March 4, 2008
Today’s ‘Informal European Policy Dialogue on China’ (co-chaired by Elmar Brok and Glyn Ford) echoed the contents of yesterday’s post.
Trade tensions were discussed in the light of today’s economic downturn. Both the European and Chinese participants agreed that there is a growth in protectionist sentiment in the EU and China, with action likely to be triggered in the United States.
Protectionism in todays’ globalised and interdependent world could lead to negative economic growth and political and social instability. There is an urgent need to work out a response. The first target of protectionists will be the growing trade deficit with China.
The reasons for, and the effects of, this deficit are complex and discussioin tends to generate more heat than light. There is no consensus among economists (is there ever?) and it is much easier for advocates of protectionism to advance simplistic, but apparently convincing arguments, such as losing jobs to cheap imports.
Globalisation is, overall, a win-win but there are individual winners and losers. We have to ease the burden of the losers.
I will return to this subject later.Author : Stanley Crossick