Protectionnism is the deliberate attempt to limit imports or promote exports by putting up barriers to trade. Despite the arguments in favour of free trade and increasing trade openness,these measures are often used by countries to limit unfair competition from foreign industries. It’s a defensive measure that’s politically motivated. It works in the short run. But it is very destructive in the long run. It makes the country and its industries less competitive in international trade.
Countries use a variety of ways to protect their trade. One way is to enact tariffs, which tax imports. This immediately raises the price of the imported goods, making them less competitive when compared to locally produced goods. This works especially well for a country like the United States,which imports a lot of consumer products and oil.
The two brightest examples of the rising protectionist movement against open markets and borders in 2016 were the Brexit referendum in June and the victory of Donald Trump in the US presidential election in November.
Trump has promised to throw up barriers to Asian imports throughout his Campaign, however some economists say that this measure is impractical and is unlikely to destroy the rules-based system of international trade.
Rise of protectionism and anti-globalism made global international institutions feel unsettled ground as they made numerous statements and commitments to prevent predominance of protectionism in global trade and sovereigntism in foreign policies.
In July, International Monetary Fund (IMF) Managing Director Christine Lagarde warned the protectionism supported by Donald Trump can result in significant damage to the global economy.
In September, when the Brexit choice was already a reality, but the US election was still ahead, G20 leaders reiterated their intention to roll back protectionist measures in trade until the end of 2018 in their communique at Hangzhou summit.
“We reiterate our opposition to protectionism on trade and investment in all its forms. We extend our commitments to standstill and rollback of protectionist measures till the end of 2018, reaffirm our determination to deliver on it and support the work of the WTO, UNCTAD and OECD in monitoring protectionism,” the communique read
In late November, just after the US election, leaders of 21 Asia-Pacific APEC countries also stood up against protectionism in their Lima declaration. They extended until the end of 2020 a moratorium on trade-distorting measures, which, they said, “weaken trade and slow down the progress and recovery of the international economy.”
The Organization for Economic Cooperation and Development (OECD) decried the increasing trend of protectionism in its late November report. The organization warned that it could deteriorate growth of local and world trade, as well as cause increase in prices and worsening of living standards across the globe.
A year-end economic and social development report by the United Nations in early December warned that a growing threat of protectionism in the developed world threatens to undermine economies in the Asia-Pacific despite the 5 percent growth of 2016.
The global trend of “closing doors” in economy may mean that bilateral trade deals will replace plurilaterals, such as TPP or TTIP, in future. US-Japan and US-UK bilateral economic partnerships now look most feasible.
On the political scene, Europe may see new sovereignty-defenders coming to power during the upcoming election in some of EU member states.
In France, which is going to have fiercely-contested national elections in April-May, Francois Fillon, nominee from the center-right The Republicans party, and far-right candidate Marine Le Pen are the two main candidates. The ruling Socialist Party is lagging far behind after its popularity plunged during President Francois Hollande’s term.
Fillon does not see eye-to-eye with German Chancellor Angela Merkel who is welcoming migrants to Europe, and for this reason he is against Turkey joining the union. He also supports the lifting of sanctions against Russia, and insists on closer cooperation with Moscow, especially on the Syrian issue. On the EU topic, Fillon, unlike far-right Marine Le Pen, is not a eurosceptic, but his vision is certainly a pro-sovereignty one.
Gianluca Savoini an adviser on international politics of Italian Lega Nord party said in an interview with SputnikNews that Fillon’s victory in the Republican primaries reflected the global change toward sovereigntism, which makes the nation’s sovereignty its top priority in decision-making.
“After Brexit vote and [Donald] Trump’s victory in the United States, Fillon’s win is a proof that the wind is blowing in the direction of sovereigntism on the global scale. The French have just said ‘no’ to failed policies of left bureaucrats and bankers that are so distant from the people,” Gianluca Savoini said.
Far-right french presidential candidate Marine Le Pen is sending a nationalist, euroskeptical, anti-immigrant message to the voters. She insists it is necessary to cut legal immigration, deport illegal migrants and tighten rules on nationality. She echoes Outers in the Brexit campaign and believes France should take control of its borders and currencies back from the EU institutions.
With the changes in some Western democracies’ administrations yet to come, the year of 2016 might go down in history as a watershed in global affairs which triggered a shift to inward-looking economies and politics.