Europe’s New Protectionism

The European Union has begun to acknowledge that China's growing exports pose a new challenge to its economy. However, there is a growing divide amongst EU countries as to how to deal with China and the globalizing world as a whole. One path is that espoused by Tony Blair, who advocates increasing the competitiveness and quality of European economies while retaining free trade. The other strategy is the Franco-German tactic of erecting protectionist barriers to keep out Chinese imports. The latter plan makes little sense, suggests The Economist, given that Germany is the world's largest exporter, and any trade barriers which it chooses to erect are likely to result in a decline in demand for its products in key markets like China. The Blair approach is becoming more popular in light of a growing realization within the EU that globalization is unstoppable, and yet can be a desirable and profitable shock to economies willing to upgrade. – YaleGlobal