CNBC Transcript: U.S. Secretary of State Mike Pompeo Speaks with CNBC's Michelle Caruso-Cabrera

The following is the unofficial transcript of a CNBC EXCLUSIVE interview with U.S. Secretary of State Mike Pompeo and CNBC's Michelle Caruso-Cabrera on CNBC's "Closing Bell" (M-F 3 - 5PM) today, Monday, July 30th. Watch video of the interview on CNBC.com here!

MICHELLE CARUSO-CABRERA: The president during his news conference with the prime minister of Italy said he would meet with the president of Iran with no preconditions. Are you onboard with that? Is that a good idea?

MIKE POMPEO: I am, indeed. We-- we've said this before. We-- we-- the President wants to meet with folks to solve problems. If the Iranians demonstrate a commitment to make fundamental changes in how they treat their own people-- reduce their maligned behavior, can agree that it's worthwhile to-- enter in a nuclear agreement that actually prevents proliferation, then the president said he's prepared to sit down and have a conversation with him.

MICHELLE CARUSO-CABRERA: There were reports last week that they have rebuffed numerous requests from the president. Is that true?

MIKE POMPEO: I'm not gonna speak about the private conversations that may have been had or may not have been had.

MICHELLE CARUSO-CABRERA: The-- the Iranian currency is getting pummeled. And this is even ahead of the snapback sanctions that go into place next week. Are you happy about that? Is that a good thing? Is that gonna help bring them to the table?

MIKE POMPEO: What we're looking isn't the rial to collapse or anything else for that matter. What we are demanding is a change in the behavior of the regime. You can't launch missiles into Riyadh. You can't arm people in Iraq and Syria and Lebanese Hezbollah. You can't fight with Iraqi militias. That's not behavior that is acceptable from Iran. Those are the changes that we're looking for. And we're-- we're hopeful that the Iranian regime will see it that way as well and change their behavior.

MICHELLE CARUSO-CABRERA: You announced several new initiatives today related to the Indo Pacific Region. That's basically the Pacific and India. You described it as a new era. Why? Why're you doing this?

MIKE POMPEO: Well, it's an important region. It's been an important region for a while. But the Trump administration is taking this incredibly seriously. And we're doing it in-- in a way that's very consistent with this administration. We want private industry, with the assistance of the United States government, understanding that we're going to support this effort. We're gonna have private industry go in and develop relationships. When American businesses come to these countries, they'll thrive. We'll have contracts that are open and transparent. We'll form real partnerships with these countries. And we will benefit America for sure, but we'll benefit of each of the nations in the Indo Pacific by engaging in this way.

MICHELLE CARUSO-CABRERA: When you read the descriptions, if you read the Chinese headlines today, they say, "This is a counter to One Belt, One Road." This is the massive infrastructure spending plan that China is doing in numerous countries throughout Asia and-- and even into Europe. Is this an answer to One Belt, One Road, what you announced today?

MIKE POMPEO: We're convinced that American engagement in the Indo Pacific benefits all the nations in that region. We want it to be free. We want it to be open. We're not looking for-- dominance. We're looking for partnerships. Others choose to behave differently. We want these to be commercially viable projects led by the American private sector in a way that benefits-- the entire region and the world.

MICHELLE CARUSO-CABRERA: There's a reason why some of these countries though like to get involved with One Belt, One Road, right? Those-- those-- contracts are not transparent. They are state directed. We've discovered now since a lot of them have gone into place that there's a lot of corruption. Autocratic countries actually like that. They don't want transparency. They don't want companies that don't want to pay bribes. I mean, how do you convince those countries that this is a better option, that the way the United States does things is a better option?

MIKE POMPEO: Look, I think some of the countries who've engaged in that find themselves in a place that they are not happy about. And I think the others are beginning to see that as well. The way you convince them is that you demonstrate that over the course of history, over the-- the even near term and medium term-- that developing relationships with the United States, that have transparency actually turns out to be better-- for the leadership and FOR THE PEOPLE in each of these countries. I'm convinced that history supports that theory. And I'm also convinced that the vast majority of the countries of the Indo Pacific will agree with that.

MICHELLE CARUSO-CABRERA: The Trans-Pacific Partnership probably wouldn't have happened, regardless of who won. The left and the right seem to hate it, right? Everybody's against free trade these days, it seems. But my colleagues in CNBC Asia-- and this interview is gonna air there in just a couple of hours when they wake up, they were keenly interested in this. And they said, "If you really want to have economic influence in Asia, the Trans-Pacific Partnership would be the way to do it." What do you say to them?

MIKE POMPEO: Well, the right mechanism-- is to be determined. But President Trump wants free trade. Make no mistake about it. You suggested that there's no free traders left. President Trump is an ardent free trader. Zero tariffs, zero subsidies, zero barriers. He's looking to rebalance these relationships. And as I said, perhaps it's a multilateral arrangement. But more likely, it will be a series of bilateral arrangements. They tend to prove more effective, better for the American people. And they'll get the outcome that President Trump is demanding. He's simply looking for fair and open and reciprocal trade. And when we get that-- we'll have free trade relationships with these countries that will benefit not only the United States, but their countries as well.

MICHELLE CARUSO-CABRERA: Is his methodology making your job harder as a diplomat, THE TRADE war?

MIKE POMPEO: His-- his methodology is leading to increased economic opportunity here in the United States of America. That's always a benefit for any diplomat or any soldier.

MICHELLE CARUSO-CABRERA: One of the countries that's really gorged on One Belt, One Road is Pakistan. So much so they've taken on all kinds of debt. They might actually have to go to the IMF, the International Monetary Fund, for a bailout because they've taken on so much Chinese debt. The IMF is funded by U.S. taxpayer dollars. Many other countries as well, but if they go to the IMF for a bailout, there's a chance that U.S. taxpayer dollars are going to go towards Chinese directed companies as-- as part of that bailout. Are you concerned about that? Are you monitoring that?

MIKE POMPEO: So two thoughts. First, there's new leadership in Pakistan and we welcome engagement with them in a way that we think will benefit each of our two countries. Second-- make no mistake-- we will be watching what the IMF does. There's no rationale for IMF tax dollars-- and associated with that, American dollars that are part of the IMF funding-- for those to go to bail out Chinese bondholders or-- or China itself.

MICHELLE CARUSO-CABRERA: North Korea is part of the Indo Pacific Region. Numerous times during the whole-- all the events around Helsinki- - excuse me, around Singapore-- both you, the president, other world leaders refer to the opening of the North Korean economy. Has Kim Jong-un ever actually expressed a desire to have more market forces in his economy? It's been Stalinist, long past Stalin's death. Is he interested in changing that economy in a way that is fundamental?

MIKE POMPEO: He has. We've spoken to him about a brighter future for North Korea. We've spoken to him about the importance of allowing private dollars to come in. Not just dollars from the United States, although I'm confident there will be Americans who would want to invest in an open and rules-based North Korea. But Japanese, South Korea and Chinese too will all wanna be part of the economic opportunity that there is in North Korea. We've-- we've told Chairman Kim,"If we can denuclearize-- your country-- there is a brighter future for the North Korean people." We're convinced that he too shares that understanding, that there has to be, indeed, he has directed better economic times for his own people.

MICHELLE CARUSO-CABRERA: But-- but does he have any belief in market forces at all?

MIKE POMPEO: We've talked to him about how it is that you grow an economy. That you grow an economy with-- a private rules based system and -- foreign direct investment is the quickest way to fuel economic improvement for your own people.

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