectly well, so well tried and tested system.
QUEST: I still have difficulty understanding why people like yourself are so optimistic in the face of so many studies, surveys, academics -- yes,
there are some who say it will all be fine. But you have to agree the preponderance of views is.
But it won't be fine, that it will be bad and that Britain will suffer outside. That is the preponderance of view.
LONGWORTH: Well, there are a massive number of entrepreneurs and we have a large number of businesses in our network who actually don't agree with
that. It's the entrepreneurial part, the private-business own part of the economy that is very optimistic, that embrace change, that actually wants
to enjoy and look forward to new ideas and innovation.
It's the (INAUDIBLE) in the CBI, the Confederation of British Industry, the big corporations, you want to skip things exactly as they are, because they
have it stitched out --
QUEST: Right --
LONGWORTH: They have protectionism and they like the monopoly profits that they make.
(END VIDEO CLIP)
QUEST: John Longworth talking to me earlier. After the break, Starbucks finds a way to do without drinking straws. It's the latest brand to punish
the plastic pests (ph).
[16:40:00] (COMMERCIAL BREAK)
QUEST: Some news in just CNN. The Turkish lira has fallen sharply against the U.S. dollar after Turkey's President Erdogan named a cabinet filled
with people loyal to him, it includes his son-in-law as finance minister. The appointment will deepen the concerns the masses already have about the
independence of Turkey's central bank.
As you can say it's off nearly and the 3rd of percent. Now, the question of Starbucks. Starbucks is looking to ban plastic straws by 2020, you're
familiar with these, it's -- not recommended for use in hot beverages. As a coffee chain, redesigned for the shape of its cups.
Today, Starbucks announced that it was going to get rid of the plastic straws. And Hyatt hotels also announced, it's also abandoning straws.
Latest companies that have been persuaded to abandon the prolific plastic straw. The World Wildlife Fund is one such persuader.
The Director of Sustainability and Research is Erin Samon and joins me now. Erin Samon, obviously, you must be delighted when people like Starbucks
announced that they're going to get rid of these plastic straws, that's real progress.
ERIN SAMON, DIRECTOR OF SUSTAINABILITY AND RESEARCH, WORLD WILDLIFE FUND: Yes, it is. I mean, we're looking at an enormous problem here. We have
over 8 million metric tons of plastic that's entering the ocean every year and so we look at companies to help us solve that problem and that's going
to happen in a variety of different ways, right?
So getting rid of some of the plastics that are unnecessary like straws, that's a great way to start, and having a brand like Starbucks, brands that
have such global reach and power start out by saying we're going to get rid of all of them by 2020. That sets a nice line in the sand that says we
need everybody to come to the table and do the same thing.
But that's just one of the ways that we have to look at addressing that --
QUEST: Right --
SAMON: Plastic waste problem.
QUEST: I often wonder though when I think of the plastic straw and then I think of the great polluting countries or the great polluting industries.
I mean, all we know, sort about the token as an end, when you're talking about plastic straws --
SAMON: Absolutely --
QUEST: It's nice that Starbucks into it, but come on, let's have an honest moment here. Is getting rid of plastic straws really going to make that
much difference when there are bigger fish to fry, pardon the pardons.
SAMON: Now, that's a really great point and I'm glad you brought that up because getting rid of straws is just a small piece of the waste that's
entering our oceans, right? And I think that today what it does is that it's meaningful and it connects the consumer to this large issue.
But there is much more that needs to be done, right? And so companies like Starbucks are looking at other initiatives to address other parts of the
waste stream that they are contributing too.
So one of the things that they are doing is engaging in the next cup challenge, which is trying to address the fact that hot and cold cups today
aren't really accepted in most recycling programs. And so it's looking at how they can change the design of the cups --
QUEST: Right --
SAMON: That we can get it back, right? So that's another --
QUEST: Right --
SAMON: But it's going to take a number of different things.
QUEST: What is -- what is driving this in terms of corporations getting involved. Because here I am -- look, I've got a Coca-Cola cup with a
plastic lid and a straw. Now, I can imagine this is sort of -- the sort of thing that will send you into apoplexy of -- because it's got everything
that -- it's got everything that I shouldn't have necessarily.
But it all came from the canteen down the road, it all came in -- you know, there has to be a better way of doing it. So what drives corporations in
deciding how to do this better? Is it political pressure? Is it consumers?
[16:45:00] SAMON: I think it's a combination of everything, right? Over the past, you know, three or four years, the marine debris issue has really
risen to the top. Some of the -- you know, the social media momentum, right? And so I think there's this huge interest in understanding what we
need to do to address the problem.
We had some great science that came out in 2015 that said the root cause of marine debris is surprise-surprise, limited and lacking waste management.
And especially in areas of the world where they have no -- you know, no waste management whatsoever, and there are areas where the populations are
growing and they're buying a lot more stuff.
So it really helped really --
QUEST: Right --
SAMON: Not only companies, but the scientific community together to say, OK, we understand the problem, we understand that there's a number of
things we need to do to look at better material systems, better way to --
QUEST: Right --
SAMON: Make our products, better way to use them, and above all else, making sure that none of that material -- whether it's plastic or any other
ends up in our ecosystem.
QUEST: Erin Samon, thank you for joining us, we'll talk more about this in the future, I appreciate it --
SAMON: No problem --
QUEST: Thank you. As we continue tonight, a star-studded concert in Johannesburg, fighting global poverty. Naomi Campbell was the host and she
tells us about that concert in a moment.
(COMMERCIAL BREAK)
QUEST: President Trump is pushing back against accusations his administration kowtow to the baby formula industry where he tried to water
down a resolution that would promote breastfeeding. The president tweeted that "the U.S. strongly supports breastfeeding.
But we don't believe women should be denied access to formula. Many women need this option because of malnutrition and poverty." "The New York
Times" reports the U.S. threaten to punish nations that supported the resolution. The resolution passed after Russia stepped in as a sponsor.
Lucy Sullivan says the U.S. stance sacrifices public health for private property. The executive director of 1,000 Days which is working to improve
infant nutrition. Good to see you. What is so wrong fundamentally with what the president tweeted.
He says the U.S. strongly supports breastfeeding, but we don't believe women should be denied access to formula where obviously it's necessary
because of malnutrition and poverty. Now, that seems to me to be a perfectly balanced position to take.
LUCY SULLIVAN, EXECUTIVE DIRECTOR, 1,000 DAYS: Yes, it absolutely was a perfectly balanced position to take and it was quite surprising. So I'm
really glad to hear that the U.S. government supports breastfeeding. It is one of the most powerful life-saving interventions we have.
It saves the lives of babies, it saves the lives of women, so I'm glad to hear that the president is such a strong supporter of breastfeeding. I
think what I take issue with is this notion that the problem is an issue of access of mothers not having access to infant formula.
[16:50:00] Infant formula is an absolute necessity for many families. Many mothers choose to use infant formula, many mothers have to use infant
formula. So the question is not one of access, but rather how these products are marketed. These products in many cases are unethically
marketed and these companies have been going against the international code of marketing for some time -- for decades now actually.
QUEST: Is it your feeling that somehow the administration is being noble, it's got-at, that this very powerful lobby is putting -- has managed to
convince the administration.
SULLIVAN: I think so. This resolution when it was presented at the World Health Assembly and when we saw it, was really not controversial. The
World Health Organization; the highest global health policy-setting body in the world put forward a resolution that basically said breastfeeding is
really important, countries need to do more to support breastfeeding.
Here is some new guidance that we have to support mothers breastfeeding in humanitarian disasters, emergencies, that sort of thing. So when we he
strong arm tactics against -- started hearing ramblings that the U.S. government was going to oppose the
resolution, and then of course using t QUEST: Yes --
SULLIVAN: Ecuador, the country that was proposing the resolution. We began to ask ourselves, well, why do we think this is happening --
QUEST: All right --
SULLIVAN: The infant formula industry has been trying to undermine global breastfeeding policy for decades. Since 1981, since this code of marketing
of breast milk substitute was put into place. Companies have been trying to chip away at efforts to promote and protect breastfeeding.
Let's not forget that the infant formula business is about $70 billion a year --
QUEST: Wow --
SULLIVAN: And so every day in every single country around the world, there's a billion dollar battle being fought for babies first food.
QUEST: Good to see you, thank you for bringing this important story to us tonight, we appreciate it, thank you.
SULLIVAN: Absolutely, it's my pleasure.
QUEST: Now, the anti-poverty group global citizen is announcing a massive concert later this year that will celebrate the 100th birthday of Nelson
Mandela. It's a star-studded event that will take place in Johannesburg on December the 2nd, and it will raise awareness of Mandela's fight against
extreme poverty.
Naomi Campbell and Global Citizen Chief Executive Hugh Evans spoke to Zain Asher from Johannesburg.
(BEGIN VIDEOTAPE)
NAOMI CAMPBELL, MODEL: What this festival will do is one that will teach the next generation about what Nelson Mandela's hopes and dreams were and
what he went through just trying to achieve. And I feel Global Citizen with making the awareness also to bringing people to understand the actions
that they can take to go into each person and their township, their region.
There's mayors, there's politicians, that they can make a difference. Everyone collaborated together, coming together makes this happen. And
that's where I feel that global citizens starts, I think they're amazing at it and I am so happy and proud to be part of it.
HUGH EVANS, CHIEF EXECUTIVE OFFICER, GLOBAL CITIZEN: Thank you.
ZAIN ASHER, CNN CORRESPONDENT: Yes, and here, you know, gosh, I mean, music is really so powerful. What is the role of music do you think in
terms of bringing humanity together?
EVANS: Well, I think all throughout history, music has been this great uniter. Whether it was the anti-apartheid movement and the march towards
Pretoria or whether it was the end of the abolition of the slave trade in Britain and songs like amazing grace that became the anthems of that time
in the 1800s.
Today, I believe that the modern day movement to end extreme poverty needs a new anthem, and so we need to bring together the world's greatest artists
to come together and say let's inspire the next generation of activists, young people who may not have grown up during the years of libate or Live 8
back in the 1980s, but actually can see how they can use their collective voice to advocate for systemic change particularly for the achievement of
the United Nations sustainable development goals.
ASHER: One thing I actually love about this festival is really the fact that obviously, I'm Nigerian myself, and I looked at the lineup and of
course I saw the usual names, celebrated names like Beyonce, like Ed Sheeran, like Chris Martin. But I also saw a lot of African artists as
well.
I saw D'banj --
CAMPBELL: Yes --
ASHER: I saw Tiwa Savage. In Africa where you have a situation whereby so much of the continent is below the age of 30. What does it mean do you
think to young Africans to see themselves represented on the global stage like that?
CAMPBELL: First of all, it should be that way anyway, I think when you think of something like this, I think to include all talents of all ages.
Me, I come from fashion obviously, and that's how I feel about fashion too. I feel like fashion should be in Africa like it is everywhere else, but
it's not, but it soon will be.
[16:55:00] EVANS: And from Global Citizen perspective, we made this commitment that 50 percent would be on the continent, 50 percent would be
international, and through that process, we bring together artists from across Pan-Africa.
ASHER: Naomi, a personal question to you. You're one of the most famous models in history, I would say. What do you want your legacy to be?
CAMPBELL: My goodness.
EVANS: Good question.
CAMPBELL: I'm doing what I want my legacy to be. I'm doing -- I'm getting to reach people and do things and help change lives, and that's what I
didn't know I was doing this when I started in '93. But this is what I like doing and I am happy with my life like this way and I want to continue
doing this and I want to continue to put our country like Africa on the map in the rightful way.
(END VIDEO CLIP)
QUEST: We will have our profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, the Brexit negotiations are at a crisis stage in the United Kingdom. It was always going to be difficult,
but now and truly it is appalling. If you think about it, the man responsible for the negotiations David Davis and the foreign secretary, the
man responsible for Britain's foreign policy have both resigned.
And that's because they have papered over the cracks for so long that it could no longer continue. What happens now, the Lord alone knows because
parliament couldn't necessarily agree, the Europeans don't know what the British want and frankly, neither do the British.
And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest at the CNN Center. Whatever you're up to in the hours ahead, I hope it's profitable,
back in New York. I'm now home.
END
