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AS
the global economy continues to face tough
times, governments are increasingly playing
politics with trade and giving in to protectionism.
So proponents under the rubric of "progressive
protectionism", say it is the way to
go, writes Robert Plummer on the BBC business
website.
Others,
of course. is agree entirely starting with,
China's top promoter of foreign trade, Wan
Jifei, said rising protectionism was having
a negative impact.
"Trade
protectionism is shortsighted and narrow-minded,
and it cannot fundamentally address the
problems of unemployment and economic growth
worldwide," said Mr Wan, former
president of the China Council for the Promotion
of International Trade.
"Free
trade is the engine of national economic
growth," he added.
Now,
you might think it a bit rich for China
to denounce such measures, given that Beijing
is routinely accused by others of protectionist
behaviour.
Most
recently, US President Barack Obama has
alleged that China illegally subsidises
exports of cars and car parts, thus forcing
US manufacturers to shift production overseas.
On
the other side of the US political fence,
anti-China sentiment is also strong. The
Republicans have pledged to declare China
a "currency manipulator", reflecting
the anger felt by many Americans over what
they see as the deliberate undervaluing
of the yuan to favour Chinese exporters.
China
is already facing several cases at the World
Trade Organisation (WTO), including one
brought jointly by the US, the EU and Japan
over its restrictions on rare earth exports.
On
the other hand, China also sees itself as
a victim of protectionism. In an effort
to alleviate the pressure, it has enaged
in talks with Japan and South Korea on a
free-trade pact.
Some
observers think the US should put its own
house in order before it starts calling
other nations protectionist.
After
all, one proposal on the "to-do list"
that President Barack Obama presented to
Congress in the spring was a 20 per cent
tax credit for firms that relocate jobs
to the US from abroad.
But
the US can also point to fresh progress
on trade liberalisation after its long-delayed
free-trade deal with Colombia finally took
effect. Even so, fresh bilateral trade disputes
between the US and China keep emerging.
In
another dispute, Washington has slapped
anti-dumping tariffs on Chinese solar panels,
which it says are being sold at unfairly
low prices. China denounced the move as
protectionist, but the EU has also now begun
an anti-dumping investigation into the trade.
It
seems that free-trade and protectionist
tendencies are fairly evenly balanced among
the great powers, with every nationalist
impulse countered by a liberalising one.
This
"one step forward, one step back"
behaviour can be seen in the EU as well,
beset as it is by the crisis in the eurozone.
The
last French presidential election saw both
the successful challenger, Francois Hollande,
and the defeated incumbent, Nicolas Sarkozy,
stepping up their protectionist rhetoric
in an effort to woo the 80 per cent of voters
who are anti-globalisation.
However,
as has often been stated beyond the country's
borders, France is a big winner from globalisation,
with French companies doing 14 times more
business abroad than foreign firms do in
France.
President
Hollande has said he wants French financial
aid to go to exporters of French products.
But
if he is serious about his campaign promise
to create 150,000 new jobs in France, many
analysts feel he will have to promote more
competition in the economy, not less - in
other words, more liberalisation and less
protectionism.
In
any case, the German Chancellor, Angela
Merkel, has long maintained that a return
to protectionism would be a grave danger
for the global economy, making it unlikely
that Mr Hollande will get his way at a pan-European
level.
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