Protectionism calls for global coordination

The world is in the grip of surging protectionism. The anti-free trade and anti-globalization sentiments are taking deep roots. Populism is swaying the masses. The odds seem to be conspiring against an already fragile
economic growth. International Monetary Fund (IMF) warns of “low growth trap” in the next few years.
Despite warnings and calls to stop the tide of isolationism, the threat from building walls continues to grow. Britain is grappling with immigration and single market dilemma in the wake of Brexit. Both the presidential candidates for the US elections — Donald Trump and Hillary Clinton — vociferously oppose Trans-Pacific Partnership (TPP). German Chancellor Angela Merkel has tasted a shocking poll defeat for backing the open-door migrant policy. Austria, Czech Republic and France — which goes to polls next year — are witnessing a phenomenal rise of populist groups that are against economic openess. The US-EU Transatlantic Trade and Investment Partnership (TTIP) is in limbo. And the
EU-Canada trade pact might face a similar fate. To top it all, there is a spat over softwood lumber between the US and Canada — believed to be the closest trading partners in the world. The list that reflects the rampant anti-globalization and protectionism mood is growing by the day.
Global economic growth has been too low for too long. It needs a speedy
recovery. Prolonged stagnation doesn’t augur well for world economy. It requires a hard push by liberal and open trade to avert a recession. But protectionists are hastening the impending crisis by putting trade barriers and retreating inward.
What has made them do so? Why has anti-globalization and protectionism rhetoric increased over the last 4-5 years? That’s because growth in some places has failed to be inclusive. Globalization has helped billions. It has lifted many out of poverty. But the working class in some countries feels that it has triggered disparity. The challenge, therefore, today is to bring about equitable development.
Instead of removing the drawbacks of globalization, if a country simply closes in on itself, it will close the door of opportunity and development. Isolationism is not a solution. Isolation will add up to the problem. Rather than restricting trade, ensuring that business is done on a level-playing field is important. The world needs to formulate strategies where business standards and trade regulations follow ethics that help the society and the environment. Today, free trade pacts like TPP and TTIP are being rejected because they lack the element of ethics. Policies that aim at ethical and sustainable economic growth will help bridge the gap caused by a trust deficit and put the world on the path of real progress.
The global economic order is today in need of trade integration more than ever before. The fruits of globalization are meant for all. Digitization and technological changes will make economies more robust in the future. Failing to tap them would be a folly. Economic liberalization will help in shaping a technologically vibrant society.
Some economists feel that the surge in anti-globalization will not stay for long — may be it will subside after a decade or so. However, the damage that it does to global economy by that time would be irreversible. Hence, it is of great
urgency to forge global coordination through cohesive plans that are growth-friendly for all.