"In certain sectors, protectionism is essential," says economist David Cayla.

Can protectionism be left-wing?

Protectionism is a trade policy and can therefore be "left or right," but I don't really like these terms. For me, the question is mainly how much faith we have in the market. To summarize, there are three different trade systems. Free trade, which is based by definition on an absence of regulation and the disappearance of trade borders. Protectionism, which aims to regulate trade, either by taxing or by setting quotas (that is, by limiting the volumes of what enters and leaves). And finally, autarky, whose objective is to cut oneself off as much as possible from the outside world by becoming self-sufficient. This is what Nazi Germany or Fascist Italy promoted, for example, but it was accompanied by a policy of territorial conquest. In practice, no society has ever been truly self-sufficient: even when we examine the contents of the tombs of Paleolithic societies, we see objects that traveled hundreds of kilometers!

What is the purpose of a protectionist policy?

In its mercantilist version, it can aim to improve its trade balance or increase its exports. This is a strategy that has been used by South Korea or Japan, and today by China, and which aims to support exports through public subsidies. One can also choose to pursue sectoral protectionist policies. The sector that has benefited most from this over the years is agriculture. In Switzerland, for example, this choice is made because labor costs are so high that, without protection, the peasantry would disappear.

More generally, the European Common Agricultural Policy (CAP) was based until the 1990s on a logic of guaranteed prices, according to which farmers' incomes did not depend on fluctuations in world prices but on tariffs fixed in advance. This logic ended thirty years ago, under the impetus of CAP reforms: today, farmers sell their products at market prices, trade flows are open, but in return, farmers are subsidized. Basically, this amounts to substituting a protectionist policy with a policy of social aid.

Nevertheless, protectionism has long had a bad press: to what do you attribute its (relative) return to favor in public debate?

For a long time, it was associated with trade conflict, even with a certain form of nationalism, mostly because it is confused with autarky. But in France, free trade has never been very popular either! I cite as proof the hostility aroused by treaties like Tafta (Atlantic Free Trade Agreement), for example. It seems to me that the return of protectionism to the debate corresponds to an awareness of the effects of deindustrialization. In the 1980s, we were told that France should specialize in high value-added and abandon its industry. Between the 1970s and today, the share of industrial jobs in total employment has fallen from 30% to around 12%.

But in the 2000s, we began to measure the effects of deindustrialization: a widening trade deficit and loss of independence; an increase in territorial inequalities between metropolises focused on services and industrialized territories; a decline in the quality of jobs (an employee in the service sector is often less well paid than a worker in industry); a loss of influence of unionism... Deindustrialization has produced effects on the whole of society – as Karl Marx said, it is always the economy that determines the social –, and these effects have become extremely visible. It is indeed the anxiety engendered by the disappearance of industry that has revived protectionist theories.

This spring probably came into play in the United States, where Donald Trump is playing on this fear, but without backing his protectionism with a real industrial policy...

Indeed. Trade policy is an essential component of any policy aimed at rebuilding an industry, but it is not enough: the environmental and tax relief measures decided by Donald Trump are not enough to create an industrial policy. The return of customs duties will not magically make the factories that have disappeared reappear, because it is not certain that this will automatically make it profitable to open a factory on American soil.

What would virtuous protectionism be?

This would be protectionism implemented within the framework of a good industrial policy and good policy in general. Intelligent protectionism must respond to the strengths and weaknesses of the European economy and have a strategic objective. There are, in my opinion, sectors in which protectionism is indispensable.

Let's start with digital. Today, the European Union spends hundreds of billions of euros a year in royalties and services to use American software and digital platforms, when we could have European or free solutions. For example, all French universities give their members access to the Microsoft suite, which is very expensive, when we could very well work on LibreOffice, for zero cost. The same goes for our videoconferencing software: today we use Zoom or Microsoft Teams, when we should develop a European company, why not with public funds, to support this type of service.

There are other priority sectors that we should protect. Our automobile industry is threatened by Chinese imports: we must both develop future production (electric cars) and implement import quotas or customs duties. As for our agriculture, it is a tragedy: we cannot continue to be so dependent on agricultural products from Brazil or elsewhere. A local preference should be established, for example by favoring the consumption of local products in public procurement (schools, administration, etc.).

Doesn't reducing our dependence on external sources risk causing household bills to skyrocket?

I think we have to accept the fact that a protectionist policy leads to higher prices. Free trade chooses to defend the interests of consumers against those of producers: protectionism rebalances things. That said, neoliberalism teaches us from the cradle that any inflation kills purchasing power, which is not economically true. We had inflation close to zero during the 2000s, were people satisfied with their purchasing power? No. Conversely, in the 1960s, we had 5% inflation per year and an increase in purchasing power. Let's stop demonizing inflation. The protectionist bet is that rising prices will be accompanied by an increase in employment and wages, making it possible to offset the rise in prices.