Rise of India, China no cause for protectionism: British premierMay 2nd, 2008 - 10:58 am ICT by admin
By Dipankar De Sarkar
London, May 2 (IANS) British Prime Minister Gordon Brown has urged Europe and America to keep their trading borders open despite the twin pressures of an economic downturn and the rise of India and China. Speaking ahead of this month’s expected resumption of world trade talks, Brown also called for countries to lower their trade barriers and remove agricultural subsidies that unfairly impact on poor countries.
In a speech to the Institute of Directors, a London-based group of business heads, Brown said Wednesday the worldwide benefits of free trade could be as much as $300 billion by 2015 - equivalent to 0.6 percent of global income.
“But if we do not get a trade deal within the next few weeks there will not be a trade deal for years,” he warned.
Brown told an audience of 3,000 business leaders that “protectionist sentiments are growing” not only because of the current credit crunch and rises in fuel and food prices, but also due to the longer term challenge posed by the rise of Asia, particularly India and China.
“Some of our biggest corporations - IBM, Corus, Jaguar and Land Rover - are now partially Asian or Arab owned, with Indian and Chinese sovereign wealth funds also buying into global companies,” he said.
“And increasingly China and India are not competing simply on low pay as if it were a race to the bottom. With five million graduates a year, far more engineers being produced, far more computer scientists, they are competing on high skills too, in a race to the top.”
Brown said up to a million manufacturing jobs and 250,000 service jobs are moving from Europe and America to Asia each year.
“So it is understandable that in America and Europe worries exist, and the dominant response is not to welcome new competitors but to see people in fear of their jobs and livelihoods.
“And as a result we see protectionist sentiments growing, we see the danger of increasing demands for heavy-handed regulation, we see pressure for regulating hedge funds and sovereign wealth funds in almost every capital.
“And I see that there is a reaction building up: popular fears in America especially but across Europe too; people’s fears that they are not in fact the winners of globalisation but losers - that even when they are benefiting from low inflation and lower interest rates and cheaper consumer goods they are instead the victims not beneficiaries,” the British leader said.
However, he said rising Asia presented “huge opportunities” to the world economy, which was projected to double in size in just over 20 years, with over a billion new professional or skilled jobs and the global middle class growing twice as fast as the rest of the population.
“China and India will become countries that don’t just sell to us but buy from us - as the third and fifth largest consumer markets in the world,” he added.
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