Thanks to the recession, the double game of rich countries has been exposed. They had been all along criticising poor nations for being protectionist, but look what they have done once the economic screw tightened on them. One is pontificating on nationalism, and talks about job portection, a third can't stop pumping subsidie... And protectionism has suddenly become debate-worthy.
Justified in Recession?
These are terribly bad times and former free-market nations are now supporting some “reasonable” level of protection. They say it’s OK as long as it doesn’t affect the global economic system.
The Poor Man’s Argument
Poor countries say they should be allowed more leeway for protectionism. The ‘Buy America’ campaign in the US can’t be treated at par with the Third World’s attempt to protect local industries.
The Knock in the Long Term
Understandably, companies are worried over their nations’ protectionism. It impairs their ability to hire the best talent irrespective of nationality. Local workers will now enjoy scarcity value. Good for politicians, bad for business.
Is It Antiglobalisation?
The Smoot-Hawley Tariff Act of the 1930s steeply raised U.S. tariff s on imports. The Act caused one of the largest drops in global trade ever recorded. History is full of examples of how protectionism slows growth rather than speed it up. The few who still swear by globalisation say the current round of protections will only delay the recovery.
Not Just Trade Barriers
There are brazen, naïve protectionist countries and then, there is China. The communist regime is one of the most protectionist the world, but keeps quite low-key. Its smart keep the currency artificially low so that exporters keep getting the big bucks.