Obama asks to avoid protectionism: Will he?

Bangalore: In May 2009, U.S. President Barack Obama had told his countrymen to 'say no to Bangalore and yes to Buffalo.' He asked Americans to create job opportunities inside America rather than in Bangalore. Now, four months later, a week ahead of the G20 Summit in Pittsburgh, U.S. President Barack Obama has flipped on his earlier comment and said it is in everyone's interests to avoid protectionism, especially at a time when the world trade is starting to bounce back.

Obama's pro-protectionism comments had drawn many reactions across the world. Many slammed Obama's comment as a protectionist measure that would hurt the U.S. more than it would harm India. While others felt it would not have any effect on the Indian outsourcing industry even though it did create a panic in the IT industry.

"The last thing, I think, that we have to pay some attention to is making sure that we're not dropping back into protectionism," Obama told a business round table, which comprised of top U.S. CEOs. He also said that other countries should avoid protectionism. He said these words in March and by the month of May he had changed his stance on protectionism and announced the end of tax incentives to those U.S. companies which created jobs overseas in places like Bangalore.

Now, in the month of September, Obama is appealing world powers to not fall for protectionism. "I think it's in China's interests and our interests and the world's interests to avoid protectionism, particularly just as world trade is starting to bounce back from the huge declines that we had seen last year," he said in an interview with CNBC Television.

Interestingly, these anti-protectionism comments by Obama came after the U.S. slapped duties on imports of tyres from China over the weekend. China, in response, filed a World Trade Organization (WTO) complaint, challenging the higher U.S. tariffs as a violation of free-trade rules. Obama had approved the duties on the imports after a labor union blamed these for the loss of thousands of American jobs. But Obama says that he is not surprised that China is upset. "But keep in mind, we have a huge economic relationship with China. We have cultivated a strong strategic relationship with China," he said.

Obama has thrice changed his stance on protectionism in less than three months. He is advising world powers not to go for protectionism, but we will have to wait and see if he will follow what he preaches.