SPECIAL REPORT

Fallout from the UN settlement vote sparks debate

This is a rush transcript from "Special Report with Bret Baier," December 27, 2016. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIPS)

JOHN BOLTON, FORMER U.S. AMBASSADOR TO U.N.: There's a lot of back and forth about the language of the resolution, but the fact is this is an extraordinarily radical step by an outgoing American president intended to box in his successor.

BEN RHODES, NATIONAL SECURITY ADVISER: You know, I'm a bit -- I wouldn't say surprised, disappointed in the volume of the reaction because I think it fails to acknowledge the totality of this president's record and, frankly, the fact that we've had a disagreement on this issue related to settlements for years. This is not new.

(END VIDEO CLIPS)

DOUG MCKELWAY, GUEST ANCHOR: Still resonating across the world today is the Obama administration's decision last Friday to abstain from a vote in the U.N. Security Council, a vote that condemned Israel for its settlements in the West Bank and elsewhere. The importance of this, regardless of whatever the Trump administration does unilaterally, is that it has now become, in effect, international law, a condemnation of the one democracy in the Middle East.

Let's bring in the panel right now: Fortune magazine's Nina Easton; Matt Schlapp, contributor with The Hill; A.B. Stoddard, associate editor at Real Clear Politics, and syndicated columnist Charles Krauthammer.

Charles, you were on fire last night. You said the United Nations should be emblazoned with the Trump logo and sold as condos in the aftermath of this. What else do you have to say?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I'd also collect the parking tickets of all the U.N. ambassadors.

MCKELWAY: Which is a problem.

KRAUTHAMMER: That would close the budget deficit in Washington.

Look, this was a blow against Israel. It will have a hard time recovering. The Trump administration cannot do it because it requires Security Council action, and that you can't get without the Chinese and the Russians, who will never undo it.

The fact is that Americans have to really think about why we still invest, support, and, in a sense, psychically invest in the U.N., which was a great idea 70 years ago when it was an idea. But it is a complete failure, and it's a farce. Sixty percent of its activity is devoted to reports, attacks, denunciations and demonization of one state, the one Jewish state on the planet, a dot on the map. For example, you hear about the World Health Organization. It corrupts everything it touches. Talking about the Israel causing a health crisis within its territories -- this at a time when the Russians are dropping bombs on pediatric hospitals in Syria where children there were dying for lack of medicine, lack of food. And they're obsessed with Israel.

This is really a time -- we're going to have a lot of disruptions, a lot of rethinking of our relationships, the way we are, for example, with Taiwan and China, time to rethink our devotion, slavish devotion, to an institution that devotes itself to attacking an ally and to undermining American interests.

MCKELWAY: And A.B., this points out, what Charles just said, the presumed power of Donald Trump to change this. We cannot undo this resolution, I don't think we can, anyway. Does he have power to do that with the sheer power of his influence?

A.B. STODDARD, REAL CLEAR POLITICS: I think as Charles points out, the power is to swing influence and opinion against the U.N., and that's building in the Congress and that seems to have resonance.

The problem is that we don't know what Obama still has left to do. So as you see the Israelis try to collect this evidence they're going to show to Trump to prove that Obama both produced and provoked this resolution, this is going to be an ongoing story as we have -- one president at a time, but it's a story that Trump will relish being involved in. Again, it's not that he can undo it and get a result, but it is definitely a threat to the U.N. over the long term.

MCKELWAY: Matt?

MATT SCHLAPP, THE HILL: Doug, why do you want to be our friend? Why would anybody want to be America's friend when this is how we treat our strongest allies? You have a president who's gone around the globe apologizing to everyone, including apologizing and reaching out his hand to the Castro brothers and to the mullahs in Iran. And that sends a terrible example to the authoritarian leaders across the globe. And then you look at how we treat our friends.

And the most disgusting part of this, this is happening at the tail end of the Obama administration where basically his third term was denied. And he ought to do the right thing for the country, which is that kind of just manage everything until the new president gets inaugurated, and allow the next president to try to build important relationships across the globe. And Obama's doing everything he can to bind president-elect Trump's hands and it's wrong.

MCKELWAY: Last word on this before we move to other foreign policy issues.

NINA EASTON, FORTUNE MAGAZINE: In some way it was a gift to the president-elect in that it gives him an opportunity to cement and show his support for Israel, A. B, the whole question of do we support too much this -- give too much financial support to this institution that is often a forum for attacks on western countries such as ours who are funding it, that's something that's been going on for years. And I think this helps to crystalize Donald Trump's argument about not just the U.N. but other international institutions. Are we carrying too much of a load? But particularly with the U.N., where, again, it does do a lot of good, a lot of peacekeeping efforts and so forth, but it does tend toward being this forum for anti-western rhetoric.

MCKELWAY: In other foreign policy news today, just a short while ago, Prime Minister Abe of Japan wrapped up his visit to Pearl Harbor, this following seven months ago the visit President Obama made to the Hiroshima memorial in Japan. It, again, draws attention to this absolutely key relationship the United States has at a time of unrest in the South Asian Sea there, the Asia Pacific region. Here's Gordon Chang speaking about the importance of this relationship.

(BEGIN VIDEO CLIP)

GORDON CHANG, ASIA ANALYST: At this moment, it looks like that U.S.-Japan relations will continue to be strong under the Trump presidency. There are a lot of important forces that drive these two countries together. They have common interests. They have common values. And they are threatened by a country that has challenged both Tokyo and Washington, and that, of course, is China. And I think that will be an important element of the glue that keeps these two nations marching forward together.

(END VIDEO CLIP)

MCKELWAY: Charles, Japan was always included in Trump's remarks in the campaign about engaging in unfair trading practices.

KRAUTHAMMER: We've got to be very careful to look at the Japanese-U.S. relationship purely through an economic lens, purely as a matter of trade. It's a terrible mistake. One of the miraculous successes of U.S. foreign policy since the Second World War was the befriending of two terrible enemies, Germany and Japan, to the point where they're our strongest allies in that region. And we did that through incredible statesmanship of Truman, Eisenhower and others, of course, and that is something that we have to be very careful about.

If we want to talk about the balance of who pays for what, the Japanese actually pay for quite a lot of our soldiers, of that cost. I think it's more than half of soldiers in Okinawa which causes a lot of Japanese nationalist resentment against the U.S. I would tread carefully on there - - on that.

This is a region where China is the rising threat. Just yesterday, it sent its first aircraft carrier into the South China Sea. It came near Taiwan. There's a lot of trouble. I think this administration, the first four years of this administration, China is likely to be our biggest crisis threat, and we are going to need all the allies we can. We have no stronger ally in the region than Japan.

Content and Programming Copyright 2016 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2016 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.