THE rift between France and the Czech Republic intensified over the weekend when President Sarkozy of France announced a 6.5 billion euro plan to support its ailing automobile industry and ignored protests from Prague over his remarks about pulling out French carmakers from the Czech Republic and relocating them in France. The Czech prime minister, Mirek Topolanek, used his position as the current president of the EU Council of Ministers to call for an emergency EU summit to discuss the growing dangers of protectionism that could undermine Europe's single market. A red warning light over France's policy was also flashing in Geneva at the World Trade Organisation which is still hoping, against hope, to conclude the stalled Doha round of trade talks designed to give improved access to export markets for developing and developed countries. The WTO warned that its members are “vulnerable to any new measure that closes off access or distorts competition.”

Only last week the European Union was making representations to Washington about the protectionist “buy American” provisions in President Obama's fiscal stimulus proposals; he responded by amending the provision but he is unlikely to be so co-operative in the future if he finds that protectionism is being practised within the EU. Once protectionism takes hold it is almost impossible to stop its spread. Its adoption in America in the early 1930s was one of the causes of the depression that subsequently affected Europe and many other areas.


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