Is Free Trade Really Free? Why Protectionism Is Alive And Well

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Is Free Trade Really Free? Why Protectionism Is Alive And Well

Is Free Trade Really Free? Why Protectionism Is Alive And Well

Recently, it was reported that the three largest U.S. airlines — American, United, and Delta — are officially protesting three major Persian Gulf-based airlines’ right to fly in the U.S. market. The American carriers claim that the Gulf carriers (Qatar Airways, Emirates, and Etihad) have received $42 billion in subsidies from their governments over the past several years, amounting to an unfair trade advantage that enables them to offer better and lower-cost service.

The controversy doesn’t surprise Reuben Abraham, CEO and senior fellow at IDFC Institute (a Mumbai-based think tank) and a member of the World Economic Forum Council on Emerging Multinationals. “There’s no doubt about it: The Gulf carriers, [or for example] state-owned enterprises in China — all of them have some level of state subsidies embedded into them. But one mustn’t forget that equally there are subsidies embedded into products on the other side of the world.”

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He gives the example of the iPhone. “Most of the technology inside of an iPhone in some po