Political Risk Latin America Blog @PolRiskLatam

Argentina: beggaring our neighbours

Posted in News and Articles, Political Risk by politicalrisklatam on July 14, 2011

by Judde Webber for Financial Times – Beyond Brics, July 14th, 2011.

Argentina has run into trouble before with trade tactics that often seem like knee-jerk reactions to events rather than a coherent policies.

The result is a growing reputation for protectionism, which is earning it few friends and making many enemies.

A couple of months ago, it upset its biggest trade partner, Brazil, with restrictions on Brazilian exports to which Brasilia responded by limiting car imports from Argentina with the result that 40,000 Argentine vehicles are still blocked at customs, according to Miguel Ponce of the Argentine Chamber of Importers.

Now, the government is planning to extend to importers of almost all finished goods a 1:1 policy already in place in the car, agricultural machinery, shoe and toy sectors, whereby imports must now be matched dollar for dollar by exports.

As has become customary, Argentina has enacted the measures without committing them to paper, something Ponce says underlines their discretionary, arbitrary nature. (continue reading… )

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