Mumbai: Union finance minister Arun Jaitley on Thursday said that the growing tendency to move towards protectionist measures in some part of the developed world amidst populist backlash against globalisation could disrupt international trade and cross border capital flows. He warned that the spill over impact of those protectionist policies on other parts of the world would be extremely adverse.
Referring to Brexit and the U.S. presidential election debate, Mr Jaitley said: “The tenor of debate going on in the U.S. is increasingly becoming more and more protectionist. I think the fears are real. We will have to keep our fingers crossed this time and hope that that the tenor of free trade returns once the election is over.” Presidential candidate Donald Trump is aggressively campaigning for protectionist measures and has vowed to renegotiate or withdraw his country from some of the free trade agreements.
In a slowing world economy, Mr Jaitley said investor-friendly domestic reforms could neutralise the impact of global slowdown to a large extent. Echoing a similar view, RBI governor Urjit Patel said Britain’s decision to leave the European Union, the US presidential election process and political realignment in the Eurozone region would impact policy decisions in BRICS nations.
