Surprise, surprise, governments throughout Europe are proposing their own "protectionist" measures to provide aid to local businesses. It just so happens that the countries proposing such measures are the countries who were making noise about US protectionism even before anything had been proposed. As I mentioned before, there are limits but it's also equally fair to ask a government bailout plan - paid for by local taxes - to do something more to support their own struggling economy.
If the political leaders had not sold such a pack of lies about so-called free trade in the past, there also would not have been such a strong reaction against it today. Leaders from the left and the right all told voters how great it was going to be but never the reality has been radically different from the sales pitch. Bill Clinton sold Americans on free trade and then cashes in to the tune of millions doing consulting work for emerging markets. How fair is that?
A number of EU governments are planning or considering measures to help the European automobile industry, which saw the weakest sales in 15 years in 2008 with new car registrations plunging eight percent.
Italian Prime Minister Silvio Berlusconi announced this month new measures worth 2.0 billion euros (2.6 billion dollars) to boost the economy and help the auto industry, but he tied the aid to keeping factories at home.
Italy swiftly defended its plans.
The measures the government plans to take to support the Italian auto industry "are absolutely not discriminatory," Andrea Ronchi, Italy's minister for European affairs said in Rome.
Brussels, along with several EU nations, had already asked questions about the French auto plan, and has also asked Spain for details of its measures.
The French proposals in particular have been met with the protectionist tag.
President Nicolas Sarkozy has announced plans to lend PSA Peugeot Citroen and Renault three billion euros (3.9 billion dollars) each and other measures in exchange for a promise not to shut French plants or sack French workers.
"If you build a Renault plant in India to sell Renaults to Indians, that's justified, but if you build a factory, without saying the company's name, in the Czech Republic to sell cars in France, that's not justified," Sarkozy said early this month, provoking outcry in the Czech Republic which currently holds the EU's rotating presidency.
At least the EU is trying to stay fair in this but those who have made the most noise about protectionism are at the leading edge of protectionism. It's a tough sell to ask locals to fund a bailout for factories in Eastern Europe or wherever. Many large manufacturers have moved production to cheaper and cheaper locations and of course, that means job losses back home. Regardless of the country, it's asking a lot to fund such migrations which are destroying local jobs. Why should anyone fund long term employment suicide?
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