Here will follow the story of Mandelson degrading even further the degraded EU Commission.

Read this and you will understand a lot about the EU Commission and Mandelson.

PETER Mandelson, the Blairite spinmeister turned European Union (EU) Trade Commissioner, is a Machiavellian character whom even his friends have nicknamed “The Prince”. But all the dark arts of media manipulation are unable to put a positive spin on what – even by the standards of Brussels – is an especially callous new trade policy. Starting on Friday, regressive tariffs will come into force on imports of Chinese and Vietnamese shoes to the EU, a move which will simultaneously hurt the poorest European consumers while robbing thousands of desperate workers in China and Vietnam of their livelihoods: Chinese shoes will be taxed up to 19.4%, Vietnamese ones up to 16.8%, supposedly to compensate for “unfair distortions of trade” which exist only in the imagination of Mr Mandelson and his economically illiterate fellow-travellers in Brussels. The only winners will be a handful of Italian producers who have ignored warnings to change or die.

Mr Mandelson has been in his new job for only two years but his list of failures is already longer than the considerable one he notched up during his scandal-soiled Westminster career. Far from injecting a breath of fresh air into an insipid Brussels Commission and flying the flag for free-trade and open markets, as a gullible British media (but not this newspaper) was led to believe would be his mission when he was appointed by Prime Minister Tony Blair, he has turned out to be both out of his depth when it comes to the intricacies of trade and an unreconstructed protectionist when it comes to policy.

His tenure in Brussels has been a failure of substance and style. His careless negotiation of Chinese trade quotas led to the humiliating “bra-wars” fiasco last year, which saw millions of clothes piled up in warehouses while the supermarkets which had ordered them had to turn customers away. At the same time, he has proved to be an extraordinarily divisive force in European politics, where his incessant self-promotion, spin and Westminster-style secret briefings to favoured journalists have gone down badly, making him a figure of suspicion and hatred. Now the crucial Doha trade round, which could determine the future viability of the World Trade Organisation (WTO) and the fate of the international liberal economic order, is being held back both by Mr Mandelson’s failure to come up with realistic trade proposals and his inability to get on with people.

He started his tenure by picking an unnecessary fight with Robert Zoellick, his then American counterpart, even questioning his authority to negotiate. Washington quickly learned that every contact they had with him was quickly spun in the press to Mr Mandelson’s advantage; so they stopped trusting him. Then he made it known, for reasons entirely capricious and self-serving, that he disliked Celso Amorim, the important Foreign Minister of Brazil; naturally, this soon leaked and hardly strengthened the EU’s negotiating hand. The consequence is that Mr Mandelson is increasingly regarded as the worst of the 25 new Commissioners, no mean feat given that they are mostly a collection of nonentities, has-beens, second-rate minds and bureaucratic fiddlers.

After initially spending his time in Brussels falling out with other Eurocrats, then leading international figures, Mr Mandelson now travels the world trying to justify the EU’s increasingly irrational anti-globalisation policies. Of course, he is under intense pressure from protectionist member states; but he is not merely making tactical sops to these members – he is actively making bogus arguments against freeing up trade. Mr Mandelson is already being compared unfavourably to his predecessor, Pascal Lamy, a man who turned out to be an unlikely hero for free-traders, with a good grasp of detail and a clear sense of direction. In stark contrast, Mr Mandelson blunders and blusters: he recently claimed that the EU is “the most open economy in the world”, exactly the sort of balderdash you’d expect from a New Labour spin-doctor but hardly appropriate from the EU’s official trade representative. Of course, his claim does not stand up to a moment’s scrutiny: Hong Kong, for example, has no tariffs; and New Zealand has no farm subsidies. Indeed, the EU’s overall applied tariff against the rest of the world is a third higher than that of the United States, no slouch itself when it comes to protectionism.

While spinning himself as a free trader, Mr Mandelson has allowed the EU to launch an “anti-dumping” investigation every 12 days, steadily jacking up trade barriers on everything from clothes to shoes, bicycles, furniture and plastic bags. In a recent interview, he typically tried to shift the blame for the “bra wars” fiasco on to M Lamy, claiming he had fought “a pitched battle with protectionists” on the matter. He even insisted that “the Chinese textiles deal, far from being protectionist, was anti-protectionist, given what I was under pressure to do, and given the arrangements I inherited”. It is the kind of statement at which Mr Mandelson excels – and of which George Orwell’s Big Brother would have been proud – and ignores the fact that he was appointed at the start of August 2004 and the textile quotas were agreed in June 2005, meaning he had plenty of time to argue for his own policies; it is a matter of record that the negotiations with the Chinese were abysmally mismanaged.

On paper, Mr Mandelson had the perfect training to be a leading apparatchik of the European Commission, which has a long history of harbouring failed national politicians, such as Britain’s Neil Kinnock and Leon Brittan. Mr Mandleson had twice been forced to resign from the British government, first for accepting an interest-free £370,000 loan from a millionaire Labour MP to buy a Notting Hill flat he could not afford on his salary, then over allegations that he helped Srichand Hinduja, an Indian billionaire, secure a British passport after he foolishly donated £2m to the Millennium Dome (Mr Mandleson was later cleared of wrongdoing but emerged with sufficient mud on his name to ensure he could never return to British government again, even under his old friend Mr Blair). The epitaph of his 12-year Westminster career was suitably coined by one of his former Cabinet colleagues: “Peter has a problem with the truth.”

This is now evident in Brussels. At key junctures in trade policy Mr Mandelson has concentrated more on preserving his own reputation in the British media than getting the right result (long the trademark of New Labour politics). As a result, he has caused more damage than someone who is overtly anti free-trade.

As recently as October 2005 in Beijing, Mr Mandelson attacked what he rightly called the “Maginot Line” approach to trade; only a few weeks later, he had dramatically reversed his position. Demonstrating how little he understands of the theory of comparative advantage in international trade, he claimed that “my [sic] member states will simply not accept further first moves from the EU which are pocketed without parallel moves by others”. In other words, trade is a zero sum game and the reduction of trade barriers is a gift or favour by one country to another.

By last month, Mr Mandleson’s transformation into the King of Protectionism seemed complete. He described a world without subsidies and barriers as “free-market mayhem”. At a British National Farmers Union conference, he ruled out cuts in farms tariffs, saying that he would refuse to be swayed by “a lazy political correctness into giving ground in agriculture simply because this will please a vociferous lobby that has misunderstood what is really needed to tackle world poverty.?Trade justice cannot be equated with agricultural liberalisation and a race to the bottom for EU agriculture – a free market mayhem that would gravely damage the interests of some of the poorest countries in the world.”?

Thus has Mr Mandelson gone native, to the extent of openly disagreeing with his old mate, Tony Blair, and his old enemy, Chancellor Gordon Brown, who have both rightly called for the abolition of the European Common Agricultural Policy. Mr Mandelson now argues that “agriculture is an economic sector that cannot be treated like all others. It is too intimately connected to wider issues such as the environment, food security, the future of the countryside and our distinctive rural way of life” – the usual Brussels blather in favour of protection, subsidies and tariffs.

Mr Mandelson claims, implausibly, that the EU’s complicated system of tariff preferences is a better way of helping the world’s poor than plain and simple free trade. He has accused the World Bank of distorting the truth about gains from trade liberalisation, arguing that its calculations failed to take into account preferences which the poorest nations receive and which would be eroded by cuts in EU tariffs. This attack was rightly described by the World Bank’s leading trade economist as “simply dead wrong”: even once changes in the terms of trade and preference erosion are taken into account, sub-Saharan Africa would still be a net beneficiary of full free trade.

The EU system of “preferences” is deeply flawed anyway. It only applies to 50 very small countries and excludes large and important economies like Nigeria, Kenya, India and Pakistan, which have tens of millions below the poverty line. The World Bank has shown conclusively that even countries, which supposedly have full duty-free access to EU markets, only manage to get duty-free status for a small proportion of their exports to the EU because of the EU’s complicated “rules of origin” which slap on tariffs if the export has content from a third country. Even where trade preferences have had an impact – such as the EU’s sugar and banana preferences – the long-term effect is damaging. The EU regime encourages countries to invest in volatile commodity markets, rather than diversifying their economy, as well as in industries in which they are not competitive; as world trade barriers fall and preferences are eroded away, the “preferred” industry is left bankrupt.

Mr Mandelson’s efforts to defend his duties on Chinese and Vietnamese shoe imports have now gone from the sublime to the ridiculous. He claimed that importers and retailers should be able to suffer huge cuts in their margins and that the duties could be absorbed in the supply chain with no price increases for consumers. He clearly has to idea of retailers’ margins. Even more ludicrous, he accused retailers of failing to pass on lower prices from imported goods over the past five years. As anybody who has ever gone into a supermarket would know, this is the exact opposite of the truth; but perhaps Mr Mandelson is now too grand for mundane shopping trips with a trolley

Mr Mandelson is the wrong person in the wrong job at the wrong time. Europe’s Trade Commissioner should command trust and have the integrity to win arguments and change minds at a critical juncture for free trade and globalisation. Instead he is a man whose word is distrusted and whose arguments are devalued and dismissed the moment they leave his mouth. Mr Mandelson is intelligent and sophisticated but his overweening self-regard is his fatal flaw and his obsession with solipsistic spin has destroyed whatever credentials he might have brought to the job. He should go before he does any more damage to free trade; but, such are the undemocratic and unaccountable ways of Brussels, he will continue to slash and burn free-trade principles for the foreseeable future.

Copyright © 2005 UKIP Christchurch
Last modified: December, 2007