UN WARRANTED PROTECTIONISM

The decision of OBAMA administration to withdraw tax concession to American companies that have subsidiaries out side their home land, could prove counter productive in the long run. The business of out sourcing is flourishing in India and in other emerging economies is not because of tax breaks offered by the U S administration but on the sound business principles. The cost of out sourcing, is some times are one tenth of the cost, if it were to be done in the U S. Ultimately it is the economics that matters in business. The economics are in favour of Countries like ours. It is an irony that champions of free trade economy are advocating the opposite of it. All these years America took advantages of free trade and now because of some economic slow down it has taken a ‘U’ turn of its own principles and ideology. Compared to the un employment problem, the problem providing quality education and health care and other problems faced by rest of the world, the ‘big brother’ problem is nothing. If other countries also follow the same selective protectionism to wards the goods manufactured by American MNCs, that will hurt U S more. In India, among others, we should say good bye to COCA-COLA and PEPSI, the most prominent and money spinning brands.