US in plot to repatriate jobs, says CBI chief

The CBI in Birmingham: Prime Minister makes fresh attempt to win back business vote; Jones warns of US threat to British jobs
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The Independent Online

US Politicians and government departments have been putting pressure on US companies to pull out of the UK and cancel lucrative orders with British companies, it was suggested yesterday.

The revelations were at odds with claims by Tony Blair that he and George Bush would announce a plan to rescue the stalled world trade talks during the US president's state visit to London today.

Digby Jones, the director general of the CBI, said he had been told by the chief executives of two American-owned defence companies - one of which employs 300 people in Scotland - that they were being urged to shut their factories and return to the US.

In addition, he said that a UK manufacturer had been told it might lose a major order to a US state after the Federal government insisted the order go to an American company.

"This goes to the jobs of ordinary skilled people in Britain," Mr Jones said on the fringe of the CBI conference. "This will increase unemployment in Britain and will be caused by our best friend. That's not on.

"If you have a president that says 'my best friend Tony Blair', then we want him to walk the walk," he said. Mr Jones said he informed the Prime Minister of the allegations during his visit to the conference yesterday and he will raise it with John Snow, the US Treasury Secretary, when he arrives in Birmingham today.

Mr Jones said he had been personally told by the two defence chief executives of pressure from US Congress representatives during a recent visit to Washington. "They are under serious pressure from the Capitol," Mr Jones said.

He said that another member of the CBI, a Scottish-owned general manufacturer, had been on the brink of winning a large order from a US state after successfully supplying it with a trial order.

"The state says it wants more, at which point central government says to the state 'if it don't buy them in Britain but buy them from a company making them in the US we will compensate you some of the difference'," he said.

The news may sour relations on the eve of Mr Bush's visit and comes on top of plans by the European Union to launch $2bn of sanctions against US imports unless the White House respects a ruling that its tariffs on steel imports are unlawful.

The Prime Minister said he would make Europe's case "very forcefully" against the US government's tariffs on imported steel, which have been declared illegal by the World Trade Organisation.

"What is important for us is to hold very firm with the rest of Europe and say the WTO rules have been breached," Mr Blair told business leaders at the CBI conference.

"It's important that America responds to that and we look to them to respond to it properly."

Asked about the possibility of using the visit to kick-start the trade talks that collapsed in Cancun in September, he said: "I hope President Bush and I can say something firm in the next few days."

Panitchpakdi Supachai, the WTO's director general, urged the EU and US to reach a "mature decision", warning that a trade war would damage both sides.