What is the growing share of protectionism that limits cross-border trade between major economies in the projected slowdown in global economic growth?
Do you agree with my opinion that in many developing countries the influence of foreign direct, capital and financial investments is significant.
However, the analysis of this process in individual countries results in a significantly different scope and nature of the impact of foreign investment capital.
According to the doctrine of classical economics, all countries should benefit from opening up the economy to foreign investments and the development of trade, including the export and import of economic goods.
However, are all countries always benefiting from this process economic benefits and the process develops faster?
It's not always like that. If all countries benefited from the growth of trade, protectionism, such as the establishment of anti-dumping duties to reduce cross-border trade, would be unnecessary.
What is the impact of foreign investment capital in the globalization era on the economic development of developing countries?
What is the growing share of protectionism that limits cross-border trade between major economies in the projected slowdown in global economic growth?
Are the currently limited protectionist practices cross-border trade is the main factor in the forecasted slowdown in global economy growth?
Please reply
Best wishes
Yes, protectionist practices cross-border trade is One of the main factor in the forecasted slowdown in global economy growth. Time and again it has been brought through various media publications, including IMF, the World Bank and so on. It has clearly signaled that "Free Economy Cycle" has started reversing and that Protectionism and Regionalism is taking over in the present times.
I tend to agree with Eyal Ronen . Protectionism is not the cause of economic slowdown.
Let’s not forget the huge literature that was published on the return to ‘new normal’ after the 2008-2009 global crisis. The main points were that the 15 years period of high growth (roughly 1990-2005) had been an exception, mainly linked to the return of China into the World economy after decades and decades of absence. Another factor was the lack of growth-enhancing technical progress, at the difference of the post World-War2 30 glorious. The fear was that a return to protectionism as a (wrong) response to slow down and rising unemployment. Not the way round.
To conclude, if there is a causality (not sure, but ‘if’) protectionism is more the consequence of the economic slown down than the opposite. The roots of the slowdown have to be found somewhere else.
Post Scriptum:
This said, the US administration trade policy vis à vis China has nothing to do with trade, it is a political economy struggle to force a change in the Chinese industrial policy in its treatment of foreign direct investment and intellectual property.
The above question: Are the currently limited protectionist practices cross-border trade is the main factor in the forecasted slowdown in global economy growth? - has already essentially lost its relevance because it is now the Coronavirus SARS-CoV-2 (Covid-19 disease) pandemic that is a major factor in the global economic downturn.
Do you agree with my thesis?
I am asking for an answer and invite you to a discussion,
Best regards,
Dariusz Prokopowicz
Protectionist practice is one of the reason in the slowdown in global economic growth amid Covid-19, however, benefits of so called Globalization & Liberalization have failed to address the Equality, access to equal opportunities & removing poverty in many emerging nations.
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