Globalisation continues to be a game of the rich. The rich nations make the rules of the game and change them any time they feel their ‘ national interests’ are threatened. In fact the rising protectionism in many of the rich countries seems to be blocking the globalisation process.

Even within the rich world, there continues a bitter conflict over who is more liberal and freer than the other and who is causing serious damage to globalisation, the WTO and the Doha talks by refusing to scale down their respective protective walls against foreign economic ‘incursions’.

Take for example the case of Britain. It claims to be going global in the true sense of the term, but finds its partners in the rich world dragging their feet.

Last year foreign companies spent over $91 billion buying UK firms, up from $41 billion the year before. The pace of mergers and acquisition (M&A) activity has appeared relatively feverish here. This is happening, it is claimed, because the country has reposed its firm belief in globalisation.

But to London’s dismay UK-based companies are not finding the M&A market in other countries especially in the developed countries as liberal and as free as it is here. Governments in other countries, it is believed here, have gone to great lengths to stave off the commercial realities of globalisation. For example, the French government engineered the merger of Suez and Gaz de France to pre-empt a rival bid for Suez from the Italian energy group Enel.And the Spanish government did everything in its power to ensure Spain’s energy companies remained Spanish as it thwarted the bid by German energy group EON for Endesa.

Interestingly the same Spanish government gives tax breaks to nationally registered companies that make an overseas acquisition.

Over in Italy, the Governor of the central bank was forced to resign last year after it emerged that domestic bidders were being given a clear advantage over foreign bidders in takeover battles for Italian banks.

Even the United States, the supposed ‘champion of free-trade’ has acted highly protectionist when the Dubai Ports take-over of P & O was delayed and fundamentally re-structured by the US authorities because control of six US ports was included in the sale. And their protection of their airline industry is said to be an ongoing disgrace. But the most glaring example of this hypocrisy quoted was France proclaiming a yoghurt manufacturer - Danone - to be a ‘national champion’ of strategic importance.

Early last week opening the Confederation of British Industry’s (CBI) annual conference Sir John Sunderland, President, CBI hit out bitterly at the leading European countries and the US for letting protectionism block the process of globalisation and failing to come up even to the level of globalisation that Britain has achieved.

He claimed that the UK could stand almost alone on its credentials as a free trading nation.

The concept of free trade and open markets is threatened by the "insidious parasite" of protectionism as many of the world's developed economies seek to stave off the impact of globalisation, according to the Sir John.

In an outspoken attack on what he called a "self-defeating and hypocritical" approach, Sir John warned that "selfish and protectionist actions" affected everyone, reducing opportunities for jobs and growth throughout the global economy.

He said though British companies had spotted opportunities overseas "sadly the reaction of our competitors has been more akin to an Alex Ferguson defensive wall than Adam Smith's free trade dream".

Sir John warned that protectionism by developed economies set a poor example to developing countries. "How can we preach free trade at the Doha negotiating table ... if we don't practice the principles we preach."

What sort of example is being set for the emerging economies of the rising global powers of Brazil, Russia, India and China? And even more so for the really underdeveloped countries? He asked.

He said, we have to learn to deal with the realities of globalisation. Yes – jobs and businesses disappear in the face of foreign competition. But that has been the case since the industrial revolution. And yes – we need to up skill and re-train our own people.

He pointed out that overseas competition had forced UK companies to raise their game ….. and become more responsive to customer needs. They are turning to hi-skill, hi-tech manufacturing ….. and moving more into service provision.

The benefits of open markets can be seen in the influx of foreign investment into the City of London’s financial markets, or the establishment of Honda, Nissan and Toyota in the UK. All have created thousands of jobs, imported new skills and driven productivity to levels way higher than the British norm.

Value-added and investment per employee is 25 per cent higher for foreign-owned companies in the UK than domestic-owned. Ford’s Halewood factory in Liverpool, where the Jaguar X Type is made, is the most productive in the company’s portfolio ….. thanks to its investment in technology and skills.

Are there considerations other than pure economics in assessing a takeover ? If a state controlled foreign enterprise, for example, wants to acquire a company of strategic importance ….. then yes, we should have an effective regulatory framework that can oversee such activities.

”But I mean real strategic importance – a company so vital to the security or economic wellbeing of the nation that it would be risky to put it under foreign control. Not a yoghurt manufacturer!” Sir John observed.

Beyond the economic aspects of globalisation – which, according to Sir John, have pulled hundreds of millions of people out of poverty - open borders and interlinked trading networks give countries and people a healthy and positive mindset.

He said, it means that as China, India, Brazil and other countries progress to higher-value production ….. we benefit and use it to re-invigorate our own economies.

According to Sir John sectors cannot be artificially propped up indefinitely - market forces will always find a way through, like rabbits through a fence. Countries and firms who refuse to face reality and accept the need for change will suffer the most as they will be the least prepared.

Look at the Spanish and Italian shoe-makers who refused to face up to international competition ….. and are now desperately trying to survive against imports from China and Vietnam. In a bid to protect themselves, rather than adapt to competition, they’re demanding and regretfully securing tariffs on imported shoes which will drive prices up for consumers ….. and simply delay the inevitable.

Why should we penalise our consumers because Spanish and Italian shoemakers have failed to adapt? He asked.

In the UK, Sir John said, we get the globalisation message. But the arguments still need to be made and won in Washington, Paris, Rome, Madrid and elsewhere.