'No Way Back' for Protectionism: Pascal Lamy
Calls for protectionism make no sense in today's global economy and globalization was not responsible for the economic downturn, despite some claims to the contrary by politicians, Pascal Lamy, Director General of the World Trade Organization told CNBC.
"Protectionism in today's world of trade doesn't make sense. Trade is not what it used to be which is a country producing something, selling to a country which will consume something. Trade now is all over the place, it's not made in the US or made in China, it's made in the world," Lamy stressed.
Speaking from the French Business Leaders Association Annual Forum in Paris, Lamy said the WTO was aware of increased calls for protectionism by politicians, notably in France and was "monitoring the situation very closely", but so far fears of a return to protectionist policies had not materialized.
"So far, so good, but the risk is there, and if there is some sort of double dip, we will have to remain vigilant," he said.
Lamy warned there was "no way back" to an age of protectionism due to the changing nature of trade and he warned that countries who chose to revert to such policies ran a greater risk of hindering their own recoveries.
"With this global value chain if you start hitting your imports, in reality you will hit your imports because a large part of what you export is bits and pieces which you have imported and to which you have added value.
"So it doesn't make sense anymore given the trade integration we have on this planet," Lamy said.
Lamy rejected suggestions that globalization was responsible for the financial crisis, telling CNBC a lack of regulation was more to blame.
"I know it's easy for a politician to scapegoat globalization, the fundamental reality is that globalization is (responsible) for nothing in this crisis. Trade globalization is (responsible) for nothing in this crisis. Where there was a problem was in poor, insufficient regulation in some global activities such as the financial industry, but global trade is not the reason why we had this crisis," he said.