Reading the UK coverage of leftwing socialist Jean-Luc Mélenchon's election policies, one thing that has not been mentioned is his leftwing form of "protectionism". Melenchon stresses the need to re-localise Europe's economy by limiting imports, and this is the approach that has brought him enough votes to challenge Marine Le Pen in the polls. This is hardly surprising since 70% of the French, both on the right and the left, favour some form of protection for domestic production. Add to this the fact that developing countries such as Brazil, Argentina and Costa Rica have erected barriers to destructive flows of foreign capital and it becomes clear: protectionism is rising up the agenda.

This under-reported trend should provide the impetus for a debate about the need for a "progressive protectionism" in the UK and Europe – is it time to reject the ubiquitous calls for open markets and the need to be internationally competitive? After all, acceptance of these edicts as inevitable by the three main political parties invariably results in the driving down of tax rates, the worsening of social and environmental conditions and the eradication of countless local jobs and small business opportunities.

Progressive protectionism would not involve a return to the situation of the 30s, where the goal was often for each protected industry or country to increase its economic strength by limiting imports, and then try to compete and export globally at the expense of others. Unsurprisingly, the more countries did this, the less trade there was between them. Today's equivalent is to be found in the ludicrous fantasies of export fetishists who whistle in the dark trying to keep up the nation's economic spirits by promising hi tech export-led growth. In an era of rising Asian dominance, this must surely rate as the last colonial delusion. It is to be expected that free-market Conservatives and Orange book Liberal Democrats would support such an approach, but even Ed Miliband's call for a patriotic preference to give UK firms a better chance of doing well domestically was marred by the usual nonsense of asserting: "It is about building the brand of British manufacturing around the world and supporting our exporters, particularly to new markets in the Brics (Brazil, Russia, India and China)."

Progressive protectionism by contrast would instead allow countries to wean themselves off export dependence. It would enable the rebuilding and re-diversification of domestic economies by limiting what goods states let in and what funds they allow to enter or leave the country. Having regained control of their economic future, countries can then set the levels of taxes and agree the regulations needed to fund and facilitate this transition. National competition laws would ensure that monopolies didn't develop behind protective barriers and an internationalist approach to trade with poorer countries would insist that the gains from reduced levels of international trade helped fund the move towards a localised economy that benefitted the poor majority. In essence, this approach would make space for domestic funding and business to meet most of the needs of society worldwide.

Perhaps of most short-term political importance would be that prioritising the grounding of manufacturing, money and services here in the UK would enable politicians and activists to call the bluff of relocation threatening big business and finance, who at present have the whip hand over all governments who support open markets. Under progressive protectionism they have to be sited here to sell here and at a stroke the all-powerful threat of relocation is rendered impotent.

This taking back of national control over the economy is the only way to tackle the financial, social and environmental crises, return local power to citizens and provide a sense of security and hope for their future. If implemented it could play a crucial role in seeing off the rise of the extreme right, as this invariably flourishes when the sense of insecurity within the majority worsens. At present none of the policies offered by parties of any political hue are likely to tackle this in the way that progressive protectionism can.

Of course, such a radical change in economic direction could not be introduced in one country alone, since the money markets would ferociously destabilise such a challenge to their present dominance of the world economy. Europe is facing huge threats from the forces of international finance, yet the continent would be a powerful enough bloc to implement a programme of progressive protectionism, particularly if the politically active started to discuss then campaign for it. The time to start that debate is now.

• This article was amended on 20 April 2012. Two sentences from the third paragraph (the one starting "Today's equivalent is to be found" and the following one) were accidentally lost in the editing process and have now been reinstated