It's all Mandelson's fault

THE past few weeks have been a fascinating lesson in how not to run the economic affairs of the European Union. Peter Mandelson's blundering intervention into the Chinese clothing exports issue has provided us with a valuable insight into the pitfalls of EU protectionism.

THE past few weeks have been a fascinating lesson in how not to run the economic affairs of the European Union. Peter Mandelson's blundering intervention into the Chinese clothing exports issue has provided us with a valuable insight into the pitfalls of EU protectionism.

That Mr Mandelson appeared not to have grasped the fact that the clothing imports he was banning had been made to order, was not the best advertisement for the business skills of the EU's Trade Commissioner. The net result was over 87 million garments clogged up in Europe's ports and a colossally embarrassing dispute leading to a hastily put together new agreement with the Chinese.

However, business does not sit still and wait for Mr Mandelson to get his act together, indications are that British retailers have simply switched to ordering from India, where there are no quotas. Clothing manufacturers over there have seen orders from European and US retailers rise by up to 25%.

The original intention of the quota scheme was to protect European manufacturers but it has signally failed. It has also meant that the business plans of many UK retailers have been disrupted because their orders have not been filled. Consumers will feel the pinch. Worse still, the imposition of quotas on the Chinese is hardly likely to make them co-operative when they take part in World Trade Organisation talks in Hong Kong, this coming December.


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Business leaders, including the CBI are not happy, taking the view that the West has benefited for years from the opening up of Chinese markets. Now all that good work could have been undone by a stroke of Mr Mandelson's pen. He has been motivated by the protectionist credo of countries like France and Italy which has been allowed to prevail over the free trade EU countries like the UK, Germany and the Netherlands. It again exposes the folly of the EU's one size fits all policies.

We can only hold our collective breath now and wait to see what other calamities the Prince of Darkness will lead us into.

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The EU's protectionist instincts are no better illustrated than in the watering down of the 'Bolkestein' services directive, which was intended to create a European Union wide single market in services. Now it looks very likely that thanks to pressure from France, Germany, Belgium and Luxembourg, state monopolies will be excluded from the new regime.

This is doubly irritating from a British point of view. It means that British companies will be legally excluded from investing in Continental public services while at the same time, our own domestic utility markets have already been bought up by companies from Germany and France, who now own most of Britain's power industry as well as several local water monopoly suppliers.

The EU's consistent efforts to stifle competition always lead to trouble and higher prices for consumers. Economics and the EU don't mix.

Jeffrey Titford is one of UKIP's Euro MPs. Readers interested in more information about Jeffrey Titford MEP or UKIP can find it on www.jeffreytitfordmep.co.uk or www.ukip.org

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