AFR Opinion – Avoiding modern day protectionism

by ericknight

There is a lot of protectionism going around at the moment. In today’s Australian, the Trade Minister, Craig Emerson, has declared Doha dead. He is calling for side talks for nations who are willing to push for free trade over protectionism.

Australia’s services sector will compete well on a level playing field but what about our value-added goods? It’s easy for a lot of protectionism and sentimentality to creep into Australia’s prospects in advanced manufacturing. The truth is that we already have a lot of natural competitive advantages – a well educated workforce, world-leading expertise in biotech and solar. The problem isn’t getting government to invest more. It’s encouraging private investors to see the light.

I have a piece in today’s Australian Financial Review which distinguishes between these two positions – government subsidies versus an attractive tax incentives. The first (and more instantly gratifying) is a modern day form of protectionism. The second creates the right financial incentives for a prosperous Australian economy.

Click here to read the piece.

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