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Quest Means Business
Russian Food Restrictions; Sanctions Super Market; President of US Poultry and Egg Export Council Unconcerned; US Markets Down; Containing Ebola; Randgold's Ebola Precautions; European Markets Down; Russia Embargo Warning; Europe's Economic Headwinds; Bank of America Settlement Criticized
Aired August 07, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: Worries about the economy, worries about geopolitical situations. The market in New York is down nearly half of one
percent. Trading is coming to an end, and the man with the gavel brings it to a close for Thursday, it's August the 7th.
Tonight, it's a food fight, all right. Russia bans Western produce. The effects will be felt far and wide.
The tech team workers from Ebola. The chief exec of one of Africa's biggest gold mines tells us he's tightening safety.
And think of it as cheeky monkey. It's a selfie. The question is, who owns the copyright?
I'm Richard Quest, I mean business.
Good evening. Tonight we begin with a food fight of global proportions. Russia is retaliating against Western sanctions and has
introduced some bans of its own. It's introduced bans and imports of fruits, vegetables, meat, milk, dairy products, various products from the
European Union, Australia, Canada, Norway, and the United States.
We'll go into some detail over which country will be most affected and for how long, but Sweden's foreign minister said today an EU equivalent ban
would have been called "inhuman." Carl Bildt, the foreign minister joins me now on the phone from Croatia. Minister, what did you mean when you
said that?
CARL BILDT, SWEDISH FOREIGN MINISTER (via telephone): What I meant that if we, the European Union, had imposed a ban on food exports to
Russia, I think that would have been an international outrage. It would have been seen as an inhuman act, because it would have deprived Russian
consumers of their choice of good foods, of cheaper food, of food quality.
And sanctions are one thing. You can divide energy technology or things like that, or the cronies of Putin, but this is a measure that is
directly hitting ordinary Russian --
QUEST: Right.
BILDT: -- innocent consumers, and it's imposed by Mr. Putin.
QUEST: But of course, as sanctions go, I mean, let's look at it from the other side, it's extremely effective, because this will hit most
countries, if you look at the list. Everybody exports a little bit of something to Russia. So, this is a very effective and painful form of
sanction.
BILDT: I'm not quite certain of that. Of course, it's going to have an effect on certain countries. I see that in Germany, the Netherlands
(inaudible) that are the ones that are going to be primarily hit, Norway with fish.
But it's fairly minor portions of the foreign trade of those particular countries, but it is a significant portion of the import of food
into Russia. So you will see the effect on the shelves of the supermarkets in Moscow and St. Petersburg, and it's not going to be a good one.
This is a sanction that Mr. Putin is imposing upon the Russian consumers, and he's saying it's for one year only, let's see what happens.
There will be no apartments in Moscow, that is going to hit some, at least.
QUEST: Are you worried now, Minister, that what we are -- what's been embarked upon is -- not only is it classic tit-for-tat, but it's going to
get worse when you've got President -- Prime Minister Medvedev talking about the banning of overflights of Siberian air routes?
BILDT: I am deeply worried. I'm deeply worried about he geopolitical situation for Russia and in the east of Europe, because we might have
believed that after the shooting down of the Malaysian airliner that they would step back, because that was such an outrageous act, which was caused
by them supplying these particular weapons.
That does not seem to be the case. We see them continuing the support to the separatists, we see the propaganda continuing, and we see them sort
of going in a sort of nationalist economic mood. It concerns with the pattern as well of Russia being increasingly protectionist --
QUEST: Right.
BILDT: -- in terms of the economic policies.
QUEST: If this is the way this moves forward, it is very difficult to see the interlocutor that manages to bring the two sides together to effect
if not a rapprochement, at least a standstill.
BILDT: At the moment, it certainly looks like that. But we are still hoping that there will be a mutual and monitored cease-fire in the east of
Ukraine. I think that would be in the interest of each and everyone.
And Mr. Putin is riding on the tiger of nationalists that he has unleashed himself. And it might be that he feels that he needs to feed
that particular tiger, and feed it and feed it and feed it.
QUEST: Right.
BILDT: That is going to be dangerous, if that is the case.
QUEST: Finally, Minister, so the food bans are in place, the EU has now done its bit. When will you in the union revisit with the potential
for ratcheting it up? And do you believe the union now has to ratchet in response to that which has been done?
BILDT: Not necessarily in response to this, because I think this is going to hit primarily Russia itself. I think it's a profoundly stupid
move by President Putin from his own point of view.
What's going to be the future of this is dependent upon the policies of Russia, what they continue to do or what they are ready to do in terms
of the conflict in Ukraine, that I would hope that we would go for deescalation, and also deescalation in terms of sanctions, but so far, Mr.
Putin has been moving in the opposite direction.
QUEST: Right. Carl Bildt, Sweden's foreign minister. Minister, it's always good to have you on QUEST MEANS BUSINESS. Thank you, sir, for
giving us time, much appreciated this evening.
Now, we need to put some perspective onto exactly what has been sanctioned and banned and where the embargoes. And to do that, we need to
go and visit the sanctions supermarket. So, you join me with my shopping trolly.
The countries most affected by the import bans that we've been talking about, they are, of course, Norway, Poland, the United States, and Spain.
But I'm going to show you in the supermarket check out exactly how each country is affected and by what. So, first of all, the United States will
feel --
(CASH REGISTER BELL)
QUEST: -- the full food because of poultry. US exports some $309 million worth of poultry to Russia every year. It's a vast majority of all
meat exports. But then, over in the European Union --
(CASH REGISTER BELL)
QUEST: -- well there, you've got the question of fruit, vegetables and, crucially, cheese. The bulk of EU exports to Russia last year. In
fact, Russia is the EU's second-biggest customer for many of these products. All these good and services go to Russia. Now, when we talk
about Denmark, we're talking --
(CASH REGISTER BELL)
QUEST: -- about exports worth $376 million worth of pork products, Danish bacon, and the like. You get an idea. You add in some fresh
Norwegian fish, and you put in many more fruit and vegetables, and before long, you end up with a picture of a deteriorating situation for the
European Union and the United States.
Remember what I said, though, about the United States? It is the EU that is primarily responsible for the fruit and vegetables. Jim Sumner is
the president of the US Poultry and Egg Export Council. Now, Jim joins me now, live from Washington.
As I was looking, Jim, at the variety of things, it is poultry that is the most affected, $309 million. So, Jim, what are you going to do? How
are you going to make up the shortfall?
JIM SUMNER, PRESIDENT, US POULTRY AND EGG EXPORT COUNCIL: I don't think we have to be too concerned, Richard. If this would have happened 5,
10, or 15 years ago, it would have been disastrous for our industry, but we have diversified so much since then, we've opened new markets around the
world.
And we -- while we export about 20 percent of our production, our chicken production, only about 7 percent of that goes to Russia. So,
really, we're pretty insulated from this.
QUEST: Right. But you're still going to have -- you're either going to have to get the domestic market to pick up, or you're going to find
somewhere else for that 7 percent. It's not a huge amount, but you're still going to have to work out what to do with those chicks.
SUMNER: Well, we have no problem here in the domestic market. With the price of beef and some of the pork issues going on today, chicken sales
are at their all-time high. And with many other market opportunities around the world, that's good, too.
And actually, I've been getting calls today, some of our member companies have, too, that in a move of support, people are calling me and
telling me they're going to start eating more chicken.
(LAUGHTER)
QUEST: Eating more chicken. Now, let's talk about -- well, it's good for protein, very good, strong form of protein. But let's talk about these
sanctions, because whether it's beef, which of course isn't exported from the US to Russia because of the additives issue, a minimal amount of pork,
but there's no question the US is now, along with the Europeans, embarked on a process which you must find if not worrying, at least disconcerting.
SUMNER: I do, and unfortunately, it's not the first time we've been through this. It's second or third problem we've had with Russia. We had
an embargo back in 1996 where they banned US poultry for a month.
For some reason, poultry's always been in Russia's crosshairs, I guess because for many years, we were by far the number one US export to Russia,
so we've always been very visible. Maybe they think we have a lot of political clout, so if they punish the US poultry industry, maybe we can
straighten out the US government.
QUEST: Right.
SUMNER: But that's far from the case.
QUEST: But tonight, as I understand you, Jim, that although there's going to be an economic impact, it is -- it's manageable and basically --
it really comes down to producers to be on their mettle to actually find elsewhere, other markets.
SUMNER: Yes. And as far as poultry producers, they're not even going to notice this. And of course, there are other countries, such as Brazil,
ready to move in and pick up our market share. But really, Richard, the real loser in this, as you talked to the minister, it's the Russian
consumer, because they're going to see higher food prices.
Yes, Russia has a significant poultry production, they're nearly self- sufficient, but the US can provide product into their market at a much lower price. So, it's the consumer, the pensioner, that's going to suffer
the most.
QUEST: Right. Thank you, sir, for joining us and putting it into perspective. Good to have your views on this.
Now to the markets. Just a quick look at the markets and you'll see we were up in the morning, mid-morning it went down, and it really took a
bit of a tumble down, 75 points, off the best part of half of one percent. Alison Kosik joins me. I -- you're going to tell me it's a bit of
nonsense.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: No, no, no nonsense, I wouldn't say that. You see the green. Investors woke up --
QUEST: Yes!
KOSIK: -- ready to --
QUEST: What happened, though?
KOSIK: Well, we saw investors buying in at the beginning because of a jobless claims number that was good.
QUEST: Right.
KOSIK: But then, the mood turned negative, as it's been doing -- you've noticed this pattern for the several sessions that have been going
on -- it turned negative because of those geopolitical concerns.
You know what it's about? Ukraine and Russia, one analyst saying it's going from bad to worse. And these food sanctions, they're kind of the
cherry on top to the tension that's going on there.
And then you've got the ECB, yes, keeping rates the same, but you've also got Mario Draghi coming out and saying look, we're going to keep our
eye on Ukraine and Russia to see how much of that impacts Europe's fragile economy.
So, things are a little shaky. You're seeing more reasons for investors to sell rather -- to buy in, pick your poison. There's a number
of --
QUEST: Right.
KOSIK: -- things, and they're not nonsense.
QUEST: And elevated levels -- not as elevated as we were, but we're still elevated.
KOSIK: Right. It's all about pricing. Investors want to know if these levels should really be where they are. Let me ask you, what are you
doing with our fish tonight? What kind of fish is that? Are you cooking that for me tonight?
QUEST: Well, I --
KOSIK: I saw it run across the conveyer belt there.
QUEST: It's already in your bag.
KOSIK: Oh, God, I don't know if that's good or bad.
(LAUGHTER)
QUEST: Still to come, we are going to turn our attention to what's happening in West Africa. Alison and I just shook hands. Our next guest
tells us that Ebola is potentially just a handshake away, and businesses are struggling to protect their employees. Randgold's chief exec about the
precautions he's taking during the outbreak. It's QUEST MEANS BUSINESS, good evening to you.
(COMMERCIAL BREAK)
QUEST: Maybe not a moment too soon, but now Liberia has declared a 90-day state of emergency in an effort to stop the worst Ebola outbreak the
world has seen. Now, Liberia, along with Sierra Leone and Guinea, have borne the brunt of the epidemic. It's claimed 932 lives so far.
Business is doing whatever it can to protect employees. One of the companies involved is Randgold. Randgold has mines around the affected
countries. Now, if you just take a look, you'll see these are some of the mines, that's another mine, that's another mine, and they're all on the
contiguous borders of the three -- or at least in the countries.
The point being from Randgold is that these borders are extremely porous, whether it be with nomadic workers, miners going backwards and
forwards across, or business travelers that have to visit the mines and then visit these other communities.
Randgold's chief executive, Mark Bristow, is worried that when you look at the position of the mines, and you think about the response so far
from the WHO and others, the outbreak could creep closer. That's why Mark --
(BEGIN VIDEOTAPE)
MARK BRISTOW, CEO, RANDGOLD RESOURCES: The response to this outbreak has been rather slow, and it's worrying, because in that part of the world,
there's a lot of what we call illegal miners, they move around and --
But I think the real risk, look, we've worked very hard with the national health departments in all countries now. Because if you look at
Senegal, where Massawa is, it's right there.
I think the big risk is still very much businessmen and the more sophisticated travelers. The sort of nomad type people in that part of the
world, it's such a vicious virus, you can't really go a long way walking or traveling on foot.
QUEST: Right. You obviously have staff going backwards and forwards through, if not exactly the affected areas, at least into the Western
African part and Senegal, as you talk about. So, what restrictions, what extra measures can you and are you taking?
BRISTOW: Well, the first thing is, we've banned movement in and out of the affected countries. So, for instance, like for instance, along your
drilling companies, some of its big bases are in Guinea, and we've requested that no one moves across borders without the authority of our
medical -- chief medical officer.
As far as we're concerned, you've got to deal with the actions of making sure you don't go around shaking people's hands and you keep
yourself sanitized and just exercise a bit of extra hygiene as you travel, and just mindful of --
Well, I've just come from Mali right now. I've been there for quite a few days. Before that, I was in the Ivory Coast, so you've got to pay
attention.
QUEST: Right. And I think what I'm getting from you, and certainly from the tone of your voice and the seriousness in which you're addressing
it, is this is a very real issue of which you have to be cognizant and aware of.
BRISTOW: Yes. And you know that the point is that you -- it's a particularly important issue, because you only realize how bad it is when
it happens. And it's one of these things where you've got to pay real attention up front to prevent it from happening, because once you, as we've
seen in Nigeria, once you see it, it's -- you don't understand -- it takes you a long time to realize just how big the problem has become.
(END VIDEOTAPE)
QUEST: That's the chief executive of Randgold with some sobering thoughts on Ebola. Turning to the markets, if you look at what happened in
Europe, clearly we're starting to see some effects, not just of the ECB and the Bank of England, which left rates unchanged, but you are seeing the
effects of potential Russian sanctions that were introduced and the longer- term effect.
You've got the Xetra DAX down 1 percent, Lisbon was down 2.25 percent. Well, we know the problems amongst BES in the market there. Adidas was
down 4 percent. In fact, anybody who really does business in Russia was seeing an effect on what was happening.
Now, the ECB president, Mario Draghi, has warned the eurozone will suffer more than any part of the world because of the situation in Russia.
It's a hit that Europe can ill afford as it struggles with what the president calls "slowing growth momentum."
(BEGIN VIDEO CLIP)
MARIO DRAGHI, PRESIDENT, EUROPEAN CENTRAL BANK: Well, there's no doubt that if you look at the world today, and you see the geopolitical
risks have increased all over the world. We have the Russian-Ukrainian crisis, Iraq, Gaza, Syria, Libya.
So, geopolitical risks are heightened, are higher than they were a few months ago. And some of them, like the situation in Ukraine and Russia,
will have a greater impact on the euro area than they certainly have on other parts of the world.
(END VIDEO CLIP)
QUEST: Sobering words from the president of the ECB. Bob Parker is a senior advisor at Credit Suisse. He told me that given the threats to the
European economy, he expects the ECB will take further action, and probably sooner rather than later.
(BEGIN VIDEOTAPE)
BOB PARKER, SENIOR ADVISOR, CREDIT SUISSE: I think there is a case for further action, whether it is quantitative easing, buying government
bonds, whether it is buying asset-backed securities. But clearly, monetary policy in Europe has to stay easy --
QUEST: Right.
PARKER: -- and there is a strong argument for it to become even easier.
QUEST: Whether we have technical deflation or not, to all intents and purposes, you've certainly got disinflation, and you've probably got
deflation, too.
PARKER: The answer to that is yes. Now, the headline numbers are that eurozone inflation is 0.4 percent year-on-year, and that contrasts
with the ECB target of having inflation just below 2 percent. So, clearly, there is a disinflation problems, and I think that is starting to have a
problem -- having a negative impact on economic activity in a number of countries.
QUEST: Are you able to quantify yet the effect of Ukraine and the Ukraine situation?
PARKER: I think it's difficult to quantify, but I think overall, the impact probably will not be that severe. I don't think it's going to be a
factor tipping the eurozone back into recession.
But I think if we look at countries like Germany, where originally I thought the growth for the rest of this year would run at about 2 percent
to 2.5 percent, I think probably now German growth is going to be of the order of magnitude of perhaps 1.5 to 1.7 percent largely due to the Ukraine
effect. And of course, that contrasts with the great growth numbers that we're seeing in America and the UK.
QUEST: You see, that really is what it really comes down to. Why is Draghi and the governing council waiting? Is Europe destined to be
resigned to sclerotic growth for the foreseeable?
PARKER: Well, I think the assumption was going to be that the action they have taken so far, and most notably, the quite severe action that they
took at their last meeting when they pushed interest rates -- deposit interest rates down to minus 0.1 percent. The assumption was that that
would have an impact on growth.
The answer is over time, it probably will. But I don't think Europe can now afford to wait another sort of six to nine months for the action
taken so far to have an impact. And that's why I think that they will take further action, and they will do it as soon as September.
(END VIDEOTAPE)
QUEST: As soon as September says Bob Parker. We'll watch and see, that's only next month.
As Bank of America prepares to pay out a record settlement, the critics say the profits from the crime may far outweigh the fine. We'll
look at the deal next.
(COMMERCIAL BREAK)
QUEST: As Bank of America negotiated a record settlement with the US Justice Department, we told you about it this time last night, the critics
are already accusing the DOJ of a lack of transparency. BOA has tentatively agreed to pay more than $16.5 billion. It's a large amount of
money.
Around $7 billion would go to relief for homeowners. The $9 billion in penalties goes to the US government. It's an extraordinarily large
amount. The critics say the Justice Department now need to reveal how much of Bank of America's clients, investors lost as a result of the action and
which laws were broken.
Our US Justice Department Evan Perez joins me now from Washington. Nine billion goes into the -- sort of the general coffers, and a bit more
goes -- a bit less goes to help people and homeowners. But it's a weird deal, this, isn't it?
EVAN PEREZ, CNN JUSTICE CORRESPONDENT: Well, yes, Richard. I mean, these deals tend to be a little bit strange, in part because the homeowner
relief portion, for example, the $7 billion that you just pointed out, that is supposed to go to help homeowners rearrange their mortgages, for
instance, maybe get a lower interest rate.
The bank gets a lot of PR value for that, obviously, because they're going to be able to advertise it. As a matter of fact, JPMorgan has been
advertising the fact that it's helping homeowners to recover from the financial crisis.
The problem is, that the people who really suffered during the financial crisis, they've lost their homes already, a lot of them. They're
not around to get any value or any benefit from these settlements.
So, this is going to be going towards other people, perhaps, in the population who are now -- who now have loans with Bank of America.
QUEST: Right.
PEREZ: And so, that's part of the issue.
QUEST: Is this the end of it? We've had JPMorgan, we've now had --
PEREZ: Right.
QUEST: -- we've had BOA. Who else has still got to pony up?
PEREZ: Well, they have several other cases going around. This is believed to be among the biggest ones that are left. We just had Citi as
well. We also have a lot of the smaller banks --
QUEST: Right.
PEREZ; -- that have been under investigation. But this is wrapping up some of the bigger cases, Richard.
QUEST: Evan, thank you for that, keeping us informed --
PEREZ: Sure.
QUEST: -- with what's happening at the Justice Department, our correspondent is Evan Perez. Now, when we come back after the moment,
we're going to turn our attention once again to the Russia food ban. Who gets most hit when Russia decides to ban the imports of some pretty
important staples?
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. This is CNN, and on this network the news always comes
first.
A US official tells CNN that the United States is considering possible air strikes against ISIS militants in Iraq. The UN Security Council is due
to hold an emergency meeting on the threat posed by ISIS. Militants have now taken over Iraq's largest Christian town.
Hamas is vowing to return to battle if its demands aren't met at a cease-fire talks in Cairo. Israeli troops are deployed along the Gaza
border, awaiting the outcome of those talks. Negotiators are trying to extend a truce, which is due to expire within hours.
A 90-day state of emergency has now been declared in Liberia as part of efforts to stop the spread of Ebola. The World Health Organization says
932 people have lost their lives to the virus. More than 1700 people have been affected.
Closing arguments have begun in the Oscar Pistorius murder trial. Prosecutors have characterized the athlete as an appalling and deceitful
witness. The defense attorney says the state's case was riddled with mistakes.
Russia has banned imports of food and agricultural products from the E.U., U.S. and other nations which in turn had imposed their own sanctions
on Russia. It's a tit-for-tat retaliatory measure that's likely to raise food prices and inflation in Russia. President Putin says measures will be
taken to prevent that.
Mike Cockrell is the chief financial officer -- the CFO -- for Sanderson Farms which is the third largest poultry farmer in the United
States. Nearly 40 million kilos of chicken each year goes to Russia. Mike, can you hear me, sir? Let's test the connection.
MIKE COCKRELL, CFO, SANDERSON FARMS: I can indeed.
QUEST: Excellent, excellent. So, you can no longer - and I'm sure, you know, as of today you must have been working at Sanderson Farms very
hard working out the implications for what this ban means. What does it mean for you?
COCKRELL: Well, first of all, it didn't take us by surprise. We kind of anticipated this for the last couple of weeks, and it's not the first
time we've gone through this. In 2004, for political reasons once again, Russia banned United States chicken. In 2010 it happened again and now it
happened in 2014. Fortunately for us and for our industry, Russia is not nearly as important an export customer as they were in 2004. They were
buying 40 percent of our exports in '04. In 2010 they were 10 percent - between 10 and 15 percent. Now they're more like 7 percent. So it's not
quite the volume, but still a customer, and we'll have to find alternative markets for that product and we're working diligently to do that.
QUEST: Tell me about those other markets. Where will you be looking? I mean, I don't - forgive me, I don't know much about the poultry export
market - so are you looking worldwide or have you got specific areas?
COCKRELL: Oh, absolutely. Chicken is still today the lowest-priced protein available on the international market, and Russia as of today has
been - depending on how you measure it - either the second or third largest export market for our product. Mexico's first, emerging countries such as
Angola -- countries with a developing middle class -- the first thing they want to do is buy protein. In our industry, since '04 and the experience
we went through then has done a great job diversifying that. So you've got Mexico, China, Hong Kong, the Philippines, Angola, former Soviet Union
countries - Georgia -
QUEST: This is absolutely fascinating! I mean, I realized that it was an export market, but I would've thought many of these countries
would've had a domestic market of their own. And I'm absolutely fascinated to find that you're selling so much chicken - you're putting chicken on
boats such long distances.
COCKRELL: We are, and the reason that it works that way is the United States has access to grain. Obviously a chicken - 50 percent of our cost -
is corn and soybeans meal. And grain is not available in a lot of these countries, so it's much less expensive and economical for them to buy
product from us rather than import the grain and develop their own industry. And, again, this is the source of protein available and it's
just a very popular product.
QUEST: Mike, thank you so much. It is really sort of the case of you learn something new every day. Please come back as this develops. I'd
like to talk more about this with you in the future, sir.
COCKRELL: I would love to do that, thank you so much.
QUEST: Thank you. Thank you. Well that's fascinating - Mike Cockrell from Sanderson Farms there, putting into perspective. Now more
Russian retaliation could be in the works. Russia's Prime Minister Medvedev has banned Ukrainian carriers from Russian airspace, and he says
the restriction could be extended to other countries' airlines soon.
(BEGIN VIDEOCLIP)
DMITRY MEDVEDEV, RUSSIAN PRIME MINISTER, VIA TRANSLATOR: Nevertheless, the following measures are on the table. First, it is a ban
on use of airspace of our country for transit flights, of European and American airlines to the East Asia regions. That means to the Asia Pacific
region.
(BEGIN VIDEOCLIP)
QUEST: Lord Truscott is author of "Putin's Progress" and "Russia First" and the government -- former government --minister of the United
Kingdom. He joins me now from London. Lord Truscott, this is getting very difficult to see an easy or less complex way out, particularly if Russia
now goes one stage further and bans over-flight which perhaps you might expect.
PETER TRUSCOTT, AUTHOR, "PUTIN'S PROGRESS" AND "RUSSIA FIRST": Yes, I mean, we're getting into a situation where we're seeing tit-for-tat
sanctions and not only are they talking about banning over-flights through Russian airspace, but possibly also other sectorial sanctions which would
hit the aerospace, auto and ship-building sectors. So, Russia's already indicating that it can play this game too and it can get very unpleasant
for all concerned.
QUEST: This issue of course we heard at the beginning of this program was one that many Russian consumers will be the ones -- Carl Bildt, the
foreign minister of Sweden, -- he's - he - makes that point that the people who suffer from these food embargos will be ordinary Russian consumers.
Will Putin care?
TRUSCOTT: Well, I mean it's certainly true that Russian consumers will be hit by this and Russia's about the fifth largest agricultural
importer in the world in terms of agricultural goods - about 40 percent of its agricultural produce by value is imported. So it is going to hit
Russia quite hard. But certain items are excluded from the list - grains, coffee, wine, some I think favorite produce that the Russian consumers
enjoy. But clearly they'll need to look to other markets - Latin America has been mentioned - and they'll be aiming at some sort of import
substitution and boosting their domestic agricultural sector. But it will be painful, there's no doubt about that.
QUEST: Help me understand. You've written widely on this and you are expert - your expertise - is valuable to us tonight. What's the way out of
this impasse?
TRUSCOTT: Well, I mean, I think the thing is that no one wins with sanctions. It ends up being a situation where there are no winners, and
it's painful for everyone concerned. The history of sanctions is that in many cases they don't effectively work. They can be useful in bringing
people to the negotiating table, but where vital national interests are at stake, often they don't bring about a change in policy. I think what needs
to happen over the Ukraine is there has been a solution on the table from the very beginning. The solution was - and this was remarked on by Moscow
and Kiev - that further - greater - autonomy should be given to Eastern Ukraine, the Russian-speaking population there and that their linguistic
rights should be protected. Now the trouble is now we've moved into a military phase -
QUEST: Right.
TRUSCOTT: -- and clearly Ukraine is trying to finish this crisis militarily. There are no effective diplomatic discussions going on and I
think all sides should return to the negotiating table because, as I say, this tit-for-tat series of sanctions is really not going to benefit anyone
at the end of the day.
QUEST: Lord Truscott, thank you for making clear and coming in to us this evening. Appreciate it. Now, Russia's import ban is Vladimir Putin's
latest move to show the West is not about to back down in the face of international pressure. CNN delves into the personality of the former KGB
agent-turned president in a special report - "The Power of Vladimir Putin." You can see it Saturday at 8 o'clock in London, 9 o'clock in Central Europe
of course in Berlin and Paris and Rome and onwards. It's only on CNN.
In a moment, a photographer is telling Wikipedia to quit monkeying about and take this picture down from its site. "Quest Means Business."
(COMMERCIAL BREAK)
QUEST: A British nature photographer - you're going to hear that a lot - is fighting a legal battle with the owners of Wikipedia because of a
selfie taken by a monkey. (RINGS BELL). A group of Indonesian macaques took David Slater's camera and started taking pictures of themselves. This
one went virile. Slater sent Wikipedia a takedown request. The company has denied it. Wikipedia says the monkey owns the copyright to its selfie.
Slater says the money might've pressed the button, but he did all the setting up and he's missed out on the profits the photo might have
generated. Paul Callan is former media and law professor at Seton Hall University and a CNN legal analyst. Oh Great One, sir, who owns the
copyright in that picture?
PAUL CALLAN, FORMER MEDIA AND LAW PROFESSOR, SETON HALL UNIVERSITY: That is one good-looking monkey. And if he's as smart as he is good-
looking, you would think the monkey might own the copyright. And actually if the monkey were human, he would own the copyright, because the general
rule is the person who takes the picture owns the copyright. In this case, the money stole the photographer's camera and then apparently liked the
clicking sound and started taking selfies of himself. So, --
QUEST: But the photographer says he set it all up. He did the lights, he set the Aperture, he's the one who created the environment where
the monkey could take the picture.
CALLAN: He does say that. However, the monkey stole the camera. It would be one thing if the photographer had come up with this idea. `Let me
get this monkey to take a selfie, and I'll set the camera up a certain way.' That's not what happened here. This photographer went to Indonesia
with the idea that he was going to take pictures of these monkeys. So, yes, the light - he picked certain light - and he brought a certain camera.
But it's the monkey that determined the moment in time to take the picture, the angle to take the picture at. So, photographer doesn't own the
copyright, the monkey doesn't either - nobody owns the copyright. It's in the public domain. And sometimes that's what happens when you take
pictures of good-looking monkeys.
QUEST: Right. What about the monkey's owner?
CALLAN: Well.
QUEST: Now -
(LAUGHTER)
QUEST: --well, no I mean assuming it's not a monkey in the wild. I mean, if it was a monkey in captivity, then the monkey's owner would own
the copyright.
CALLAN: Well I hope people know you went to law school, because only a lawyer would come up with that angle on it. No, I don't think the
monkey's owner would own it either. And let me just give you an example. When professional models are involved in a photo shoot - let's say you're
doing a catalog for a department store. Photographers get releases even from their own assistants because if an assistant takes the photographer's
camera and then clicks the camera and takes a picture, the assistant owns the copyright or a copyright interest.
QUEST: Even as an employee?
CALLAN: Even if it's an employee unless they sign a release. So a good photography gets everybody on the set, including the models, to sign
releases, otherwise everybody's going to claim ownership.
QUEST: That's right - just keep signing.
CALLAN: I'm not signing off because, you know, I may wind up in that seat over there, who knows? You know, depending on -
QUEST: Not while - not while I - don't touch the bell.
CALLAN: Yes, I won't touch the bell. I promise. But that's - and it's complex -
QUEST: It's fascinating.
CALLAN: -- copyright law, and you got to be real careful. You have to get signed releases when you're taking pictures to ensure that you own
the pictures, if somebody else uses your camera.
QUEST: I may have an example of this now. If you look at these pictures here, these are pictures which I - which were taken in 2006. They
are me with monkeys. Incidentally, the monkey involved stole my camera, ran up the tree, bashed the camera around, took some pictures with it which
were never particularly very good at those sort of things. But you're saying the monkey owned those not macaques - not of these, but of other
creatures.
CALLAN: That monkey was guilty of criminal mischief which would - did it take place in the United States? If it took place in New York, there -
a criminal act had occurred but of course we can't put him in prison because he's a monkey.
QUEST: Right.
CALLAN: Yes.
QUEST: Won't stop some lawyers.
CALLAN: Yes.
(LAUGHTER)
QUEST: Good to see you, Paul.
CALLAN: Good seeing you, Richard. Pleasure.
QUEST: Don't touch the bell. Now, this week, the long embattled smartphone (inaudible) - Apple and Samsung - called a truce and agreed to
put their international patent disputes behind them. For one Apple employee, -- join me a the Super Screen - it was also time to move on as
well.
The man's name, appropriately, is Sam Sung. No, not Samsung. His first name is Sam, his surname is Sung. He used to work Apple in the days
when that relationship was at its most contentious. Now he is auctioning off his last business card on eBay, and the current bidding - you're not
going to believe this - for a business card is $80,000.
It's all for a good cause - Sam Sung has promised all of the proceeds will go to a Children's Wish charity - the Children's Wish British Columbia
chapters. He says, `I hope my old business card will go to another fellow Apple enthusiast with a sense of humor and a desire to raise money and do
some good for some good works.' Mr. Sung with his Sam and with his pass.
There's one man who's probably working harder than me at the moment - it is Tom Sater who is at the World Weather Center. Tom, between storms
going up to Hawaii, Bertha or whatever it is, coming up through the Atlantic, --
TOM SATER, METEOROLOGIST FOR CNN INTERNATIONAL: Yes.
QUEST: -- nasty rain in parts of Europe, high temperatures up in Latvia -
SATER: Right.
QUEST: -- where do we begin?
SATER: With the Pacific Ocean which is unhappy about something, Richard. There's a lot of turmoil going on here, something we haven't seen
quite often. When you look at the globe - and this is a real time animation - we can start to look and see what's happening. Bertha heading
over toward the U.K. Low chance of development off the coast of Mexico - hurricane number one. Hurricane number two, Super Typhoon - typhoon -
moving toward Japan. It is active and they're all moving somewhere. Super Typhoon Genevieve was a hurricane 12 hours ago before it crossed the
international date line. So it goes from the National Hurricane Center under the control of Joint Typhoon Warning Center and Japan's
Meteorological Agency. We'll talk about how long in a minute that's heading toward Japan.
But first, in this vastness of the ocean, you can see the Hawaiian Islands, and it is quite something to believe that as long as the Hawaiian
Islands have been here, it has only had a landfall from two tropical systems before. They were both hurricanes -- one in 1959, one in 1992 and
the postcard picturesque vacation spot is going to get a little messy.
We've got two back-to-back headed toward the Hawaiian Islands. Here is Hilo. This is on the big island. Iselle is equivalent to a category 1,
Julio, equivalent to a category 2 hurricane. This is the first time that we know of that a hurricane is going to make landfall in the Hawaiian
Islands coming in from the east. It makes more sense if they come in from the south - the water's warmer and the last two that made landfall were
well off towards the west. But, again, we have our very first hurricane warning in effect and the grocery stores are running out of bread and
water. They are not used to anything like this.
So, again, we have a well-defined system here and one back behind it. This is about 400 kilometers away now from the big island here, Volcanic
Island, and you can see the streamline. Not much in the way of a surge - maybe one meter. Forty-five thousand live in Hilo but overall on the
Hawaiian Islands, we're talking about at least one and a 1/2 million - not to mention all those vacationing which will not be flying out in the next
several hours because this system is moving in and it's going to knock out power. It is going to create some issues with heavy amounts of rain.
Not to mention the fact that at 6:24 this morning, there was a 4.5 earthquake here in Hilo, but they have one once a week. They don't have
hurricanes quite like this, so the high flood potential coming down off the volcano is just one concern because the heavy amounts of rain are going to
be moving into this area. But it is actually interesting to see. After the first one moves around, Richard, Julio, which is stronger, will slide a
little bit to the north. It's still going to produce extra amounts of rainfall, but at least it's not a 1-2 Hawaiian punch here. But, again,
we're going to be watching these systems closely. The one moving toward Japan makes landfall late Saturday evening local time.
QUEST: We'll talk more about that. Thank you. Busy times ahead. Now, the last major golf tournament of the year began today in Louisville,
Kentucky. Those in the industry are worried about the green - not the grassy kind but the money. This is "Quest Means Business." Good evening.
(COMMERCIAL BREAK)
QUEST: The final golf major of the year - the PGA championship send away -- here in the United States - Tiger Woods took to the course today
searching for his first major victory since 2008. A back injury threatened to derail the sport's biggest star and his quest for a comeback. After
struggling to find the fairway and shooting three over par, it looks like Woods might have to wait until next year as the ailing Woods' trouble
sinking the putt, the sport itself is sinking in popularity. CNN's Jim Boulden on why the business of golf has landed in the rough.
(BEGIN VIDEOCLIP)
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Golf is not cool, and those in golf have been witnessing the decline for years.
MARK KING, ADIDAS NORTH AMERICA: Every macro indicator that we've been looking at for the last 20 years - rounds played, number of minorities
playing, women coming into the game - all of these things that we've tracked - says that there's less people playing and the ones that are
playing are playing less frequently.
BOULDEN: Sales for Adidas Golf brand TaylorMade dropped 18 percent in the second quarter, and Adidas will now cut back to quote, "match lower
expectations for the golf industry's development." But here at this week's PGA championship, some bright spots perhaps.
KING: The industry is changing more than anything, and there are a lot of positive stories out there as well. Our business is up in almost
every manner this year, including lessons given, number of locations and the number of PGA pros that we're employing.
BOULDEN: Still, many say golf is too expensive post-economic crisis, especially for the young, or it takes too long to play, or it's too hard to
succeed. Then there are the struggles of Tiger Woods. When he doesn't play, TV ratings plummet. Some of those who cover golf know the struggles
firsthand.
JOHN HUGGAN, GOLF WORLD, EUROPEAN CORRESPONDENT: My daughter who did play golf a bit had a great golf swing was chased her away from the game
because there was no other girls to play with. She played with the boys, but when the boys finished playing, they would go into the clubhouse to
play pool on the pool table in a room where she was banned. She couldn't go in.
BOULDEN: To attract new players, some courses are experimenting with holes the size of pizzas. Others are allowing football golf on their
links. But here at the Grove outside London, it's not about gimmicks, it's about access and accessibility. They don't even have memberships so even I
can play here. The Grove says steep membership fees are a big reason why rival courses are suffering. Golfers were hit by the recession too.
ANNA DARNELL, DIRECTOR OF GOLF: They might have a 3,000 pound membership fee to pay each year and they might only play ten times, and for
them that's working out a lot of money per round.
BOULDEN: The Grove provides corporate facilities, a hotel, a wedding venue - all to help replace the revenue. And sales in the pro shop are now
doing better.
DARNELL: They'd stayed quite flat for a few years for us. We found that people started to come back and play again, but many didn't really
actually spend any additional revenue when they were onsite. Actually this year has kind of stopped that trend. We found that our around (ph) shop
figure were around 12 percent up from last year.
BOULDEN: So at least for now here at the Grove - no need for bigger holes or football golf. Jim Boulden, CNN, Watford, England.
(END VIDEOCLIP)
BOULDEN: As regular viewers to the program know my views on this subject, it ruins a good walk fiddling with sticks. (RINGS BELL).
"Profitable Moment" next.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment." Well, it wouldn't take much and it was always going to be inevitable that tit-for-tat sanctions was
going to become the way forward. But whether it's cheese or fish or pork products, everybody's going to suffer. Just think about it. The Russian
consumer won't get the goods that they want to find in the shops at the price they can pay, the producers in Europe, Australia, Canada and the
United States, well they'll be - won't have markets which have been matured and were allowed to development. Put it all together, and it there's a
ratcheting up of the sanctions over Ukraine, things promise to get a great deal worse. The very possibility of banning over-flights over Siberia.
What it all tells us is that once you start going down this road of sanctions, -- tit-for-tat, tat-for-tit, -- it's not long before it very
quickly gets out of control. And that's what's happening now. And that's "Quest Means Business" for tonight. I'm Richard Quest in New York.
Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable. I'll see you tomorrow.
END
