CITY AND SUBURBAN
Britain is the world's biggest loser from a kamikaze war
CHRISTOPHER FILDES
The big guns open up across the Pacific, the British artillery pops away on its second front, and the two instant casualties are the world's stock markets and our own foot. This country, so the Chancellor of the Exchequer proclaimed this week, is now the world's biggest exporter of services. More cautiously the British Invisible Ex- ports Council says that we soon may be. On its latest figures we are second only to the United States, and in the export of financial services, first. What do ministers now do but join in America's trade war with Japan by threatening a war of our own in financial services. They conjure up the spectre of the Financial Services Act and the Banking Bill, to scare the Japanese into opening up their international telecom- munications business to a British company, Cable & Wireless. Never mind that Cable & Wireless has little to do with financial services and less with banking. Never mind that the political dust that would fly if British Telecom's international business (and major money-spinner) were opened up to a Japanese company. The posture is that unless Japan does the decent thing by Cable & Wireless, its banks and brokers in the City of London will stand to lose their licences. As targets, they are at least within range, and — as Whitehall points out are denied the shelter of the General Agreement on Tariffs and Trade, or Gatt. This, the world's free-trading charter, has historically been concerned more with trade in goods than trade in services, and more with tariffs than with other barriers which can work just as well. They go up in poor countries and stay up in rich ones. Domestic legislation can deny access to London's capital markets, or keep British insurers away from overseas customers. It has needed a European Court decision to let Lloyd's into Germany. Lotis is the British lobbying group under Sir Michael Palliser, former head of the Diplomatic Service and now chairman of Samuel Mon- tagu: the acronym stands for Liberalisation Of Trade In Services. The efforts of Lotis helped to get trade in services high on the agenda at last year's Gatt meeting. I do not fancy its chances at the next one. The world's biggest exporter, we shall be told, does not scruple to protect its own markets in services, or to expel its competitors, not for anything they may have done or not done, but because they make a convenient stick to beat some other dog. If that is Britain's idea of free trade in services, it is a game that any number can play, and the best of luck to Sir Michael Palliser when he knocks on foreign doors to sell the skills,of Samuel Montagu. Mr Lotis regrets.
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