Everybody’s doing it

February 10, 2009

Few politicians so far are calling for protectionism.

Among economic and diplomatic policy-makers, openly advocating protectionism is about as socially acceptable as promoting child pornography.

So how to explain the slew of tariff hikes, export subsidies, non-tariff barriers, stimulus packages and bailouts — highlighted in a report at the World Trade Organisation — which all have the effect of slowing imports, boosting exports and generally promoting jobs at home at the expense of competitors?

The answer: they are not protectionist. Everybody says so.

New subsidies for French carmakers? Not a whiff of protectionism, says French Economy Minister Christine Lagarde. It’s all about research and development.

Export subsidies resumed for EU dairy produce? Not protectionism, says EU Trade Commissioner Catherine Ashton. It’s just a technical measure triggered by market prices.

“Buy American” in the U.S. stimulus package? Not protectionism, the Senate says. It will be “applied in a manner consistent with U.S. obligations under international agreements”.

Higher Indian steel tariffs? Not protectionism, says New Delhi. We cut them when inflation was high, and now that inflation was moderated we can put them back to their normal level.

Indonesian imports restricted to 5 ports of entry? Not protectionism, Jakarta says. It’s all about tackling smugglers.

Everybody’s doing it — denying that trade measures are protectionist.

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