Belfast Telegraph

Protectionism 'the Class A drug of the trading world', says Liam Fox

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 four-fold 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, said the meeting was taking place "at a truly historic moment" for the UK following June's vote.

He 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.

"There are 52 member states in the Commonwealth, boasting a combined population of over 2.4 billion people.

"Moreover, one billion of those Commonwealth citizens are under the age of 25, a vast pool of talent and resources that can help transform the world, if we ensure they have access to future trade and investment opportunities."

The meeting came ahead of the Commonwealth Heads of Government Meeting (CHOGM), which takes place in the UK next year.

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".

He said business between Commonwealth members is due to rise from around £600 billion to £1 trillion by 2020 but, while member states account for a third of the global population, they carry out just 15% of trade.

He said: "There is enormous potential there.

"The challenge is ... to harness that and to try and develop a recognition that in a world where globalisation is potentially retrenching, with a change of attitude in the American government, with obviously Brexit, that within this group that has at its head the Queen and the Royal Family ... that there is a great opportunity."

Todd McClay, the New Zealand trade minister, added protectionism was nothing new, saying between 1,600 and 1,800 protectionist measures were introduced after the financial crisis by G20 nations, of which only 600-700 had been removed since.

He said: "I'm not sure there have been a lot more (recent measures) but we have seen a lot more talk about protectionism over the last six or eight months.

"That talk is quite concerning because actually if the world, some economies of the world, move in that direction, then we know that overall the world's economy is harmed."