Everybody suffers with protectionism

During the Bill Clinton administration, the United States was a champion of globalisation and free trade.

The US was a superpower then and no country could match it, not Russia and not China.

It was innovation and technology that brought strength and prosperity to the US and the American economy at that time. Everyone would still remember Silicon Valley.

Unilateralism and protectionism will not lead to strength and prosperity.

Protectionism could result in immediate short-term benefits but it will not work in the long run.

Malaysia's national car industry is a good example.

In the beginning, car maker Proton managed to corner more than 75 per cent of the Malaysian car market through high import tariffs that were imposed on foreign cars.

But today, Proton has about 10 per cent share of the market. Protectionism will result in complacency and is not sustainable. It is a populist solution to a problem.

I hope both the US and China will be able to come to a compromise soon, as trade wars will hurt not only the two of them but also countries like Singapore that depend heavily on trade.

If there are unfair trade practices, both sides can refer the matter to the World Trade Organisation for arbitration.

Sim Lim Onn