The Productivity Commission has issued a timely warning of the national and global risks of protectionism, the Australian Chamber of Commerce and Industry has said.
James Pearson, Chief Executive of the Australian Chamber said:
“Where governments around the world have embraced protectionist policies and introduced measures that add costs and barriers to trade, they have harmed their own economies and in turn reduced global growth and prosperity. While some may suggest a rethink of Australia’s commitment to free trade, the Productivity Commission confirms ‘they would be wrong’.
“While we need to recognise that there are negative effects from liberalising trade and open economies, the benefits from this overwhelmingly outweigh the costs. Every one of us that uses a computer or a mobile phone or drives car or catches plane relies on global trade.
“Australians produce, make and do things that the rest of the world wants. In turn we need goods and services the world can provide to us. This virtuous cycle means jobs and comfortable lifestyles that would otherwise be out of reach.
“The report reflected on the prospect of an escalation of trade wars and the prospect of resultant global recession, noting if a scenario akin to the experience of the 1930s were to be repeated, a household with the median weekly income would be worse off by nearly $1500 a year; and 100,000 jobs would be lost.
“These are issues which need to be taken seriously. Otherwise, we could be fooled into going down a path with a dead end.
“Many of the benefits of freeing up trade are available to us without the need to wait for others to embrace them. We benefit a lot when we do the reform ourselves, but we all gain the most when the world does this together.”