Interesting Economist article today on trade restrictions in Argentina

LaurenW

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Nothing anyone that has lived here for more than 2 days hasn't noticed already: http://www.economist.com/node/21530136?fsrc=scn/tw/te/rfd/pe

one quote from the article:

"Argentina has made no pretence of honouring that time period. In January it expanded the list of products requiring licences from 400 to 600. It was a limit on phone imports that led Research in Motion to hire Brightstar to make BlackBerrys in Argentina (tax incentives then led the firm to Tierra del Fuego). Other affected goods include toys, pharmaceutical ingredients, tyres [sic], fabrics, leather and farm machinery. On September 15th Argentina blocked imports of books, and over 1m piled up at the borders. Imports of Harley-Davidson motorcycles are frozen until 2012."
 
It's crazy... We're probably going to be buying two dog crates for our dogs in the US and paying $150 to bring them on the plane as extra luggage since it will be cheaper and better quality than anything in Argentina. And don't even get me started on electronics...

What was really crazy was the mention of holding books. Ughhh...
 
I don't mind a bit of protectionalism or trade tariffs as long as the domestic industry is up to standards and it's for the good of the country... but that's not the case since the quality of goods here is simply not up to par with Europe or the US. What we seem to have here is an anti-business sentiment plus importation barriers - so you're stuck with garbage or over priced items. I suppose the hope is that Argentina industry, engineering, and technology will catch up, but I seriously doubt it given the education and business situation.

I remember some speech by Cristina bragging about how 60% of refridgerators are now domestic made and how this was a great step for la industria Argentina... but what else would happen if you block imports? It doesn't mean Argentina's refridgerators are good or that they can compete overseas, it just means people here have little choice.
 
Does anyone know if they are also blocking imports from Mercosur countries?
 
The thing that is really funny is that they had to (maybe still have to) buy peso bills from brazil and chile since they were not able to print enough on their own. At least they did not declare a yearly quota for that.
 
Eclair said:
What we seem to have here is an anti-business sentiment plus importation barriers - so you're stuck with garbage or over priced items.

I think that your analysis or the situation is spot on. Lack of competition leads to limited poor choices at whatever price they want to charge. In the end the consumer is the one that loses their money and their choices. Anyone given the choice will buy a Blackberry manufactured in any country except this one.
 
We should split up it in parts, as would say Jack The Ripper....

Nicolás Alejandro wrote:

As Argentinean I’m very disgruntled about this article.

First of all, the author accuses Argentina of becoming a “protectionist” country, but he don’t show us numbers of other countries to compare.

How many protectionist barriers have a country to impose to be considered “protectionist”? 50? 150? 5.000?

In second term, the author tells us that according to the 9th GTA Report Argentina is the country which has imposed the greater number of trade distorting-measures in the last year (save Russia). Although true, this is a very simplistic interpretation of the GTA Report for the following reasons:

1) Argentina is far more affected by other countries barriers, than other countries are being affected by Argentina’s commercial measures. According to the last GTA Report, Argentina’s state measures affecting other jurisdictions commercial interests totalizing 125...perhaps it looks like a lot but... the foreign state measures affecting Argentina’s commercial interests reach a staggering 252. ¿Who is being harmed? (GTA Report, page 63).

2) Moreover, in the last year, and analyzing the 8th and 9th GTA Reports, Argentina’s state measures affecting other jurisdictions commercial interests rose in 36 new ones (from 89 to 125). But in the same period, foreign state measures affecting Argentina’s commercial interests jumped 55 (from 197 to 252). Although in %, Argentina imposed more than other countries, it is still being far more affected by others measures. (GTA R 2010, page 53; GTA R 2011 page 63).

3) It is worth pointing out, that if measured in $, the “protectionist” argument given by the author is more likely to be a JOKE than a real fact. First of all, we have to considered that Argentina is losing billions because of European and American barriers, import quotas and subsidies to agricultural and food products. In second place, and according to the 6th GTA Report, Argentina’s new imposed temporary trade barriers can be valued in $ 0.3 billions… that's about 0,3% of total Argentina’s imports (GTA Report 2010, page 42). Only to compare, in the USA new barriers have been valued in $ 9,9 billions; European Union $ 7,7 billions, India $ 3.1 bill, China $ 2,4 bill, Turkey $ 1,9 bill., Brazil $ 1,2 bill and so on.

4) As the article explained, Argentina is ranked second by number of discriminatory measures imposed, but (and apart from what I've already say about barriers in $) the country is ranked not even among the top ten when measured by number of sectors affected by barriers. This reflect that Argentina’s “protectionism” is focused in few industrial sectors and (as all the GTA Reports showed) is directly mainly to China. When Argentina sets up some measures to protect herself of Chinese products is “protectionism” but if the European Union impose barriers to Chinese textiles they just try “…to manage China's integration into the global economy in a sensible and smooth way” (The Economist, “Textile Trouble”; Sept 1st 2005 | Brussels | from the print edition”).

Finally, I think the author confuses the economic vocabulary when he states “Making BlackBerrys south of the Magellan strait will COST $23m upfront…”. Dear sir or madam.... that is not a cost, is an INVESTMENT (FDI to be precise).

I believe that if we are going to speak seriously about protectionism, the first requirement is not to be hypocrite.

Nicolás.

He can't said it better.
 
Lucas said:
We should split up it in parts, as would say Jack The Ripper....

Nicolás Alejandro wrote:

As Argentinean I’m very disgruntled about this article.

First of all, the author accuses Argentina of becoming a “protectionist” country, but he don’t show us numbers of other countries to compare.

How many protectionist barriers have a country to impose to be considered “protectionist”? 50? 150? 5.000?

In second term, the author tells us that according to the 9th GTA Report Argentina is the country which has imposed the greater number of trade distorting-measures in the last year (save Russia). Although true, this is a very simplistic interpretation of the GTA Report for the following reasons:

1) Argentina is far more affected by other countries barriers, than other countries are being affected by Argentina’s commercial measures. According to the last GTA Report, Argentina’s state measures affecting other jurisdictions commercial interests totalizing 125...perhaps it looks like a lot but... the foreign state measures affecting Argentina’s commercial interests reach a staggering 252. ¿Who is being harmed? (GTA Report, page 63).

2) Moreover, in the last year, and analyzing the 8th and 9th GTA Reports, Argentina’s state measures affecting other jurisdictions commercial interests rose in 36 new ones (from 89 to 125). But in the same period, foreign state measures affecting Argentina’s commercial interests jumped 55 (from 197 to 252). Although in %, Argentina imposed more than other countries, it is still being far more affected by others measures. (GTA R 2010, page 53; GTA R 2011 page 63).

3) It is worth pointing out, that if measured in $, the “protectionist” argument given by the author is more likely to be a JOKE than a real fact. First of all, we have to considered that Argentina is losing billions because of European and American barriers, import quotas and subsidies to agricultural and food products. In second place, and according to the 6th GTA Report, Argentina’s new imposed temporary trade barriers can be valued in $ 0.3 billions… that's about 0,3% of total Argentina’s imports (GTA Report 2010, page 42). Only to compare, in the USA new barriers have been valued in $ 9,9 billions; European Union $ 7,7 billions, India $ 3.1 bill, China $ 2,4 bill, Turkey $ 1,9 bill., Brazil $ 1,2 bill and so on.

4) As the article explained, Argentina is ranked second by number of discriminatory measures imposed, but (and apart from what I've already say about barriers in $) the country is ranked not even among the top ten when measured by number of sectors affected by barriers. This reflect that Argentina’s “protectionism” is focused in few industrial sectors and (as all the GTA Reports showed) is directly mainly to China. When Argentina sets up some measures to protect herself of Chinese products is “protectionism” but if the European Union impose barriers to Chinese textiles they just try “…to manage China's integration into the global economy in a sensible and smooth way” (The Economist, “Textile Trouble”; Sept 1st 2005 | Brussels | from the print edition”).

Finally, I think the author confuses the economic vocabulary when he states “Making BlackBerrys south of the Magellan strait will COST $23m upfront…”. Dear sir or madam.... that is not a cost, is an INVESTMENT (FDI to be precise).

I believe that if we are going to speak seriously about protectionism, the first requirement is not to be hypocrite.

Nicolás.

He can't said it better.


For those trying to grapple with the sheer absurdity of these protectionist policies, may I just remind you it's all about the election. We all know that Argentina's economy is way too small to be able to benefit from these draconian measures. Enough said.
 
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