Policymakers sounded the alarm about the growing threat of protectionism on Thursday as new data showed a sharp fall in air-freight traffic signalling a broader slowdown in world trade. India's trade minister, Kamal Nath, warned at the World Economic Forum that the global economic crisis could fuel protectionism to safeguard national industries and jobs. He told Reuters that India saw growing signs of protectionism and would respond with its own measures if its exporters were threatened. “We do fear this because one must recognize that at the heart of globalization lies global competitiveness, and if governments are going to protect their non-competitive production facilities it's not going to be fair trade,” he said. “If there are protectionist measures India will be compelled to also take commensurate measure against those countries which will be good for no one.” Nath cited Dutch authorities' seizure last week of a Brazil-bound shipment of a generic high blood pressure drug made in India. He said India had taken up the issue with the Dutch authorities and the European Union, and hoped to resolve it. India raised tariffs on steel to protect local producers, a measure trade experts say was aimed at China, which India does not regard as a market economy. The deepening economic crisis, and the failure to complete the World Trade Organization's long-running Doha round on freeing up global commerce; have raised fears that countries will block their partners' exports to protect jobs at home. This type of behavior would intensify the crisis, as happened in the 1930s during the Great Depression. Slump in air cargo In more bad news for the global economy, the International Air Transport Association said international air freight traffic fell 22.6 percent in December compared to a year earlier. IATA called it an “unprecedented and shocking” drop and said: “There is no clearer description of the slowdown in world trade.” Keeping oil prices high Organization of Petroleum Exporting Countries (OPEC) members in Davos said the prices of oil must rise in order to maintain investment in future supplies, but energy chiefs say investment in renewable sources could spur needed economic growth. “Even with $50 we cannot have a decent income for our members,” OPEC Secretary-General, Abdullah Al-Badri said. Nobuo Tanaka, executive director of the International Energy Agency, which advises 28 industrialized countries, agreed consumers would have to pay more. But low prices were needed now by a world economy that the International Monetary Fund has said will be at a near standstill this year. “To stimulate the economy, you need a low price, but to stimulate investment long-term the price should be higher,” he said. “In the mid to long term, oil prices will go up.” Any stimulus package for the world economy should be as environmentally friendly as possible, Tanaka said. “If governments are spending ... for a stimulus package, why not spend it on renewables?” Tanaka added. “It stimulates the economy short-term and in the long-term is sustainable. You kill two birds with one stone.” Renewable energy sources include wind and solar power. “Clean energy opportunities have the potential to generate significant economic returns,” the World Economic Forum said in a statement accompanying a report declaring clean energy spending needs to at least triple in order to counter-act planet warming emissions. Clean energy investments were $155 billion last year, up from $30 billion in 2004 but still far below the $515 billion the report's authors say is needed to combat climate change. The IEA's Tanaka said that to diversify supply and help prevent a repeat of the upheaval caused by the Ukraine-Russia pricing disputethe EU needed an improved grid and a single energy market.
