March 31st, 2009
04:12 PM GMT
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LONDON, England – One of the five "pillars" of the G-20 meeting is protectionism. World trade has naturally fallen in this recession and British Prime Minister Gordon Brown is worried politicians will start to build up import barriers to "protect" jobs at home.

In reality, of course, jobs are often lost when barriers rise for two main reasons; other countries retaliate, hurting exports, and also because nowadays many companies import raw materials which become more expensive during a trade spat. Mr. Brown calls the danger of protectionism "de-globalization."

Now, you might think this means countries are resisting protectionism; clearly not. The World Bank estimates that 17 of the 20 G-20 "countries" (The European Union is treated as one country in this group) have erected barriers of one form or another to protect certain industries.

The United States has its "Buy America" provision signed into law by Barack Obama as part of the stimulus package.

France appears to have succeeded in its bid to keep auto jobs at home when Renault created 400 jobs at a plant outside Paris to make the tiny Clio automobile, claiming its Clio plant in Slovenia was at capacity. France's auto bailout came with calls for the French automakers not to cut jobs at home.

Then there was Russia's duty increase for imported used cars, etc. etc.

Martin Brougton, the president of the UK's Confederation of Business Industry (CBI), told me that even a bank bailout can be protectionist if it helps a domestic bank compete unfairly. He says most companies don't want protectionist measures and says it is politicians who can't help but fiddle with trade rules to please voters.

Remember, at the last G-20 Meeting just a few months ago, the leaders pledged to resist protectionism measures and then did it anyway.

You might say these moves are symbolic or minor and that's probably correct. But what happens after this G-20 meeting could set the trade tone for years to come.

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soundoff (8 Responses)
  1. Fred Magdalera

    The economic future of this planet rests on the shoulders of countries that hold 80% of the wealth of the earth. The G-20 participants MUST come to a definite agreement in combatting poverty and lawlessness around the world.

    April 1, 2009 at 4:00 am |
  2. Rod

    If globalization of everything (is) brought to this point, it's time for some de-globalization. Let face it, a free-trade-for-all isn't free, as long as we have global predator companies exploiting / leveraging anyone or anything. Politicians don't get the fact that citizens under their watch suffer enormously because of their inactions and actions that allow predatory businesses to violate basic human dignity. It's all about the money for the rich, not ethical behavior or enriching the lives of the common citizen.

    April 1, 2009 at 5:44 am |
  3. g.r.r.

    Some amount of protectionism is needed until all of the countries in the g20 have drop their trade barriers and opened their money (namely, China, and India). In addition, ALL of these countries should be required to have tight environmental laws and ideally even minimum wages. One of the easiest fixes there is, is to implement a VAT on ALL goods that are either made locally for local consumption, OR imported for local consumption. It should be based on pollution from that production, which should include CO2 emissions. The most important part of it, is that it should be implemented SLOWLY as in taking 4-6 years to take full effect. Give countries the CHANCE to change their environmental laws.

    April 2, 2009 at 12:30 am |
  4. KAMAL AHMAD KHAN

    Once again , The Powerful People use the "Poor-Common" man as a conduit to bail themselves out showing that the idiom "The Rich Get Richer while the Poor Get Poorer" is correct and true. This G 20 is a Sham. Only the rich people are stuck and want bailout using taxpayers money . Cost goes to the poor people due to Loss of jobs , Less/worse Healtcare , Worse Education , Worse Internal Security – The Common Man "NOW" is more venurable to Terrorists than 10 years back. Thanks largely due to the Governements of G 20 and their Flawed Policies. The World economies will see more Downturn over the next 2 years with Much More Job Losses especially in USA & UK , European Union will shrug off this downturn by First Quarter 2010. UK is in a Steep downslide. USA is CRITICAL as they are heading for Defaults. ANYONE who invests money in USA will be a looser. Even China is asking for guarantees of its investment in U.S. Government Bonds. Clearly the USA has overshot its Twin Deficits to UNMANAGABLE LEVELS . Conclusion "DEFAULT" timeframe 10 years . The writing is on the wall. US Economy is now in a Tailspin beyond Repair. Only thing left for the common man is to reduce their liabilities and wait for collateral damage to start setting in Once this Crazy "SICK BANK and Spending spree – Bailout" is over. It is clearly ONLY Bailing out the Rick at the Cost of the poor. To Top it all the G 20 is following it. I Had pointed it out to CNN/BBC/FOX that media has to play their part otherwise the effects will be also on them due to less income from sponserships/Advertisements etc etc . WAKE UP AMERICA ... WAKE UP WORLD. Today is April 2 , 2009 .. Maybe Disintrigation of USA is on the cards (My conclusion).

    April 2, 2009 at 4:56 am |
  5. Dr. Muhammad Sadiq

    Today I heard US President Obama say that "we have been talking a lot about democracy but ....( I understand he meant there are other more important things that matter). The glorious past of USA and EU is not because of democracy but because of strong judiciaries ( My Conviction). The G20 should help the development of fair, accountable and responsible judiciaries in developing and poor countries to fight rampant corruption and also improve the deteriorating judiciary in the developed world to stop any financial frauds in the banks and other financial institutions in future.

    April 3, 2009 at 2:58 pm |
  6. John D. Froelich

    The best examples of defeating poverty have all come from "capitaalism" thru investment and freer trade.

    April 3, 2009 at 5:54 pm |
  7. Manuel Vilhena

    I believe that in recession is obvious that each country tries to fall the minimum.

    In Portugal we have a saying that says: Put the hash in our own sardine.

    I believe that protectionism should be avoided without forgetting each one interests.

    Manuel,
    Coventry, UK

    April 3, 2009 at 9:53 pm |
  8. Leia

    We the People of the United States of America just shot ourselves in the foot and because of the poor quality of Universal Health Care, the infection is going to spread and become gangrene and we will have to have it amputated at the hip and will be in a wheelchair for the rest of our existence.

    Our country is too young to die.

    April 4, 2009 at 12:01 am |

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