Protectionism as bad as terrorism, says Narendra Modi in Davos

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Davos: Prime Minister Narendra Modi on Tuesday equated protectionism with terrorism and, in the process, made a very out-of-the-box defence of globalization.

Formally launching the annual summit of the World Economic Forum (WEF) in Davos, Modi urged world leaders to embrace more open trade policies instead of erecting protectionist barriers to tackle unfavourable economic headwinds.

“Forces of protectionism are raising their head against globalization. Their intention is not only to avoid globalization themselves but also to reverse its natural flow. The result of all this is that we get to witness new types of tariff and non-tariff barriers,” the prime minister said.

Modi is the first Indian prime minister to give the plenary address at WEF Davos.

The prime minister’s pitch for a liberal global trade regime came hours after US President Donald Trump slapped extra duties on import of solar equipment and at a time when the domestic business in India is lobbying for relief from cheap imports.

India’s domestic industry lobbies, especially in the steel sector, have been mounting pressure on the government against any tariff concessions to rivals in the 16-member grouping of RCEP (Regional Comprehensive Economic Partnership) countries, fearing that tariff concessions to countries like China may hurt the domestic steel industry.

“Bilateral and multilateral trade negotiations have come to a kind of standstill. Most nations have seen a decrease in cross-border financial investments and a drop in global supply chain. The solution to this worrisome situation against globalization is not isolation,” said Modi.

Modi’s comments are similar to remarks made by Chinese President Xi Jinping in Davos in January 2017 when he spoke in defence of globalisation, implicitly challenging the views held by the then US president-elect Donald Trump.

In a veiled reference to policies such as Trump’s “America First”, Modi said, “Many countries are becoming inward focused and globalization is shrinking and such tendencies can’t be considered lesser risk than terrorism or climate change.”

Presenting India’s credentials as an investment destination, Modi said his government is following the principle of reform, perform and transform. “We have made it so much easier to invest in India, manufacture in India and work in India. We have decided to uproot licence and permit raj. We are replacing red tape with red carpet,” he said, adding that as many as 1,400 archaic laws that were becoming roadblocks in India’s growth had been removed.

The prime minister said that 1.25 billion Indians were ready to accept changes and challenges for creating a $5 trillion economy by 2020.

Modi also spoke on climate change and terrorism—two challenges that were, he said, among the greatest threats to civilisation.

“We need to think what can be done to tackle this (climate change) issue together. Everyone says we need to do something but how many countries are there in the developed world who talk about helping smaller countries on this issue?” Modi said.

Jayant Dasgupta, India’s former ambassador to the World Trade Organization (WTO), said Modi has made the right noises at Davos. “Unless India forcefully makes its case for a rule-based system, the US under the Trump administration could wreck multilateral architectures like the WTO,” he said.livemint