The news is that Northrop Grumman Corp. and partnering European Aeronautic Defense and Space Co.(EADS) have dropped their bid for a U.S. military aircraft contract is bad news. Boeing now remains the sole bidder for the $40bn contract after Northrop et al. dropped out, claiming that the contract specification was skewed to suit Boeing’s product. Ignoring the technicalities of the contract, which we don’t have the expertise to comment on, the fundamental point is the importance of a competitive tendering process for government procurement.  The Pentagon, like any other government department, must do its absolute utmost to ensure that competitors can challenge for its lucrative contracts -- wherever they are based.

Brazil has published a list of 102 products that it intends to impose import tariffs upon- to the tune of $591 million- in retaliation to the egregious U.S cotton farm subsidies as per a ruling in a long-running dispute that the World Trade Organisation delivered a verdict on in August 2009.

The question of foreign ownership of firms is revisited in today’s Financial Times. The recent takeover of Cadbury ignited nationalistic sentiments among those who incorrectly view domestic ownership as being of fundamental importance. In today’s globalised economy, the notion of defining ownership by nationality is inappropriate and outdated. Ultimately a company needs to be profitable to ensure stability. Political meddling, such as imposing draconian rules of ownership, invariably reduces investment and mitigates potential profits, harming a company’s long term future.

We recently came across a particularly egregious appeal for Kenya to turn to mercantilist policies to boost economic activity. The author calls for an “enforceable policy of protectionism to regulate what we export and to safeguard infant industries.”  The argument is not supported by any evidence of prior success through such policies. That is because there isn’t any.  There is no historical correlation between infant industry protection and improved national economic productivity. Furthermore it is highly unlikely that there ever will be- “protecting” domestic industry deters foreign investment, reduces consumers’ quality of living and encourages insular domestic industries that will never be able to compete because they are cut off from the more efficient global supply chains.