Rediscovering Trade Barriers

Guess what happens to Chinese products once destined for Western economies that can no longer afford them? They find destinations closer to home (via 2point6billion):

Indian markets saw a flood of Chinese made toys in the second half of2008 after many western countries decided not to import toysmanufactured in China anymore. Besides a lack of capital, westernimporters decided to “buy American” also due to recent qualityproblems.

Guess what happens to Chinese products that try to find destinations closer to home? They get turned away:

India on Friday banned Chinese-made toys for six months in order toprotect the domestic industry which was being hurt with a flood ofcheap Chinese toys that couldn’t make it to western shores.

Whether for environmental, social welfare or simple economic reasons, this is probably just the beginning of a rollback period for globalization, and it coincides with the first global downturn since the broad expansion of liberal trade policies.

I’m curious to see how the protectionist urge triggered by the financial crisis will affect the EU, which has largely taken on its current form during an extended period of relative prosperity and growth. I’m thinking about migration patterns resulting from massive unemployment, for instance. External borders are already in the process of being beefed up to keep Africans in Africa, but will internal frontiers be reinstated to keep the famous Polish Plumber in Poland? Will integration be a barrier against protectionism? Or a casualty of it? And what’s going to happen to Provence when all the English expats are forced to pack up and go home?

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