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QUEST MEANS BUSINESS
Obama's Deficit Reduction Plan
Aired September 19, 2011 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN ANCHOR, QUEST MEANS BUSINESS: The battle lines are drawn. President Obama vows to veto any plan without tax hikes.
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BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is not class warfare. It's math.
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QUEST: The governor of the Bank of Israel tells me tonight how his economy weathers the economic storm.
And we examine what needs to be done to curb child labor in the cocoa industry.
I'm Richard Quest. I mean business.
It's time for those people who have done well to pay up. It was tough talk a few hours ago from President Obama when he took that wraps off his $3-trillion deficit cutting plan. These are the details. The blueprint combines spending cuts and tax reforms along with the so-called grand bargain, that the president tried to hammer out with Republicans earlier in the year, which he said didn't turn into a grand bargain after all.
The cuts would come from Medicare/Medicaid, the healthcare programs for the retired and poor, amongst other places. There will be reduced war spending Iraq and Afghanistan.
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But on the revenue side, Mr. Obama wants to let the Bush era taxes (sic) on the rich expire, and that of course, also brings us the Buffett Rule, named after billionaire Warren Buffet, who says the super rich are under taxed. Republicans are up in arms saying new taxes on the wealthy are a form of class war. The president disagrees.
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OBAMA: I will not support any plan that puts all the burden for closing our deficit on ordinary Americans. And I will veto any bill that changes benefits for those who rely on Medicare but does not raise serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share.
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QUEST: So the Buffet Rule, the Republic-well, he says, the president says he'll veto if it doesn't have tax rises. We know the Republicans won't go for tax rises.
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Maggie Lake is in New York.
You're shaking your head, as well, you might. I mean this thing is dead on arrival.
MAGGIE LAKE, CNN BUSINESS CORRESPONDENT: It certainly is, and you know, for a lot of people watching, given the economic problems we're facing you would wonder why having the rich pay more taxes is such a hard sell. But it has been one. And that is why you see President Obama today giving specific, using Warren Buffet as an example about what he wants to do. Buffet has many times in recent years pointed out that he pays something like-when it is all said and done-about 17 percent tax rate, while his secretary, who he mentions all the time, and other employees pay an average of about 36 percent tax rate.
President Obama wants to get those two numbers much closer together, or flip them. He wasn't specific on the actual numbers, he says it is time for the rich to pay more. Part of the reason he hasn't been able to really break through and connect with voters on this, is because Republicans put two arguments. First of all, they say taxing the rich, you are going to tax the very people who create jobs; small business owners who often file as individuals, not as companies. But they also-and this is more interesting-keep hammering on something that really resonates with Americans and that is that you get punished if you are successful, under this plan. And Obama pushed back hard against that today. Have a listen.
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OBAMA: Nobody wants to punish success in America. What's great about this country is our belief that anyone can make it and anyone should be able to try. The idea that any one of us can open a business, or have an idea, and make us millionaires, or billionaires, this is the land of opportunity. That's great. All I'm saying is, that those who have done well, including me, should pay our fair share in taxes to contribute to the nation that made our success possible. We shouldn't get a better deal than ordinary families get.
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LAKE: That shared sacrifice. He's going to push hard on that theme. Republicans, of course, coming out right after that. And here we go back in the circle. John Boehner, the House leader, saying that pitting one group of Americans against another is not leadership. So they are at a standstill, but Obama definitely shifting his message. You can hear some of the frustration over the fact that he hasn't been able to sort of connect, and sway lot of voters onto his side.
QUEST: All right. Maggie Lake, in New York, many thanks for joining us now.
Now, the Dow Jones industrials, as you can see.
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At the moment, the Dow is off some 220-214 points, at the moment, down 1.87 percent, 11,294. That is where the U.S. market stands at the moment. Largely I suspect on the worries of what's happening in Europe, as well as the Obama plan.
And when we talk about Europe we talk about deficit cutting. What is driving the market? Anxiety, the region's major benchmark sank on Monday, amid worries that Greece could fail to push through the deficit cuts that will securer the next big chunk of marry-marry? Money. The CAC 40 some 3 percent; French banks were especially hard hit because their major exposure to Greek debt.
What's going on? A bit of a mess, start of a new week, and we are already seeing markets that are down some 2 and 3 percent. Jim is with me, on the question.
Where do we stand with the troika? And the negotiations? And Greece? Never mind the ESFS.
JIM BOULDEN, CNN BUSINESS CORRESPONDENT: No, but that's the second bailout.
QUEST: That is too much richer for me.
BOULDEN: Let's just pretend we're back to last Monday, because we are. We are back to last Monday. All the meetings in Poland, all the troika talks, all the talk, all the nonsense, we're back to where we were. Which is, Greece has got to make some tough decisions, we've been saying that for a long time, to fill the gap, to meet the targets, to get the next tranche of money by mid-October. It needs that $11 billion to pay a bond, a coupon for a bond, it needs to pay its pensions, it needs to pay it state employees. So, right now, Mr. Venizelos is on a phone call with people from the IMF, the European Central Bank. And they are discussing whether or not the decisions made over the weekend will be enough in order to let the troika go on with its business to get the money to Greece.
QUEST: They are going to get the money, Jim.
BOULDEN: Well, politically they are going to have to get the money.
QUEST: They are going to get the money, because if they don't get the money, they will go bust.
BOULDEN: Yes, absolutely. And maybe, maybe, maybe, maybe, they won't have to wait `til October 14th to get the money, if they come up with a decision quicker. But right now talks are going on, we are probably not going to hear much until tomorrow, about what it is that Greece is going to do, what it can do. The last 24 hours, the discussions with the government, in order to get the troika to agree to give them the money.
QUEST: I notice Greek 10-year bonds now over 20 percent. At the same time as bundes in Germany, under 2 percent, and U.S. Treasuries, also under 2 percent on the 10-year bond.
BOULDEN: But we saw better numbers from Greece, better yields from Greece on Friday because people were believing that maybe something good would come out of the Poland meetings. We saw the markets up a lot last week, and now we are right back to where we were on Monday.
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A bittersweet birthday for the chocolate industry; 10 years on there was a landmark deal, it is called the Cocoa Protocol. It was designed to end forced child labor, the shocking signs the problem still not disappeared. After the break, should we celebrate the Cocoa Protocol or mourn what's taken place?
QUEST: "The Freedom Project" now, our year-long effort to help rid the world of modern-day slavery. We are focusing on something that was supposed to have finished by now, be over and done with, a shameful business practice. Ten years ago today the world's biggest chocolate companies signed something called the Cocoa Protocol. It was a deal that should have ended forced child labor in West Africa's cocoa farms, a noble endeavor. Many aid groups say not a successful one.
Ten years on, do not get the bunting and the candles out, do not start raising a glass of champagne. Ten years on child labor is still a shocking scar on the chocolate industry.
QUEST (voice over): In the film, "The Dark Side Of Chocolate" we follow undercover researchers on several coco farms in the Ivory Coast. Through their cameras, viewers see children with machetes. We're told some are held against their will, forced to work, and that many never even get paid.
ROBIN ROMANO, FILMMAKER: Every single time I've gone to a farm there, I've seen children. Now some of them may be local children. Some of them maybe the children of the farmer, but many times they are not. And it is very hard to figure out where they come from. And one of the clues you have is that they don't necessarily speak French, or the local language.
QUEST: Robin Romano's film also show disturbing signs of child trafficking. Children smuggled from Mali and Burkina Faso to work on cocoa plantations.
JUDY GEARHART, EXECUTIVE DIRECTOR, INT'L. LABOR RIGHTS FORUM: It's just trafficking; a child being trafficked, a child being forced to work. It doesn't get worse than that. I don't think it is just-it can't be just about, are there enough of them? It is a serious abuse.
QUEST: Ivory Coast is the world's largest producer of cocoa. The U.S. State Department estimates that there are more than 100,000 children involved in the worst forms of child labor on coco farms throughout the country. According to an industry wide agreement, signed on September the 19th, 2001, this should not be the case.
The Harkin-Engel Protocol was written to put an end to forced child labor in chocolate by 2005. A deadline that has been extended to 2008 and again to 2010.
GEARHART: Honestly, it hard to see anybody saying that this protocol has attained the goals that were set out in it.
QUEST: Leading companies in the cocoa market were amongst those that signed the protocol in 2001, agreeing to commit significant resources to voluntary standards.
CHRIS BAYER, TULANE UNIVERSITY RESEARCHER: Unfortunately, over the last 10 years we've seen very little implementation of the actual commitments.
QUEST: Chris Bayer spent five years in Ivory Coast and Ghana, under a contract from the U.S. Department of Labor. Part of Tulane University's oversight project. Monitoring the protocol's action plan and studying the scope of the problem. The International Cocoa Initiative, the ICI, was set up by the protocol to bring all parties together to address the worst forms of child labor and the supply chain.
In an e-mail they said, quote, "Five of the six commitments made in the protocol have been completed. And [participants] are actively working on the sixth commitment-to improve the livelihoods of cocoa growers. Substantial funds are being expended on these activities.
BAYER: The cocoa and chocolate industry, has spent $5.5 million between 2001 to 2009. And we did the math, we determined that they need to spend at least $75 million.
QUEST: It is an industry that certainly can afford it. According to Tulane researcher Chris Bayer, from 2001 to 2011, the global revenue from cocoa products was an estimated $1 trillion.
GEARHART: This is about companies saying, it is our supply chain, we are accountable for the cocoa in our supply chain. We have to audit that supply chain, just like we audit the books.
BAYER: We are talking about a population that is already vulnerable, a population that is among the poorest in the world. And this population supplies a commodity, a primary good, that creates such incredible wealth, and so much pleasure and indulgence, especially in the West and among those countries that consumer cocoa products. So we have this disparity between incredible poverty and suffering and yet, indulgence and decadence on the other hand.
QUEST: Now, the U.S. senator who helped put together the protocol and whose name is on its very typeface, says he hasn't got the support that he needs from the chocolate companies, and is prepared to do more, if necessary. Last week I asked Senator Tom Harkin to explain what is holding this agreement back and keeping children in forced labor?
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SEN. TOM HARKIN, (D) IOWA: Number one, we just didn't get enough money at all from the chocolate industry. They didn't step up to the bar. We really didn't have a real commitment, I don't think, from the two governments. And then (UNINTELLIGIBLE), of course, as you know, they have been involved in lot of revolutions and civic strife there. So that set us back, somewhat.
So there have been a number of reasons why. I just will say this: That we need a better commitment, a stronger commitment from the chocolate industry worldwide. Families need to know that when they buy chocolate in whatever form, that a lot of that is being produced by what is really, in essence, child slavery. And I think as people understand that more, they're going to insist that we take firmer action to get those kids out of the cocoa fields.
QUEST: What about the idea that ultimately you are going to have to hold the chief executives and the presidents of the companies, if not exactly responsible, but at least to them, make them morally reliable on this subject. It is only when you-like I'm talking to you, Senator Harkin, I can put a name and a face to the issue. You are standing forward. I'm putting your name forward. Shouldn't CEOs do the same?
HARKIN: Well, yes, should and we should know who they are. But let me just go back, Richard, back in 1980, '81, I was one of the leaders, in the United States, in the Nestle boycott. Dealing with how they advertise infant formula. That was a very successful boycott against Nestle. It took about two or three years, but Nestle finally came to the table and agree to stop what they were doing in terms of infant formulas.
Well, again, that is always out there. I think quite frankly, I've been trying to hold at bay a number of entities that want to have another boycott on the chocolate industry. I spoke about that on the Senate floor a few years ago. And if these companies aren't willing to come forward and work with us, and put some more money forward to get these kids out of the cocoa fields, I think they may face a really big backlash, like Nestle did back in the 1980s.
So, do you have plans for more legislation, or some legislation? 2005, extended deadline, 2010, extended deadline, same intent. Isn't it time, Senator, for legislation?
HARKIN: Well, the time is now to get a good monitoring system in place with the ILO. And to make sure that we know the benchmarks and that we can keep track on both how many children are taken out and what is being done about getting them in school, remediation. And again, we'll look at this every year, this year, next year, the year after. And there had better be progress, because if there is not-well, like I said, ask Nestle what happened in the 1980s.
QUEST: Senator Tom Harkin. When I read the protocol and the names who had signed it, I was pretty certain we needed to hear from the presidents of the companies, the president of the companies who actually signed the Harkin-Engel Protocol, inviting them to come on this program and talk about them.
Join me at the super screen and I'll tell you, we sent out requests to the top five chocolate makers and five cocoa manufacturers, inviting them to come and join me. Only four responded. Mars said, "We have always been and continue to be deeply concerned about child labor issues in West Africa. Reaching every one of the millions of farmers in West Africa is a difficult task." They are committed to achieving a permanent solution. Didn't put anybody up.
Kraft-Cadbury said it is "working with others in the industry" for support of the Harkin-Engel Protocol, referred us to other people who might come on the program. Didn't put anybody up.
What about both companies and (UNINTELLIGIBLE) referred us to the International Cocoa Initiative, that is the joint group of companies who signed up to the deal. The person who signed on their behalf, didn't put him up either.
And as for ADM, said, the signatories of the protocol will be releasing a joint statement in the coming days. When that statement is released we'll bring it to you. Guess what? Didn't put anybody up.
We'll have more on what needs to be done to curb child labor later in the program. QUEST MEANS BUSINESS, in a few moments, I'll be taking you to the Windy City, Chicago, after the break.
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QUEST (On camera): Coming up, after the break, "Future Cities" is in Chicago, taking a tour on the river.
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QUEST: Chicago, the Windy City's once neglected river now getting much needed attention. The mayor of Chicago, Rahm Emanuel, says the river is the city's next recreational frontier. And new boathouses will anchor future development plans. Well, in the month of September in "Future Cities" we are in Chicago. And tonight, a trip along Chicago River. Let me show you why it is more than just messing about in a boat.
UNIDENTIFIED MALE: When moving about the ship, please, watch your step, use the handrails going up and down the stairs.
QUEST (voice over): It has been here from the beginning, a vein, providing life to a new city. And today it remains the backbone as Chicago continues to grow up around its river.
A perfect port for industry, the river allowed Chicago's economy to flourish. Along the way, though, it has become neglected. With sewage streaming into it, carrying pollution and disease, straight into Lake Michigan, Chicago's drinking water supply. In 1900 the flow of the river was reversed, sending it west to wards the Mississippi River, away from the lake.
Since then, the lake front has been Chicago's most popular draw; a beachfront in the middle of the city. The river simply hasn't had this kind of success, at least not recently.
Chicago still struggles with the health of its river. As long as water quality suffers it will never match the popularity of its pristine lake neighbor. The dated sewer system has caused polluted overflow to continue. The water authorities have stepped in, constructing a series of tunnels to help ease the pressure during heavy Midwestern rains. They are determined to bring this river back life.
DAVID ST. PIERRE, EXEC. DIR., METROPOLITAN WATER RECLAMATION DISTRICT: We are embarking on disinfection, which will kill the bacteria going into the river. And that actually provides an opportunity for the waterways to become full body contact, or swimmable waterways, where people can fully enjoy the waterway they live by.
QUEST (on camera): It's from the Chicago River that you get this phenomenal view of the skyscrapers in Chicago. The river, which for so many years, was nothing more than a dumping ground, has now been turned into a major tourist attraction.
(Voice over): Now Chicago is really embracing this river revival. Highlighting it with a new river walk, running directly alongside the water. Bringing people as close as can be to this future tourist attraction.
NELSON CHUENG, CHICAGO DEPT. OF PLANNING & DEVELOPMENT: We always talk about, the river is your front door. You know, we want people to see, for people to look at the river, see your office, and actually look at it as your front door and it should be treated that way, as your front door amenity. Hopefully, in a decade or so, is when we are hoping all of this will be completed.
QUEST: So far, almost 1 kilometer of the walk has been completed. The greatest challenge is creating a seamless path.
(On camera): When it comes to crossing under Wabash Avenue, there is no problem. The river path continues under the bridge. However, by the time I reach the State Street Bridge, it is a different story, as you can tell. The river path has come to an end.
At the moment you have to come up the stairs, over the bridge and down the other side. Bu the long-term goal is to create the walkway so you stay by the river, rather than getting a work out.
CHEUNG: You have to build out to make continuous walkway, into the river channel, and also preserve access. You know, the river itself is a multi-use area. We have ships here. Here we have tour boat. We have kayakers. We have bicyclists. And we actually still have some commercial boat traffic.
QUEST (voice over): The river walk has been designed to connect Lake Michigan to the popular lake, hoping to bring tourists from one to the other. As the walk garners more foot traffic, the city expects business to follow. Restaurants have already started to pop up. The surrounding real estate is gaining value. With the addition of new buildings, like the Trump Tower.
ST. PIERRE: Well, water attracts people. And people love water. They love to interact with water. So, it is has become a development center, not only a resource for transportation and transportation of goods, but also just something people enjoy and want to be around.
QUEST: A missed opportunity no more, Chicago is finally realizing its river's potential.
MARGARET FRISBIE, EXEC. DIR., FRIENDS OF THE CHICAGO RIVER: Everyone realizes the Chicago River is our biggest opportunity. We've only just begun. And that means the city, all our communities, you know, we are just seeing the beginning of the Chicago River Walk, we are just seeing new neighborhoods. We are just seeing the miles of trails that connect it. In the future the river is going to be full of people in canoes and kayaks, full of people rowing boats, full of river edge restaurants and cafes, full of river edge businesses, that, you know, get people out on the water, or just let appreciate it.
QUEST: It may have taken Chicago years to see the possibilities of this river, that runs through the heart of the city, at least now it is clearly reflecting on the greatness of the river's future.
QUEST: Chicago, absolutely, one of my most favorite cities in the United States; truly an awesome city.
Still to come, facing global pressures and local tensions. The governor of the Bank of Israel about how relations with Egypt, Turkey, are impacting the country's economy. And what happens if the Palestinians do ask-(DESK BELL CHIMES)-for statehood?
(COMMERCIAL BREAK) * QUEST: Chicago -- absolutely one of my most favorite cities in the United States. Truly an awesome city.
Still to come, facing global pressure and local tensions -- the government of the Bank of Israel about how relations with Egypt and Turkey are impacting the country's economy and what happens if the Palestinians do opt for statehood?
QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN. And on this network, the news always comes first.
"Yemen is on a knife-edge" -- words from a human rights activist, as extreme violence claims as many as 31 lives in the city of Sanaa and Kaiis (ph). Witnesses say government troops shot randomly at protesters. The government has repeatedly denied accusations of excessive force.
Libya's revolutionary forces say they are enduring heavy casualties in Moammar Gadhafi's hometown of Sirte. Some 20 were killed and dozens more injured in weekend fighting. Gadhafi loyalists are also putting up an intense fight in Bani Walid. The revolutionaries say they control 80 percent of that city.
Barack Obama has unveiled a $3 trillion deficit reduction plan that calls for future cuts in Medicare and Medicaid and saving from troop drawdowns in Iraq and Afghanistan. The plan raises revenue by allowing some Bush-era tax cuts to expire. It introduces the so-called Buffett Rule, named after the billionaire investor, Warren Buffet, who says Americans should pay -- rich Americans should pay more in taxes.
The Palestinian Authority president says he still intends to submit an application for Palestinians to the U.N. Security Council. Mahmoud Abbas met with the U.N. secretary-general on Monday to tell him he would make the controversial move on Friday. The U.S. is threatening to veto the bid.
In a week of political and diplomatic challenges, left, right and center, not the least of which that bid for statehood by the Palestinians at the United Nations, for the country of Israel, the central bank is working to ensure there's no economic fallout.
Relations with Turkey have been damaged as it moves closer to regional rival, Egypt, while the Palestinians are going to the U.N. Security Council with that bid for statehood on Friday.
I was joined a while ago by the governor of the Bank of Israel, Stanley Fischer, and needed to know these geopolitical issues, these issues of Turkey, Egypt, the Palestinians, the ramifications they had for Israel's economy.
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STANLEY FISCHER, GOVERNOR, BANK OF ISRAEL: Now, when we come to the situation vis-a-vis our neighbors, we -- we traded -- about 3 to 4 percent of our trade was with Turkey. Losing that trade is important from an economic viewpoint. It's not critical. But Turkey is a very large economy and growing very rapidly and it will cost us progressively more as time goes by...
FISCHER: -- if we don't succeed in restoring economic and other ties with Turkey. With regard to Egypt, Egypt was supplying gas to Israel. That pipeline has been blown up several times since the Egyptian revolution and basically it doesn't seem that that gas supply will continue...
QUEST: All right. Let...
FISCHER: Fortunately, we have discovered a lot of gas in Israel.
FISCHER: Sorry, Richard. Go ahead.
QUEST: Right. Sorry to interrupt you. If we look at the -- the most pressing issue, though, are you worried that if the Palestinians do go forward with a statehood bid at the United Nations, this could have an effect in Israel economically?
FISCHER: It very much depends on -- on what happens immediately afterwards. We have certain treaty arguments with the Palestinians now. If those are revoked or renounced by either side -- it could be our side, it could be their side -- we'd have to work toward a new modus vivendi. And if there's trouble there, it's going to be costly to the Israeli economy. If much worse, violence breaks out, then we are going to be seriously affected and that would be a great pity.
I hope that we handle it with care. I hope the Palestinians handle it with care. We're right next to each other.
FISCHER: We need to cooperate. We need to take account of the fact that the Palestinians take care of their own security now. We'd rather not take that on, I think.
QUEST: Right. As central bank governor, are you putting in place any plans, any contingency plans, either because of Tur -- what might happen with Turkey, or what might happen with the Palestinians?
FISCHER: Well, we look at contingency plans and we plan all the time for things that might happen. You know, aside from the local circumstances of Turkey, the Palestinians, Egypt, Europe and the United States are in at least a slowdown, possibly worse. And we've got to take that into account.
So, yes, we have plans for dealing with all sorts of disturbances, primarily through how we manage our interest rates and how we manage our exchange rate.
(END VIDEO TAPE)
QUEST: The governor of the Bank of Israel talking to me earlier.
We'll bring you part two of that interview with Stanley Fischer on Friday, when, of course, we'll consider more global economic issues.
Ireland's government has begun its first ever trade mission to America's Southeast. Representatives from 70 Irish companies have joined the minister for enterprise, jobs and innovation, Mr. Richard Bruton, for the four day tour of Georgia, North Carolina and Florida. The minister joins me now from the CNN Center.
Before we talk about why -- what you're doing and what you're -- what business you're hoping to drum up, let's just pause and think about the recovery plan, the troika.
You had a report from the troika after its last visit that basically makes Ireland the poster child for the bailout programs in terms of success.
You must be quite pleased.
RICHARD BRUTON, IRISH MINISTER FOR ENTERPRISE, JOBS & INNOVATION: -- progress. And, obviously, it has been difficult. We've had to confront problems in our banking system, which we've now restructured and recapitalized. And that is working. We have a program of correction in our public finances, which, of course, is also, we're hitting all of the targets.
BRUTON: And we're -- we're now beginning to see a strong export-led recovery. And I think that gives people great heart that, you know, we have a sustainable formula. It won't be easy, but it's a sustainable formula.
QUEST: What is Ireland doing that Greece isn't?
BRUTON: Well, I'm not going to comment on Greece, but I can tell you what Ireland is doing. We are undertaking, as I say, fiscal correction, so we have cut back severely on public spending, including cuts in public service pay, even cuts in welfare payments.
We have, you know, consolidations are -- our tax, we've raised -- broadened the tax base and that -- that will continue.
BRUTON: Consolidations our -- our tax we've raised broadened the tax base and that's -- that will continue.
We've also corrected our banking system. So we -- we now have a sound banking structure, which is capable of lending to the domestic economy.
So we have a lot of the basics right. We've also undertaken restructuring across areas of the economy that needed reform, you know, things like the wage...
BRUTON: -- setting mechanisms in the States, sheltered sectors of the economy that haven't been open to competition, they are being opened up.
So there's a very solid...
QUEST: All right...
BRUTON: -- program of reform.
QUEST: As you're in the U.S. and going round, your companies are meeting U.S. companies, are you having to tell them, in any way, that Ireland isn't bankrupt or that Ireland isn't closed or that Ireland didn't go out of business?
Is there a prejudice factor that you're having to deal with as a result of what's happened?
BRUTON: No, not at all. I think here in the U.S., people realize that there's a lot of countries in financial difficulty. Even in the U.S., there's really difficult decisions facing them. And I think people do say well, Ireland has made some difficult decisions, it's moving on, taking the medicine.
But there was also, you know, we have a very dynamic side to our economy. And maybe it's the untold story about Ireland. We have a lot of very young, dynamic companies. And they are finding that this year, in the Southern states, where, you know, you have world leaders in...
BRUTON: -- in key technologies and our companies are developing partnerships that I think are really dynamic and important for our export- led recovery.
QUEST: You're the minister for enterprise and jobs. And let's just finally say -- talk about jobs.
The U.S., 9.1 percent unemployment. Euro average, 9, 10 percent unemployment. Ireland is higher, obviously. Greece is much higher.
How worried are you that unless euro politicians grasp this jobs question, it is going to blight a generation?
BRUTON: Well, I think it is very important that we have a -- a solid growth strategy in Europe. And I think that's what we have been working on.
You know, clearly, last year, the last three years in a row, we've built our export market share. So we are doing well even in markets that are quite depressed.
But, you know, it makes the recovery much easier if you have a solid growth strategy in the EU. And we would, you know, very strongly advocate that.
But a lot of the work we have to do is, I suppose, macroeconomic reform, to make us a little bit more competitive. We've made really good strides in our competitiveness. And we continue to work within the constraints, hitting all the targets.
So we're sticking to our knitting. But clearly, we -- we want a more growth-oriented environment.
BRUTON: But, you know, we -- we recognize Europe has been very positive in reducing the debt burdens, which has helped our recovery.
(END VIDEO TAPE)
QUEST: Minister Richard Bruton in Atlanta, as we travel the U.S., be careful of the grits.
Don't have grits for breakfast. Never liked them, in the -- in the Southern United States. I'm sure that last will get some people up in arms.
Many thanks for joining us.
BRUTON: Thanks very much, Richard.
QUEST: Now, coming up in just a moment, we'll turn now to a much more dark subject, the dark side of chocolate -- how something so sweet and enjoyable can have such a nefarious side. That beggars belief.
But the child labor problem is a big one in the cocoa industry.
As our Freedom Project continues, we examine the measures being taken.
QUEST: Today is the 10th anniversary of the Cocoa Protocol. It was a deal to stamp out forced child labor in West Africa's cocoa farms.
And as I was explaining earlier, in fact, this has proven difficult to eradicate. It makes the anniversary without much cause for celebration. It didn't stop the campaign, Stop the Traffik, from hosting their own party ahead of an International Cocoa Organization meeting in London. They gathered for a flash mob to highlight the deal's failing.
Joining me now is the director of Stop the Traffik campaign, Antonie Fountain.
Mr. Fountain, should we sing "Happy Birthday?"
ANTONIE FOUNTAIN, DIRECTOR, STOP THE TRAFFIK: Well, it is the 10th anniversary and holidays are good -- anniversaries are good occasions for celebrating.
However, this time we shouldn't.
We sang "Happy Birthday" to the words of 10 years ago today. We find it a crying shame that industry actually hasn't lived up to its promise.
I spoke to Senator Harkin, who says this -- if you read what the industry -- I could print out what they sent us to read, they say that five of the commitments have been lived up to and they're working on the sixth one of the protocol.
FOUNTAIN: I was surprised to see that. Of those six...
QUEST: Are they lying?
FOUNTAIN: They're lying. It's not true. Of those six that are there, they haven't actually fulfilled any single one of them completely. The first one, for example, says that what they're going to do is to connect sufficient resources. Now I think Mr. Harkin's first answer to what is the problem to this was the industry wasn't committing sufficient resources. So that's, I think, the problem number one.
For example, the second one says that they're actually going to put forward remedies to solve this thing. Well, they haven't done that. So all -- already, on the first two, they haven't actually tackled the problem.
QUEST: All right. So why are they doing it?
I you accept that the country -- the companies who are involved -- and we'll go into this in just a moment, they aren't bad people, the presidents and the chief executives and the board members are not bad people.
FOUNTAIN: They're very good people and I know quite a few of them personally.
QUEST: So why haven't they done it?
FOUNTAIN: That's the question I keep asking them.
QUEST: Why do you think they haven't done it?
FOUNTAIN: I think because there are no consequences to not doing it, except for public pressure. When, 10 years ago, this saw -- this protocol was voluntarily done, there were no consequences if they wouldn't actually achieve doing it.
QUEST: All right. Hang on.
If you say there are no consequences and that's one of the reasons why -- there are profit or loss consequences. You're basically saying that some of them may be morally corrupt?
FOUNTAIN: I'm saying...
QUEST: Or moral -- no, not -- not morally corrupt, morally bankrupt.
FOUNTAIN: I would say that it's a story of little children versus very big companies. And a very...
QUEST: Morally bankrupt.
FOUNTAIN: And the very big companies have the money to solve this problem, but they haven't done it yet. So whatever reason that they haven't done it, that's up to you. But we believe that it's time for this to change...
QUEST: All right, that...
QUEST: -- they say -- and I would say to you at this time...
QUEST: -- it's been 10 years.
QUEST: Change is happening and people like you just really want it faster than is reasonable to expect.
FOUNTAIN: Well, I think change is happening. And I think you can exper -- you can kind of compare that to the idea of trying to put out a forest fire with a glass of water, which is what's been done up to now. There's been a lot of projects done, but they're small projects.
QUEST: It takes time.
FOUNTAIN: Well, maybe they've got buckets that they're using, but they don't have the fire brigade yet because the problem itself isn't addressed. In fact, when I speak to the people of industry, I ask them, when is the problem going to be solved?
And their answer is, we don't make any statements about the future.
Now, that is unacceptable. They need to be able to say -- they've acknowledged that there was a problem.
FOUNTAIN: They said it was going to be solved five -- six years ago.
QUEST: Antonie, we'll have to leave it there.
Antonie Fountain joining me from Stop Traffik.
FOUNTAIN: Thank you.
QUEST: According to the campaign -- the 10 Campaign, the main cocoa producers are -- join me over at the super screen and you will see, these are the main cocoa processors.
Now, first of all, we have Cargill, which has 14.5 percent of the market.
ADM, who you remember we did ask on the program, they have just under 14 percent.
Barry Callebaut -- I'm sure I've mispronounced that at least three times already tonight -- has 12 percent.
Petra Foods, they have -- ooh, dear, they're 7 percent.
And Bromner (ph) are also in the top five.
Now, that's the way the situation is. I'm sure you're more familiar with the major chocolate makers. So, of course, we've got Kraft, Cadbury. You've got Mars. You've got Nestle, Hershey and the Ambassador with Ferraro.
That is the way they are. We will hear from the industry tomorrow. We have reached out to the chocolate and cocoa companies that signed the Harkin-Engel Protocol. Those who responded are directing us to a specific person, Joanna Scott, spokeswoman for the Global Issues Group at the Coalition of Chocolate and Cocoa Companies. She'll be joining us tomorrow.
I wanted a chief executive or a president of one of the companies. You take what you get in this world.
Coming up next, flying in the face of an economic downtown, we do have a top man. He's Airbus' John Leahy, who tells us why, in the next 30 years, there will be tens of thousands of more planes, in a moment.
QUEST: Airbus is predicting the worldwide passenger fleet will double over the next 20 to 30 years, despite the specter of rising fuel prices, ongoing economic turbulence, arguably, that will drive the market toward these new, more efficient planes.
The European plane maker expects airlines in Asia to expand and grow and the number of mega cities and for careers in the West to replace their aging fleets.
This is the way it all looks. Look at this.
Airbus's forecast says that demand for nearly 28,000 jets by 2030, the amount involved is worth $3.5 trillion, up 7 percent on its last forecast.
Turn the clock. Boeing is even more optimistic. In June, Boeing said it would be at 8.5 percent, $4 trillion. And Boeing expects 33,000 planes.
Do I hear any more?
Turn the clock.
ARTA forecasts 2011 profits -- oh, dear. They're all buying these new planes or will be and the margins are dreadful. The profits are awful. And the airlines are barely making a profit in 2011, $4 billion, which, when you look at the revenues, it gives a margin of about less than 5 percent.
So, let's talk about this with -- with Airbus's head of commercial operating officer, John Leahy.
I asked him if, frankly, the economists can't forecast a 2008 mega global recession, how can he predict how many planes are going to be bought 20 years from now?
JOHN LEAHY, COO, AIRBUS: We have been right. Our methodology has worked. GDP growth and air traffic growth are intertwined. If you can get the growth of GDP right, you can usually do a pretty good job with air traffic.
If we go back to this lost decade of 2000, our forecast in the year 2000 of what would be in 2010 was spot on. We said $4.8 trillion revenue of passenger kilometers. If we can move 45 percent more people in the year 2010 than we did in the year 2000, and we do it with the same amount of fuel consumption, the only explanation there is we're doing it more efficiently, with fuel-efficient aircraft.
QUEST: You may be doing it more efficiently, but by your forecast, some 17,000 of these 27,000 planes are new. They are not merely replacing existing fleets.
They're actually adding to the number of aircraft in the sky, correct?
LEAHY: Yes. In certain ways, they are. But if we can do this without increasing our fuel consumption or doing it very mildly, we can keep GDP going, because you can't have growth in these developing markets unless you have air transport.
QUEST: The 320 Neo, you scored an absolute home -- home run, as the Americans would say, by making that decision to get out there and offer it before Boeing.
LEAHY: They decided to copy us. If they were going to copy us, they shouldn't have done it nine months later.
QUEST: Go back earlier, though, to -- to Paris.
QUEST: Go back to Paris and when the orders, the really big orders...
QUEST: -- in there.
What was it like?
LEAHY: Well, we were very confident that we had the right product at the right time. But then a lot of us were predicting that. If you recall, when we launched that airplane in December of 2010, a lot of the so-called industry forecasters and experts said no, no, no, it's never going to work, oh, they won't do it. They might sell a few to their existing customers.
Well, no airplane in aviation history has ever sold so quickly and so well.
QUEST: Are you surprised that airlines that have traditionally been one or the other are now splitting their orders?
LEAHY: Well, look at American Airlines, for example. I think the last deal we did with them was a deal I was involved in back in 1987. And then they had decided to stay with Boeing. But when your competitor comes out or Boeing's competitor, Airbus, and starts offering something too good to be true, they took a very hard look at the Neo, but also decided they wanted to buy today's airplane.
Because those 4,500 out of production airplanes need to be replaced. And that's what they're doing with today's A320, 130 of them, and then, in 2015-16, they will do the Neo for a further 15 percent reduction in fuel consumption.
QUEST: What I'm hearing from CEOs is they're saying they don't want to put all their eggs in one basket now and that no single manufacturer, when you're ordering 200 or 300 or 400 or 600 planes with options can really take on that response -- can take on that magnitude.
LEAHY: Well, I hope Southwest follows that advice, because then they should, by rights, bring in Airbus, as well. And we'd be certainly willing to talk to Southwest about our products.
(END VIDEO TAPE)
QUEST: Touche from John Leahy of Airbus on the battle for the Southwest order.
A Profitable Moment after the break.
QUEST: Tonight's Profitable Moment.
With the exception of, perhaps, Warren Buffet and Maurice Levy, no one willingly wants to pay more taxes.
But as President Obama made clear today, you simply can't balance the books without revenue raising.
The U.K. top income tax has been raised to 50 percent temporarily, so they say.
In Italy, capital gains taxes have been raised.
In France, loopholes closed.
In Greece, attempting to properly collect taxes for the first time in years.
In the U.S., the tax debate will get stuck in presidential politics and one can only wonder whether anything will get done.
And that's QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I hope it's profitable.
The news is next.