Brown warns against ‘retreat to protectionism’
European leaders must “wake up” to the costs of protectionism and realise that free trade is vital for the global economy, Gordon Brown has said.
The chancellor warned that efforts to maintain the common agricultural policy (Cap) and the protection of domestic companies from foreign takeovers threatened the growth of the European single market.
The result of that, he said ahead of a speech to the Confederation of British Industry (CBI) tonight, would be less trade, less economic growth and fewer jobs.
Earlier this year, France arranged for state-controlled firm Gaz de France to take over Suez, after it became a target for Italian utilities group Entel, and Luxembourg has been accused of blocking a bid approach for Arcelor from Netherlands-based Mittal Steel.
“The danger is that the world relapses into another bout of protectionism which would mean less trade, less growth, less export and less jobs. We have got to fight that both in Europe and around the world,” Mr Brown told Today.
“We need a trade deal for the world and I am pressing very hard that we make progress in the next few weeks on that.”
Finance ministers from the EU and the eight leading industrial nations are due to meet later this week, while the World Trade Organisation (WTO) is reconvening at the end of the month to try to reach a deal in the Doha round of talks, which began in 2001.
The chancellor held up the UK as an example of the strong trading relationships that could exist with the rest of the international community, saying there were companies from across the world operating from London.
“The future for Britain, and which makes me incredibly optimistic about the future if we make the right decisions, is incredibly bright. But we have got to prevent the retreat into protectionism,” he said.
Mr Brown indicated that he would like discussions on the Cap, which subsidises European farmers to the detriment of their rivals in the developing world, to begin earlier than the 2008 timetable agreed during last year’s EU budget discussions.
“We need Europe to wake up to the costs of agricultural protectionism and also what we have seen in the last few months – restrictive practices by some of the major economies in Europe where they are blocking takeovers and trying to operate what are called economic patriot policies,” he said.
“In a sense they are restricting the growth of the single market and preventing us as British companies and us as British employees getting work from the rest of the single market in Europe.”
