Former Greenpeace economist Colin Hines advocates a policy of Progressive Protectionism, enabling countries to rebuild and rediversify their economies by limiting what finance and goods they allow to enter their borders, and in the process wean themselves off export dependence.
Long distance trade would shrivel to its original priorities – the quest for raw materials and cash crops that can not be found domestically.
Such trade will be governed by international trade rules which ensure that the rebuilding of sustainable local economies are their raison d’etre, rather than evermore open markets and exports.
Because India is limiting exposure – in spite of New Delhi’s move to open its market to foreign retailers – Ikea is withholding its entry into India. Mikael Ohlsson, chief executive, told the Financial Times that India’s requirements that single-brand retailers source 30% of their goods from local small and medium-sized companies was an obstacle to its investment that needed reviewing.
India’s opposition leaders claim that greater foreign direct investment in the retail sector would not create new jobs or reduce prices. They argue that it would, instead, deepen poverty and put many local traders out of business. Arun Jaitley, BJP leader, warned that opening retail to foreign companies before India had strengthened its own manufacturing sector would lead to an influx of cheap Chinese goods. He cited the casualties faced by the US in the 1980s when retailers moved into local neighbourhoods, and warned that this is a situation facing India.
France and America
Under the headline, ‘Davos consensus’ under siege it is reported that Barack Obama, in his State of the Union address and Francois Hollande, the Socialist party’s candidate for the French presidency, have both promised to bring manufacturing jobs and factories back home – a new theme for Davos.
Mr Obama said his blueprint for strengthening the US economy, “begins with American manufacturing”. Mr Hollande called for France’s “reindustrialisation”.
The FT [30.1.12] reports that both the American president and the French would-be president stressed measures that are implicitly protectionist. Mr Obama has promised to set up a trade enforcement unit charged with investigating “unfair trade practices” in countries such as China. Mr Hollande has denounced “unfair competition” and proposed to rectify it by telling foreign countries to raise their social and environmental standards, or face tariffs.
Mr Hollande promised to reassert the “sovereignty of the republic, in the face of globalisation”:
Isn’t that just what the Indian government is doing?