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Quest Means Business
Trump Makes Wave in Davos; Mnuchin Goes (Green) Back and Forth on Dollar; U.S. President Hints at TPP Turnaround; Australian Trade Minister Reacts to Trump's TPP Hints; Pakistan Prime Minister bothered by Trump's Aid Treats. Aired 4-5p ET
Aired January 25, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] RICHARD QUEST, CNN HOST: Closing bell ringing on Wall Street. Dow and the S&P at records. No record on the Nasdaq. Strong session all
round. Interesting movements of certain stocks. Hit the gavel. Trading is over on Thursday, the 25th of January.
Tonight, Donald Trump is in Davos. His economic adviser Gary Cohn tells us they will get the message. Green back up, green back down. Now the
president says he wants a strong dollar. Oh, and the TPP, Donald Trump suggests he may rejoin the trade pact. I'm Richard Quest live at the world
economic forum where together we mean business.
Good evening from Davos. And so, Trump world rolled into the World Economic Forum and the presidential delegation steamrolled its way through
the conference hall. From his arrival by helicopter, to the dinner he had tonight with executives, European corporate executives, Davos has rarely
seen anything the like before.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: What's your message for everyone here, sir?
QUEST (voice-over): We always said he was going to do a victory lap and this is as victorious as it gets and enjoying every moment.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think the feeling is mutual from the standpoint of liking each other a lot.
QUEST: It was Theresa May and now it's Benjamin Netanyahu. Could we listen in?
TRUMP: Great to be with Prime Minister Netanyahu. We've developed a great relationship. Both our countries where I think it's never been stronger.
QUEST: I've been doing Davos' for 15, 16 years, and I've never seen a reaction quite like this.
MARK RUTTE, DUTCH PRIME MINISTER: America's leader of the free world and we need Donald Trump's leadership in many international issues.
VICTOR CHU, CHAIRMAN, FIRST EUROPEAN INVESTMENT GROUP: We are very concerned that the United States will undermine the multilateral system of
the WTO.
JACOB FRENKEL, CHAIRMAN, JPMORGAN CHASE INTERNATIONAL: Growth in the U.S. economy, productivity in the U.S. economy, openness, trade, open mind,
innovations, that's the solution for growth and the U.S. needs to be the leader of the free world.
TRUMP: The receptivity that we've had, and the United States has had being here has been incredible. Probably I can think of no other place or time
where you'll have executives of this stature.
TRUMP: Today has been a very exciting day, a very great day and great for our country. Thank you very much.
(END VIDEOTAPE)
QUEST: Extraordinary views, particularly when you bear in mind what is at stake. World leaders here are looking for hints of what President Trump is
going to say here and what it means when he gives his speech tomorrow. The administration's rhetoric is trade friendly. America First does not mean
America alone. And they'll repeat that to you as often as you'd like.
But the actions hindered protectionism, tariffs on imports. Talking down the dollar. Gary Cohn is President Trump's top economic adviser and leads
the national economic council. He joined me here and I put it to him that nobody believes the president is about to deliver a non-protectionist
message.
(BEGIN VIDEOTAPE)
GARY COHN, DIRECTOR, NATIONAL ECONOMIC COUNCIL: Well, they're going to get it tomorrow. When the president delivers his speech tomorrow he's going to
talk about the role that America plays in the world and as America grows, the world grows. And it's good for the world to grow. We benefit when the
rest of the world grows, and the rest of the world benefits when America grows.
QUEST: And yet as the president was speaking and signing his solar panels and washing machine tariffs, here, President Macron, Angela Merkel,
President Temer, Theresa May, have all put a more globalization message than the president.
[16:05:00] COHN: And by the way, we are really excited to hear that. Because we really believe in free, fair, open and reciprocal trade. We
would love the European Commission to drop their tariffs on many of the items that we would love to export from the United States. We've dropped
our tariffs on most items and we would have free, open and fair and reciprocal trade. That's exactly what we're looking for in the United
States. We're looking for a level playing field. We want to be part of a level, global world.
QUEST: You are taking a level playing field is a very narrow definition. As of being a zero-sum game in terms of deficits versus surpluses.
COHN: I am talking about a zero-sum game at all. I'm talking about it as a reciprocal world where we treat each other as countries, equally. Right
now, we're not in a fair level playing field. We're in a playing field where many, many countries charge tariffs for U.S. products and we don't
charge their product a tariff to come into the United States. So, we put our workers at a disadvantage. We want to level the playing field to put
our workers at a competitive equal level to workers around the world.
QUEST: The perception is that that is protectionism.
COHN: No, no. It's the opposite. It's the opposite. Our products are charged tariff around the world today. Other people's products are not
charged tariffs to come into the United States. That's the reality of what we have in the world today.
QUEST: Let's take the example of the solar panels. You are aware as I am, that previous cases of tariffs, steel in the 90's, vehicles, car tires,
they always end up boomeranging and actually costing more jobs than the relatively small number of jobs that will be saved. And the same is being
said, true, of solar panels. There is a solar panel installation business. Just not manufacturing in the U.S.
COHN: Huge solar panel installation business in the United States, 350,000 solar panel installers in the United States. Very important business in
the United States. Unfortunately, there are no sell manufacturers left in the United States and therefore, we are allowing the sales to come into the
United States at a much larger quantity then they come in today. So, there are absolutely no tariffs on cells coming into the United States. And they
can come in larger quantities than their coming in today.
We do have panel manufacturers in the United States. People that put the cells in the frames. We are giving those panel manufacturing some
protection to build the panels in the United States. And because we want to create jobs in the United States.
In the washing machine area, look, we've actually achieved exactly what we want to achieve. The two big foreign manufacturers of washing machines
have agreed to open up factories in the United States. They're going to hire 1600 workers in the United States because, guess what? We're a very
competitive place to work right now, the United States.
QUEST: Are these policies, though, exactly the sort of policies you would have been against in your previous life?
COHN: We're in this policy because we've had product dumped into the United States because businesses have been artificially subsidized. They
are producing products way below cost, way below cost of production. You cannot produce these products at these levels. That is unfair trade
practice.
QUEST: Let's move on. Were you surprised when the treasury secretary, he didn't suggest, he said a weak dollar was good for the United States. And
you know, sir, the rubric is always the same, a strong dollar is in the best interest of the United States. You've heard it a million times.
COHN: In long term a strong dollar is in the best interest of the United States.
QUEST: But at the moment, there is a good 13 to 15 percent weakening of the dollar and the perception is you would like it lower.
COHN: In the long term a strong dollar is in the best interest of the United States. But we do believe in free and open markets. And right now,
in the short-term as it always does, the market sets the value of the dollar. So, the market is set in the value of the dollar. We are the
reserve currency of the world. We're going to maintain our status as the reserve currency in the world. And long term, we have to have a strong
dollar to do that.
QUEST: So, to be absolutely clear, there is no change in policy, whether or not the secretary may have been misunderstood or contextualized.
COHN: Long term, we have to have a strong dollar to be the reserve currency the world.
QUEST: Tax cuts. Within the next few weeks they will -- the benefits for many will be arrived. Not for me, I live in New York.
COHN: Well, the benefits have already started arriving for many others. We have 240 companies in America, over millions of workers are already
starting to get the benefits of higher wages. We've had people had their wages raised. We've had people given bonuses already by companies. So,
companies are already giving out some of the tax savings. Yes, the withholding tax charts come out in February. So, you'll have less
withholding taxes from your paycheck in many areas of the world. You'll continue to see benefits through the whole year, and you will see a lot
more benefits next April when you file your taxes.
QUEST: When people make this argument that it's a longer-term benefit for corporations versus a relatively short-term benefit for ordinary people. I
can see your smiling. You've heard this argument.
[16:10:00] COHN: There is no argument I haven't heard.
QUEST: There's no argument you haven't heard. But it still persists, the perception that this is a boondoggle for corporations versus say ordinary
people.
COHN: Well, we continue to be perplexed why the Democrats wouldn't vote to make the personal income tax cuts permanent for citizens. We are perplexed
by that. We would have loved the Democrats to vote with us and make the personal income tax cuts permanent, but they didn't. We couldn't make them
permanent. We're going to make them permanent eventually. We hope we can do that. We were able to make the corporate cuts permanent and that's why
people say that. But overall as we grow the economy and were going to continue to grow the economy. We've had two quarters in a row of over 3
percent growth. We get GDP tomorrow.
QUEST: Come on, you know what it is.
COHN: I might, and I might not. We hope to get another good quarter, over 3 percent. As we continue to grow the economy, we'll have a bigger base to
tax as we can tax more, and revenue continues to grow, growth, growth, growth. We'll hopefully be able to make the personal income tax permanent
forever. That's our objective. It was always our objective to give the individuals a tax cut forever as well.
QUEST: On this stage, two years ago, -- on this set -- you said tax cuts and tax reform was something you wanted to see.
COHN: I did.
QUEST: So, now tell me what's the next thing you want to see?
COHN: There's many things I want to see.
QUEST: Come on.
COHN: The next thing I want to see in the United States with the president and we are working on is infrastructure. We have to rebuild our crumbling,
outdated infrastructure in the United States.
QUEST: Will you be around for the rest of the year and beyond to see that through?
COHN: I have been unbelievably lucky to be a part of President Trump's economic team, to be able to drive taxes and tax reform, to be able to work
on the regulatory form, to be able to work on infrastructure reform. I'm very excited to have the job I have. I am very lucky and I'm very excited
to be working on infrastructure reform.
QUEST: And I'm trying to -- I am trying to sift through answer.
COHN: That was a great answer.
QUEST: It was.
COHN: That was a great answer.
QUEST: It told me absolutely nothing about whether you're still going to be in the White House, in the government by the end of the year.
COHN: I told you. We're working on infrastructure. We're going to talk about it in the state of the union. Where going to announce plans in early
February. We've got a very detailed plan on how we're going to drive over $1.5 trillion of infrastructure. How were going to shorten the approval
process from 10 years to two years. We've got a lot of work to do here. I am very excited about the work that we have.
QUEST: We are knocking to get into the minutia of Russia, et cetera. But I do want to know, the Russia investigation, the serious Russia
investigation, is it paralyzing large parts of the White House in the way in which so much energy and effort is being taking and dealing with the
Mueller investigation, whether, which, what and how?
COHN: You answer that. Did we not just get tax reform done? Something that hasn't been done in 31 years that everyone at the beginning of the
administration, day one, before there was a Russia investigation, would have bet everything against that we could have possibly got done. Have we
not cut out hundreds and hundreds of regulations that were really hindering businesses from growing? Have we not got more court people appointed?
Have we not got more judges appointed? Did we not get a Supreme Court Justice appointed?
You tell me. It doesn't seem like it's hindering things to me. People in Congress can't wait to see our infrastructure agenda. I've been rolling it
out to different members of Congress, both on the Democrat and the Republican side. They're all excited to see it. It seems to me like we're
getting our agenda done.
QUEST: What color?
COHN: Well, red is unacceptable in the world. OK, so that's out. So, will go with green.
QUEST: Go green.
COHN: Go green.
QUEST: With your environmental policies.
COHN: Go green.
QUEST: Let's go to the wall.
COHN: What are going to the wall for?
QUEST: WEF says it's a shared future in a fractured world.
COHN: Shared future in a fractured world. OK.
QUEST: That's no fracture at all.
COHN: OK.
QUEST: That's we're very fractured. With the arrow going in different directions. That's Microsoft and people saying on this side. Where would
you go. How fractured do you think?
COHN: Obviously, you can --
QUEST: That's the middle by the way.
COHN: If you say so. Obviously, you can talk about this in a variety of different contexts.
QUEST: You define it.
COHN: When I talk about it in the economic terms of the United States and where we are in the globalized world, I think we are in a pretty fractured
world. People talk a good game. They talk a good game about this globalized world and wanting to be one world and wanting to trade with each
other and wanting to be in a shared economy, but everybody is putting up barriers. They're subsidizing workers. There putting up trade barriers.
I would say, we're sort of somewhere in -- well, I need a good spot.
QUEST: Wherever you like.
COHN: It is too green down there. Let's go here. But hopefully we're moving this way, right?
QUEST: So, there we are. I shall just note who it was -- that's Gary Cohn, who says, obviously, a very seriously fractured environment, but
moving in the right direction. Now you heard Gary Cohn say that the U.S. needs a strong dollar.
[16:15:00] The administration is trying to downplay the treasury secretary's comments on Wednesday that a weak dollar is good for U.S.
trade. Well, that's certainly a truism, everybody knows that. However, it is a departure from the conventional wisdom that America is best served by
dollar strength. Here in Davos, Mnuchin tried to clarify saying he's not concerned about day-to-day fluctuations.
(BEGIN VIDEO CLIP)
STEVEN MNUCHIN, U.S. TREASURY SECRETARY: In the short term where the dollar is not a concern of mine, OK, that it will fluctuate. That in the
short term there's obviously benefits and issues with a lower dollar.
(END VIDEO CLIP)
QUEST: Well, yes. This was the effect of the Treasury Secretary's original comments and the clarification. The dollar fell. Then fell
further to a three-year low, and only rebounded after president Trump told CNBC the secretary's original comments had been misinterpreted.
(BEGIN VIDEO CLIP)
TRUMP: I think they were taken out of context because I read this exact statement. But I'll tell you where I stand, which ultimately is very
important. Number one, I don't like talking about it because frankly, nobody should be talking about it. It should be what it is. It should
also be based on the strength of the country. We are doing so well. Our country is becoming so economically strong again -- and strong in other
ways, too, by the way -- that the dollar is going to get stronger and stronger. And ultimately, I want to see a strong dollar.
(END VIDEO CLIP)
QUEST: Misinterpreted or not, Mnuchin's comments on Wednesday angered central bankers in Europe. Mario Draghi, didn't refer to the secretary by
name, but he did suggest someone's not playing by the rules. Joining me now is Angel Gurria, the secretary-general of the OECD.
ANGEL GURRIA, SECRETARY-GENERAL, OECD: Hello, there.
QUEST: You, sir, have had a lifelong experience of not commenting or seeing the effects of commenting on the dollar or any currency. What did
you make of what it was all about?
GURRIA: I think Mr. Mnuchin was right in the sense that a weaker dollar promotes exports. And you are absolutely right in pointing to the facts
that throughout historically the position has always been the strong dollar, a strong dollar, a strong dollar. So now what you have is perhaps
an analysis that was a little bit too technical against a political position and we are seeing both positions being expressed today.
QUEST: Confusion.
GURRIA: Well, I would say an element of today, this afternoon, tonight, vis-a-vis the longer term. And second, Mr. Mnuchin is right to say that
the secretary of the treasury cannot live day to day and make policy decisions based on the value of the dollar that day.
QUEST: On the question of trade, there is a sophistry in the argument of a level playing field, fair trade, versus free trade. You have been a
student of this, years at the OECD, and you know that you can take the same facts on both sides and see it differently. Do you see the U.S. moving
toward protectionist policies?
GURRIA: Trade is crucial, and the fact that Mr. Trump is closing Davos and that before him you had dozens and dozens of leaders who were all saying
multilateralism or say more trade and more collective approaches to the world's problems, I hope will inspire him in his address tomorrow.
QUEST: You hope, but you can't have much expectation because tonight in that interview with CNBC, he specifically says he's in favor of bilateral
negotiations, bilateral trade.
GURRIA: That had already been expressed as the preferred way during the APEC meeting. Now the question is, as I said, we've now after many, many
days of all his most important trading partners say, we prefer this way. We'd rather see it this way. Perhaps, you know, maybe that will tone his
speech tomorrow.
QUEST: So, we've now got a situation. The U.S. is growing well. It got very good economic fundamentals. It's got this tax reform package which
will boost growth.
GURRIA: Creating jobs.
QUEST: Creating jobs. You must, be relatively assured at the strength of the global economy at the moment.
GURRIA: Listen, we are concerned about the sustainability of the recovery, OK? So, 3.9 percent, after all, is below the 4 percent cruising speed that
we had before the crisis. So, that was over us a little bit, and second, we run out of room on monetary policy. We run out of room, if not totally,
but a lot on fiscal policy.
[16:20:00] So, the question is now structural change is the one thing that is going to keep us going and that is education, that's innovation and
that's competition and that's regulations and that's R&D, that the financial system, et cetera. So, and that doesn't work too fast. It takes
time, and well, politicians like fast results.
QUEST: Choose your color on the fracture board.
GURRIA: OK. Let me get the red.
QUEST: Come over here. You know what the question is. How fractured are we by your definition as the OECD would see it?
GURRIA: We are very fractured, very fractured.
QUEST: Are we going to the worst that way.
GURRIA: Right about here.
QUEST: Or back to that way?
GURRIA: Listen, what I hope is that we'll probably get a little worse and then maybe turn around if we get it right. OK. I'm hoping with policy
decision going this way.
QUEST: Thank you. Good to see you. Thank you, as always.
GURRIA: OK. Delighted
QUEST: Thank you very much indeed.
A weak dollar helping U.S. exporters. The Dow and the S&P close at fresh all-time highs. Take a look at the numbers. And as we continue, Donald
Trump has only been here for a few hours, a busy few hours at that. Sitting there with two world leaders and already, what he is saying is
causing a stir. We'll get you caught up in just a moment. This is QUEST MEANS BUSINESS. We're live at Davos.
(COMMERCIAL BREAK)
QUEST: Delightful evening. It' s crisp and clear, and it's not too cold.
Donald Trump has been attending a dinner tonight, hosted by the World Economic Forum, gearing up for his turn and giving his speech on Friday.
The president met Britain's Prime Minister, Theresa May, and insisted their country's relationship was as special as ever. And he said trade between
the U.S. and the U.K. would grow much wider under his watch.
He also held talks with the Israeli Prime Minister, Benjamin Netanyahu, speaking publicly about the Middle East. He threatened to stop U.S. aid to
the Palestinians if their leaders don't agree to peace talks with Israel. The PLO has described that as blackmail. So, the Dutch Prime Minister
tells me he's not sure if President Trump is offering leadership to solve big, international issues. Mark Rutter joined me here in the studio and
said we have to judge the president not necessarily by what he says, but by his actions.
(BEGIN VIDEOTAPE)
MARK RUTTE, DUTCH PRIME MINISTER: I think Donald Trump is the president of the United States and we have to judge him and what he is actually doing.
And with every American president, I am not always in agreement on everything the president is doing. But still, America is the leader of the
free world, and we need Donald Trump's leadership in many international issues. And he is providing that leadership in a couple of important
areas.
QUEST: When we talk about protectionism, you know, within the next few hours, you're going to hear what America First means.
[16:25:00] RUTTE: Have you seen his speech already?
QUEST: No, I haven't.
RUTTE: Have you?
RUTTE: No.
QUEST: Will that be at odds, do you think, with what you, President Macron, Angela Merkel, with what you all believe?
RUTTE: Well, again, we need the United States and its leadership to solve big, international issues. Be it an economy, be it state to state, be it
multilaterally, we need that American leadership.
QUEST: But you're not getting it. You can say we need it, but you're not getting it? Or are you?
RUTTE: I am not sure. I am not sure. It's not for me to comment on the president of the United States. But I have to judge him on what he's
actually doing. And at the moment he is still working and trying to conduct his policies in the mainstream of what we internationally accept as
is reasonable. That's what he's doing. So, judging him on what he's actually putting in place in reality, that's what we have to do.
QUEST: Much talk here on the question of greater integration in Europe. Emmanuel Macron spoke about it. Angela Merkel spoke about it. And this
idea of a close -- ever closer union, the people don't necessarily want it, and I ask you, Prime Minister, your election showed to some extent that
leaders are going faster than populations. When are they going to get the message?
RUTTE: Well, on Europe, I think what people understand is that in an unstable world we need to pull together. That's what the European Union
does, and it provides the internal markets, which provides for the jobs and for the economic security of people. So, that's crucial. But I am against
the sort of integration for its own sake. Because what that would mean is that countries would not implement the necessary reform at a national level
and will try to somehow internationalize the national problems. We cannot accept that. So, every country has to fulfill the basic promise of the
European Union. Which is that when everybody is doing what is necessary then collectively we will have a higher level of wealth and opportunity.
(END VIDEOTAPE)
QUEST: Well, Mark Rutte, the prime minister there. Joining me now, Alex Stubb, the vice president of the European Investment Bank, former Prime
Minister. Good to see you, Alex
ALEX STUBB, VICE PRESIDENT, EUROPEAN INVESTMENT BANK: Nice to see you, Richard.
QUEST: You were just saying, Europe's back. What do you mean by that?
STUBB: Well, I think that someone has to fill the power vacuum that's been left by the United States and I think Europe has doing a good job on two
accounts. One is values. We're seeing Macron and Merkel leading on that. And the second on is trade. We're doing trade agreements all over the
place. So, I think Europe is back.
QUEST: You talk about the vacuum. You think there is one there?
STUBB: Oh, I definitely think so.
QUEST: Or you just don't like the leadership that's been given?
STUBB: No, I think 2016 was a watershed in the sense of where both Brexit and Trump and you can't lead the world from ahead if you reject
globalization. If you start building walls. If you talk about protectionism and America First. If someone is taking that space,
President Xi took it last year, talking about globalization, free trade and climate change. And I think the Europeans are doing it this year. So, I
think Europe is back.
QUEST: Angela Merkel is not exactly in a strong position.
STUBB: Don't underestimate her capacity to deal with difficult situations. She's been there for 12 years. She'll be there for four more, and she'll
solve this one, as well. She's the champion of difficult situations and compromise. She'll do it.
QUEST: And Emmanuel Macron, he has put himself in a fascinating position as being a halfway house to America. Which would normally be, of course,
the role that the British would play.
STUBB: Well, exactly. That's why think unfortunately, and I say this as a big fan of the Anglo-Saxon world. There is a certain demise of the Anglo-
Saxon world. And it's really interesting to see France pick up that space. I think in many ways, symbolically, Macron is the symbol of liberal
internationalism in Europe. And together with Merkel, they're going to drive Europe forward.
QUEST: And yet, when Macron still talks about the role of the future all of Europe closer and how that defines, there's no evidence that Europeans
want to get much closer.
STUBB: I think there is no evidence that the European integration cannot advance without the Franco/German access. What will happen is they'll
drive the process forward together. You'll have one wanting to drive a bit faster, that will be France, and one pushing on the brake a bit, that will
be Germany. And then the compromise is the final solution.
QUEST: Who cares what ordinary Europeans think about all of that? Let's face it, you know, you sat in the meetings, Alex. We wouldn't want to let
those pesky voters get in the way until there's an election.
STUBB: No, that's not the question at all. I think when the economy is doing well, when Europe provides results. When we are true to our values,
I think people will follow. But I do think that the face of democracy is changing, and Europe has seen that in the past few years, as well.
QUEST: And yet America has seen it and gone the other way and seems to be OK with that at the moment.
[16:30:00] STUBB: I think everyone is OK when the economy is doing well. But when there is a downturn, someone needs to be blamed and believe me, I
know it, usually it's the politicians.
QUEST: I guess I forgot about that. Choose a color.
STUBB: Finland turned 100 years last year. So, of course, I'll take blue.
QUEST: Right, come and join me at the board.
STUBB: Yes.
QUEST: How fractured are we and which way are we going? That's better, that's worse. How fractured are we?
STUBB: Well, I think we are fractured. I think we are actually divided on the basis of values. But you know what? I'm the eternal optimist. So, I
think we will do better. So, I'll go a little bit to this side.
QUEST: Better or worse?
STUBB: Better, better, the direction. Is that better?
QUEST: That's better.
STUBB: We're going to go better.
QUEST: Thank you very much. Are you enjoying life, post-government?
STUBB: Believe me, I'm loving life post-government and I tell all my colleagues that the best title in the world is former prime minister.
QUEST: All the pleasures and none of the pain.
STUBB: All smiles. Thanks a lot.
STUBB: Thank you very much.
Thank you, Alex, good to see you.
STUBB: Thanks.
QUEST: Former Prime Minister, Alex, always good to see you.
As we continue now and tonight, Donald Trump makes a surprise announcement on global trade. The president seems to be softening his stance on TPP.
Now that the other 11 Asian countries are going ahead without the United States. It's QUEST MEANS BUSINESS live tonight from Davos.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. When Donald Trump says he could get on board with TPP after
all. Australia's trade minister is here to give his action to the very thought that the Americans might be back onboard.
And Pakistan's Prime Minister tells me why he's bothered by the president's early morning tweets. As we continue from Davos, this is CNN and on this
network the facts, they always come first.
President Trump has arrived here in Davos and brought with him America First to the World Economic Forum. Many U.S. allies are pushing for free
trade and globalism. Speaking to me on QUEST MEANS BUSINESS, the president's top economic advisor Gary Cohn argued that what's good for
America is good for the world.
(BEGIN VIDEO CLIP)
GARY COHN, PRESIDENT'S TOP ECONOMIC ADVISOR: The president delivers his speech tomorrow. He's going to talk about the role that America plays in
the world and as America grows, the world grows. And it is good for the world to grow.
We benefit when the rest of the world grows and the rest the world benefits when America grows.
(END VIDEO CLIP)
QUEST: At least three people were killed, and dozens injured on Thursday when a train derailed and crashed near Milan in Italy. The accident
happened at around 7:00 in the morning local time. Officials say eight people remains in critical condition.
[16:35:00] An investigation has already been launched into the cause of the crash.
Israel's Prime Minister Benjamin Netanyahu says there is no substitute for the United States as an honest broker in the Middle East peace process. He
made his comments here at the World Economic Forum and said it was fantasy for any other body to play this role. The Prime Minister said President
Trump is a very able team with many abilities.
The head of the IMF says she's worried about any measures that would hinder international trade. Christine Lagarde was sitting just inches away from
the U.S. treasury secretary when she spoke here in Davos.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: Any measure that would try to slow down trade, that would try to limit the
strength of the engine would be of concern. Because if we are all seeking more growth, better growth, more inclusive growth, sustainable growth, we
need to fire from all engines.
(END VIDEO CLIP)
QUEST: Now, the president, the U.S. President in an extraordinary development CNBS says, he's open to taking the U.S. back into the TPP,
that's Transpacific Trade Partnership, providing any new deal is substantially better than before. He pulled the TPP out last year, I think
it was the first act he did as president. Well, the other 11 countries did not waste too much time. They agreed this week that they'll go ahead with
what they're calling a Comprehensive and Progressive Agreement for Transpacific Partnership, or CP TPP, a catchy title. Australia is one of
them and its trade minister joins me now. Steven Ciobo joins me. Minister, good to see you.
STEVEN CIOBO, AUSTRALIAN TRADE MINISTER: Good to be here. Richard.
QUEST: So, your thoughts. I mean obviously, you would welcome the U.S. back into what was now the CP TPP, but are you prepared to offer them a
better deal?
CIOBO: Well, if we -- we all, I think, collectively want the United States back in. That's precisely the reason why we're negotiating the TPP to make
it a TPP 11. We simply suspended the provisions that we knew were materially important to the United States. So, the Australia, Japan,
Singapore, New Zealand, we all want the U.S. back at the table. Let's try to make it happen.
QUEST: But Singapore said, and you said, that there could be no wholesale renegotiation of the TPP. And effectively that's what happened. There has
been no, you basically put a few knobs on, taken some things out and done it slightly.
CIOBO: But a new name.
QUEST: And yes, catchy. Whoever came up with that one. But the point is how far do you think you and the other countries would go to accommodate a
U.S. seeking a better deal?
CIOBO: Well, I mean, we have had very slight renegotiation. We've now got the TPP 11. So, we've had $13.7 trillion worth of global economic activity
at the table. We've got an agreement and we hope to sign in early March. I can't see a wholesale change to that in order to accommodate the
Americans. That's not to say that the 11 of us couldn't get together and work out how we can address some of the U.S. concerns in order to bring the
U.S. back to the table. Because we want that. We want the U.S. back. But we need to be realistic about what can be achieved.
QUEST: And to that end, that's the difficult part, isn't it? Because there's a great bonanza for you if you manage to do it. But you can't be
seen to overturn what you've agreed. That would be devastating for your electorates.
CIOBO: And it would be hard, too. We'd be going back on what we've settled and as you know, with multilateral, pluri-lateral trade deal like
this, if you start unstitching it, it's hard.
QUEST: Minister, bilateral versus multilateral. The president says tonight he's in favor of bilateral deals. But as far as that goes, you
know, other leaders, your own prime minister says, multilateral is a preferred option. So again, where is the meeting of minds on this?
CIOBO: the Australians are a pretty pragmatic platform.
QUEST: Absolutely.
CIOBO: We adopt multilateralism where we can, plurilateral-ism and bilateralism. Right now, we have the most active trade agenda in
Australia's history. I've got trade negotiations either under way or about to commence with Indonesia, Hong Kong, Mexico. We've also got the U.K.,
European Union, India, so is a big deal. My point is that in terms of the United States, if I was the biggest gorilla in the room. I would want
every deal to be bilateral too.
QUEST: Right.
CIOBO: But we all know that. We all know the deal. And we think there's more to be gained from working together for a good outcome.
QUEST: Brexit and the -- you just mentioned you would deal with the U.K. You've got to try to get as close as you can without, of course, breaching
the European rules for the commission and yet at the same time there could be this two-year transitional. So how close would you like to get during
that two years?
[16:40:00] CIOBO: Look, in many respects, which we'll work to the U.K.'s tempo. The U.K. is currently, of course, right in the center of trying to
negotiate their exit from the EU. I have a great working relationship with the May government in particular with Liam Fox, my counterpart.
So, we'll work to their tempo to a certain extent. We are having preliminary discussions. We're the first country the U.K. said that they'd
form a working group with. We'd want to conclude as quickly as possible once they formally exit the EU. But how long precisely will that be, we'll
have to see.
QUEST: But do you imagine you could get something done, ready to go during the transitional period?
CIOBO: No, because the U.K. have said repeatedly that they cannot commence negotiations until such time as they fully exit the EU.
QUEST: Choose a color, minister.
CIOBO: I'm going to go blue.
QUEST: Everyone is going blue tonight.
CIOBO: Well, you know, it's the color of Australia. Blue seas, blue sky, all that sort of thing.
QUEST: If you say so.
CIOBO: I'm tourism minister, so.
QUEST: Where are you? How fractured are we? Not, middle ground, very fractured.
CIOBO: Look, I see, I mean, in our part of the world we continue to see countries come closer together. Notwithstanding some of the tensions
around North Korea. So, I am going to put us on this side around about here somewhere.
QUEST: Very nice.
CIOBO: I'll just put Australia.
QUEST: And the arrow going better or worse? Better or worse?
CIOBO: I think we're trending and I'll put a small arrow trending for the better.
QUEST: Excellent. And the economy in Australia continues with extraordinarily robust growth of recent years, doesn't it?
CIOBO: Not by luck. I mean, we're in our 27th year of continuous economic growth, a new record for a developed economy. But we have been committed
to not only domestic economic reform, but also opening up trade opportunities.
QUEST: Right. Good to see you.
CIOBO: Richard, thanks.
QUEST: Thank you very much, indeed.
What a surprise. Calsa (ph), please. France's economy minister said to expect the unexpected from President Macron. You're going to hear from
Bruno Le Maire as we continue tonight.
(COMMERCIAL BREAK)
QUEST: From the Alpines of a French music, and France's economy's minister says we should expect surprises from President Macron this year, as he
continues a major economic overall. Speaking to me earlier, Bruno Le Maire, said, Mr. Macron was just getting started.
(BEGIN VIDEOTAPE)
BRUNO LE MAIRE, FRENCH ECONOMY MINISTER: We have been successful in passing some very important reforms, the labor market reforms which is a
very important milestone in the mandate of Emmanuel Macron. The total of a whole of the French tax system, that's also something very strong, but much
more is to come.
[16:45:00] We will have next year the law to help the medium and small sized enterprises to grow and be able to conquer new external markets.
There will be a law on training. There will be a law also on the pension system. So much more remains to come. And there will be some new
surprises coming from France.
QUEST: Oh.
LE MAIRE: Yes.
QUEST: Tell us more about the surprises. I guess there would not be a surprise if you told me them.
LE MAIRE: The surprise will be the total determination of the French government and the French president to really overhaul the French model.
(END VIDEOTAPE)
QUEST: We will give you a close-up look on what's going on in France next week on QUEST MEANS BUSINESS. I will be live in Paris on Thursday and
Friday. The program comes live from the French capital only on CNN.
So many ministers and so many different policies, all trying to vie the agenda here in Davos. Italy's finance minister says policymakers had to
take charge to make sure growth is truly inclusive. Pier Carlo Padoan has already seen Italy's economy through exceptionally turbulent times. Now in
the era of Trump and renewed populism, he told me where his priorities lie with elections just ahead.
(BEGIN VIDEOTAPE)
PIER CARLO PADOAN, ITALIAN ECONOMY MINISTER: I hope that Europe stands up to the challenge and that we find a joint, cooperative solutions with the
big players, with United States, with China, with other countries.
QUEST: What do you mean of reshaping of global power, of global influence?
PADOAN: The fact that the governance of the global system needs to reconsider elements and the most important element is the lack of looking
at inequality issues are rising fast. This is root of populism and nationalism. We have to find the root of those things.
QUEST: Is there -- I assume by that you mean, obviously, the way in which Americans voted in Donald Trump and therefore expressed a dissatisfaction
with the way the system was working for them at the moment.
PADOAN: absolutely, this is the case of the U.S. But not just in the U.S. also in many European countries.
QUEST: Right, in Brexit and in Germany and others. So how do you prevent that from becoming an issue or at least getting your message over back to
your own elections? The Italian people are perhaps going to say, well we to one wholesale change.
PADOAN: The Italian people would like to see more jobs, security for their kids and they're beginning to see that. So, growth must be stronger, but
also more inclusive. And it is the duty of policymakers to provide the instruments to do better, we can do it.
QUEST: You say we can do it and arguably, I say you, not you personally, obviously, leaders have singularly failed to do so. There is a comeback to
this core point, which I sometimes wonder whether leader fully understand the anger in societies. That creating more jobs in different parts of the
world, developing the world, is fine, but it's come at the expense of good jobs or jobs in their own countries.
PADOAN: Well, it's not necessarily coming at of the expense. We are also facing technological shocks which are very large.
QUEST: Which need to be prepared for.
PADOAN: Yes, we need to be prepared. And the recipe is good old education investment and wealth redistribution to the tax system.
(END VIDEOTAPE)
QUEST: The finance minister of Italy. At a time of strained relations between Washington and Islamabad, I speak to the Pakistani Prime Minister
on everything from Trump to twitter. That's after the break. It's QUEST MEANS BUSINESS, we our live in Davos. Oh, in Davos, of course.
[16:50:00] (COMMERCIAL BREAK)
QUEST: Pakistan's Prime Minister says he doesn't understand why Donald Trump is taking such a hard stance of withholding aid. The U.S. says it
would hold back $225 million after accusing Islamabad of harboring terrorists. Shahid Abbasi spoke to me about that and how his training as a
pilot equipped him with some of the skills he needs to be Prime Minister.
(BEGIN VIDEOTAPE)
SHAHID KHAQAN ABBASI, PRIME MINISTER, PAKISTAN: We have engaged the U.S. at every level.
QUEST: So why would you make these comments?
ABBASI: I don't understand that. Because our position is very clear. We articulated it to the U.S. at every level. At the operational level, at
the Secretary of State level. I met with Vice President Pence in New York. We explained the whole situation to them. We believed there was
understanding of the realities on the ground. The realities are very different, and 200,000 of our troops are fighting a war against terror. We
have defeated the same enemy, on the same terrain that the world failed in Afghanistan.
So, it's a success story. The U.S. CENTCOM commander, visited Pakistan twice. He has seen the situation on the ground. So, I say come and look
at the situation, and the reality will come before the world.
QUEST: Are you concerned that the U.S. might decide to start using the power of the purse?
ABBASI: The power of the purse --
QUEST: Just today, for example, just today, the president has said about the Palestinians, a different issue, about the Palestinians, the U.S. gives
hundreds of millions -- or whatever it is -- to the Palestinians and they won't come to negotiate. So, he's clearly taking a businessman's approach
which is maybe something different than you're used to.
ABBASI: Well, we aren't used to it at all. There is a very limited U.S. aid to Pakistan in the last 10 years. It can't be quantified what aid has
been given. It's not aid. It's the reimbursement for expenses, called the Coalition Support Fund. Where we play a part in the war against terror,
the expenses are reimbursed. It's also a fact that we've had over a million U.S. sorties through our airspace. We have not even been billed.
The same thing for the ground logistics. We are partners in the war against terror. It's not an adversarial relationship.
QUEST: Are there similarities between being a pilot and being a prime minister?
ABBASI: I'm not a commercial pilot.
QUEST: No, but you're a pilot --
ABBASI: This is not a commercial venture.
QUEST: No, but you know what I mean.
ABBASI: I'm a pilot -- both are responsible positions, let me put it that way. There is great responsibility in being a pilot, especially a
commercial pilot. You've got 500 people sitting in the back and the prime minister who has got 207 million people.
QUEST: But can you think like that? Because every pilot I've met who fly's big planes or small planes. It doesn't matter how many planes, if
you have anybody in the back. If you start thinking about it in the same way, if I start thinking about how many people might be on the other side
of the camera you'd never do it.
ABBASI: Well, I think --
QUEST: I mean, you wake up in the morning and think of the 200-odd million people that you have, you would never do it.
ABBASI: I won't agree with that. That's a motivation. It's a motivation to contribute to the welfare of 207 million people. That keeps you going.
That's the motivation.
QUEST: That's what keeps you going?
ABBASI: Yes, absolutely.
QUEST: And when it's time to relax and when it's time to switch off, what do you do then?
ABBASI: This is a job you don't switch off. Ask President Trump.
QUEST: We know what he does.
ABBASI: He is up at 7 a.m. tweeting me.
QUEST: We know what he does.
(END VIDEOTAPE)
QUEST: He plays golf, the Prime Minister of Pakistan who may or may not play golf, but if that's how he relaxes.
Now, for decades, Her Majesty, Queen Rania of Jordan has campaigned for greater equality around the world and now the #metoo campaign is in full
swing. Earlier Her Majesty told me, society still has a long way to go.
(BEGIN VIDEOTAPE)
HER MAJESTY, QUEEN RANIA OF JORDAN: Well, look, I'm hoping that we can look at 2017 as a turning point. As the year when we really started to
address an issue that is an age-old issue that people have not been speaking about. It's given new voice to an old issue. And I think, you
know, it's created the kind of social environment that's allowed people to feel more comfortable coming out and speaking about issues that have been
going on for so long.
[16:55:00] So, what I am hoping for is that this will create these voices that have come out and will turn into actual actions. That the anger that
was generated will turn into actual action and you know, so that we can see policies changing and so that we can see ethics and cultural norms
instilled in corporations that don't allow for these kinds of things to happen.
QUEST: On that point, everybody wants this change to take place, to be permanent, to be a mindset change.
QUEEN RANIA: A cultural change.
QUEST: A cultural change. Can I be cynical and suggest we need to be very careful about people paying lip service to change but nothing really
changing underneath.
QUEEN RANIA: Exactly, because I think we want to see equal pay for example. We want to see change in actual conduct. We want to see
resources directed towards victims. So, in parts of the world we see women breaking through glass ceilings and other parts we see them being sold in
modern-day slave markets. And so, you know, there's a lot that needs to be done. And according to the latest global gender gap report, at the current
rate of progress, it's going to take us 217 years to achieve gender parity. So, we have a lot of work to do. It' s not enough to just talk about these
things. We need to translate -- we need to move from breaking the silence to actual tangible actions.
(END VIDEOTAPE)
QUEST: More from Her Majesty next week with Davos plus. We will have a Profitable Moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment, extraordinary times in Davos and it promises to be a most remarkable day tomorrow when Donald Trump finally
gives his speech. Who knows what he's going to say? But we will hang on to every word. And that's QUEST MEANS BUSINESS for tonight. I'm Richard
Quest in Davos. Whatever you're up to in the hours ahead, I hope it's profitable.
END
