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CNN'S AMANPOUR

China's President Xi Warns Against Trade War; Trump Adviser Addresses Concerns Over President-elect; May's Brexit Divorce Plan; Falling Through the Cracks. Aired 2-2:30p ET

Aired January 17, 2017 - 14:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(COMMERCIAL BREAK)

[14:00:20] CHRISTIANE AMANPOUR, CNN HOST: Tonight, shaking up the current world order as the Chinese president defends globalization and free trade

against the new U.S. president's tilt towards protectionism and nationalism. My interview with Anthony Scaramucci of the Trump transition

team.

(BEGIN VIDEO CLIP)

ANTHONY SCARAMUCCI, DONALD TRUMP TRANSITION TEAM: The focus now after 71 years of unbalanced trade agreement since the Second World War, the focus

now has to be making them fairer so that the American middle class and working class can do better.

(END VIDEO CLIP)

AMANPOUR: Also ahead, the British prime minister lays out the Brexit divorce plan. Home secretary Amber Rudd tells us her message is clear.

(BEGIN VIDEO CLIP)

AMBER RUDD, HOME SECRETARY: We are leaving the EU. What we want to do, though, is have the widest possible access to the single market.

(END VIDEO CLIP)

AMANPOUR: Good evening, everyone, and welcome to the program. I'm Christiane Amanpour in London.

It's looking very much like an upside down world. Today, a strong defense of free trade and globalism from the leader of the world's largest

communist nation, China's President Xi Jinping denounced protectionism and had a clear message for the U.S. President-elect Donald Trump while never

actually mentioning his name.

(BEGIN VIDEO CLIP)

XI JINPING, CHINESE PRESIDENT (through translator): Say no to protectionism. Pursuing protectionism is just like locking one's self in a

dark room. While wind and rain may be kept outside, so are light and air. No one will emerge as a winner in a trade war.

(END VIDEO CLIP)

AMANPOUR: And no one knows what Trump will do after he takes office this Friday. His disruptive nature is causing high anxiety, but a key Trump

adviser tells me that he is banking on that very nature, and the ongoing tweet storm to be excellent news for the U.S. and the world.

Anthony Scaramucci is on Trump's transition team and will serve as an adviser in the White House and he joined me to talk about all of this from

Davos.

(BEGIN VIDEOTAPE)

AMANPOUR: Anthony Scaramucci, welcome from Davos.

SCARAMUCCI: It's a pleasure to be here. Thank you.

AMANPOUR: So let me ask you, there you are representing the incoming Trump administration, and you know -- I don't have to tell you, because you're

meeting them all -- there is a huge amount of anxiety and confusion, and in some areas, agitation, even, about the incoming president of what he plans

to do.

What are people there saying to you?

SCARAMUCCI: Well, listen. I met with a lot of different people. We got a whole collection of business people and diplomats and so forth. I -- you

know, I don't really see it the way you just described it, you know. At the end of the day, I think people are starting to get used to the

communication style that the president-elect has. And I think that they will find -- that many people find it refreshing.

I think it's been very effective. He wouldn't be president if he didn't have it. And I think it's going to help us get a lot of things done on

behalf of the American people, particularly the middle class people and the working class families.

AMANPOUR: It was an amazing thing to see a Chinese president, it's the first time ever, obviously, biggest communist party in the world, second

biggest economy in the world. And there is he saying that a trade war will see no winners. That we, he said the Chinese, are defending globalization

and free trade. Implicitly, you know, trying to fend off what's coming out of a pre-presidential Donald Trump.

You know, threats of 45 percent tariffs. All the rest of it. I mean, they are taking it very seriously.

Is that dangerous?

SCARAMUCCI: Well, listen. Unfortunately, because of the schedule I had, I didn't get to see the president's remarks. But I'm sure that they were

well-intended and well-founded.

But we don't currently have a free trade relationship with the rest of the world. We have an asymmetrical trading relationship with most parts of the

world. We're looking for free trade. The president-elect is a free trader. He just wants the deals to be fair for the United States.

So I would say to the Chinese president, I would say to the American people and to your viewers around the world, that the best hope for globalism is

actually growth in middle class opportunity in America and working wages in America.

Because with 23.6 percent of the GDP, you'll see a lot more purchasing power than you've seen in years' past and you'll see a lot more consumer

demand. That usually comes from America. And that will lift China and other countries.

[14:05:00] AMANPOUR: So just quickly on the Chinese. Do you think the president-elect will, as president, impose the kind of tariffs and trade

barriers and things that he said during the campaign?

SCARAMUCCI: I think he's been very straight up on this. He's basically said, we've got to get the trade deals to be more fair. If you don't want

the trade deals to be more fair, then we have to take measures, which would include the cajole of tariffs.

I don't think he wants to impose tariffs any more than anybody wants them imposed on the other side. But I think what you're missing is you're

sitting there in London thinking that we have fair, free trade deals with China and other countries. And I've studied these deals, Christiane, and

we don't.

AMANPOUR: I would like to move on to ask you about Europe. Again, in the conversation with the British politician, Michael Gove, and "The Times,"

Donald Trump again said that he had called NATO obsolete, that it doesn't fight terrorism, while as you know, Mr. Scaramucci, because you're out

there, it has been fighting terrorism since 9/11 in Afghanistan and elsewhere. But he put America's chief European ally, Angela Merkel, on a

same par as America's chief adversary, Vladimir Putin, in talking about his respect for them and how he will start off by trusting them.

Tell me what that's all about.

(CROSSTALK)

SCARAMUCCI: All he was trying to say in the interview that he had a lot of respect for her, but he also had a lot of respect for President Putin.

That these people are dealing with their countries and their political situations, and he admires them.

I don't know why that would be a bad thing to say. It's fairly diplomatic for that matter.

AMANPOUR: Do you think it was right to call an ally's policies insane and catastrophic as he did about Angela Merkel, and to still not criticize for

any reason whatsoever Vladimir Putin? And this is what's really befuddling the world. We want to understand if you can help us understand that.

How is it positive to diss a major U.S. ally?

SCARAMUCCI: But he's not really doing that. He praised her. He just said that that decision, OK, has had some consequences that were probably

unintended. That's all he was basically saying in that statement.

AMANPOUR: But can you please explain to us, please explain to us, why there really does seem to be a bromance between Vladimir Putin, who just

about everybody from your own intelligence to the outgoing President Obama who met with President-elect Trump, to Europe, to everyone, is warning

about being overly trustful and overly warm towards Vladimir Putin, based on policies like Crimea, like Ukraine, like Syria, all sorts of things.

SCARAMUCCI: Let's take the president at his word or the new president and give him the opportunity to express himself internationally in terms of

what him and the State Department is going to execute in terms of his diplomacy.

All we're saying is that there might be a better path or there is common interest together. There had been common interest in the past. We both

know that.

And we also know -- we both know this, that the sanctions have actually had a very positive political effect on President Putin. So we've got a

disruptive entrepreneur that's about to enter the White House. He's a brilliant guy. He's the smartest person that I've ever worked with or for.

And let's give him the opportunity to see how he does and I would suspect maybe you'll be less unhappy a year from now.

AMANPOUR: If things were going so swimmingly, why is the latest poll in the United States given Donald Trump a historic and I mean historic

approval or disapproval vote.

SCARAMUCCI: Yes.

AMANPOUR: Apparently, only 40 percent of people approve. That's coming in from an 84 percent approval for President Obama. And I'm talking about at

this stage of the historical process.

SCARAMUCCI: I think it's very early. He's not a traditional politician. He's 20 months into his political career. Let's let his actions and the

policies filter into the system. And then let's take a look at it then. I don't really think it's that big of a deal right now.

AMANPOUR: You're a very good advocate. And I want to ask you, though, why they have gone down since the election.

SCARAMUCCI: Why have they gone down from since the election? That's a good question. I'm not a student politically to really understand that.

So they probably have gone down since the election because of the -- again, this is just my guess -- is that there is a big change coming. There is a

disruption coming. And people, as we know, when disruptive change happens, there is some anxiety about it. But I'm here to assure people that that

disruptive change is going to be a good thing and positive in their life. And they don't need to be anxious about it.

AMANPOUR: Anthony Scaramucci, thank you for joining me.

SCARAMUCCI: It's a pleasure to be here. Thank you. Thank you for having me on.

(END VIDEOTAPE)

[14:10:04] AMANPOUR: So while American policy gets ready to do a 180, the UK is preparing for a leap into the unknown with Brexit. Britain's prime

minister set out her red lines today for negotiations. The British Home Secretary Amber Rudd, next, with the details.

(COMMERCIAL BREAK)

AMANPOUR: Welcome back to the program.

It is the moment many have been waiting for. Britain's big Brexit reveal. And today, seven months after the UK's shock vote to leave the European

Union, Prime Minister Theresa May finally laid out her vision to the future.

And all signs point towards a clean, hard break. She said no to staying in the single market, the customs union and the European court of justice.

And yes to controlling immigration, new global trading partners and a vote in parliament on a final Brexit deal.

(BEGIN VIDEO CLIP).

THERESA MAY, BRITISH PRIME MINISTER: I know there are some voices calling for a punitive deal that punishes Britain and discourages other countries

from taking the same path. That would be an act of calamitous self harm for the countries of Europe and it would not be the act of a friend.

Britain would not, indeed we could not, accept such an approach.

(END VIDEO CLIP)

AMANPOUR: Well, after that shot across the bow, EU Chief Donald Tusk said that May's word show the UK was becoming, quote, "more realistic on Brexit

and the EU was ready to negotiate."

I spoke to senior cabinet minister, the home secretary Amber Rudd, about the vision that is being laid out.

(BEGIN VIDEOTAPE)

AMANPOUR: Home secretary, welcome to the program.

RUDD: Thank you.

AMANPOUR: Let me first start by asking, you all predicted a, quote, unquote, "market correction" with the pound dropping after this speech. In

fact, it's raised about three cents and they say that it sounds less hawkish, the speech than expected and particularly holds out the

possibility of an associate EU membership. Is that how you read what the prime minister said today?

RUDD: I wouldn't call it any sort of associate membership, because really she set out very clearly that we are leaving the EU. What we want to do,

though, is have the widest possible access to the single market. And I think that, perhaps, is what the markets are taking some comfort from, the

fact that we have explicitly set out that that's what we want to have. We will be controlling our borders. We'll look for the widest possible

access, and critically and this was new, that we will be taking it to a vote in parliament at the end of the negotiations.

AMANPOUR: So tell me why that's important. Again, the markets, reacted to that, as well.

RUDD: Well, I think on that final point, there is a view that that will enable us to be really challenged and have a very frank discussion and

debate about the terms as we have those negotiations.

AMANPOUR: How much do you really think the idea of quick trade deals outside of Europe? The prime minister talked about being global, getting

outside of the EU, and going all over the world in terms of trade deals. Really speedy trade deals, is that what you envision?

RUDD: We can't say how quickly those will take place. But we can say that we've had a strong welcome from other countries and that we'll be seizing

that opportunity.

AMANPOUR: And does it worry you that the EU foreign policy chief said in response to Donald Trump's promising a speedy new deal that actually

Britain can't even start until you leave the EU so not that speedy.

Is that -- is that part of the calculation?

RUDD: Well, and the fact is that Donald Trump has been very welcoming about the prospect of a bilateral deal, and we will be taking that forward

with him.

I would urge EU representatives to try and approach this in the way that many of them are and the prime minister has now set up, which is to be

positive and optimistic. This is something that can work for us and can work for the European Union.

She was explicit today in saying we want to make sure that the EU is a success, too. We view them as a partner. Let's get a deal that works for

both of us.

[14:15:28] AMANPOUR: The prime minister was clear and even trailing the speech. Your ministers were clear that they don't want to harm the EU.

They're not trying to throw daggers at the EU. They want a successful EU. But one of your closest partners emerging, the new U.S. President Donald

Trump has said a little bit like the opposite. That, actually, he predicts that more and more countries will leave and frankly he's aligned with more

and more of the politicians in Europe who want to leave the EU.

It's quite dangerous when an American president comes in and speaks about the dissolution of the EU, isn't it?

RUDD: Well, he can have his views, but they're not views that we share on the EU. As the prime minister said, we think the EU should be a strong

trading body, strong union, and we're going to look forward to doing deals with it.

This tone that she took today in that speech, I think was really important. We had a lot of European ambassadors there. The fact is, these are our

friends, these are our partners. We want to have a deal that is going to work for them and work for us, as well.

AMANPOUR: But the prime minister also did say no deal is better than a bad deal given the fact that the negotiations are meant to last no longer than

two years. If it's a bad deal, will you just go anyway?

RUDD: We are committed to leaving the European Union, to have the best negotiation. Of course, we have to be able to say that if we can't arrive

at a deal, we are still leaving. It's not the desired outcome. The desired outcome is to have this positive vision that the prime minister set

out.

She did introduce a new idea, which is about phasing in the agreement. So although we want to arrive within the next two years at the final

agreement, we don't expect on the day we leave to have it all absolutely implemented. The actual implementation will need to be phased in over a

period to make it possible.

AMANPOUR: What about the EU citizens living here? What about British citizens living abroad? There's still no clarity on that and the prime

minister says she wants to attract high -- motivated, highly-skilled workers and such. But there is still no clarity on how that will work.

RUDD: Well, you're right that in terms of the existing people here and the UK citizens living abroad, we don't yet have that deal. But I really

welcome the fact that the prime minister set out again the fact that it is our intention to make sure that we secure those rights of people here. At

the same time as having the UK citizens secured abroad.

She went even further this time by saying it was one of the priorities she's going to make when the negotiations take place, which is really

important, because I want to reassure all the EU citizens living here that that is our intention. We just need to have agreement from the other EU

countries and the EU commission itself.

AMANPOUR: Amber Rudd, home secretary, thank you for joining me.

RUDD: Thank you.

(END VIDEOTAPE)

AMANPOUR: And my next guest says the Prime Minister Theresa May is about to play a game of chicken with the EU over these Brexit negotiations. He

says she is not likely to win.

Ian Dunt is the author of "Brexit: What the Hell Happens Now?" and he joins me here in the studio.

Welcome to the program.

So game of chicken that she won't win. Why not? And what is the game of chicken that she's playing?

IAN DUNT, AUTHOR, "BREXIT: WHAT THE HELL HAPPENS NOW?": The game of chicken is she is basically saying a chaotic hard Brexit is what happens in

MARCH 2019 according to the Article 50 timetable.

AMANPOUR: You add in the word chaotic. She is just saying hard.

DUNT: I think even according to her definition here and they're saying we need transitional arrangements. Her bluff towards the EU is work with me

to sort this out or we're just going -- it's the cliff edge is the word that she used. But, you know, that's chaotic by almost any definition of

the word.

Suddenly, you would have long lines of Loris at the border, who can't get in to the EU, because they suddenly need to be checked by customs

officials. Tariffs coming in on, let's say, car manufacturers. On agricultural products, sky high tariffs on those issues. And you would

have the city, the financial services constituting 80 percent of what this country does of its economy. Suddenly unable to operate, at least for some

of its services in Europe.

Now that is in nobody's interest. The thing is, it's more damaging to the UK than it is to the EU.

AMANPOUR: Which she says and the British say exactly the opposite.

DUNT: They do.

AMANPOUR: They have no deal or a bad deal is more damaging to the EU than the UK.

DUNT: They do. And they either say this in order to bluff to improve their negotiating position or they say it because they don't understand

that it's false. If it's the former, fine. If it's the latter, then it's a very, very troubling statement on their competence. But the EU's exports

to us constitute about 12 percent of what it does. Our exports to the EU constitute 49 percent, that is half of the products that we send overseas.

Suddenly hit by tariffs.

And not only that, we would be starting basically at year 0 in terms of our trading relationships. There is simply no comparison between the effect of

this event on Britain and the effect in the EU. The troubling thing is that the British political climate has not yet realized just how grave that

dynamic is.

[14:20:15] AMANPOUR: But you have said that actually time is the biggest enemy. If there was time, one could have an orderly Brexit with good deals

being negotiated.

DUNT: Yes, exactly. So none of this is really to do with Brexit at all. It's to do with how you pursue Brexit. So let's say the Canadian deal.

Canada just finalized a trade deal pretty similar to what May is clearly going to go for with the EU. That took them seven years. Now that's

basically a good steal. That's really about tariffs and a little bit of mutual recognition.

There's no services mentioned there at all. Services are very, very hard to sort in a trade deal. And, Britain, again, is 80 percent services. So

let's take that as the example. Seven years for Canada. She now wants to wrap all this up in two, while also dealing with the administrative issues

around Brexit. What happens with EU citizens in Britain and vice versa? That is not a realistic time scale. Until she realizes that, we have a

reason to be very concerned.

AMANPOUR: Don't you think she does realize. And, obviously, Amber Rudd said one of the really important things that was said today is, you know,

we're going to wrap-up the negotiations. But we're going to have an implementation that could take a long time after that. Sort of exit.

DUNT: Right. So this is a very interesting little two-step shuffle that May has done today. She has accepted that there is a transitional period.

But it's not for the negotiation or for the ratification. That is just for implementation. And that sounds very similar. But in actual fact, really,

that's her trying to buy some time. Because at the moment, our entire national regulatory structure is based around lots of European agencies.

You take medicine, the European medicine's agency. You take, you know, the planes crisscrossing in the sky. That's a European sky project. We need

to transfer those legal functions to the UK. When she says this, she is trying to buy time in Britain's interest to be able to impact on a trade

deal but not the negotiation. And, again, when it comes down to it, these deals take years and years to negotiate, much more than two years. So she

is playing chicken with them. And it has to be said, the EU holds the upper hand.

AMANPOUR: And yet she did throw down the gauntlet. She said any attempt to, you know, to punish us is going to be bad, you know, for you and you

will not be our friends anymore and that would be a bad relationship.

You know, people were shouting questions at her.

Prime minister, are you trying to have your cake and eat it, too?

DUNT: Well, she is. I mean, what she has presented there is exactly what she wants, which is fair enough. She is about to go into trade

negotiations.

It's also worth saying that the UK does have cards. It has security cooperation. It has military cooperation. Countries in Eastern Europe,

especially Poland, very, very interested in Britain's military commitments. Now that Trump is making it look like NATO might not be as much of an

insurance policy as they originally thought. And it also has a very big market. It is not without leverage.

However, it is still the junior partner in these conversations. And most of the political debate in Britain, through a quite hysterical period of

sort of just beating nationalism that we seem to be in to have mystified themselves as to the brutal objective reality of our relative strengths and

weaknesses. I'm afraid to say that it's something that we're about to discover over the next two years.

And what is one about to discover about a, you know, offer by the new American president for a quick and speedy trade deal.

Possible? Good thing?

DUNT: I mean, it's certainly possible but it's not a good thing. So two things happen when you had a very --

AMANPOUR: Why not?

DUNT: So when you have a quick trade deal, two things have happen. Either the trade deal has no content to it or one partner have capitulated

totally.

Now I would say the dynamics right now with Britain leaving the EU with a lot of political pressure to show that Britain can make its way in the

world would push Britain to accept American offers that it otherwise might not accept.

One key area for that, for instance, would be nice. Nice as a body inside of the NHS that decides how efficient drugs are according to that price.

U.S. pharmaceutical industry hates nice and would love it to be dismantled for very obvious reasons. That is a very prime and obvious victim of a

quick and dirty Trump trade deal that Britain would do. We should be very, very cautious as to the content of what that deal would entail.

AMANPOUR: Gosh, you've laid out all the trap doors ahead.

Ian Dunt, thank you very much indeed.

As the political landscape here in Britain shifts as we've heard, what will become of a successful joint EU environmental policy, for instance. For

some British scientists, it's a case of as above, so too below. With the literal transformation of Antarctica's landscape forcing them to make a

drastic move. We imagine all of that, next.

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[14:26:41] AMANPOUR: And finally tonight, on a day when the Chinese President Xi Jinping got loud applause for spotlighting the urgent need to

protect our environment, we imagine a world breaking up beneath our very feet and pulling the ground out from under British scientists in

Antarctica.

The residents of the Halley 6 Station are having to relocate 23 kilometers upstream. After a massive crack in the brunt ice shelf threatened to send

them floating off on an iceberg or fall off into the fissure. The ice chasm have been dormant, but began growing in 2012, and then a second crack

was spotted in October last year.

16 staff are bracing for work during icy winter months now between March and November. As they dodged the chasm with Brexit and Trump on the

horizon, here is hoping the environment and the global climate accord aren't the ones to fall through the cracks.

That's it for our program tonight. And remember you can always listen to our podcast, see us online @Amanpour.com and follow me on Facebook and

Twitter? Thanks for watching and goodbye from London.

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