Amazon Picks New York and Virginia for New Headquarters; Draft Brexit Deal Reached Between U.K. and EU; Italy's Cabinet Meets Amid Budget Battle with Brussels.
PAULA NEWTON, CORRESPONDENT, CNN: It's the final hour of trading here at the New York Stock Exchange and markets can't seem to make up their minds today. The Dow has been going between gains and losses all day. We are down now, as you can see there, by about 125 points. I have to remind everyone, that's after the epic loss of 600 points yesterday. It's Tuesday, November 13th. Hey, there, so we have a breakthrough on Brexit ahead for you. Brussels has agreed to terms of the deal with lawmakers in London do the same. Amazon has a special delivery for three cities. Some want to return HQ2 to sender and Boeing is responding. The company is accused of withholding information about a safety feature tied to a deadly crash. I'm Paula Newton at the New York Stock Exchange and this is "Quest Means Business." Okay, the British Prime Minister is laying her leadership on the line. This is a historic hour right now. Theresa May is looking for Cabinet backing for a draft Brexit deal. Now, it's been nearly 900 days, yes, 900 days since Britain voted to leave the European Union. And now finally, a draft deal has been reached. But, and you guessed it, folks, it's not in the bag yet. She's got to sell this and she's starting by trying to sell it to her own Cabinet. She has summoned an emergency meeting of her Cabinet Wednesday. Now, as you can imagine, there was a bit of a relief rally for the pound. It surged on the news, before pulling back a little bit, but still, a good gain there. Still not able to break that 1.3 mark. We have a full coverage this evening. Our Erin McLaughlin is in Brussels. But first, let's head to London and CNN's Bianca Nobilo. Bianca, you've been following this through several hours now. Yes, apparently a deal is in hand. In terms of what the sticking points are, and you and I have talked about this so many times, they are looking at whether or not this is hard, soft, or somewhere in between.</s>BIANCA NOBILO, CORRESPONDENT, CNN: Yes, Paula, the sticking point, which has marred this process basically since the EU and the UK agreed on their joint agreement in December is the issue of how to avoid the hard border in Northern Ireland. Now, the UK and the EU were disagreeing about that backstop. They decided that it may be feasible that the UK would remain in a customs union with the EU if they couldn't avoid a hard border through other means. But then they couldn't decide on how that mechanism would work and crucially how the UK would withdraw itself from that. So that is the mystery section of the text that the Cabinet hadn't seen until tonight and then will be discussing tomorrow. Last week, they saw 95% of the deal missing that critical part that the Cabinet hadn't agreed on, until this point. And Paula, the Cabinet is the Prime Minister's very first test in trying to get this deal through and it's composed of arch remainers and ardent Brexiteers and some in the middle. So it is an important litmus test of whether or not she will be able to get this deal through Parliament.</s>NEWTON: Yes, and we should say only the first test because of course, many are expecting a fight in Parliament, as well. Erin, to you now. You know, this also - this deal has to be seen by the EU and all of its member countries, as well. Do you sense a relief there in Brussels, or is it more caution?</s>ERIN MCLAUGHLIN, CORRESPONDENT, CNN: I think diplomats and EU officials tonight here in Brussels, Paula, are simply holding their breath, looking to Theresa May's Cabinet to see how they handle this draft agreement. I was talking to diplomats who told me they have yet to receive a copy of the draft text, but they are aware of the broad contours of the draft agreement, which involves a customs union for the whole of the UK and regulatory alignment for Northern Ireland as part of that backstop that's been in dispute for months now. But there is skepticism among diplomats I've been talking to over whether or not Theresa May has the political space to get this past her Cabinet, because there are elements of this agreement that are seen to be deeply unpalatable to both remainers and Brexiteers. So there's a question mark of over whether or not Theresa May will be able to pull this off. And I also think it's worth noting that today, the European Commission behind me published over 70 papers, preparing their preparations for a no- deal possibility, including this.</s>MCLAUGHLIN: They tweeted this out, "Seven things you need to know when traveling between the UK and the EU after Brexit in the event of a no deal." So, Brussels is hoping for the best at this point, but also preparing for the worst, Paula?</s>NEWTON: Yes, and when we say preparing for the worst, we mean, what this is going to boil down to in terms of people's lives, people's wallets, and the way businesses can function the day after. And Bianca, to that point, you know, Erin mentioned it, the European Union has been showing a lot of skepticism as to whether or not politically this is the deal that Theresa May can make work. It seems to me that there is still so much skepticism about that, even with her own conservative MPs right now.</s>NOBILO: There is, and even though we're surprised and shocked in some ways that a deal has finally come to fruition between the EU and the UK, that element of this process was always regarded as the most likely to happen. These deals do happen down to the wire, but we thought it would be possible, and likely. The fact of Theresa May getting a deal through the House of Commons is not, definitely not a certain prospect. And I've been speaking to MPs, I've been speaking to experts in the Parliamentary Library. I've been speaking to seasoned political commentators and absolutely, nobody can say with any certainty if Theresa May has the numbers to pass a deal through the Houses of Parliament. And that is, Paula, of course, because she has a minority government. She's depended on the Democratic Unionist Party for power. Now, they are very hard to please in this Brexit deal. They won't countenance anything which they think interferes with the union, between Northern Ireland and the remainder of the United Kingdom. So they're going to be difficult to please. She's got her Brexiteers who are likely to find whatever she presents them with as too soft a Brexit. She will have remainers and those pushing for a second referendum who will also be displeased and probably think her deal is the worst of both worlds. She's then got MPs who disagree with the deal on other basis, like the so-called Henry VIII powers which they don't think are appropriate and they think give the government too much power. So she is facing opposition to this deal from so many different directions and I didn't even mention the opposition Labor Party, which of course is not going to be wanting to help the Prime Minister out in this instance. In fact, they're doing their utmost to try to trigger a general election in the UK, which would further destabilize things. So as you can tell, Paula, so much instability ahead for Britain and the hardest task is now facing the Prime Minister to get the sign-off on this deal through her Cabinet and then try and see if she can make this deal through the passage through Parliament.</s>NEWTON: Well, Bianca, she certainly knows what she's up against, and as European officials have said, they have not counted her out and will not. Erin McLaughlin there in Brussels, who continues to watch the European situation. Bianca, our thanks to you as well. Now, it has been a busy day on the oil markets. US oil is now at its longest losing streak since 1983. Now, that's when Futures began trading. It's down 11 straight days; West Texas and Brent Crude are each down more than 7%. Not even yesterday's message from Saudi Arabia signaling that they're willing to cut production can prop this market up. Now, the BP CEO Bod Dudley spoke with John Defterios in Abu Dhabi. He said there are uncertainties everywhere right now.</s>BOB DUDLEY, CEO, BP: Well, we are starting to see a slowdown in the growth rates around the world. So if you'd asked me two or three months ago, I would have said, oil increases 1.5 million barrels a day in demand and now looks like more consensus around 1.3. That's probably just based on the growth rates. So there is plenty of oil out there. I think OPEC throttling back a little bit. I think there'll be potential more increases in US, as the Permian gets de-bottlenecked, but you also have got uncertainties in Venezuela in terms of its production levels. So there's uncertainties in the up and down side and I think OPEC -- the plus group -- is trying to find its way. We'll know more December 6th after they meet.</s>JOHN DEFTERIOS, EMERGING MARKETS EDITOR, CNN: You were absolutely convinced we were overvalued before the bear market set in. What made you so convinced that the price was getting out of control?</s>DUDLEY: Well, it went up so fast. It seemed to be in response to the sanctions. I mean, my view was, I think President Trump could see $100.00 oil, so he's granted the exemptions and that's what I - I didn't know, of course, but I thought maybe there would be some exemptions, it's maybe a bit more than I expected coming out of it, but I just felt very uncomfortable very fast when it got up to $85.00 a barrel.</s>DEFTERIOS: Was the White House mismanaging this whole process? They talked about getting Iran's exports to zero by the end of 2018 and then eight country exemptions and it seems like quite a shock. Was he over concerned about triple digit or $100.00 oil? DUDLEY; Well, I think the President is a negotiator. He keeps people off balance and keep guessing and I think it's nothing more significant than that.</s>DUDLEY: I wouldn't call it mismanagement, I think it's just keeping everyone off balance a little bit.</s>DEFTERIOS: What is your forecast for 2019, after what we saw in October?</s>DUDLEY: Well, we're planning BP and have been on a $55.00 real oil price for some time. Now, this year, we've been way above that and we'll decide what we set our budgets now, which is different than the long term plan. But right now, we're going to keep the company very disciplined. We're going to keep our capital structure, we've said over and over, in the $15 billion to $17 billion range, going forward. We've made a big acquisition in the US. We're going to make divestments. We're readjusting our portfolios. But we're not going to get exuberant about the oil prices.</s>NEWTON: Okay, as we were saying here, markets are mixed at this hour of trade, and we just gave you that big oil story, but all of these mixed markets follow, we have to make a fine point of this, at 2% sell-off on Monday. Now, taking a look at the Dow components, Boeing is the biggest loser after a report alleging it withheld information about a fault with one of its jets. We'll have a full report on that later on in this program. Joining me now though is Ted Weiser. He is the President of Seaport Securities. Ted, we don't want to gloss this over. The market isn't down by much right now, and it's been kind of seesawing, but 600 points down yesterday, wiped out a lot of the gains. We were supposed to be out of the woods after midterms, Ted. What happened?</s>TED WEISBERG, PRESIDENT, SEAPORT SECURITIES: Well, we were for a day.</s>NEWTON: A whole day.</s>WEISBERG: A whole day. We had that one 500-point rally. You know, I just think we're sort of on the other side of the mountain a little bit. The markets in general, and we've talked about this before, a forward-looking indicator. And the question is how far forward? Six months, a year, a year and a half? And the problem we all have now is, what are the markets looking at? We're looking at an economy in the US at least, that's kind of running full bore. That means some kind of inflation and higher interest rates. You know, you go back three or four years, when we had zero interest rates and the market was looking at the eventual recovery and a lot of changes that we have now had, so what are we going to do for an encore? And therein I think for the moment anyway lies the problem for the markets in general. In other words, what are we looking at? What's out there that can really be positive for the markets, at least as we see them today? I'm not quite sure what that is.</s>NEWTON: A China deal might do it, especially as the President is talking to Xi Jinping at the end of the month. The thing here, though, in terms of getting to a technical bottom, are we anywhere near bottom? I think that that's the fear with investors. They feel like, "Okay, we may not growing in the next few weeks or months, but where are we going to be?" Could we have a lot further to fall?</s>WEISBERG: Well, I think the answer is, nobody really knows. We have a lot of the smart people that are going to guess and give you their best guesstimate. But I think we simply don't know. Stocks will reach a level, just when they go up, they reach a level and they will reach a level on the downside, when the values will start to reappear in terms of pricing. We'll know we're sort of there when stocks no longer react negatively or even to positive news or negative news and continue to sell off. Once this news or whatever it is, is priced in, and we'll know - the markets always tell us, they never lie. I believe that as sure as you and I are having this conversation. Markets never lie. We don't always believe what they're telling us, but they never lie. And we'll know when we get there. We're not there yet. Where is it? Your guess is as good as mine.</s>NEWTON: Okay, and it's only Tuesday. Gosh, it just seems like an entire month on the markets here and you only go through two days.</s>WEISBERG: Well, you know also, by the way, now we're getting into this very kind of squirrely time of the year where we have tax selling and the weak stocks tend to get weaker, because these people in this country are starting to take tax losses and that will continue right to the very last minute to the last day of the year.</s>NEWTON: It will be something to take in mind to December 31st.</s>WEISBERG: Yes.</s>NEWTON: Ted, thank you so much. When we return, we go back to our top story. Theresa May's agreement with Brussels. Some hard line Brexiteers are, as you can imagine, already not happy with the draft deal. Take a listen here to British Foreign Secretary, Boris Johnson.</s>BORIS JOHNSON, FORMER BRITISH FOREIGN SECRETARY: We're going to stay in the customs union on this deal. We're going to stay effectively in large parts of the single market. And that means, it's basin states stuff. We aren't going to, for the first time in a thousand years, this place, this Parliament will not have a say over the laws that govern this country. It is a quite incredible state of affairs. It will mean that we are having to accept rules and regulations from Brussels over which we have no say ourselves.</s>NEWTON: That is former Foreign Secretary, Boris Johnson there. Daniel Kawczynski is a conservative member of the British Parliament and an outspoken Brexiteer, he joins me now from London.</s>NEWTON: I'm willing to bet you agree with everything Boris Johnson just said, but it is something that many people in Britain and Europe have heard before. In this draft deal, and it is something that they do finally have hammered out, what do you believe will be the red line for you and those who think like you in the conservative camp?</s>DANIEL KAWCZYNSKI, CONSERVATIVE MEMBER, BRITISH PARLIAMENT: Well, you're right. This has caused a great deal of trouble and consternation this evening. What we've been hearing about this new agreement, the European Union, we've had concerns about their conduct for many years, for decades. They're moving rapidly towards a super-national state and they're trying to intimidate and bludgeon independent sovereign nation states to abandon their own sovereignty and to be rule takers from them. What is a red line for us is that the Prime Minister promised that we would pull out of the customs union and that after the transition period, if we were to extend that for the backstop, for the Northern Ireland border, we would have a mechanism whereby we, the United Kingdom, could actually pull us out of that agreement. That appears to be jettisoned and we will continue to take instructions from the European Union ...</s>NEWTON: But isn't it being jettisoned --</s>KAWCZYNSKI: ... when we can pull out ...</s>NEWTON: ... but isn't it being jettisoned in the interest of the British people, in the interest of the British economy? You can't have chaos.</s>KAWCZYNSKI: Well, no, because I think that the British people, in unprecedented numbers, over 17.4 million of them voted for Brexit. They knew what they were voting for. They voted that by pulling out of the European Union, they knew they were voting to pull out of the single market and the customs union. The British people are very proud. They love their country. We value our independence and our sovereignty, and one of the reasons we're pulling out is because we can see the European Union hurtling towards a super-national state, which is not in our interests. We are equal partners with the European Union and it seems as if our own government has sold out and as compromised far too much. It's going to be very difficult for us to support this in Parliament.</s>NEWTON: And what's very difficult now, though, I say for many people in Britain, is that even if you're supported Britain, you see - supported Brexit, pardon me, you see a Conservative Party absolutely tearing itself apart over this. Constructively, what can the Conservative Party do to get to a Brexit that all the MPs in government can support?</s>KAWCZYNSKI: Well, it's a very difficult and problematic process, because, of course, no country has ever had the temerity or the courage to take on the elites of Brussels and to actually say, "We are leaving." So there's no road map for us to follow, there's no path. We're on virgin territory here, and I think it's a very courageous step we're taking. What we are looking to is the Cabinet, our senior members of the Cabinet, who were Brexiteers, who campaigned with us for Brexit, they will have to go to the Prime Minister and say, "This agreement is too much of a compromise. It doesn't fulfill what the British people voted for. You will have to go back and renegotiate, because you simply don't have the numbers to get this through the House of Commons." And you're right.</s>NEWTON: So you would like - would you like them to resign, in so doing that? Would you like members of the Cabinet to resign based upon what you know about the deal right now?</s>KAWCZYNSKI: I think there is a lot of people in the European resurgence group and in the Parliamentary Party who feel that these people's positions will be untenable, unless they either ensure that this agreement was ditched or that some additional compromises were found, because simply, if we were to pass this, it would be going against our own manifesto, which is what we promised to the people at the last general election, that we would pull out of the single market and we would pull out of the customs union. And I can't begin to overemphasize to you, you in the United States cooperate with Canada and Mexico, but your Supreme Court is supreme in your country. You make the laws in your own country. You trade very successfully with Canada and Mexico, without being dictated to by these countries. And you would not tolerate or accept anything like the sort of things that we've had to put up with from the European Union over the last 46 years. This is a battle of wills. This is a real battle of wills, and if we lose, we will set back the euro skeptic cause on the continent of Europe by decades. There are hundreds of millions of people in Europe, who like us, believe in their country, believe in sovereignty and want to retake control of their countries. We cannot be perceived, the fifth largest economy in the world, a permanent member of the UN Security Council, to be caving into the elites of Brussels.</s>NEWTON: Some would say it would be caving in on the livelihoods of people in Britain, and you know that that is the argument put forth by your conservative Prime Minister. I'm sorry, I have to leave it there, but you're welcome, as this process continues, to come back because we know it's going to be a very long night in Britain and a long week. Appreciate your time. Now, coming up, Amazon goes long on Long Island City and finds love in Virginia, as the search for its new HQ2 comes to an end. And later and a "Wall Street Journal" report accuses Boeing of withholding safety information about its 737 Max. Boeing has now responded. You know, it had all the trappings of a TV dating showing -- a group of eager hopefuls, months of courtship, and even a twisty ending. Something no one could have predicted. Amazon's year-long search for its perfect match is now, thankfully, over. And it's picked two lucky cities to host its new headquarters. Two, not one. HQ2, ironically, it is called, will be split between Long Island City right here in New York and Arlington, Virginia, just across from Washington, DC. Now, the decision brings with it thousands of new jobs, obviously, and billions of dollars of investment. Nashville, Tennessee, though, not to be outdone, was - we'll call them, a runner-up. They get a new operations center, employing about 5,000 people. Now, earlier on "The Express," Amazon's Senior Vice President for Communications, Jay Carney, said the decision was all about attracting those all-important high-tech workers.</s>JAY CARNEY, SENIOR VICE PRESIDENT FOR COMMUNICATIONS, AMAZON: Talent was really the driving factor for us. We wanted to be in places where we could have access to existing talent, and also places that would be attractive to potential recruits to move to. So that's how we ended up in New York and Northern Virginia. And also, if you look at the investment, I mean, we're talking $2.5 billion straight up investment in each location, 25,000, minimum jobs - high-paying jobs, averaging over $150,000.00 per year, per job. And the downstream effect in terms of revenue that these locations will get, the cities and states will get are in the multiple billions of dollars. You know, I think that that - this kind of investment by the locations makes a ton of sense.</s>NEWTON: Our Clare Sebastian is in Long Island City, New York. I mean, Clare, people are asking, did New York really need another high tech investment like this and will it transform the area that you're in right now?</s>CLARE SEBASTIAN, CORRESPONDENT, CNN: Yes, Paula, there's no question that for better or for worse, this will transform this area, and I think the appeal for Amazon, if you look at the geography of where I'm standing is certainly very clear. Across the water just there, we have Manhattan, which is of course already an established business center, financial center, fashion, media - you name it. This, if we can pan the camera around a little bit and show you the neighborhood, it's one of the fastest growing neighborhoods not only in New York City, but in the country itself. More rental units added between 2010 and 2016 than almost anywhere else in the country. So certainly an attractive location when they're looking to add that kind of tech talent and a similar vantage point in Arlington, Virginia, just a couple of miles from Capitol Hill and from the White House, but this is - obviously, a lot of people are very excited about this. The governor, himself, threatened to change his name to Amazon Cuomo to attract this site. The mayor is very excited. But I spoke to one state senator there who is one of several opponents here, high profile opponents who are very worried about this. I asked him how he felt about the news.</s>MICHAEL GIANARIS, NEW YORK STATE SENATOR: Appalled at the size of the public subsidy that we're giving to one of the biggest corporations on the face of the earth. They're the last people that need our sparse public dollars. Here in New York, we have a subway crisis. The trains can't handle the volume of people that are on them. They are in disrepair. We have parents in this very neighborhood fighting over school seats for their kids. We have a lack of health care options, and yet we're taking scarce public resources and giving it to a company that doesn't need it. The conversation has been flipped on its head. I understand why Amazon wants to come here. This is a great neighborhood. But if they want to come here, we should be talking to them about how we're going to subsidize our community, not how we're going to give them our scarce public dollars.</s>SEBASTIAN: So Paula, I want to pull out the incentives because that is the very controversial part of this, that both of these locations have offered. It's about $1.5 billion in tax incentives from New York, about $500 million from Arlington, Virginia. That is what has got some people extremely worried. But overall, you see a lot of excitement around this deal, and of course, in Nashville, the runner-up as well, which is getting 5,000 jobs. Clearly, Amazon is going to have the power over a number of years to reshape the economic and the physical landscapes of these areas.</s>NEWTON: Yes, Clare. It will be interesting to see the way that neighborhood that you're in right now adjust to this Amazon effect and we will continue to follow that story. Our Clare Sebastian, thanks so much. Now, we have to ask, will the selection process ever be the same for these big companies, as Amazon held its competition, Google very quietly announced its plans to add tens of thousands of workers in New York as well. Joining me now from Austin, Texas, Tracye McDaniel is the Vice Chair of the Board of International Economic Development Council. She is also founder and CEO of McDaniel Strategy Ecosystems. Look, you're sitting there in Austin right now, I'll ask you, why not Austin? It was on the list. I mean, what do these cities who are not Washington, or LA or New York have to do to attract a company like Amazon?</s>TRACYE MCDANIEL, VICE CHAIR, BOARD OF INTERNATIONAL ECONOMIC DEVELOPMENT COUNCIL: Well, Paula, I think this whole process is going to be an amazing case study for cities not only in the United States, but around the world to look at, how do you retain and attract talent, so you can have companies like Amazon and others to invest in your communities. And not only that, how do you retain the companies that are there, that are looking for highly-skilled workforce and have them available for them, as they grow their strategies?</s>NEWTON: You know, my issue, Tracye, is that they didn't pick, you know, Austin and New York, or Austin and Washington. Jay Carney there, and we had him, was very transparent, saying, we need to be able to attract talent. What is that saying for people outside of Silicon Valley or New York in terms of those cities saying, "We want high-paying jobs in our cities as well, and we want a better and higher quality of life."</s>MCDANIEL: I think what it's saying is that we need to start looking at our talent pipeline and making sure that we're working with employers each and every day. That's what members in our association do. They have relationships with the community colleges and the colleges to understand the dynamics that these employers need to grow their company. And I think to be competitive, we need to be laser-focused on those approaches, so we can ensure that we have the people there. The talent is the most valuable asset these companies are looking for. And Austin, I live in Austin. I would have loved to see an opportunity for Austin. I think there are a lot of people here, though, who have to take the daily commute, just like I do, who are saying, "You know, it was great. We got to the place we were, but thank God it didn't happen." So they may be celebrating in some corners of Austin, that we're going to be just fine with investment and the companies that we have here and continue to grow.</s>NEWTON: And that's a really good point, a lot of cities don't want to be Amazon, but there are a lot of other cities that could use that growth and that potential. I mean, were you surprised that it was in the end, some people feel pretty predictable and maybe just a publicity stunt?</s>MCDANIEL: Well, I know there's a lot who consider a skeptic about the process, and I think the process is one that will be studied for the next decades on how they literally flip the site's selection process upside down, and it became more of a crowd sourcing experiment, if any. And I think we'll be studying that for a long time. There are a lot of cities over 236 now, who are looking and saying, this is something that we can learn from and we can grow strategies so our cities are more competitive in the future for these types of opportunities.</s>NEWTON: Yes, a lot to be learned there, and we'll see though if there's this kind of a clamor, if anyone starts this kind of a competition again. Tracye, thanks so much, really appreciate your time. Now, coming up --</s>MCDANIEL: Thank you --</s>NEWTON: It's election night in the United States again, and Congress is back in Washington as votes are counted, all that and more after the break.