Finance Minister Arun Jaitley on Thursday expressed concern over increasing protectionist tendencies in Western economies, especially in the US, but hoped that post- elections the world’s largest economy will adopt a business as usual approach.
“I believe that there are trends today which on the surface indicate that the world, at least a part of the developed world, is moving towards protectionism. These worries are real because the spillover impact of such policies on other parts of the world could be extremely adverse,” Jaitley told a BRICS seminar on Investment Flows here.
Without naming Donald Trump, the Republican candidate for the US presidency, and the loose talks on clamping trade protection measures at the campaigns, Jaitley said, “I think the fears are real because the US is increasingly becoming more and more protectionist”.
Like the post-Brexit British who want to remain an open economy, such threats in the US would also die down once the poll heat is over, he said. The US election is on November 8. “My own experience has been that some statements made during the elections get over subsequently under the burden of governance. The tenor of the debate is protectionist during the elections and after that you get back to business as usual. So we have to keep our fingers crossed this time and hope that free trade returns back to the table once the heat of the elections are over,” Jaitley said.
Trump has been talking about the need for trade protection and threatened to scrap most of the free trade pacts that the US has with other nations. He has also threated to get back most of the manufacturing that US companies shifted to China. Similarly, one of the major reasons for the British to vote to quit the EU was the increasing job losses for the not-so-qualified locals to well-educated immigrants from across the world, and especially the mainland EU as well as the duty disadvantages arising from the world’s largest political union. Jaitley said, however, the post-Brexit Britain proves that globalisation is a reality that cannot be wished away.
“I was pleasantly surprised when British officials told me ‘please do not view this (Brexit) as the sign of protectionism and that our policy towards open trade would continue’. Don’t confuse taking back control with restricting trade and that the nature of our decision-making will be different but the openness to trade will remain’,” he said.