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Protectionism will hit Employment, not Goods


From the Wall Street Journal:

On Wednesday U.K. Prime Minister Gordon Brown addressed the U.S. Congress, striking an antiprotectionist note. But with the U.K. in a deepening recession, the British appear to be undergoing a mood swing when it comes to globalization. The small band of Italians [working at an oil refinery] became the focus of wildcat strikes last month by an estimated 2,000 workers at power plants and refineries across the U.K. Their message: British jobs for British workers.

Government figures indicate the number of British workers in the country declined by 234,000, to 27 million, in the last quarter of 2008 from the year-earlier period, while the number of foreign workers climbed 175,000, to 2.4 million.

That’s why seemingly routine events now can provoke outrage in some quarters, like the recent award by the government to a Japanese-led consortium of a contract to build and maintain a fleet of high-powered trains. Bob Laxton, the member of Parliament for Derby, the city with the U.K.’s last train manufacturer, called it “a crass decision which gives the Japanese an opportunity of getting into the U.K. market.” The government says parts of the train will be manufactured in the U.K.

As the government spends billions on bailouts, some taxpayers are demanding the money be spent at home. “Of course the cash should be kept in Britain,” says Trevor Oliver, who runs Oliver Construction Ltd. in Immingham. “You can’t be a global family, you look after your own family.”

This time it won’t be about banning foreign goods. No, that is an old-economy-measure, and a large part of world manufacturing is global anyhow, especially in the US and UK. Plus, not “buying” abroad creates the problem that they gotta sell their goods in foreign countries – Coke and Prudential aren’t restricted to their home countries.

So the only way things will change is to stop employment of foreigners. The distinction is strange in the US where a large majority of people descend from, or are immigrants. Less, but still strange in the UK where it’s entirely likely a bloke from the south of Britain finds himself a foreigner in Norfolk.

Lashing out against Italians or Frenchmen is a farce. The real target of this “protectionism” is likely be those that seem to have eaten away at every level of job, from taxi drivers, to restaurants to technology workers and investment bankers. Indians and Chinese people.

It’s apparent in the Gulf, at least, that when the economic scenario changes the first to go were the Indians. Nothing wrong with that – it was in the contract, and in the Visa. They were there for a job. No job, no stay. (This is true with H1-Bs in the US as well. No Job, No H1-B, and no legit reason to stay in the US)

“Buy American” or “Buy British” now means “don’t employ foreigners”. I’m quite ambivalent to that, as an Indian; on the upside, it provides some of that quality talent to India.


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