FedEx boss slams growing, systemic protectionism

Founder Fred Smith says moves by advanced countries that hamper trade also crush economic growth

FedEx boss slams growing, systemic protectionism
FedEx protests at protectionist tide

The head of one of the world’s biggest transport and logistics companies has warned a tide of protectionism is stifling global economic growth and castigated his own country for being part of it.

Fred Smith, the Chairman, President, CEO and founder of top-three global transport operator FedEx called for greater efforts to battle restrictions on trade, to ensure trade agreements are enforced and that Customs regulations are simplified, US publication Journal of Commerce (JOC) reports from its Trans-Pacific Maritime Conference.

His call comes one month after the US research organisation, the Brookings Institution, highlighted that trade blockages extended to online trade, which hindered the ability of small and medium-sized enterprises (SMEs), the engine room of most nation’s economic and employment growth, to participate in international trade.

The study found significant trade reforms are needed to help benefit from the Internets a platform for e-commerce and international trade.  

For Smith, swift action against the global protectionist trend is crucial.

"The problem is not cyclical, it’s systemic, and it’s spreading," Smith was quoted as saying in a keynote speech.

"We need to redouble our efforts to move governments toward trade liberalisation.

"Protectionism squelches competition and lowers economic growth."

He notes that according to the Organisation for Economic Cooperation and Development figures, each dollar of increased protection leads to a drop of 66 US cents in gross domestic product (GDP), and a dollar increase in tariff revenues can result in a US$2.16 drop in world exports and a 73-cent decline in world income.

Although not singling out Australia, Smith stated that the top 20 economies had increased trade-hampering measures by 23 per cent since 2009.

Smith blamed US lack of trade leadership and tardiness on the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership on its politicians, saying both initiatives could increase world GDP by 5 per cent on simplified trade regulations.

The JOC can found here

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