British business bridled by Bush

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Last updated at: (Beijing Time) Friday, November 21, 2003

British business bridled by Bush

As US President George W. Bush continued his state visit to Britain Thursday he was criticized by British business circles for his government's imposition of steel tariffs.

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As US President George W. Bush continued his state visit to Britain Thursday he was criticized by British business circles for his government's imposition of steel tariffs.

At the start of an annual conference in Birmingham on Monday the Confederation of British Industry (CBI), an umbrella business organization of large British companies, urged the United States to drop its illegal tariffs on steel imports and to abandon other quick fixes that are damaging the global economy.

CBI President John Egan told business leaders from all over Britain there is "a real danger of the United States sliding towards isolationism and protectionism."

Last week the World Trade Organization (WTO) ruled the US tariffs imposed by the Bush government on steel imports two years ago were illegal. Europe is threatening to retaliate with US$2.2 billion worth of sanctions against the United States.

"The US Government's stance on steel tariffs is not only illegal, it is damaging business on both sides of the Atlantic," Egan said. "I urge the president to abandon the tariffs as soon as possible."

The confederation's leader, Digby Jones, also argued that removal of the tariffs would now be in the best interests of both America and the European Union.

"They are actually harming America's reputation and American industry, which is paying above the odds for steel both from home and abroad," he said. "They are holding back US manufacturers as they struggle to lead the global economy out of choppy waters."

The business leaders' demand was echoed by British political leaders, who pointedly made their calls in different ways for lifting the steel tariffs to avoid a transatlantic trade war that would be detrimental to both the European Union and the United States.

British Prime Minister Tony Blair is expected to make efforts to persuade President Bush to lift the steel tariffs during his talks with him.

While making a speech at the annual conference of the Confederation of British Industry on Monday, Blair said he would be arguing Britain's case on trade with Bush on his state visit.

"Obviously in relation to the United States, and the issues to do with steel tariffs, we will make the points, as we have, very forcefully," Blair said.

He added: "The WTO rules have been breached. It's important that America responds to that and we look to them to respond to it properly."

The following day, British Chancellor of the Exchequer Gordon Brown also told the annual conference just hours before President Bush was due to arrive in London that normal trading with the United States was vital for the EU to prosper.

"We know that damaging trade and regulatory disputes between Europe and the United States have hindered commerce and damaged transatlantic relations," he said. "It is time now for us all to make the effort to move beyond them."

Britain is one of the most important members of the EU and has always boasted of a "special relationship" with the United States. All the demands and calls from British political and business leaders were seen as a painstaking effort to avoid a tit-for-tat transatlantic trade war.

Also, British entrepreneurs believe they were denied by the United States in the first round of a post-war Iraqi reconstruction bids. They wish to take the chance of Bush's visit to make their complaints heard.

The awarding of contracts for Iraqi reconstruction has been a highly controversial process as the bigger contracts have gone to US companies, some of which appear to have close ties to Bush's administration, freezing out the British and other companies.

In order to win contracts for British companies, government officials established good offices at an early stage with the American Agency for International Development, which has been in charge of contracts handouts. However, what they did was in vain.

Whether the British companies will be awarded some of the contracts in the second round of bids is still undecided.

Observers here believe that during his stay in Britain, President Bush will have to give some positive indication about the controversial steel tariffs and Iraqi reconstruction contracts, apart from being forced to see and listen to slogans and placards saying "Bush is unwelcome."

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