RBI Guv takes a dig at Trump's visa policy, says Apple, Cisco and IBM would be nowhere without international talent
Apr 25, 2017, 16:28 IST
Warning against protectionism policy of the US government and several other countries, RBI Governor Urjit Patel has said that giant American corporations like Apple, Cisco and IBM would be nowhere without international talent.
"I don't think that we have heard the last word on US policy talk about this because there is a push back internationally that the world has benefited from an open trading system," said Patel after delivering the Third Kotak Family Distinguished Lecture, sponsored by the Raj Center on Indian Economic Policies at the Columbia University's School of International and Public Affairs in New York.
When asked about his take on the increasing tendencies of following protectionism stance by several governments worldwide, he added that global supply chains are responsible for the soaring share prices of the most efficient corporations in the world, including in the US.
"Where would Apple be, where would Cisco be, where would IBM be if they were not sourcing the best products and talent from across the world. And if policies come in the way of that, then the big wealth creators in a country that advocates protectionism are ultimately affected."
Patel said that the need of protectionism in the US stands because of equity and domestic distribution issues, which can and should be addressed through domestic fiscal policies like taxation and income transfers.
If trade instruments are used for protectionism, it might result in the nation going on a slip road from the highway of growth.
"Using trade instruments like customs duties, border tax etc is not the most efficient way to do this. In fact you could end up at somewhere else. You do not know what are the implications of some of these policies on equity and distribution besides objectives that you want to address," he said.
"It should be a domestic policy issue, using domestic fiscal policy if those are the objectives that need to be addressed," Patel said.
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"I don't think that we have heard the last word on US policy talk about this because there is a push back internationally that the world has benefited from an open trading system," said Patel after delivering the Third Kotak Family Distinguished Lecture, sponsored by the Raj Center on Indian Economic Policies at the Columbia University's School of International and Public Affairs in New York.
When asked about his take on the increasing tendencies of following protectionism stance by several governments worldwide, he added that global supply chains are responsible for the soaring share prices of the most efficient corporations in the world, including in the US.
"Where would Apple be, where would Cisco be, where would IBM be if they were not sourcing the best products and talent from across the world. And if policies come in the way of that, then the big wealth creators in a country that advocates protectionism are ultimately affected."
Patel said that the need of protectionism in the US stands because of equity and domestic distribution issues, which can and should be addressed through domestic fiscal policies like taxation and income transfers.
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"Using trade instruments like customs duties, border tax etc is not the most efficient way to do this. In fact you could end up at somewhere else. You do not know what are the implications of some of these policies on equity and distribution besides objectives that you want to address," he said.
"It should be a domestic policy issue, using domestic fiscal policy if those are the objectives that need to be addressed," Patel said.