Non-traditional protectionism will delay economic recovery
Economic uncertainty seems to be the new normal of late. It started with the housing bubble bust and the sub-prime mortgage crisis in the US and, as the world recovers, the EU region has been hit by a severe sovereign debt crisis.
Such a situation would eventually lead to inward-looking policies and promote protectionism. As a matter of fact, developed nations have resorted to restrictive measures in terms of trade policies. Trade comes very low down in the list of priorities for the Obama administration with the presence of powerful protectionist forces in the White House, notably the unions. The picture is not different in the EU region with a GDP growth rate of 0.2% for Q2 and Q3, 2011 and a negative external trade balance of €10.33 billion for the first nine months of 2011. Even when the crisis hit the region last time in the 1970s and 1980s, EU policy makers went through a lot of navel gazing. As per a recent report, the EU is considering long-term import tariffs against goods from Chinese steel pipes to plastic from the Gulf States. Moreover, the commission is under pressure from protectionist members like Italy and France to introduce an EU vetting procedure primarily to block inward foreign investment.
Such a situation would eventually lead to inward-looking policies and promote protectionism. As a matter of fact, developed nations have resorted to restrictive measures in terms of trade policies. Trade comes very low down in the list of priorities for the Obama administration with the presence of powerful protectionist forces in the White House, notably the unions. The picture is not different in the EU region with a GDP growth rate of 0.2% for Q2 and Q3, 2011 and a negative external trade balance of €10.33 billion for the first nine months of 2011. Even when the crisis hit the region last time in the 1970s and 1980s, EU policy makers went through a lot of navel gazing. As per a recent report, the EU is considering long-term import tariffs against goods from Chinese steel pipes to plastic from the Gulf States. Moreover, the commission is under pressure from protectionist members like Italy and France to introduce an EU vetting procedure primarily to block inward foreign investment.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School
IndiaManagement Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
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