Indian Finance Minister Arun Jaitley warned yesterday that growing opposition to globalisation and free trade in Western countries would hurt the world economy, echoing concerns by the IMF and others.
Jaitley told a gathering of officials from the Brics group of emerging nations ahead of a summit this weekend that he was concerned about protectionist movements in parts of the developed world.
“(The) world is indeed moving towards protectionism and the worries are real,” Jaitley said during a speech in India’s financial capital Mumbai.
“The spillover effect of these policies on other parts of the world could be extremely adverse,” he added.
Jaitley cited Britain’s decision earlier this year in a referendum to leave the European Union – a vote which analysts attributed to anti-globalisation sentiment and will see the country leave the EU’s single market.
He also expressed concern at anti-free trade rhetoric being expressed in the US presidential election.
Republican candidate Donald Trump has threatened to withdraw the US from global trade pacts, including the North American Free Trade Agreement, if elected next month, striking a cord with people worried such deals cost jobs.
“We hope the tenor (tone) of free trade returns back once the heat of elections are over,” Jaitley told Brics delegates.
The comments come days after the International Monetary Fund (IMF) warned that protectionist political trends risked “turning back the clock” on free trade, threatening an already fragile world economy.
Brics is a bloc comprising Brazil, Russia, India, China and South Africa and was formed in 2011 with the aim of using its growing economic and political influence to challenge Western hegemony.
It will hold a summit on Saturday and Sunday in India’s tourist state of Goa to be attended by the five countries’ leaders.