'Beyond Brics', a Financial Times blog that specializes in Emerging Markets has recently posted two interesting articles about Brazil's and Argentina's trade policies.
Economic theory and evidence from research indicates that in order for a developing nation to be able to overcome poverty and inequality it is necessary to make an initial transition from the agricultural industry to the manufacturing and services industry (Barry Eichengreen, 2007). Therefore, both countries seem to be in favor of establishing protectionist trade policies that will spur the manufacturing industry.
Though Brazil tax import policies have been quite volatile throughout the 2012 fiscal year, it can be said with certainty that they lean towards protectionism rather than free-trade. Yet, Brazil has somehow managed to avoid complains in the WTO and project the image of a pro-liberal and free trade country; an image that its neighboring country, Argentina, has failed to project to the World.
With that in mind, why do both countries project such a different image to the world? Why do Brazil's trade policies are more accepted than Argentina's trade policies? After all, both policies attempt to reach the same goal: develop their own manufacturer industry.
A good question about the differences in perception between the two countries. It would be interesting to look at the underlying policies and determine how much of the difference in perception is due to actual variations in policy and how much is due to other factors (such as rhetorical style of presidents, e.g.). Also, the question on protectionism vs. free trade is a long-standing issue in Latin America, and Freddy si right to suggest that at many historical moments, protectionism was seen as the solution in Latin America. We will talk about this...
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