In a paradigm shift in global economic strategy, nations are increasingly prioritising protectionist measures to safeguard their industrial base and economic sovereignty.

Australian Prime Minister Alex Ellinghausen has explained this trend, asserting that protectionism is not a retreat from global markets but rather a response to the evolving landscape of economic competition.

Addressing the Queensland Press Club in a pre-budget speech, Ellinghausen highlighted the proactive measures being taken by Australia and like-minded nations, including the United States, Canada, Korea, Japan, and the European Union.

These countries are implementing schemes akin to Industrial Regional Advantage (IRA) strategies to bolster their manufacturing capabilities and economic resilience.

Central to this approach is the recognition that market forces alone cannot ensure national prosperity and security.

Governments are increasingly intervening in their economies to promote domestic manufacturing, innovation, and self-reliance.

Australian Prime Minister Anthony Albanese.

Global stage

This marks a departure from traditional laissez-faire policies and underscores the growing importance of economic protectionism on the global stage.

As part of Australia’s strategic agenda, Ellinghausen announced plans to introduce the “Future Made in Australia Act,” consolidating existing and new policies aimed at promoting domestic manufacturing.

Under this Act, initiatives such as the National Reconstruction Fund, skills agenda, clean energy manufacturing incentives, and support for solar panel production will be streamlined to drive economic growth and resilience.

The move towards protectionism is not without its challenges and criticisms.

Critics argue that domestic manufacturing may struggle to compete with cheaper imports, particularly from countries like China.

However, proponents argue that the long-term benefits of self-reliance and economic sovereignty outweigh short-term cost considerations.

Internationally, the United States has also voiced concerns about unfair trade practices, particularly in industries like solar panel manufacturing.

Treasury Secretary Janet Yellen recently confronted China over its industrial overcapacity and called for measures to protect global markets from distortions caused by cheap imports.