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Argentina/Brazil propose higher external tariffs for Mercosur

Tuesday, December 20th 2011 - 07:21 UTC
Full article 37 comments

Argentina supported by Brazil has proposed increasing Mercosur Foreign External Tariff to better defend the group when country members are being flooded with cheap imports. Read full article

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  • GeoffWard2

    If Mercosur is to mean anything at all it MUST listen to the minnows.
    Protectionism by the WHOLE bloc needs serious and publically transparent debate that considers its effects on ALL member states.

    Dec 20th, 2011 - 10:38 am - Link - Report abuse 0
  • eteega

    Two comments: I would have thought that an economist like Dilma would know about the ruinous inflation brought on in the 50/60s when Brazil implemeted such laws as the “law of the domestic equivalent”: if you could make anything in Brazil at any price that was higher than the import price then Brazil would impose an import duty on those products to protect the incompetence and lack of productivity of the domestic producers: result encouraging bad productivity practices, protecting incompetence in industry and guaranteeing masssive inflation. Look back at the history of inflation in Brazil (or Argentina) Companies in South America in general have too many people and not enough productive equipment. The productivity levels are abysmal. These countries should give tax breaks for industry to upgrade equipement and better train workers. Kristina's solution to unemployment appears to be to hire an extra 10,000 (tax payer funded) public workers a year.

    Dec 20th, 2011 - 10:46 am - Link - Report abuse 0
  • wesley mouch

    Dilma the idiot will soon crash the Brazilian economy. Brazil was lucky with the commodity boom but they confused luck with genius. Kind of like Obama who confused being black with brains. Both Obama and Dilma will crash their respective economies (Obama has already done a pretty good job of destroying the US economy).

    Dec 20th, 2011 - 11:28 am - Link - Report abuse 0
  • Redhoyt

    Protectionism - always a good idea !

    Dec 20th, 2011 - 01:31 pm - Link - Report abuse 0
  • Malvinero1

    Two comments: I would have thought that an economist like Dilma would know about the ruinous inflation brought on in the 50/60s when Brazil implemeted such laws as the “law of the domestic equivalent”: if you could make anything in Brazil at any price that was higher
    Really? Is it better to kill the industry,the banks finance the consumption?? You people did not learned anything from the financial meltdown......
    The bankers and speculators happy...Sure,making products in Argentina,USA,Brazil is more expensive than making in India,China,bangla desh....But is the reality.....You want them to work for you?/ No problem,but still you have to pay....How wil you pay?BY BORROWING!! USA debt 15 trillion dollars.Europe debt: 16 trillion EUROS( foreign debt).
    You people need a lesson in reality!!

    Dec 20th, 2011 - 01:35 pm - Link - Report abuse 0
  • so_far

    you need to pay a proper prize.....no more cheap commodities for “developed” countries.

    well done Brazil and Argentina..Well done Mercosur.

    Dec 20th, 2011 - 03:00 pm - Link - Report abuse 0
  • Forgetit87

    And perhaps you, eteega, should know that no industry has ever developed in a scenario of open competition. Nascent industries who have later matured, have always had state protection in the form of subsidies, currency manipulation and import duties -- and conversely all countries that are now, or are becoming, industrial powers have employed those policies: the US, Japan, China, etc. Keep repeating to youself your free market mantras, but in Brazil's case, too, manufacturing picked up mainly in a period of extensive protection of domestic enterprises (during the era of the military regime), while deindustrialization, which is occuring now, is happening when the government is doing the opposite of the development-oriented, statist governments did in the past.

    @wesley mouch, aka moron who should spend his time improving his crappy English instead of commenting on issues that are beyond his partisan little brain:
    1 - The housing bubble was created and burst during Bush's era; had as enabler Clinton-era 'free market' reforms that were embraced by both main US parties. Obama isn't even in the equation.
    2 - Yes, Dilma has done an awful job with the economy, but that isn't, as you probably think, because of her leftism; it's because, instead, she has worried too much about inflation, she has given way too much leeway for orthodox measures to be imposed on the economy, she has allowed further currency appreciation (as demanded by speculators and their 'pro-free market' allies), she has permitted the Central Bank to stall credit growth, and she has slashed investment by SOEs out of fear of inflation. Predictably this produced an awful effect on industrial output, which she's desperately trying to revert by means of protectionism. But she's not the only one doing that.
    3 - Brazil has had current account deficit for years. What sustained growth in previous years, therefore, was the domestic economy, not the 'commodities boom', which has not burst yet.

    Dec 20th, 2011 - 04:30 pm - Link - Report abuse 0
  • O gara

    If Mercosur industries need protection against outside competition they need to be progressively weaned off them as an ongoing 35% duty will only lead to serious inefficency and lack of innovation.These taxes should be halved in three to five years or it will be bad news longterm and will be a serious cause of inflation

    Dec 20th, 2011 - 05:25 pm - Link - Report abuse 0
  • ChrisR

    #8 O gaga
    Got it right in one.

    Never thought I would agree with you!

    There is just the problem of 'tit for tat' from the other countries of course, which may be even worse for Mercosur.

    Dec 20th, 2011 - 06:03 pm - Link - Report abuse 0
  • Forgetit87

    Worse why, exactly? No Mercosur country is export-oriented; all, by contrast, depend upon the domestic market to sustain growth - and the fact is that, for those countries, specially for Brazil and Uruguay, much of the market share has been taken over by imports - imports from countries that are known to have dirty trade practices (China and, to some extent, the US after the QEs). Mercosur's capacity to affect those countries' imports is higher than those countries' ability to respond, since they, in a very considerable extent, have already imposed their own protectionistic measures, and also because, as I said before, Mercosur countries aren't export-oriented. I won't even respond to this shit that innovation can only be promoted by open goods market. Go tell that tale to China and Japan. They'll answer: for innovation to happen, it is necessary to have developed and large industries; and for such industries to exist, it is necessary to pass through a period where the state protects and nurtures nascent industries.

    Dec 20th, 2011 - 06:15 pm - Link - Report abuse 0
  • briton

    5 Malvinero1 A piece of your own cake,
    Argentina is finnish,
    lets hope she dont drag brazil down with her,
    more bullshxt

    Dec 20th, 2011 - 06:25 pm - Link - Report abuse 0
  • geo

    ** 10 Forget

    BUT
    you should not generalize while saying that No Mercosur country is
    export-oriented at macro levels......
    some sectors are export- oriented, for instance that the Argentine
    Auto Sector is highly export- oriented........!!

    Dec 20th, 2011 - 06:26 pm - Link - Report abuse 0
  • Forgetit87

    Yeah, thanks, geo. I know that isolated sectors solated sectors are export-oriented. But as for Argentina's car industry, it should be noticed that its main market is Brazil, not some country outside of the bloc.

    Dec 20th, 2011 - 06:48 pm - Link - Report abuse 0
  • eteega

    I thinks that Uruguay and Paraguay should get out of Mercosur..they are just being used. Brazil and Argentina are heading for a fall if they proceed with this increase in duties...the Great Recession was caused by countries imposing protectionst measures; there will be a price to pay for such actions by Mercosur;
    all socialist governments just like toe PIIGS in Europe...dever forget...
    Margaret Thatcher...“the problem with solcialst governments is that sooner or later they run out of other peoples money”

    Dec 20th, 2011 - 06:56 pm - Link - Report abuse 0
  • Forgetit87

    The “Great Recession” was caused by unsustainable levels of indebtedness in both the private and the public sectors. Protectionism was A CONSEQUENCE, not a cause, of output recession. Go study some more.

    Dec 20th, 2011 - 07:08 pm - Link - Report abuse 0
  • geo

    ** 14 eteega

    you should not look to these kinds of problems dogmatically/ideologically

    Uruguay/Paraguay = little trucks
    Brasil/Argentina = trailers

    Chile could be even slogged in Mercosur....!

    Dec 20th, 2011 - 07:17 pm - Link - Report abuse 0
  • briton

    Uruguay/Paraguay = little trucks
    Brasil/Argentina = trailers
    AND
    Great Britain is the ENGINE .

    Dec 20th, 2011 - 07:35 pm - Link - Report abuse 0
  • Forgetit87

    Engine to whom exactly? The UK barely has an economic presence in Latin America.

    Dec 20th, 2011 - 07:37 pm - Link - Report abuse 0
  • geo

    ** 17 brit

    Argentina trailer had American Cummins Engine up to year 2001,
    after this date it's motor changed to a new one which have not been
    resolved it's technology yet...you see it's performance ...!
    BUT
    you 'll object as saying that it's technology gives rise to higher
    gas consumption (makes high inflation !)
    THEN
    my reply will be simple ~ 10 % inf.rate is very normal and tolerable
    for Argentina........!!

    Dec 20th, 2011 - 08:25 pm - Link - Report abuse 0
  • eteega

    15 Forgetit87 (#)Dec 20th, 2011 - 07:08 pmReport abuseThe “Great Recession” was caused by unsustainable levels of indebtedness in both the private and the public sectors. Protectionism was A CONSEQUENCE, not a cause, of output recession. Go study some more
    WRONG:
    1) If countries had NOT chosen protectionism then the Great Depression would not have occurred.
    2) When Argentina, Brazil and OTHERS are choosing to go down that path, you almost certainly will have the 2nd Great Depression in this decade.
    p.s. Remember Newton's law:...for every action there is an equal and opposite reaction

    Dec 20th, 2011 - 09:43 pm - Link - Report abuse 0
  • briton

    18 Forgetit87 (#)
    Engine to whom exactly? The UK barely has an economic presence in Latin America

    [but a big enough presents it seems to keep you lot busy and on your toes.?]

    19 geo
    You are so unbrilliant, that you now, ask your own questions,, followed by you own answers,
    I bet you learnt that in the asylum .

    France it seems is heading south, not the brits,
    We will be ok.
    .

    Dec 20th, 2011 - 10:09 pm - Link - Report abuse 0
  • Forgetit87

    @eteega

    You're not worth a response -- leave your idealogical cocoon and go study some more.

    70 years from now, probably another blind partisan and worshipper of the free markets will say the Second Great Depression was not caused by excess of debt or dangerous, criminal even, speculative activities by big banks -- no, the market is never wrong, the future partisans will say. It was all the governments' fault - theirs and their damned protectionism.

    However, the crisis is too recent for us, now, to lie about its causes. And it has been caused by the same factors behind the Great Depression.

    Dec 20th, 2011 - 10:12 pm - Link - Report abuse 0
  • Forgetit86

    @briton

    “but a big enough presents it seems to keep you lot busy and on your toes.?”

    Whom is the UK keeping busy, briton? Perhaps Argentina, 'cause neither me nor my country give a lot of thought to the UK.

    Dec 20th, 2011 - 10:15 pm - Link - Report abuse 0
  • briton

    everybody think of the british, sometimes,

    the comment prove that,
    as for the argentines,
    well the brits wont always be sitting on their backsides,

    Dec 20th, 2011 - 10:45 pm - Link - Report abuse 0
  • eteega

    22 Forgetit87 (#)
    If you are an economist: always remember that there is a special place reserved for you in Hell to read your projections If not: go read the Kondratiev Long Wave theory.

    Dec 20th, 2011 - 11:44 pm - Link - Report abuse 0
  • Forgetit86

    I'm not an economist, but I'm familiar with the Kondratieff theory through Immanuel Wallerstein's exposition; it is in fact on it that I'm basing my words. As you probably know, during the Kondratief B phase, output goes through a slowdown. And this is because profitable businesses in the industrial sector can no longer be monopolized. As a predictable result, both employment and income growth go down. In such a context we also see threats of deflation. The state thus takes a number of measures to restore demand and prevent life standards from falling down: they lower interest rates (thus promoting consumer and private sector indebtedness) or the state itself takes on increasing amounts of debt to provide for the populace certain services that most people in the country wouldn't be able to afford. Eventually debt becomes unsustainable, and banks - which have become the center of economic activity following the aforementioned slowdown in the industrial sector - eventually crash, causing both a financial and an economic crisis. That's why, as I said, it is indebtedness which is to blame for the Great Depression and for today's crisis as well.

    Dec 21st, 2011 - 01:04 am - Link - Report abuse 0
  • eteega

    26 Forgetit86 (#)
    I agree with Immanuel Wallerstein's exposition of Kondratiev. But I still believe that IF countries insist on following the purile thinking that protectionism is the answer then Newtons Law will apply: Any country that currently supplies Argentina or Brazil and is adversly affected by their move to protectionism will enact laws to balance the move, if not to help their own industries then to punish the move: how about a 35% duty on cain sugar from Brazil. Columbia and every other country will gain and Brazil will be punished.
    Brazil cain sugar would be too expensive to compete; or oil: Brazil oil at US$135 a barrel and the rest of the World at US$100 = lots of unemployment in the sugar cain fields up North.
    I'm going to bed - My last word on the matter. Good night.

    Dec 21st, 2011 - 01:48 am - Link - Report abuse 0
  • O gara

    Briton and co deludeing themselves face facts Europe is drowning in a sea of austerity and debts.
    Forgetit while I agree with you the internal markets are important to mercosur countries the rapidly growing export sector has been hugely important to Argentinas spectacular growth.It is essential that competitiveness as well as social inclusion are maintained.Remember why all of Europe not just the Eurozone is collapseing.I think these taxes are neccesary now but must be reduced if Argentine industry is to continue to advance

    Dec 21st, 2011 - 08:35 am - Link - Report abuse 0
  • eteega

    28 O gara (#)
    Wait til the EEC places a 35% countervail duty on imported cars and shoes.
    Bye Bye Brazil and Argentina. Welome to an expanding EU shoe and auto industry

    Dec 21st, 2011 - 09:11 am - Link - Report abuse 0
  • ChrisR

    29 eteega
    Correct see #9

    Dec 21st, 2011 - 09:50 am - Link - Report abuse 0
  • geo

    ** brit

    you always complain ,but don't bring any questions/arguments...!

    ---------

    ** Forget / “” eteega

    Kondratieff circuits/conjuncture curves are not valid at present
    economic processs like almost all other Economy Theories in books...!!

    Dec 21st, 2011 - 09:57 am - Link - Report abuse 0
  • Pirat-Hunter

    regulations come in handy when things don't funcion as they should.

    Dec 21st, 2011 - 11:45 am - Link - Report abuse 0
  • ChrisR

    #32 Pratt-Junta
    Only if you (Argentina) abide by them :o)

    Dec 21st, 2011 - 12:12 pm - Link - Report abuse 0
  • eteega

    31 geo (#)
    Codswollop

    Dec 21st, 2011 - 12:13 pm - Link - Report abuse 0
  • briton

    31 geo (#)
    ** brit

    you always complain ,but don't bring any questions/arguments...!

    Theirs no point, when you do it for us,
    .

    Dec 21st, 2011 - 01:43 pm - Link - Report abuse 0
  • O gara

    29/30 the English dont get the EU do they.There will be no 35% duty on Mercosur cars because 1the companies are mostly European owned and 2 The EU has huge blocks on South American food entering the old continent.

    Dec 21st, 2011 - 06:44 pm - Link - Report abuse 0
  • livin' in argentina

    36 O gara (#)
    I've told you before. A question mark goes at the end of a question. You just can't learn can you. Any Irishman would know this simple rule. But you've been busted there haven't you?

    Dec 21st, 2011 - 11:29 pm - Link - Report abuse 0

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