Do you recall during the debate on Obama’s stim plan there was a section called “buy American” ?  If so then you will recall all the fuss over it, some saying that it would stifle “free trade”, while others called it protectionism.  After a bit of debate it was removed from the plan as to keep the peace at home and abroad.

World Bank President Robert Zoellick expressed concern Thursday that Group of 20 countries continue to restrict trade flows despite vowing to resist protectionist policies.

Among those restricting trade were 17 members of the Group of 20 (G20) nations, a bloc of advanced and major developing economies that vowed not to cut trade during an emergency summit in November. They include the US, China, India and the European Union.

The study said the national measures to date were limited and would have a small effect on the global economy but warned that protectionism was a slippery-slope that was tried once before during the Great Depression of the 1930s.

Many countries have sought to protect local industries from demise over the last several months through a variety of new tariffs and government subsidies. The global economy is expected to contract this year for the first time since World War II.

The International Monetary Fund’s updated World Economic Outlook, released Wednesday, predicts world economic growth of negative 1.3 percent this year, marking “by far the deepest global recession since the Great Depression”. Not since the 1930s has the global economy undergone a collective contraction.

Member states are deeply divided over how to respond to the crisis, with each seeking to promote its own national business interests at the expense of its rivals. Few if any concrete decisions are expected to emerge. The focus is reportedly on working out how to implement the limited measures agreed to at the G20 leaders’ summit held in Britain earlier this month, including who is to pay for the proposed $500 billion extra emergency loan money for the IMF.

The recession looks like it will last awhile longer……the world recession will hurt everyone.  The deeper it gets the harder that countries may push protectionism.