November 17, 2003
This Is London / Evening Standard, News & City
By Robert Lea (Evening Standard)George Bush's administration has called on U.S. companies in Britain to relocate jobs to America in an astonishing move that could trigger a major trade war. U.S.-based multinationals have been told they will receive compensation from American trade authorities, if they cancel contracts in Britain and take jobs home, according to CBI director general Digby Jones. The allegations come only a day, before Bush arrives in London for his controversial state visit and escalate the storm of protest he has already caused by slapping big protectionist tariffs on European steel imports.
Speaking at the CBI's annual conference in Birmingham, Jones said: "Three chief executives of American companies investing in Britain have told me to my face that they have been told to close down, bring their stuff home and make it in the US." He said the companies were major employers in defense or manufacturing. Jones continued: "Whether flouting international law with their steel tariffs or telling their companies to come home, this bullying affects Britain and British jobs. We are America's biggest trading partner, but if this escalates into an international trade war, it hits us worst, because we are such a big player in the world market."
Unilever chairman Niall Fitzgerald said: "There is a mid-Atlantic trade storm whipping up. There will be retaliation and then retaliation to that retaliation, which could lead us to a 1930s decline." Fitzgerald said it was unlikely Bush would back down over steel as Presidential elections take place next November.
A spokesman for Trade Minister Patricia Hewitt said: "It is extremely worrying and just emphasises the damage, the negative effects a trade war can have."
U.S. delegates were critical of the administration's behavior. "We would caution against and resist protectionism", said Kirk Lock-Scobie, finance director of IT group Avaya, which employs more, than 700 people in Guildford, Surrey.
American companies have a massive presence in Britain and are responsible for providing an estimated one million jobs. According to the Department of Trade and Industry more, than 17,000 new jobs were created by U.S. firms in the last year alone. There are an estimated 5,700 U.S. companies operating here, covering every sector of the economy.
They range from car manufacturing giant Ford to investment banks Citigroup, JP Morgan Chase, Goldman Sachs, Lehman Brothers and Merrill Lynch. Pharmaceuticals giant Pfizer and household goods group Procter & Gamble also have huge operations here. Household names, such as Black & Decker, Campbell's Soup, Gap, Heinz and Kellogg are all U.S.-owned. And virtually every High Street in Britain is graced by the burger behemoth and American icon McDonald's.