Cote Slams Obama "Protectionism"

U.S. President Barack Obama’s “protectionist designs” and the “Bangalore to Buffalo” observations have come in for fresh criticism from corporate America.

In a direct reference to Obama’s tax reform measures to check American firms shipping jobs to other countries, including India, Honeywell Chief Executive David Cote, who was in Bangalore recently for a company event, said that his firm would not have achieved today’s growth if it had not established its facilities in India and similar ones elsewhere.

“I get extremely worried when I hear any kind of discussion about protectionism in India, China, the United States or in Europe. It is the worst possible thing that can be done,” said Cote. “It would cause people to believe in things that would be harmful in the long run. I am a big fan of creating jobs everywhere,” he added.

Obama has recently vowed to push forward with his plan to curb some overseas tax advantages enjoyed by multinationals under the U.S. tax code. “It’s a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York,” Obama said.

Bad move

“Economics is not a zero-sum game with my gain and your loss approach,” said Cote, who is also a member of the India-US CEO Forum set up by George Bush in 2005. “A preponderance of American companies will say it is a bad move for the economy,” Cote said. “A great number of businesses would be seeing protectionism as negative, as bad. And I do hope that people in the Congress realize that you can’t love jobs and hate people who create them.”

The Honeywell CEO opined that the solutions should be pragmatic and not merely driven by the short-term goals that can be popular. However, Cote hoped that the United States would not go ahead with such policies. “I understand these are only proposals. I think a big number of businesses will be looking at this and say protectionism is bad. Bad not just for our own economy but also for the world,” he said.

Further, Cote opined that the U.S. Congress would not allow such measures. “I am hopeful that within the Congress, there are people who look at it and say, ‘We understand that we have to protect revenue, but we have to do it in a way that it does not affect the business growth around the world,’ ” he said.

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