Fred Smith, founder and president of FedEx Corp, has spoken out against burgeoning trade protectionist measures taken by governments which he claimed are weakening world trade.
In a speech in Los Angeles at the International Air Transport Association’s World Cargo
Symposium, he noted that last year the top 20 world economies passed 23% more protectionist measures than in 2009.
Arguing that globalisation reduced poverty, he said: “One big reason trade is no longer growing rapidly is the rise of protectionism. Over the last few years almost every trading nation has instituted policies that permit greater regulatory intervention in the trade processes—often justified by overzealous security considerations. Unfortunately, in many other cases, the protectionism is overt and politically driven.
“The result of all these factors is that exports have been declining with most major trading partners since 2010.”
He pointed in particular to policies in China, implemented to boost domestic companies but which caused logistics prices to rise, as well as Russia and the US.
His comments were backed with evidence from IATA, which showed that nearly 500 protectionist measures were implemented across the world in 2012, and that cross-border trade growth had weakened as a result.
“Beggar-my-neighbour policies don’t work as everyone does it,” said the airline association’s chief economist Brian Pearce. “Governments need to implement the Bali agreement and as a policy issue, we need to lobby governments.
“World trade is much weaker than it should have been. Growth has flat-lined since the recovery and has only moved as fast as domestic consumption.”