The first time I interviewed Giulio Tremonti, he was in shirtsleeves and a pair of bright braces, puffing confidently on a cigar in Milan. At that time he was finance minister in Silvio Berlusconi’s centre-right Italian government, and there’s no denying it, he looked every inch the part.

Now, as Italians prepare to vote in their April 13-14 election, Tremonti is playing a more populist tune. He’s just published a book, Fear and Hope, which lashes out at globalisation and condemns “the dictatorship of the market”. He also calls for a “new Bretton Woods”. Today’s Tremonti, some may think, has more in common with his protectionist political opponents on the Italian far left than with the Tremonti of 2003.

In truth, Tremonti was always fairly suspicious of globalisation, once remarking that Europe would end up in the pot of a Chinese cook if it wasn’t careful.

All this matters because opinion polls suggest Berlusconi will win the election and, being a creature of habit, he will probably appoint Tremonti as finance minister, just as he did in 1994 and 2001. Then what will happen?

Tremonti can’t single-handedly rip Italy out of all the free trade commitments by which it must abide under European Union rules. However, it is not difficult to imagine Berlusconi and Tremonti lining up in support of French President Nicolas Sarkozy’s calls for “community preference”, an anodyne phrase behind which lurks the threat of higher import tariffs on non-EU goods.

Perhaps this is one reason why European Commission president José Manuel Barroso warned in his recent Financial Times interview that protectionist forces were on the rise in the EU, including on the centre-right. A victory for Berlusconi and Tremonti, far from signalling a triumph for the spirit of dynamic Italian entrepreneuralism, would strengthen the defensive, inward-looking forces of Europe.

The UK and other free trade advocates such as Finland, the Netherlands and Sweden need at this point to consult their copies of Shakespeare’s Julius Caesar. In Act II Scene I they will find that Brutus, when looking for a reason to justify Caesar’s assassination, said that the point wasn’t Caesar’s actions so far, but the future danger Caesar represented. “And therefore think him as a serpent’s egg/ Which, hatch’d, would as his kind grow mischievous,/ And kill him in the shell.”

So the message to Tremonti must be: Giulio, wear those braces if you must, but we can’t let the serpent’s egg of protectionism grow to full size.

It is the $22m (€15m) question. How does Europe deal with Chinese imports? That is the hourly rate of the trade deficit with the rising superpower and it is causing angst on the continent.

Even a liberal such as Peter Mandelson, the EU trade commissioner, says the figure is on Europe’s mind. Having praised China’s rise as an unalloyed good for Europe and the world, he has recently taken to wielding the stick with Beijing, warning of a backlash if it does not itself open up to foreign companies.

Mandelson wants a two-way street. China’s vast cheap labour force is bound to mean its exports increase, he says. But there should be a flow of imports of the kind of upmarket goods in which Europe specialises the other way. Service providers should have more opportunity in China’s domestic market. In the meantime, the backlash has started.

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Trade deals garner headlines and photo opportunities. The talks leading up to them tend to be rather more mind-numbing, as countries haggle over whether pig bladders should be considered a sensitive product and just how many widgets should be allowed in tariff-free.

Trade talks between rich and poor countries have the added spice of David vs Goliath about them. With Doha apparently comatose once again, attention in Brussels has turned to negotiations with 78 ex-colonies.

The African, Caribbean and Pacific group (ACP) enjoy a quasi-marital relationship with the EU. It is enshrined in a legal document, the Cotonou agreement, and includes privileged access to EU markets. That arouses the jealousy of other poor countries that threw off their colonial yoke earlier, such as Latin America.

They have challenged the cosy arrangements at the World Trade Organisation and won enough battles to force a rewriting of the marriage vows by the end of this year. These will not be trade deals but "economic partnership agreements", a concept dreamed up in the Brussels bureaucracy. It wants to create clones of iteslf, with regional common markets that trade with each other and achieve economies of scale.

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The European Union is often compared to a bicycle: if it stops moving forwards it will fall over. The bicycle theory also applies to multilateral trade talks.

Hence negotiators keep having meeting after meeting to revive the Doha round, even if they appear only to be inching further down a cul de sac.

Trade ministers chatted in Paris early last week. Then on Thursday and Friday Peter Mandelson, the EU trade commissioner, hosted his counterparts from the US, India and Brazil in Brussels. The talks were, inevitably, “productive”, but just as inevitably did not lead to a breakthrough. You can probably write the closing statement for the next round in June yourself.

In the meantime, the EU ministers are preparing to jump out of the saddle.

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Amid all the distraction of the Paul Wolfowitz affair it’s easy to forgot that life goes on – in abject poverty - for the billions earning less than a dollar a day.

Europe has been vocal in its call for the Wolf to leave his lair. It is once again burnishing its pro-development credentials. But are they all that they are cracked up to be?

Heidemarie Wieczorek-Zeul, the German development minister, said this week that the EU was ahead of its target to dedicate 0.39 per cent of gross domestic product to aid in 2006, hitting 0.42%. The bloc already provides half of the world’s development aid. While she is not known as "Red Heide" just because of the colour of her hair, campaigners beg to differ.

Concord, the alliance of European NGOs released a damning report last week. It said around a third of aid was debt relief, housing refugees in the EU and even paying for foreigners to be educated at European universities. Belgium even tries to pretend its peacekeeping mission in Congo is aid. No doubt any Congolese chicory growers are benefiting from the troops’ presence.

In short, G8 pledges to double aid to Africa were not being met.

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When it comes to dealing with the rise of China it seems Europeans are from Venus and Americans from Mars. The popular phrase of Robert Kagan, the US commentator, appears more apt than ever when talking of the rise of the potential Asian superpower.

The US has acted decisively twice in recent weeks to try to force open the doors to the workshop of the world – to a predictable howl of outrage from Beijing. For the time being, the European Union is prepared to watch from the sidelines - and perhaps even benefit as US-China relations degenerate.

Five years after it entered the World Trade Organisation, the US feels China has not lived up to its obligations. Piracy is still rampant and too many ailing state enterprises are being propped up with subsidies, Washington says.

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Trade, apart from peace and prosperity, is always held up as the great EU success story. If only the EU could get its act together in other areas, such as foreign affairs, it would be a global power, the argument runs.
Lorenzo Bini Smaghi, an Italian member of the European Central Bank board, is suggesting that the unity on trade should be a model for countries in the eurozone to boost the currency’s political weight.
Yet in the last few weeks European solidarity on trade has been conspicuous by its absence.
Last year’s imposition of quotas on Chinese textiles angered nations of shoppers such as the UK and Sweden. They were riled again this summer when the European Commission ruled that Chinese and Vietnamese shoes were being dumped on European markets. Many are made by European companies that have outsourced production.

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