World Economy

Asia, Europe must not give into protectionism: Former Italian PM Letta

Even as U.S. President-elect Donald Trump practices economic patriotism, Asia and the European Union (EU) must not respond with protectionist policies of their own, former Italian prime minister Enrico Letta warned on Friday.

Former Italian PM Enrico Letta
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"I strongly believe protectionism is the wrong answer, we need to manage the social consequences of globalization but we have to continue with progress as well," he told CNBC on the sidelines of the Lee Kuan Yew School of Public Policy Conference in Singapore.

As the current dean of the Paris School of International Affairs at Sciences Po, Letta said Europe and Asia must continue inking bilateral trade agreements, such as the EU-Vietnam and EU-Indonesia deals currently underway, to strengthen their relationship amid expectations for the U.S. to isolate itself from global trade.

Trump has promised to withdraw from the Trans-Pacific Partnership (TPP) trade deal once he enters office later this month.

The EU is at greater risk of building walls amid rising sentiments of nationalism and economic inequality as the middle class, like their American peers, fear losing their socio-economic status, 50-year old Letta explained.

"The big problem of globalization today is how to manage the subsequent social and demographic transitions, it is a welfare problem."

In regards to the future of his home country, Letta said Italy's outlook depended on the EU's unity.

"When European integration is weak, Italy suffers. Italy is a country that needs the euro and a strong commitment to completion of the EU."

With elections due in France and Germany, as well as greater detail on Brexit, 2017 will mark "a turning point" for Europe, he continued. If these events confirm Europe's ability to stick together, Italy will do well, he said.

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