CBI chief renews attack on US

CBI director general Digby Jones has launched a renewed attack on the United States over economic protectionism and sneered at its claim to be 'the land of the free'.

'Americans think they're the home of the brave and the land of the free. Well they might be brave but they ain't free. They are positively protectionist, which doesn't become the most powerful economy on earth,' Jones told Reuters.

His comments follow an election-eve blast challenging President Bush to demolish protectionist policies if re-elected.

Jones warns that unless the US takes action on free trade, it runs the risk of seeing a flight of British investors to China, weakening the dollar. 'I'll tell you what British business would like to see from a second term Bush presidency. We would like to see America setting an example around the world on free trade,' Jones said.

His attack comes amid what is potentially the World Trade Organisation's largest trade dispute over subsidies to Airbus and Boeing.

The US is the Britain's second-biggest trading partner after the EU and the UK invests more in the United States than all of the rest of Europe.

But Jones says that America cannot take the inflow of investment for granted.

'One thing I think that is worrying-over the next two years is that China will start to absorb an enormous amount of the capital in the world,' said Jones.

'The Far East is at the moment investing in the States. If it starts investing in China and the United States has got this enormous budget deficit and out goes its capital into China, you've got a run on the dollar.'

The dollar has already suffered since Bush's re-election, largely on concerns about the growing US current account deficit.

Jones also attacked the US record on a range of environmental issues. He went on to urge Bush to ratify the Kyoto agreement on global warming.