UK business leader blasts free trade 'hypocrisy'

27th November 2006, Comments 0 comments

LONDON, Nov 27, 2006 (AFP) - The Confederation of British Industry on Monday launched a blistering attack on proponents of free trade, notably France and Spain, who it said sought to block controversial foreign-backed takeovers.

LONDON, Nov 27, 2006 (AFP) - The Confederation of British Industry on Monday launched a blistering attack on proponents of free trade, notably France and Spain, who it said sought to block controversial foreign-backed takeovers.

Kicking off its two-day annual conference in London, CBI president John Sunderland said other countries hoping to protect domestic industries from foreign competition, including Italy and the United States, were "self-defeating and hypocritical" in their stance on open markets.

The gathering of Britain's main business grouping will be addressed later Monday by Prime Minister Tony Blair. The CBI's new director-general Richard Lambert, formerly a member of the Bank of England's rate-setting Monetary Policy committee, delivers his maiden conference speech on Tuesday.

The CBI is using its conference to address also the challenges of powerhouse economies China and India, and the crucial issue of global energy security.

Britain was leading the way with its free trading credentials — in stark contrast to its European neighbours France, Spain and Italy, whose protectionist policies could impact on jobs and growth, Sunderland argued.

"National governments have gone to great lengths to stave off the commercial realities of globalisation," he told delegates.

Turning his fire in particular on France and Spain, Sunderland said that the two countries had gone to great lengths to prevent their energy sectors falling into foreign ownership.

"The French government busied itself engineering the merger of Suez and Gaz de France to pre-empt a rival bid for Suez from the Italian energy group Enel."

"Meanwhile, the Spanish government did everything in its power to ensure Spain's energy companies remained Spanish ... as it thwarted the bid by German energy group EON for Endesa.

"The hypocrisy is staggering," he said, adding that "lip service" was being paid to the idea of notion competition.

The proposed Suez-GDF tie-up has been delayed up by a court ruling on a procedural matter raised by GDF trade unions and is not expected to be completed until some time early next year.

In Spain energy group Endesa earlier this month welcomed E.ON's takeover plans but advised its shareholders to wait until the German group had improved its offer, as promised, before accepting the acquisition.

Sunderland also attacked Italy, noting that its central bank governor was "forced to resign last year after it emerged that domestic bidders were being given a clear advantage over foreign bidders in takeover battles for Italian banks".

Outside of Europe, the United States was not immune from protectionist behaviour, the CBI president said.

"There was little surprise when the Dubai Ports takeover of P and O was delayed and fundamentally restructured by the US authorities because control of six US ports was included in the sale."

The dangers of rising protectionism would affect everyone, according to Sunderland.

"Selfish, protectionist actions affect us all. They have impacts far beyond the parties concerned: they influence jobs, growth, welfare and reduce opportunity throughout the global economy," he said.

"Protectionists may claim to have the interests of their own people at heart, but in reality their actions are self-defeating and hypocritical."

Foreign companies spent 91.4 billion dollars (69.6 billion euros) buying British companies in 2005 — an increase of almost 123 percent from the previous year's figure of 41 billion dollars, Sunderland said.

He cited a series of mega-deals, such as Spanish telecoms group Telefonica's purchase of British peer O2, Ferrovial's takeover of airports operator BAA and the acquisition of glass company Pilkington by Japan's Nippon Sheet Glass.

Meanwhile, other CBI keynote speakers are to include Mittal Steel chairman Lakshmi Mittal and Irish Prime Minister Bertie Ahern, while US US Treasury Secretary Henry Paulson and British finance minister Gordon Brown take to the floor on Tuesday.

Copyright AFP

Subject: French news

 

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