Protectionist mood in US threatens progress, says Brown

The Prime Minister has lambasted the growing climate of protectionism in the US, turning up the pressure on the presidential candidates not to bow to a public sentiment increasingly fearful of globalisation.

The world is in a period of the most significant economic and social change since the industrial revolution, Gordon Brown told Google's closely controlled Zeitgeist conference, but knee-jerk trade restrictions will only hamper attempts to create a successful global economy.

"We cannot allow protectionism to become the dominant mood because that will affect every industry and it will hold back the development of the world," Mr Brown said. "If you go to America, the debate is about how they can restrict imports from China and other countries; if you go to parts of Europe, the debate is about heavy-handed regulation of hedge funds, sovereign wealth funds, or other instruments of finance; ... there is absolutely no doubt that protectionist sentiment is growing, particularly in America and Europe."

The Prime Minister's strong words followed similar statements from David Miliband, the Foreign Secretary, in advance of his meetings with advisers to the US Democratic presidential candidates later this week. And there is foundation for such concerns. Both Hillary Clinton and Barak Obama recently endorsed legislation that could ramp up tariffs on Chinese imports. And both have made explicit commitments to renegotiate the North American Free Trade Agreement.

Not only is US macroeconomic policy tilting towards greater restriction, but mergers and acquisitions are also increasingly viewed through the lens of national security. Earlier this year, senior politicians lashed out when a $35bn (£18bn) contract for refuelling tankers went to EADS, which is European, rather than Boeing, which is American. And in 2006 the takeover of P&O by DP World, a group owned by the ruler of Dubai, was nearly scuppered because of P&O's contracts to run six major US ports. Amid a huge furore, legislators threatened to block the deal, and it only went ahead when DP World agreed to the sale of P&O's US operations.

Such policies jeopardise the progress of globalisation, which, if allowed to flourish, will see the world economy more than double within the next 20 to 25 years, says the Prime Minister. The current problem with rising commodity prices is a case in point, he says. "The two great protected industries of the moment are the two industries that are causing us the greatest problems today: the oil industry, with a cartel run by Opec; and the food industry, with high levels of subsidy."

But the optimistic vision of a technologically enabled, globalised future – where the advanced economies do not lose out to their Eastern rivals – may not be so easy in practice. And the innovation and education trumpeted by Mr Brown yesterday as critical to maintaining a place in this brave new world look largely rhetorical. According to a survey from the National Endowment for Science, Technology and the Arts, to be published today, the UK's position as an innovation nation is by no means secure. Two-thirds of the respondents say not enough is being done through the education system to encourage creativity and invention, 61 per cent do not know how to take their ideas further, and 65 per cent say there is not enough investment or resources available to develop ideas.

But there may be another reason for Mr Brown's impassioned speech to such a future-facing audience. Last year's headline speaker was David Cameron, and not only was the Prime Minister's performance yesterday – extempore, pacing the stage – reminiscent of Mr Cameron's storming show at the last Tory conference, but it was well-timed for a politician in need of a new image.