Interview With Becky Quick, Joe Kernen, and Andrew Ross Sorkin of CNBC's Squawk Box

Interview
John Kerry
Secretary of State
World Economic Forum
Davos, Switzerland
January 21, 2016


QUESTION: We are joined right now by the U.S. Secretary of State. He’s had his finger on the pulse of a number of hot-button issues – from the easing of Iranian sanctions and the release of U.S. prisoners to ISIS’s growing terror network and now the potential fallout throughout the Middle East as oil prices keep plummeting. Secretary John Kerry joins us right now.

SECRETARY KERRY: Thank you.

QUESTION: And sir, thank you very much for being here today.

SECRETARY KERRY: I’m happy to be here. Glad to be with you; it’s a great set.

QUESTION: Thank you. Davos is a place that you’re pretty familiar with, but you’re here this time around on something of a victory tour for a lot of the long-term projects that you’ve been working on that have come through – the Iranian deal the most notable of all of these. And there are a lot of people at home who look at this and just wonder, “How do we know that we are safe right now?” What do you tell them?

SECRETARY KERRY: Well, first of all, it’s very generous of you to call it a victory tour. We don’t view it that way. We – the implementation has begun; we have to maintain vigilance. There’s a lot of work yet to be done, and there are a lot of other big issues on the table – Syria, Yemen, Libya, North Korea – there’s just a – there’s no end to the challenges.

But that said, we are absolutely convinced that the world is safer because Iran was hurtling towards an unaccounted-for, uninspected, full-fledged nuclear program with high levels of enrichment where they had enough enriched material to make 10 to 12 bombs. Now – and frankly, Iran’s consent and their agreement, they have rolled that back.

They’ve sent all of their enriched material down to 300 kilograms – from which you cannot make a bomb – out of the country to Russia to be processed. They have destroyed their plutonium reactor, filled it with cement, taken it out. They’ve moved centrifuges out of the facilities where they were enriching, stored them, undone all of the infrastructure. And they’re now limited; for 15 years, they cannot enrich more than 3.67 percent. You cannot build a bomb with that. They’re limited in the stockpile for 15 years. For 25 years, every trace of uranium is going to be tracked, from the mining all the way through the process to the waste. And for the lifetime of the agreement, they have consented to have access where there are questions about their facilities and what they’re doing.

So the world now has a country that has gone from no accountability to the greatest amount of accountability of any program on the planet, and they have agreed they will never seek a weapon, and they will have a peaceful program.

Now, the proof will be in the implementation. But it is – it has avoided a major confrontation in the region, and now facilitates our focus on these other issues, and hopefully we can move forward.

QUESTION: What signs will you be watching to tell if these checks along the way are things that we can trust and --

SECRETARY KERRY: Well, we’re going to have 130 – we – the IAEA, the International Atomic Energy Administration, will have 130 additional inspectors in Iran, in these facilities. And there are radio-sealed transmitters on certain sealed components that will be constantly monitored. There will be visual inspection of levels of enrichment, et cetera. So this is 365 days a year, 24 hours a day, 7 days a week. This inspection and accountability process will be going on.

QUESTION: Mr. Secretary, I – we never get everything we want, obviously, and people aren’t going to act the way we want them to act. I saw some of your comments about the treatment of the naval officers. They’re back; it was a nonstory, they’re here. That’s the bottom line. So I wonder if that’s a harbinger for maybe the $150 billion that Iran now has.

SECRETARY KERRY: Well, let me --

QUESTION: Well, but maybe it won’t immediately be used for --

SECRETARY KERRY: First, I want to address – and thank you for asking the question – it’s not 150 billion, it’s not 100 billion. Iran will get approximately, according to the Treasury Department and all of the analysis of our intelligence community, about $55 billion. Why won’t they get the 100 that some people refer to? Because a large chunk of it is already committed to China, to other countries through loans and long-term commitments that have been made.

In addition, Iran has well over $500 billion of needs that they – in order to get their energy sector up to par to be able to be pumping at the level they want to and to modernize, they’ve got at least $100 billion worth of investment to get their other infrastructure – water, facilities, any number of things, they’ve had deferred maintenance and deferred investment because of the sanctions.

So it’s going to take five year – it’s going to take a period of time for Iran to come online in full economic --

QUESTION: But engagement will – we’re hoping that things – that their terrorist activity --

SECRETARY KERRY: Look, let me --

QUESTION: -- moderated by engagement. Because --

SECRETARY KERRY: Right.

QUESTION: -- after you do this great work and then you hear the supreme leader come out with some of that rhetoric and it’s like – you just go, oh my --

SECRETARY KERRY: Well, yeah, but look, the supreme leader – look, we obviously wish that the rhetoric were otherwise. They tell us they’re responding to our rhetoric, and they tell us that they’re responding to the rest of the world that says, “If you don’t do this, we’ll do that.” What I’m trying to do and what President Obama is trying to do, principally, is move us away from that kind of confrontation and put to test whether or not we can find cooperation. For instance, we are now – we have Iran at the table in the Syria negotiation process. Will they make a difference, will they be obstructionist? We have the potential to do something about Yemen. Again, we look to Iran, as President Rouhani himself said, to make this a turning point. But nothing that President Obama did here – it was not his intention in entering into this process that this was going to solve all the other problems. It was his intention to eliminate the threat of a nuclear weapon, which was a threat to the United States, a threat to the world and the region particularly, and to our ally Israel and other allies in the region.

QUESTION: So even --

SECRETARY KERRY: That’s gone. That is gone now. And so we will maintain vigilance and we will continue to make sure the enforcement is what it ought to be. But now we have an ability hopefully to reduce tensions in other areas where they exist, if possible. And President Rouhani said he wants to use this as a departure point for something new. We’re not going to – we don’t take that – just saying it doesn’t make it happen. You have to now test it and see where we’re going.

QUESTION: Okay. So even if it’s the least worst outcome – but just to put a fine point on it, do you believe that any of that $55 billion ends up in the hands of terrorists?

SECRETARY KERRY: I think that some of it will end up in the hands of the IRGC or of other entities, some of which are labeled terrorists to some degree. I’m not going to sit here and tell you that every component of that can be prevented. But I can tell you this: Right now, we are not seeing the early delivery of funds going to that kind of endeavor at this point in time. I’m sure at some point some of it will. But that has never made the difference in what is happening there.

Let me give you an example. The Saudis alone spend $80 billion a year on defense. The entire Gulf state community spends 130 billion a year on defense. Iran spends 15 billion a year on its military activities. So it’s so incredibly disproportionate that I believe that working with our Gulf state partners, which we are going to do and which we are upgrading, we have the ability to guarantee that they will be secure, that we will stand by them even as we look for this potential other shift in behavior.

QUESTION: We have had questions about whether our traditional allies feel – is comfortable with this. Some of them have said that they don’t, that they’ve been unnerved by the process.

SECRETARY KERRY: No --

QUESTION: And I just wonder, are you meeting with Netanyahu while you’re here?

SECRETARY KERRY: I met with Prime Minister Netanyahu this morning. And of course, we had a difference of opinion about this, and I respect completely Israel’s perception of the threat that Israel faces. We understand that. We disagreed on how we would manage it. We don’t disagree that there are threats and a threat. But we believe that what I’ve just described – Israel was facing a country that is in opposition to Israel and Israel’s existence that was moving towards a nuclear weapon and moving at a rate that was extremely disturbing. There was urgency to dealing with this.

President Obama decided the first way to try to deal with it, before you start dropping bombs or going to war, is to see if you can find a diplomatic solution. We found a diplomatic solution. The two months of breakout time is now over a year of breakout time. And as I said, they do not have the materials with which to make the bomb. So Israel is safer today. The key here is to make sure that Israel’s safety today extends all the way into the future as far as anybody can imagine.

QUESTION: But am I right to think that there are some frayed relations with Israel, with other nations in the Middle East that we consider our allies?

SECRETARY KERRY: No, I think – I think there is a – still a skepticism on the part of some. We acknowledge that. But we have the strongest security relationship with Israel on a day-to-day basis that any – that has ever existed. And I believe Israel will tell you that. Our day-to-day work with Israel is extraordinary, and with other countries in the region. And I am leaving here to go to Saudi Arabia to meet with the Gulf state countries. We will go through all of this. And I am convinced that we will see the way forward in a way that keeps us united and keeps us on the same page and track with respect to their security, and indeed, upgrades their ability to defend themselves and be secure in a dangerous region.

QUESTION: The world is dangerous; never perfect solutions. I’m thinking about Guantanamo. It’s impossible to bring them here, obviously, through Congress. It’s a campaign promise that the President wants to keep. But when we saw some of the individual stories of the last five or six gentlemen – I don’t know whether I’d say gentlemen, but some of the prisoners that have been released, it just – some of us just question about whether it may come back to really haunt us and that they may kill westerners or kill Americans again. Is it worth keeping a campaign promise to --

SECRETARY KERRY: Well, anybody who shouldn’t – I mean, look, if you don’t have a case against somebody, under the Constitution of the United States and our own values, you can’t just imprison people for life on a suspicion or on some kind of battlefield arrest. At some point the justice system has to confront this. President Obama has made it clear that the worst offenders, the people who do represent that kind of danger against whom there is evidence, they will be tried. They have to be subject to the justice system. The people who have been moved out are people who have been very, very carefully screened. And they are screened by the country, obviously, to which they go. Those countries have to agree to accept those people. And so far we are reducing that population down to that core group of people where we’re not comfortable making that kind of a choice. And there we’re going to have to decide how do we present them for the values of America to be upheld, for our justice system to act, which it should do.

QUESTION: Mr. Secretary, we’re going to have to go in a moment.

SECRETARY KERRY: I’m so glad you haven’t asked me about oil prices. (Laughter.)

QUESTION: I was – I want to – well, I want to ask you about oil prices in the Middle East.

SECRETARY KERRY: No, we don’t have enough time --

QUESTION: I want to ask you on North Korea --

QUESTION: Do you think the market bottomed?

QUESTION: But we --

QUESTION: Has the S&P seen its low?

QUESTION: But here’s the – no, the question I have – you speak to people all over the world, and I’m curious what they tell you about the election going on here in the United States. We’re not here in the United States, but --

SECRETARY KERRY: What do people – they look to me with an extremely quizzical look and they ask, “What is going on in the United States?”

QUESTION: And what do you tell them?

SECRETARY KERRY: I tell them I’m in diplomacy now, I’m out of politics, and I don’t have an answer. (Laughter.)

QUESTION: Okay. We’ll leave it there.

QUESTION: Sir, we want to thank you so much for joining us today. We really appreciate your time, Secretary.

SECRETARY KERRY: Thank you. It’s a pleasure. Listen, any time I can sit with a backdrop like that.

QUESTION: Come on back. We’re – we have a good backdrop in New York City, too, so we’ll see you there.

SECRETARY KERRY: All right. Thank you so much.

QUESTION: Thank you. Appreciate it.