Protectionism ‘like a Class A drug that could damage economies’

PROTECTIONIST ECONOMIC policies are like a “Class A drug” that risk damaging some of the world’s largest economies, International Trade Secretary Liam Fox has said.

Members of the G7 and G20 groups of global powers are among those introducing measures that have impacted free trade since the financial crisis, the Minister told the inaugural Commonwealth Trade Ministers Meeting.

Dr Fox told politicians and business figures gathered in London that between 2010 and 2015 there had been a fourfold increase in “non-tariff barriers to trade” by G7 and G20 nations from 300 to 1,200. The two-day meeting comes as the UK prepares to leave the European Union.

Dr Fox said international trade remained the best way to rescue people from a life of poverty around the world.

He told the audience: “New barriers, often invisible, are emerging around the global economy, providing new impediments to the open commerce that is the key to global prosperity.

“What is worse, many of these impediments are being introduced by G7 and G20 countries, the very nations who have prospered most from free trade itself.

“Protectionism can be a seductive but a false friend.

“I have described it as the Class A drug of the trading world, it can make you feel good at first but you will pay a terrible price in the long term.”

Dr Fox highlighted the UK’s commercial heritage, saying “for over a century the terms Britain and free trade were virtually synonymous”.

The Minister, who backed leaving the EU, added: “Those of us, represented here today, have, through our shared history and experience, witnessed the transformation that trade can bring and have a duty to ensure that the benefits that we enjoy today are made available to future generations.”

Lord Jonathan Marland, the former Business Minister and current chairman of the meeting organiser, the Commonwealth Investment and Enterprise Council, told reporters one of the things to be discussed was a new “trade accord”.