Not Just Victims The global economic crisis that began to unfold in 2007 hit Latin America hard, slowing down economic growth considerably. This volume shows that Latin America has not just been a victim of imposed by other Not Just Victims parts of the world, as some policymakers and commentators assert. Drawing upon the most extensive contemporary data set on crisis-era policy responses, the Global Alert, this volume shows that many Latin Latin America and Crisis-Era American governments – in particular, Argentina and Brazil – have taken Latin America and Crisis-Era Protectionism numerous, occasionally creative steps to tilt the playing field in favour of domestic firms. Protectionism This volume documents those steps and discusses their rationale and whether these changes presage a marked shift in Latin American development strategy. As such, it will be of interest to policymakers, The 13th GTA Report officials in national governments and international institutions, university researchers and trade policy analysts, and those interested in Latin American development. Edited by Simon J. Evenett

GLOB L TR DE Centre for Economic Policy Research 77 BASTWICK STREET • LONDON EC1V 3pz • UK  LERT TEL: +44 (0)20 7183 8801 • FAX: +44 (0)20 7183 8820 • EMAIL: [email protected] www.cepr.org

Not Just Victims: Latin America and Crisis-Era Protectionism The 13th GTA Report Centre for Economic Policy Research (CEPR)

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© Centre for Economic Policy Research, 2013

Not Just Victims: Latin America and Crisis-Era Protectionism

The 13th GTA Report

Edited by Simon J. Evenett

GLOB L TR DE a LERT About Global Trade Alert (GTA) Global Trade Alert provides information in real time on state measures taken during the current global economic downturn that are likely to discriminate against foreign commerce. Global Trade Alert is: Independent: GTA is a policy-oriented and research initiative of the Centre for Economic Policy Research (CEPR), an independent academic and policy research think-tank based in London, UK. Simon J. Evenett, the co-director of CEPR’s and Regional Economics Programme, is the coordinator of the GTA. Comprehensive: GTA complements and goes beyond the WTO, UNCTAD, and OECD’s monitoring initiatives by identifying those trading partners likely to be harmed by state measures. The GTA considers a broader range of policy instruments than other monitoring initiatives. Accessible: The GTA website allows policy-makers, exporters, the media, and analysts to search the posted government measures by implementing country, by trading partners harmed, and by sector. Third parties can report suspicious state measures and governments have the right to reply to any of their measures listed on the website. Transparent: The GTA website represents a major step forward in transparency of national policies, reporting not only the measures taken but identifies the implementing country, trading partners likely harmed, and product lines and sectors affected. Timely: The up-to-date information and informed commentary provided by Global Trade Alert will facilitates assessments of whether the pledge not to “repeat the historic mistakes of protectionism of previous eras” is met, and the bite of multilateral trade rules. For further information, visit www.GlobalTradeAlert.org

About the Centre for Economic Policy Research (CEPR) The Centre for Economic Policy Research is a network of over 800 Research Fellows and Affiliates, based primarily in European universities. The Centre coordinates the research activities of its Fellows and Affiliates and communicates the results to the public and private sectors. CEPR is an entrepreneur, developing research initiatives with the producers, consumers and sponsors of research. Established in 1983, CEPR is a European economics research organization with uniquely wide-ranging scope and activities. The Centre is pluralist and non-partisan, bringing economic research to bear on the analysis of medium- and long-run policy questions. CEPR research may include views on policy, but the Executive Committee of the Centre does not give prior review to its publications, and the Centre takes no institutional policy positions. The opinions expressed in this report are those of the authors and not those of the Centre for Economic Policy Research. CEPR is a registered charity (No. 287287) and a company limited by guarantee and registered in England (No. 1727026). Chair of the Board Guillermo de la Dehesa President Richard Portes Chief Executive Officer Stephen Yeo Research Director Lucrezia Reichlin Policy Director Richard Baldwin Contents

Foreword vii

1. Introduction: Crisis-Era Protectionism in Latin America in Context 1 Simon J. Evenett Section One: Studies of Protectionism in Latin America 2. Crisis-Era Protectionism in Latin America 15 Eduardo Bianchi

3. Policies and Instruments Employed By Argentina and Brazil 29 Carolina Szpak and Diana Tussie

4. Textiles and Footwear in Argentina 51 Carolina Szpak

5. Rationales for Crisis-Era Protectionism: The Cases of Argentina and Brazil 67 Eduardo Bianchi and Welber Barral

6. Is there a New Protectionism in Latin America? 79 Eduardo Bianchi Section Two: Country-Specific Information on the Incidence of Protectionism in Latin America

Argentina 99 Belize 107 Bolivia 111 Brazil 115 Chile 122 Colombia 127 Costa Rica 132 Ecuador 136 El Salvador 141 French Guiana 145 Guatemala 147 Guyana 150 Honduras 153 Mexico 157 Nicaragua 163 Panama 166 Paraguay 169 Peru 174 Suriname 178 Uruguay 180 Venezuela 185

Foreword

The global economic crisis that began to unfold in 2007 hit Latin America hard, as it did other parts of the global economy. Economic growth, unemployment, and poverty reduction goals were not met. Although responses differed, governments across the Latin American region devised comprehensive policy responses to this crisis, including in some cases measures that discriminated against foreign commercial interests. The effect of the latter – as in the rest of the world – was to shift the burden of adjustment to the crisis onto trading partners. Developments in Latin America and developments elsewhere that affect the region are important given the significant progress that many countries in the region had made in both regional integration and in integrating into global markets. Should the crisis presage a shift in policy stance towards protectionism and other beggar-thy-neighbour measures, then this might alter the trajectory that Latin American countries are likely to pursue over the coming decades. Much, then, is at stake. Certain Latin American governments have clearly made the connection between crisis-era policy developments, open markets, and the gains from globalisation. The Brazilian Finance Minister, for example, has asserted that the central banks of leading industrialised nations are effectively undertaking a “ war” by taking steps that devalue their respective . Such claims generated much debate, during which the record of Latin American governments during the crisis-era was scrutinised as well. The purpose of this volume is to better understand crisis-era decision-making in Latin America as it relates to policy choices that can affect the relative treatment of foreign commercial interests vis-à-vis domestic rivals. The emphasis here on the broader concept of relative treatment stands in contrast to analyses that confine analyses of protectionism to a limited set of policy instruments. This DFID- and IDRC-sponsored project involved not only the collection of information on government measures that affect (both beneficially as well as harming) the commercial interests of developing countries, but also the commissioning of several studies undertaken by independent researchers and presented at a conference involving policymakers in Lima, Peru in August 2012. The cooperation of Dean Alan Fairlie and his staff at the Pontificia Universidad Catolica del Peru in organising this conference was much appreciated, as was the support of the Latin American Trade Network (LATN). Particular thanks are due to Professor Eduardo Bianchi for helping to transform the papers prepared for and presentations given at the Lima conference for publication in this report. His diligence is only surpassed by his keen understanding of trade policy developments in Latin America. Phil Thornton did a great job copy-editing the chapters. We must also warmly thank Simon Evenett for his characteristic enthusiasm and boundless energy in driving the Global Trade Alert project forward.

vii viii Not Just Victims: Latin America and Crisis-Era Protectionism

Colleagues at the Centre for Economic Policy Research (CEPR) in London provided invaluable support and contributions throughout this project. Particular thanks go to Susann Herring and Anil Shamdasani. Thanks are also due for the sustained work of the researchers in the Global Trade Alert team and to the other financial supporters of the Global Trade Alert project, most notably the University of St. Gallen. As has been documented by Global Trade Alert and consistent with previous bursts of protectionism in the global economy, crises tend to induce considerable innovation in beggar-thy-neighbour policies and analysts should be at least open to the possibility that different means can be devised to advantage domestic interests over foreign competitors. There is considerable variation in the resort to beggar-thy-neighbour protectionism across Latin America. As the data presented in this Report also shows, the number of times foreign protectionism has adversely affected Latin American countries also varies a lot. Of course, our interest is not just in the incidence of protectionism but also its purported rationale and effects, both of which are discussed in the chapters in this Report.

Viv Davies Chief Operating Officer, CEPR 29 May 2013 1 Introduction: Crisis-Era Protectionism in Latin America in Context1

Simon J. Evenett University of St. Gallen and CEPR

While the purpose of this volume is to shed light on the resort by Latin American governments to discrimination against foreign commercial interests since the onset of the global financial and economic crisis, this introduction sets these developments out in the appropriate context. Particular attention is given to the circumstances facing, and choices taken by, the governments of the seven largest Latin American economies.

As the home to nearly 600 million people, too many of whom still live in poverty or in otherwise precarious conditions, the impact of the recent global economic and financial crisis on Latin America and the effectiveness of the associated policy responses are important matters. Plenty is at stake in a region that generates nearly six trillion dollars of value added (GDP) every year, not least because systemic economic crises have in the past induced sharp changes in national development policies.2 While for some purposes it may make sense to speak of Latin America as a region, given the diversity in initial conditions (including economic structures) and the different development strategies available to governments, considerable variation across the continent has been witnessed over time. The principal purpose of the contributions to this volume is to better understand the factors responsible for the policy choices towards openness made by governments of the region3 since the onset of the global financial and economic crisis in 2007. The emphasis on policies towards openness is not meant to deny the importance of other policy responses to the crisis, such as fiscal stimulus packages. Rather, policies towards international commerce in all of its forms (that is, policies towards trade in goods and services, towards foreign direct investments, towards temporary and longer stay migrant workers, and towards foreign intellectual

1 I thank Alejandro Jara and Marcelo Olarreaga for comments on an earlier draft of this chapter. All remaining errors are my own. 2 For better or for worse, the diminution of support for the policy prescriptions of the by the governments of East Asia after that region’s financial crisis in 1997 and 1998 is a case in point. 3 For the purpose of this volume Latin America is taken to comprise Mexico and all of the nations further south of Mexico in Central and South America. The Caribbean nations are, therefore, not included in this study.

1 2 Not Just Victims: Latin America and Crisis-Era Protectionism property rights and technology transfer) have particular prominence given the generalised trend towards the opening up of Latin American economies since the mid-1980s. cutting over time by the seven largest economies in Latin America is one manifestation of that opening up, as shown in Figure 1.4 Figure 1 Average tariff rates have fallen in the seven largest economies, a trend not reversed by the recent global economic crisis 20 18 16 14

rate, % 12 ff 10 8 6 erage tari

Av 4 2

0 20 11 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 ARG BRA CHL COL PER MEX VEN Data and source: Weighted average Most Favoured Nation tariff rate on imported goods, reported in the World Development Indicators database, downloaded in April 2013. The lines for some countries are broken due to gaps in the underlying dataset.

The trend towards greater openness has been widely supported, not least by the World Bank and the Inter-American Development Bank, but also by much academic research. Analysis of the policy responses of Latin American governments to the recent global financial and economic crisis would reveal whether decision-makers in the region have held firm on policies that open their economies. This matter takes on particular significance given the widespread legacy in Latin America of substitution industrialisation (ISI) policies of the decades after World War II. It would be wrong, however, to analyse changing policies towards openness without making reference to the appropriate economic and policy context, especially as it relates to the other potential responses to the crisis. For example, the potential for substitution between policy instruments and, alternatively, for combining a number of seemingly unrelated policy changes into larger packages, should not be excluded upfront. One goal of this chapter is to provide the macroeconomic context for the changes in policies towards foreign commercial interests that are documented and discussed in later chapters. Contemporary developments in Latin America should also be viewed in the context of events taking place in other parts of the world economy. After all, the global economic and financial crisis did not originate in Latin America, even though its effects were soon felt through global financial and trade linkages. Moreover, as documented in the eleven reports to date from Global Trade Alert,

4 This figure is based on data on the weighted average Most Favoured Nations tariffs imposed on by a particular nation in a given year. The comparable rate of average applied tariffs are lower, reflecting the implementation of numerous regional trade agreements and, in some cases, unilateral tariff cutting. The latter average tends to be more volatile than the former average. Introduction: Crisis-Era Protectionism in Latin America in Context 3 governments in other regions have changed their policies towards foreign commercial interests since the crisis began, sometimes markedly. For example, Russia has adopted a reindustrialisation strategy that looks awfully like the ISI policies of old. China, and to a lesser extent India, have offered substantial domestic and -related inducements to local firms. Korea and Japan have tried to give their exporters an edge in world markets through more generous financing. Subsidies and bailouts to manufacturers have been widespread in Europe, slowing capacity retrenchment and the associated over- supply depresses prices on national and global markets. Many of these non-Latin American measures have harmed the commercial interests of Latin American countries, details of which can be found in the country tables at the end of this volume. For example, since the first crisis-era G20 summit in Washington DC in November 2008, Argentina has seen its commercial interests harmed 211 times by over 60 foreign jurisdictions, with 88 more foreign measures pending that could harm Argentine interests. The comparable figures for Costa Rica are 78, 50, and 90, respectively, indicating that it is not just the largest economies in Latin America that are being hit by foreign protectionism.5 That Latin American commercial interests are being harmed by foreign state measures has led in some cases to a rise in claims that Latin America is a victim – rather than a perpetrator – of protectionism.6 In other cases, it has led to the contention that it is fine for Latin American countries to engage in protectionism because others are moving away from open borders. Long ago, economists destroyed the latter argument. The eminent Cambridge economist, Joan Robinson, who incidentally was no enthusiast for neoliberal policies, once made this point succinctly and effectively: “If your trading partner throws rocks into his harbour, that is no reason to throw rocks into your own.” A balanced approach to crisis-era protectionism is to consider the factual record of measures taken by Latin American governments and by other governments that implicate the commercial interests of Latin America. As mentioned above, detailed information on the latter is provided in the country tables at the end of this volume. The chapters in this volume focus on the nature and purported rationales for changes in policies towards foreign commercial interests taken since the onset of the global economic crisis in 2007. There is no presumption that governments undertook the same response, as data presented in this and subsequent chapters show.

5 This data is taken from the statistics page of the Global Trade Alert website. Such information can be extracted immediately and free of charge for any trading jurisdiction in the world. 6 For more information on the trade barriers faced by Latin American countries see IADB (2012). 4 Not Just Victims: Latin America and Crisis-Era Protectionism

Macroeconomic performance in Latin America and the contribution of since 20007

Since 2000, the growth of national incomes – after the effects of have been stripped out – varies considerably across Latin American countries (see Figure 2). During the years when the world economy was booming, that is from 2000 to 2007, the rate of economic growth differed markedly across the seven largest Latin American economies.8 Argentina and Venezuela experienced sharp contractions in their economies in 2002 and 2003 and then rebounded with vigorous growth. Mexico and Brazil, for example, saw slower rates of economic growth from 2000 to 2007 and less volatility in their national incomes. Figure 2 Real GDP performance of the seven largest economies before and during the global economic crisis 130

120

110

100

90

80

70

60 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 ARG BRA CHL COL PER MEX VEN Data and source: Real GDP computed from data on the GDP in local currency and the appropriate GDP deflator, indexed at 100 for 2007, the first year associated with the financial market and banking troubles resulting from difficulties in the US subprime markets. Data taken from the World Development Indicators, downloaded in April 2013.

The global economic and financial crisis had a much greater effect on some economies than others. Mexico, with its substantial dependence on exports to the US, suffered the sharpest downturn of the seven Latin American economies considered here. In fact, Mexico was the only one of these seven countries to see its real GDP fall below 2007 levels, although Chile came close to doing so. Argentina and Peru have seen their economies grow in real terms by almost 30% since the onset of the global financial and economic crisis in 2007. It will be important to understand what factors led to this favourable growth performance and to what extent policies towards foreign commercial interests contributed. More generally, as Figure 2 shows, the largest Latin American economies fall

7 For a useful overview of crisis-era developments in Latin American trade flows see IADB (2012). This report points to a reorientation of Latin American trade towards the faster growing emerging markets (a reorientation that the report notes may be beginning to slow down) and to above average performance by commodity exporters in 2011 and part of 2012. Given the downturn in commodity prices in recent quarters, concerns arise about the sustainability of the latter export increases. 8 These seven were chosen because their economies have GDPs in excess of 300 billion US dollars. There is a considerable drop in GDP from the seventh to the eighth largest economy in Latin America. The seven largest economies are Argentina (denoted ARG in the Figures in this chapter), Brazil (BRA), Chile (CHL), Colombia (COL), Peru (PER), Mexico (MEX), and Venezuela (VEN). Introduction: Crisis-Era Protectionism in Latin America in Context 5

Box1 Protectionism, the trade balance, and short-term economic growth

In the standard Keynesian analysis of short-run macroeconomic performance, national income equals aggregate demand and the latter is the sum of spending on final goods by consumers, governments, firms, and foreigners (net of imports). The trade balance, then, is a contributor to national income in the short run. In this manner statements, such as those relating for example to “export-led growth”, can be understood. It follows also in this framework that reductions in imports can bolster aggregate demand generating, everything else equal (including notably the policies of other governments), the impression that protectionism could raise national income in the short run. That protectionism can have effects for aggregate demand for goods does not diminish the supply side- and price-related effects of protectionism that are highlighted in many economics textbooks. Furthermore, to the extent that exporting firms pay higher tariffs or have less choice of inputs because of protectionism, then changes in the latter might depress aggregate exports as well as aggregate imports. Such considerations imply that the impact of protectionism on aggregate imports is likely to overstate its impact on the trade balance. The implications of these arguments for policymaking have been contested for some time. John Maynard Keynes and his disciple, the distinguished economist James Meade, debated in the 1930s the pros and cons of maintaining open borders as part of short run economic management. Meade took the side of maintaining open borders, Keynes was more ambivalent. into three groups – two fast growers, three economies with medium growth rates, and two slow growers. However, some perspective is needed as the slowest growing Latin American economies are currently expanding at rates that many industrialised countries could only dream of. Many analyses of Latin American development dwell on the pros or cons of the region’s apparent export dependence. Figure 3 reports the contribution of export growth to the increase in aggregate demand for goods and services of seven Latin American nations during the 1990s, in the run up to the crisis (from 2000 to 2007), and since 2007. That contribution is lowest in Brazil, with Argentina and Colombia catching up with other larger Latin nations. In the boom years of the world economy, from 2000 to 2007, over 30% of the growth in demand for Argentine, Chilean, Peruvian, and Venezuelan goods came from exports. This could be taken as showing considerable dependency on exports by the latter nations. However, before reading too much into this data, it should be remembered that it is the overall trade balance rather than total exports that contributes to the aggregate demand for a nation’s output (see Box 1). If an expansion in exports is used principally to finance more imports, then the former might not lead to an improvement in the trade balance and so short-term economic growth. 6 Not Just Victims: Latin America and Crisis-Era Protectionism

Figure 3 On the face of its export growth has contributed a lot to aggregate demand growth in the seven largest economies, especially during the boom years of 2000-2007 60

50

40

30

20

10

0 ARG BRA CHL COL MEX PER VEN 1990-2000 2000-2007 2007-2011 Note: The vertical axis reports the change in a nation’s total exports of goods and services expressed as a percentage of the change in that nation’s GDP during the period in question. The percentage could be interpreted as the percentage of additional aggregate demand that came from foreign sources. Source: World Development Indicators online, downloaded in April 2013.

Figure 4, which (deliberately) has the same scale on the vertical axis as Figure 3, shows that with the possible exception of Chile, changes in the trade balance in the seven largest economies in Latin America have contributed little to changes in aggregate demand. During no recent epoch, including the crisis-era since 2007, has a change in the trade balance accounted for more than 20% of the change in aggregate demand in every other large Latin American country. On the basis of such evidence, sweeping claims that exports were the main source of additional demand for Latin American products are doubtful. Figure 4 But much of the export expansion financed import growth, so the contribution of the trade balance to aggregate demand was considerably smaller 60 50 40 30 20 10 0 ARG BRA CHL COL MEX PER VEN -10 -20 -30 1990-2000 2000-2007 2007-2011 Note: The vertical axis reports the change in a nation’s trade balance expressed as a percentage of the change in that nation’s GDP during the period in question. The percentage could be interpreted as the percentage of additional aggregate demand that came from foreign sources netting out additional purchases of imports. Source: World Development Indicators online, downloaded in April 2013. Introduction: Crisis-Era Protectionism in Latin America in Context 7

Comparing Figures 3 and 4 reveals how, as far as aggregate demand contributions are concerned, correcting for changes in import purchases really matters. Still, as Figure 4 shows, the contribution of the trade balance to the growth in aggregate demand in these economies was positive in all but Colombia during the boom years of 2000-7. During the crisis era, the worsening of the trade balance in Brazil, Chile, and Peru reduced on net aggregate demand for the produce of those economies.

Comparative policy responses to the recent crisis

The global economic slowdown, including the sharp fall in world trade flows in 2009, has prompted many governments to revisit their policies to promote short term macroeconomic stabilisation and longer-term economic growth. It is too soon to say whether crisis-era policy innovations have enhanced the latter, however more information is available on contemporary policy stances and their potential short-term effects. What follows, then, provides context for the discussion in the subsequent chapters on commercial and industrial policy responses. One response of governments was to expand their spending on final goods. For sure, transfers (subsidies to private sector firms and to individuals) and might have changed as well. Still, fiscal stimulus packages received a lot of attention at the beginning of the crisis. Care is needed, however, in interpreting changes in government spending in final goods as some of the changes seen since 2007 may have been planned before the crisis. Nevertheless, unless constrained by a constitution or comparable legal instrument, as governments can decide not to implement any spending plan, then the total amount of money spent in a year typically reflects decisions by a government in that year and is, therefore, one measure of national policy stance. Aggregate measures of stance are much harder to come by and here the matter is approached indirectly. As far as short-term macroeconomic performance is concerned, if commercial and other policies “matter” they should alter the trade balance. Changes in the trade balance might reveal something of the underlying change in aggregate commercial policy stance, but other factors determine trade balances too, such as changes in commodity prices. For this reason, it would be wrong to interpret every improvement in the trade balance as due to higher barriers to imports or to export subsidisation and promotion. Still, comparing the contribution of changes from 2007 to 2011 in final goods expenditures by governments and in the trade balance to the changes in national income provides some indication of the relative scale of fiscal policy. Figure 5 reports that data for the seven largest economies in Latin America. 8 Not Just Victims: Latin America and Crisis-Era Protectionism

Figure 5 Where did the extra demand come from during the crisis era? Government fiscal stimuli contributed more than improvements in the trade balance, except in Venezuela 25.00 20.00 15.00 10.00 5.00 0.00 -5.00 ARG BRA CHL COL MEX PER VEN -10.00 -15.00 -20.00 -25.00 Trade balance Government spending Note: The vertical axis reports the change in a nation’s GDP during the period in question that can be “accounted for” by that nation’s change in its trade balance and the change in its government expenditure on final goods. Source: World Development Indicators online, downloaded in April 2013.

Several comments follow from analysing the data in Figure 5. First, only in Venezuela does the improvement in the trade balance contribute more to the expansion of aggregate demand than increases in spending by the state on final goods. In every other country, the contribution of fiscal stimulus is substantially larger. Second, in no country is the expansion in government spending less than 10% of the expansion in national income. Third, only in Chile did changes in the trade balance substantially lower the aggregate demand for goods. In this case, the expansion in government spending on final goods did not make up for the deterioration in the trade balance. Overall, then, only in Chile and Venezuela did the changes in the trade balance have an impact on aggregate demand on anything like the scale of the expansion in fiscal policy. Governments have fiscal policy as well as commercial and industrial policy options before them, and while analysts may be tempted to actively debate the latter policies in isolation, in reality other policy options may be easier to implement and to scale up, if necessary. Moreover if fiscal policy is effective – and there is plenty to debate here as well – then trade and industrial policies need not bear all of the adjustment to economic crises. A systemic economic crisis, including one involving beggar-thy-neighbour behaviour by Latin America’s trading partners, need not imply abandoning policies towards open borders. Some indicators of changes in trade policy stance are available, however. The number of announcements by each nation’s government of measures that, if implemented, disadvantage foreign commercial interests is reported in the Global Trade Alert database.9 Information on such announcements from November 2008 until the date of this writing (end April 2013) is contained in this

9 This database can be accessed online at www.globaltradealert.org. Introduction: Crisis-Era Protectionism in Latin America in Context 9 database. As Figure 6 reveals there is a positive correlation between the number of protectionist announcements by the governments of the largest Latin American governments and the expansion in those governments’ spending on final goods. Figure 6 Since the onset of the recent crisis, some governments that spent more also announced more protectionist measures – but some did not 225 200

175 150 125 100 75 announcements 50

Number of protectionist 25 0 10 12 14 16 18 20 22 Contribution of fiscal stimulus to aggregate demand Note: The number of protectionist announcements refers to the total number of state announcements to act in a way that discriminates against foreign commercial interests. In the Global Trade Alert database this amounts to the total number of measures flagged red or amber. Sources: Global Trade Alert database and World Development Indicators online, downloaded in April 2013.

Now correlations based on seven data points must come with a health warning, that is, they are not to be taken too seriously. Still, future research may want to examine whether protectionism substituted for fiscal policy stimuli or, as the positive correlation suggests, whether these measures tend to be taken together. Much is at stake here, for if the measures are taken together, then studies of the effects of discrimination against foreign commercial interests need to take account of the simultaneous expansion in state demand for final goods. A careful look at Figure 6 also reveals there are three countries that have adopted moderate-to-large fiscal stimulus packages without making many (here, less than 50) protectionist announcements since November 2008. This observation highlights the different choices available to governments and raises the question: What can protectionism deliver over and above a sizeable, temporary fiscal stimulus package? Another potentially provocative correlation is found in Figure 7.10 In this figure, a measure of the scale of protectionism implemented by a government – here taken to be the number of tariff lines or products affected by measures that discriminate against foreign commercial interests – is plotted against the contribution of changes in the trade balance to aggregate demand. The simple correlation coefficient between these two variables is 0.61 implying, according to

10 Recall the health warning! The sensitivity of any correlation to dropping observations from the sample should be borne in mind. Given these concerns, Figure 7 is included as it may stimulate other analysts to address the underlying causal relationships in larger samples once more data on the crisis-era becomes available. 10 Not Just Victims: Latin America and Crisis-Era Protectionism statistical tables, that there is only a 7.3% chance that this correlation is spurious. Figure 7 For the seven largest economies in Latin America where the scale of discrimination against foreign commercial interests was larger, improvements in the trade balance tended to contribute more to GDP expansion 900 800 700 600 500 400 300

by protectionism 200 100

Number of tariff lines affected 0 -25 -20 -15 -10 -5 0 5 10 15 Contribution of trade balance to aggregate demand Health warning: Not too much weight should be put on a correlation based on seven data points, still completeness and openness require inclusion of this figure. Sources: The number of tariff lines affected by almost certainly disriminated state measures that have been implemented was taken from the Global Trade Alert in April 2013 (these measures are colour coded red in that database.) The trade balance contribution was calculated from data obtained from the World Development Indicators.

That protectionism can affect the trade balance should come as no shock, after all that is why trading partners and import-competing firms have an interest in discrimination against foreign suppliers. Still, it does beg questions concerning the impact that beggar-thy-neighbour measures have, and their relative effect on imports as opposed to exports (which together determine the effect on the trade balance) and on other economic outcomes. Overall, then, the governments of the largest economies in Latin America have responded to the crisis in different ways. Some states have placed more emphasis on fiscal stimulus packages than enhanced discrimination against foreign commercial interests. In the chapters that follow, the form and extent of state responses to the recent global economic crisis are described in greater detail and interpreted.

The organisation of the remainder of this volume

The first chapter in Section One, authored by Eduardo Bianchi, describes in some detail the commercial policy responses of Latin American governments since the onset of the global financial and economic crisis. One important matter considered in this chapter is whether there is evidence that the crisis induced a change in commercial policymaking, or whether it was “business as usual.” Introduction: Crisis-Era Protectionism in Latin America in Context 11

Carolina Szpak and Diana Tussie then describe in greater detail the policies undertaken by Argentina and Brazil that cut across many sectors of their respective economies. In Chapter 4, Carolina Szpak analyses the measures taken by Argentina in its economically significant textiles and footwear sectors. Chapters 5 and 6 turn to the purported rationales for crisis-era protectionism in Latin America and to whether such protectionism represents a novel form of beggar-thy-neighbour policy for the region. The former, authored by Eduardo Bianchi and Welber Barral, focuses in particular on the rationales advanced by the Argentine and Brazilian governments, using quotations from the speeches of their respective heads of state. The latter chapter sets the discussion of contemporary developments in a broader, historical context and was also authored by Eduardo Bianchi. Section Two of this volume contains data on every Latin America country’s resort to discrimination against foreign commercial discrimination since November 2008. This data was assembled in late April 2013 and therefore covers four and a half years of crisis-era policymaking. Data on the number of times each Latin American country’s commercial interests have been harmed by foreign discrimination is also presented. Put crudely, then, such data allows some assessment of the frequency with which each country has been a victim as well as a perpetrator of protectionism. The data was assembled from the Global Trade Alert database by members of the team based at the University of St. Gallen, Switzerland.

Reference

IADB (2012). Trade and Integration Monitor 2012. Trade Performance and Policies after the Crisis, Inter-American Development Bank, Washington, DC.

SECTION ONE Studies of Protectionism in Latin America

13

2 Crisis-Era Protectionism in Latin America

Eduardo Bianchi Latin America Trade Network and WTO Co-chair, FLACSO – Argentina

1. Introduction

Almost immediately after the onset of the global economic and financial crisis in 2008, concern about protectionism began to rise. Given the lessons of the impact of the 1930s on trade, this concern focused on an incremental build-up of restrictions that could strangle trade, and undercut the effectiveness of policies aimed at boosting world demand and restoring sustained growth globally. Fearing that protectionist policies could close off market access or distort competition at a time when the world economy was vulnerable to shocks, multilateral agencies and research institutions decided to monitor and report, on a regular basis, trade restricting or trade distorting government measures. These concerns were amplified by the collapse in trade of 2008-09: during 2009the volume of world merchandise trade contracted by 12%, driven by a significant fall in global demand and shortages of that created supply-side constraints in many countries. In October 2008, the World Trade Organisation (WTO) Secretariat began to monitor and report on government measures, in order to help its Trade Policy Review team undertake a regular overview of developments in the international trading environment that were having an impact on the multilateral trading system.1 In the first report on April 2009, the WTO said that the economic crisis had continued to worsen around the world and that there had been an increase in protectionist pressures globally since September 2008, driven by a desire to protect domestic jobs and businesses. Nevertheless, the WTO did not find any indication of an “imminent descent into high intensity protectionism, involving widespread resort to and retaliation” (WTO, 2009a). Other reports included joint monitoring reports by the WTO for the G20 summits and reports with the Organisation for Economic Co-operation and Development (OECD) and the United Nations Conference on (UNCTAD) (see the OECD and UNCTAD and OECD, UNCTAD and WTO reports).

1 According to the WTO, this monitoring and reporting exercise has no legal effects on the rights and obligations of Members (see WTO reports).

15 16 Not Just Victims: Latin America and Crisis-Era Protectionism

On the academic side, the Centre for Economic Policy Research (CEPR) teamed up with independent research institutes from around the world to create Global Trade Alert (GTA), with a mission of increasing the information available on state measures that may affect trading partners’ commercial interests. Launched in June 2009, GTA provides information in real time on state measures taken from the beginning of the crisis, and compiles them in a database.2 In September 2009, the 2nd GTA Report found that the overwhelming picture was one of planned and implemented state initiatives that reduced foreign commercial opportunities and reversed the 25-year trend towards open borders (Evenett 2009a). In GTA’s view, the harm done by discriminatory state measures was widespread, while it was clear that G20 members had violated their pledge to eschew protectionism. After three years of regular monitoring, both the WTO and the GTA have come to similar conclusions in their most recent reports. The WTO says that new trade restrictions continue to be implemented and that the accumulation of trade restrictions is becoming a matter of concern (WTO 2012b). GTA finds that protectionist measures have risen every year since 2009 and that the G20 countries are responsible for almost 70% of all protectionist measures taken since November 2008 (Evenett 2012). In this landscape of widespread protectionism, this chapter analyses the role of Latin American (LA) countries.3 Relying on the GTA database, we set out key features and insights of government measures – “crisis-era protectionism” in GTA language – taken by LA countries since November 2008. This chapter will seek to answer the following questions:

• How many measures did LA countries adopt? • What percentage of worldwide protectionist measures was adopted by LA governments? • How are LA measures to be classified? • Are these measures to be found throughout the region or are they located in a few LA countries? • Are the measures taken by LA countries “traditional” protectionist policies or did LA countries turn to “new” ones? • Were there any protectionist tendencies in the region before the onset of the global economic and financial crisis?

The remainder of this chapter is organised as follows. The next section contains an overview of LA measures taken since November 2008 from a regional perspective, while the third section looks at the country level. The fourth section looks at whether there was a protectionist bias before the crisis. The fifth section concludes.

2 Further information on the GTA initiative, database and methodology, can be found at www. GlobalTradeAlert.org. 3 For the purpose of this chapter, Latin America (LA) refers to the following countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Peru, Paraguay, El Salvador, Uruguay, and Venezuela. Crisis-Era Protectionism in Latin America 17

2. Overview of LA state measures adopted during the crisis

During the first half of 2012, the GTA team carried out an extensive update of their database that goes back to November 2008. The state measures recorded are those that affect imports, exports, foreign investments, intellectual property rights and foreign/migrant workers, i.e. they are a broader set than traditional trade policies.4 Moreover, the GTA team did not confine itself to the measures that were covered by the existing body of agreements in the WTO, on the basis that some state measures taken during the crisis fell outside existing WTO agreements.5 As of 31 May 2012, the database comprised 2,430 state measures announced since November 2008. This is the empirical framework from which we derive the main features of LA measures. There are various methods to classify trade barriers and to estimate their impact, as Bianchi (2005) and Ferrantino (2006) discuss. The GTA team has preferred a general discrimination-based definition, starting with the following question: Is the measure considered to alter the discrimination faced by foreign commercial interests? Thus, each state measure compiled in the database is coded with a different colour, according to its impact on the relative treatment of foreign commercial interests. The criteria for this colour coding scheme is the following:

a. Red: The measure has been implemented since November 2008 and almost certainly discriminates against foreign commercial interests.

b. Amber: The measure has been implemented since November 2008 and likely involves discrimination against foreign commercial interests; OR, the measure has been announced or is under consideration and would (if implemented) almost certainly discriminate against foreign commercial interests.

c. Green: The measure has been announced and involves liberalisation on a non-discriminatory (i.e. most favoured nation) basis; OR, the measure has been implemented since November 2008 and is found not to be discriminatory; OR, the measure has been implemented since November 2008, involves no further discrimination and improves the transparency of a country’s trade-related policies.

On this basis, Table 1 shows that up to 31 May 2012, countries worldwide have taken a total of 2,430 measures, while LA countries were responsible for 481 measures, i.e. 20% of the worldwide total. While the number of green liberalising

4 For GTA methodological notes, see GTA reports, specially the first one (GTA 2009). 5 It is important to note that the GTA database deliberately excludes technical barriers to trade (TBT) and sanitary and phytosanitary measures (SPS), since their volume make keeping track of them very difficult. Still, the GTA database includes reports on changes in the legislation and implementing regulations concerning TBT and SPS, as opposed to specific interventions undertaken within the auspices of an existing regime. The GTA team acknowledges that if these measures were motivated by beggar-thy- neighbour factors then, the database will understate the true state of discrimination against foreign commercial interests. For coverage of public policies interventions on TBT and SPS, see WTO (2012c). 18 Not Just Victims: Latin America and Crisis-Era Protectionism or transparency-improving measures adopted by LA countries was 131 (24% of the worldwide total), 252 red measures (19%) almost certainly worsened the treatment of some commercial interest, while there are 93 amber measures (17%) that likely harmed foreign commercial interests. Thus, the total number of discriminatory measures announced in Latin America was 345 (Tables 1 and 4).6 These LA shares are significantly greater than its share in world trade (3.9% in 2011), indicating that LA countries were very active in adopting these measures relative to the rest of the world. Also note that, again relative to the rest of the world, the region was very active with regards to “green” measures, with almost one quarter of total measures of this group. Within LA, South American countries accounted for 90% of total measures, 87% of green, 84% of amber and 91% of red ones, indicating where the main “users” of these measures were located in the region. Table 1 Number of state measures reported in the GTA database All countries Latin America LA share (%) Total 2,430 481 20 Green 553 131 24 Amber 538 93 17 Red 1,340 252 19

Source: GTA database up to 31 May 2012.

One of the early important conclusions that the GTA team drew from their monitoring was that non-traditional forms of protection dominated crisis-era protectionism. GTA (2012) states that traditional instruments, such as tariff increases and trade remedy actions, account for less than 37% of the worldwide total of discriminatory measures implemented since November 2008.7 This finding leads GTA to conclude that governments under pressure during the crisis circumvented the more constraining binding multilateral trade rules. 8 Accordingly, Baldwin and Evenett (2009) judge that much of the discrimination is relatively non-transparent, which they call “murky protectionism.” Table 2 reports discriminatory measures (red plus amber) with and without trade remedy actions. LA countries account for almost a fifth of worldwide discriminatory measures. LA’s share is higher (26%) when we restrict it to the subset of trade remedies, while it is lower (16%) when considering the subset of all measures excluding trade remedy actions.

6 A simple count of the number of measures could be misleading, since measures are not all comparable. They differ widely, e.g. in trade coverage and in their economic impact, but a significant amount of data and resources are needed for their evaluation. There is also a “stock deficit”, since measures that existed before the beginning of the crisis are not taken into account due to a lack of information. Thus, for basic analysis we must rely on simple counts. 7 Trade remedy actions comprise antidumping, countervailing and measures: initiation of investigation, provisional and final duties and price undertakings. 8 It would be interesting to analyse the governments’ motivations for this circumvention. Is it motivated in order to avoid or hamper WTO scrutiny? Is it motivated because traditional measures like trade remedies take a long time to be effective, in the context of a world economic crisis? Crisis-Era Protectionism in Latin America 19

Table 2 Number of discrimnatory state measures reported in the GTA database All countries Latin America LA share (%) Total 1,868 350 19 Trade remedy actions 534 140 26 Total except trade 1,344 210 16 remedy actions

Source: GTA database up to 31 May 2012.

These figures indicate that during the crisis, LA countries resorted to trade remedy measures relatively more that the rest of the world. In other words, they turned to murky protectionism to a lesser extent. This conclusion is reinforced when we look at how total discriminatory measures are broken down between trade remedies and other measures in both LA and in the rest of the world. In the case of LA, trade remedy actions represent 40% of total discriminatory measures, while for the rest of the world this figure is 26%. The comparable breakdown of total discriminatory measures other than trade remedies actions, therefore, is 60% for LA and 74% for the rest of the world. Further analysis reveals that South America is the sub–region that makes up the majority of discriminatory measures, both with and without trade remedies actions.

3. Crisis-era state measures in Latin America: What is the story at the country level?

Table 3 sorts LA countries in descending order according to the number of state measures. Argentina and Brazil adopted by far the most measures: 184 and 156 respectively, which together make up 70% of the LA total. Mexico is in third place, although far behind Argentina and Brazil, with 38 measures and 8% of LA total, followed by Peru (17), Venezuela (15), Ecuador (15), Colombia (13) and Paraguay (10). The rest of LA countries have fewer than 10 measures each. While they dominate the GTA database, Argentina and Brazil differ in terms of the type of measures taken, as Figure 1 shows. Most of Argentina’s measures are classified as discriminatory: 141 are red (77% of the total) and 28 are amber (15%). The figures for Brazil are 54 red (35% of total) and 37 green (24%). In Mexico, 16 measures are red (42% of the total) and 8 are amber (21%). Thus, the share of discriminatory measures is 92% for Argentina, 58% for Brazil and 63% for Mexico. 20 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 3 Number of state measures reported in the GTA database for Latin America Country Total Green Amber Red Argentina 184 15 28 141 Brazil 156 65 37 54 Mexico 38 14 8 16 Peru 17 6 7 4 Venezuela 15 4 3 8 Ecuador 15 7 3 5 Colombia 13 6 5 2 Paraguay 10 2 0 8 Chile 7 2 1 4 Uruguay 6 2 0 4 Dominican 6 3 0 3 Republic Bolivia 5 1 0 4 Total LA 472 127 92 253

Source: GTA database up to 31 May 2012.

Figure 1 Measures reported by GTA for selected LA 200 180 es 160 140 120 Red 100 Amber 80 Green 60 40 Number of measur 20 0 Argenna BrazilMexicoPeru Venezuela Ecuador Source: GTA database up to 31 May 2012.

Table 4 shows the number of discriminatory measures (red plus amber) by LA countries, with and without trade remedy actions, and the three measures of harm computed by the GTA team.9 Argentina was responsible for 48% of the 335 discriminatory measures adopted by LA since November 2008 with 169 measures, followed by Brazil with 91 (26%). Accordingly, Argentina and Brazil together make up 74% of total discriminatory measures in LA. Mexico is in third place, with 24 measures, followed by Venezuela (11), Peru (11), Paraguay (8), Ecuador (8) and Colombia (7).

9 As explained in their reports, the GTA team does not calculate the amount of trade affected by each state measure, nor the associated welfare impact, because of the quantity and quality of the information as well as the amount of time needed. Instead, four metrics of harm done by a country are reported by the GTA team: the number of tariff lines (HS 4 digits); sectors (CPC 2 digits) and trading patterns affected by almost certainly discriminatory measures adopted plus the number of such measures. Crisis-Era Protectionism in Latin America 21

Note that Argentina adopted seven times more measures than Mexico and 15 times more than Venezuela and Peru, while Brazil adopted almost four times as many measures as Mexico and eight times more than Venezuela and Peru. In terms of the quantity of discriminatory measures adopted, Argentina and Brazil are very far ahead of the rest of LA. Table 4 Number of discriminatory measures reported in the GTA database for LA Affected by red measures (number of) Total Trade except Tariff Trading Country Total remedy trade Sectors lines partners actions remedy actions Argentina 169 53 116 467 63 151 Brazil 91 47 44 256 33 132 Mexico 24 15 9 89 26 37 Venezuela 11 0 11 786 38 72 Peru 11 11 0 6 4 4 Paraguay 8 0 8 72 12 41 Ecuador 8 1 7 88 22 47 Colombia 7 4 3 6 5 40 Chile 5 5 0 4 2 6 Uruguay 4 1 3 4 3 35 Bolivia 4 0 4 21 6 18 Dominican 3 2 1 4 4 7 Republic Total LA 345 139 209 -

Source: GTA database up to 31 May 2012

Argentina’s red measures affect 467 tariff lines, 63 sectors and 51 trading partners. While Brazil’s red measures affect fewer tariff lines and sectors than Argentina – 256 and 33 respectively – the number of trading partners affected is very close (132). In terms of harm, Venezuela ranks in third place, since its red measures affect 786 tariff lines, 38 sectors and 72 trading partners, many more than Mexico.10 It is interesting that Paraguay, Ecuador and Colombia have a smaller number of measures taken but affect more trading partners than Mexico.11

10 Main red measures taken by Venezuela are investment measures, export subsidies, import bans and quotas. 11 Most of Mexico’s measures are trade remedy actions, while Paraguay has adopted TBT, public procurement and tariff measures, Ecuador has adopted intellectual property protection, trade remedies, investment and tariff measures, and Colombia has adopted trade remedy actions, tariff measures and export restrictions. 22 Not Just Victims: Latin America and Crisis-Era Protectionism

Following the GTA approach, 40% (140) of the total number of LA discriminatory measures were trade remedy actions, while 60% (210) were non-traditional forms of protection. These shares vary substantially among LA countries. Non- traditional measures have an important share in the cases of Argentina (70% of total), Venezuela (100%), Paraguay (100%), Ecuador (88%), Uruguay (75%) and Bolivia (100%), although they differ in terms of the quantity of measures applied. On the other hand, trade remedy actions were more important for Mexico (63%), Peru (100%), Chile (100%) and Dominican Republic (67%). It is also interesting that Argentina, Brazil and, to a lesser extent, Mexico took the greatest number of measures, not least they are the only LA countries that are members of the G20. Since the G20 is responsible for the bulk of crisis-era protectionism, it is important to analyse how these three compare with the rest of the group. Table 5 compares measures adopted by G20 countries with those adopted by Argentina, Brazil and Mexico. It shows that these three countries made up a large share of the total measures taken by the G20. One in four green (liberalising) measures were adopted by LA countries. In terms of discriminatory measures, LA countries accounted for a quarter of trade remedy actions adopted by the G20, and one in five non-traditional measures. Finally, LA countries are important contributors to total G20 discriminatory measures. While the average of this type of measures for the three LA countries is 94, the corresponding average for the rest of G20 countries is 58. Table 5 Number of state measures reported in the GTA database Argentina, Brazil G20 %/G20 and Mexico Measures in database 1,652 378 23 Green 382 94 25 Amber 393 73 19 Trade remedies 166 49 30 Except trade remedies 227 24 11 Red 877 211 24 Trade remedies 268 66 25 Except trade remedies 609 145 24 Discriminatory 1,270 284 22 (amber + red) Trade remedies 434 115 26 Except trade remedies 836 169 20

Source: GTA database up to 31 May 2012. Crisis-Era Protectionism in Latin America 23

4. Was there a protectionist tendency in Latin America before the global economic and financial crisis?

It is not easy to judge if there was a protectionist bias in LA countries before the global crisis, because before then there was not the systematic monitoring that the WTO and the GTA team have carried out on a regular basis. As an imperfect substitute, we can look at WTO statistics on trade remedy actions based on members’ notifications submitted to the Committee on Anti– Practices, the Committee on Subsidies and Countervailing Measures and the Safeguards Committee. These data are appropriate for assessing any LA inclination towards protectionism prior to 2008 as they cover a time period that begins before the onset of the crisis. As discussed in the previous section, trade remedy actions play an important part in LA’s crisis-era policy choice. These traditional measures were intensively used by Argentina, Brazil, and Mexico and, to a lesser extent, by Peru, Colombia and Chile. We therefore use WTO statistics on initiations of investigations and on measures adopted covering antidumping, countervailing and safeguards actions from January 2002 to December 2011.12 A priori, it seems that initiations of investigations are more “elastic” to political will to protect domestic industry against external shocks. In the context of trade remedy actions, measures can only be taken once legal and procedural stages are completed; as a consequence, trade remedies measures do not have the same “flexibility” as initiations of investigations to respond quickly to political will. In the case of initiation proceedings, they are established by national legislation and they consist mainly of questionnaires collecting data on the domestic industry, imports and – in the case of dumping or subsidy – on unfair trading practice. Investigating authorities can either “relax” or “tighten” these information requirements, depending on circumstances. In the case of dumping and subsidy actions and in special circumstances, WTO Agreements allow authorities to initiate investigations without having received a written application by or behalf of a domestic industry, which speeds up the procedure.13 These features of the initiations of investigations procedure make them more “sensitive” to special circumstances, such as global crises. Figure 2 shows trade remedy initiations and measures for the period 2002– 11 for all LA countries.14 In the case of initiations, it shows a decrease between 2002 and 2007. In fact, the 31 initiations seen in both 2005 and 2007 are the lowest since 1995 when the data series began. Initiations rose in 2008 (51), 2009 (59) and peaked in 2010 (67), showing a quick reaction to the global crisis, as expected from previous episodes. Initiations decreased in 2011 (36), a behaviour that can be related to the fact that the main users of trade remedy actions change

12 Measures include antidumping duties and price undertakings, and undertakings, safeguards duties and quantitative restrictions. 13 See Article 5.6 of the Agreement on Implementation of Article VI of GATT 1994 and Article 11.6 of the Agreement on Subsidies and Countervailing Measures. 14 For antidumping and countervailing actions, each initiation and measure cover one product imported from one country. 24 Not Just Victims: Latin America and Crisis-Era Protectionism their “basket” of restrictive measures towards the use of non–traditional ones. The number of measures also decreased from 2002 to 2006, and the 16 measures in 2006 mark a record low. The numbers then rose between 2007 and 2009, when it peaked at 38 measures. The number of measures declined in 2010 and 2011; in 2012, LA countries adopted 24 trade remedy measures, the third lowest in the entire WTO series. Figure 2 LA trade remedy actions, 2002-11 75

60

45

30

15 Iniaons Measures 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: WTO.

The next step is examine the behaviour of the three main LA countries, Argentina, Brazil and Mexico. Figure 3 shows initiations and measures for Argentina. Although there is no clear pattern for initiations prior to the crisis, it is evident that they increased quickly in 2008 (19) and 2009 (28), then fell quickly in 2010 (14) and 2011 (7). In terms of measures, there was a rise from 2004, with peaks in 2009 and 2010 (15 measures in each year) and a decrease in 2011 (7). Figure 3 Argentina trade remedy actions, 2002-11 30

20

10 Iniaons Measures 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: WTO.

In the case of Brazil (Figure 4), initiations show a clear upward pattern after 2003, accelerating in 2006 (12) and 2007 (14), increasing rapidly in 2008 (24) and 2010 (37), and decreasing in 2011 (16). The number of initiations in 2010 is the highest in the WTO series, and the number in 2008 the second highest. In the Crisis-Era Protectionism in Latin America 25 case of measures, there was no increasing trend before the crisis, although they clearly grew during the crisis, in 2007 (9), 2008 (12) and 2009 (16), which is the highest in the WTO series. Figure 4 Brazil trade remedy actions, 2002-11

40 Iniaons Measures 30

20

10

0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: WTO.

Finally, Figure 5 shows trade remedy actions by Mexico. There was a clear downward trend for initiations after 2003 and for measures since 2005. After the crisis, initiations increased in 2009 (2), 2010 (3) and 2011 (7), while measures increased slightly in 2009 (1) and 2010 (2). Note that except for initiations in 2011, the number of initiations and measures after the crisis was well below those in the four years before 2008. Figure 5 Mexico trade remedy actions, 2002-11

16 Iniaons Measures 12

8

4

0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: WTO. 26 Not Just Victims: Latin America and Crisis-Era Protectionism

From this analysis, we can infer there was no protectionist tendency in LA countries prior to the crisis, at least in terms of trade remedy actions. We can also observe that trade remedy initiations were more frequently adopted by LA countries after the onset of the crisis and that trade remedy actions, initiations and measures decreased in 2010 and 2011, except in the case of Mexico.

5. Conclusions

The purpose of this chapter was to summarise the key facts concerning government measures undertaken by LA countries after the onset of the financial and economic crisis. LA’s shares of the worldwide totals of the different types of measures compiled by the GTA team are significantly greater than its share in world trade. This indicates that countries in the region were more active in adopting these measures, relative to the rest of the world. LA countries account for almost a fifth of worldwide discriminatory measures. Measures are mainly undertaken by Argentina and Brazil, which together account for 75% of LA total discriminatory measures. Mexico is in third place, although well behind the two South American countries. Almost 90% of Argentina’s measures are classified as discriminatory, while for Brazil the comparable figure is 60%. Most discriminatory measures adopted by Argentina are non-traditional, while most of Mexico’s are trade remedy actions. Brazil has used both types of measures in similar proportions. Argentina, Brazil and Mexico are important contributors to the total of discriminatory measures taken by the G20. Taken together, they represent one in four trade remedy actions adopted by the G20 and one in five non-traditional measures. LA countries have used trade remedies actions to a greater degree than both the G20 and the rest of the world. It is not possible to infer a protectionist tendency in LA countries prior to the crisis from an analysis of trade remedy actions. Certain Latin American countries did initiate trade remedy investigations intensively after the beginning of the crisis, exceeding pre-crisis trends. However, trade remedies actions did decrease in 2010 and 2011, suggesting that the initial crisis response may not have been sustained.

References

Baldwin, R. and S. Evenett, (eds.) (2009), The Collapse of Global Trade, Murky Protectionism, and the Crisis: Recommendations for the G20, VoxEU.org eBook, March. Bianchi, E. (2005), “International Trade Commission of Argentina: Its Experience with Non Tariff Measures”, contribution paper for the expert meeting on methodologies, classifications, quantification and development impacts of non-tariff barriers. UNCTAD, Geneva, September. Crisis-Era Protectionism in Latin America 27

Evenett, S. (ed.) (2009a), Broken Promises: a G20 Summit Report by Global Trade Alert, 2nd GTA Report, September. Evenett, S. (ed.) (2009b), The Unrelenting Pressure of Protectionism: The 3rd GTA Report, December. Evenett, S. (ed.) (2010a), Will Stabilisation Limit Protectionism: The 4th GTA Report, February. Evenett, S. (ed.) (2010b), Africa Resists the Protectionist Temptation: The 5th GTA Report, May. Evenett, S. (ed.) (2010c), Unequal Compliance: The 6th GTA Report, June. Evenett, S. (ed.) (2010d), Managed Exports and the Recovery of World Trade: The 7th GTA Report, September. Evenett, S. (ed.) (2010e), Tensions Contained…For Now: The 8th GTA Report, November. Evenett, S. (ed.) (2011a), Resolve Falters as Global Prospects Worsen: The 9th GTA Report, July. Evenett, S. (ed.) (2011b), Trade Tensions Mount: The 10th GTA Report, November. Evenett, S. (ed.) (2012), Débâcle: The 11th GTA Report on Protectionism, June. Ferrantino, M. (2006), “Quantifying the Trade and Economic Effects of Non-Tariff Measures”, OECD Trade Policy Working Papers, No. 28, OECD Publishing. Global Trade Alert (2009), Global Trade Alert 1st Report, July. OECD and UNCTAD (2010a), “Third Report on G20 Investment Measures”, June. OECD and UNCTAD (2010b), “Fourth Report on G20 Investment Measures”, November. OECD and UNCTAD (2011a), “Fifth Report on G20 Investment Measures”, May. OECD and UNCTAD (2011b), “Sixth Report on G20 Investment Measures”, October. OECD and UNCTAD (2012), “Seventh Report on G20 Investment Measures”, May. OECD, UNCTAD and WTO (2009), “Reports on G20 Trade and Investment Measures”, September. OECD, UNCTAD and WTO (2010a), “Reports on G20 Trade and Investment Measures, September 2009 to February 2010”, March. OECD, UNCTAD and WTO (2010b), “Reports on G20 Trade and Investment Measures, Mid-May to Mid-October”, October. OECD, UNCTAD and WTO (2011a), “Reports on G20 Trade and Investment Measures, Mid-October 2010 to April 2011”, May. OECD, UNCTAD and WTO (2011b), “Reports on G20 Trade and Investment Measures, May to Mid-October”, October. OECD, UNCTAD and WTO (2012), “Reports on G20 Trade and Investment Measures, Mid-October 2011 to Mid-May 2012”, May. WTO (2009a), “Report to the TPRB from the Director-General on the Financial and Economic Crisis and Trade-Related Developments”, April. WTO (2009b), “Report to the TPRB from the Director-General on the Financial and Economic Crisis and Trade-Related Developments”, document WT/TPR/ OV/W/2, July. 28 Not Just Victims: Latin America and Crisis-Era Protectionism

WTO (2009c), “Overview of Developments in the International Trading Environment”, Annual Report by the Director–General, WT/TPR/OV/12, November. WTO (2010a), “Report to the TPRB from the Director-General on Trade-Related Developments”, document WT/TPR/OV/W/3, June. WTO (2010b), “Report on G20 Trade Measures, May 2010 to October 2010”, November. WTO (2010c), “Overview of Developments in the International Trading Environment”, Annual Report by the Director – General, WT/TPR/OV/13, November. WTO (2011a), “Report on G20 Trade Measures, Mid-October 2010 to April 2011”, May. WTO (2011b), “Report to the TPRB from the Director-General on Trade-Related Developments”, document WT/TPR/OV/W/5, September. WTO (2011c), “Report on G20 Trade Measures, May to Mid-October 2011”, October. WTO (2011d), “Overview of Developments in the International Trading Environment”, Annual Report by the Director – General, WT/TPR/OV/14, November. WTO (2012a), “Report on G20 Trade Measures, Mid-October 2011 to Mid-May 2012”, May. WTO (2012b), “Report to the TPRB from the Director-General on Trade-Related Developments”, document WT/TPR/OV/W/6, June. WTO (2012c), World Trade Report 2012. Trade and public policies: a closer look at non – tariff measures in the 21st century, July. 3 Policies and Instruments Employed by Argentina and Brazil

Carolina Szpak and Diana Tussie University of Tres de Febrero, Argentina; Latin America Trade Network, FLACSO, Argentina

1. Introduction

During the recent global economic crisis, most countries have taken measures that restrict trade and affect their trading partners. According to Global Trade Alert (GTA), Latin America was responsible for 20% of the 2,430 state measures compiled in its database (as of 31 May 2012), even though its share of global commerce was just 3.9% in 2011. Among Latin American countries, Argentina and Brazil adopted the largest number of restrictive measures. In the 11th GTA report, Argentina was ranked third in terms of the quantity of measures imposed and Brazil was tenth. Governments of both countries were motivated by the aim of protecting jobs in the midst of a severe global crisis, and by the importance of industrial development as the engine of generation of employment and progress. Accordingly, many policies and instruments applied since 2008 were aimed at controlling imports, sustaining domestic activity and preserving jobs. This chapter identifies and describes the main measures adopted by Argentina and Brazil, based on the GTA database and other sources. In order to select the “main” measures, we chose those that were identified as discriminatory by the GTA team (red plus amber) and which also had a wide coverage in terms of quantity of tariff lines (4 digits). For the selected measures and instruments, we look at their implementation and comment on their coverage and characteristics. We also try, where possible, to quantify some of the measures, in order to provide a concrete assessment. We also look at how each measure related to the global crisis. Was the measure motivated by the crisis? Did the application of the measure or the administration of the corresponding instrument vary during the crisis era? Additionally, we try to give some insights into why governments would have preferred some of these

29 30 Not Just Victims: Latin America and Crisis-Era Protectionism measures to others. This chapter aims to be an introductory guide to the main crisis-era measures adopted by Argentina and Brazil. Additional and complementary work could analyse each one much more in detail, estimate their impacts and assess the wider implications. The next section deals with the main measures adopted by Argentina, while the third section is devoted to the case of Brazil. Section four concludes.

2. Main measures adopted by Argentina

The GTA database reports 184 measures adopted by Argentina between November 2008 and 31 May 2012 (see Annex 1). Following the GTA classification, 141 measures are red (77% of the total), 28 are amber (15%) and 15 green (8%). The countries most affected by these measures are: China (105 measures), Brazil (66), United States (56), Italy (54), Germany (49), France (46), Spain (45), Thailand (45), Korea (43) and Indonesia (40).1 Most of the measures adopted by Argentina are aimed at controlling imports (84.8%). Those aimed at controlling or promoting exports make up 6.5% of total, while the measures that look to maintain the level of domestic activity are 8.7% of total. Those discriminatory measures that have a wide coverage in terms of number of tariff lines affected are:

• 78 non-tariff measures involving 159 tariff lines. The most relevant instruments are: reference prices; non-automatic import licences; and affidavits on imports covering all tariff lines. • 12 state aid measures affecting 207 tariff lines. In this case, the most relevant instruments are the Capital Goods Regime that covers 197 tariff lines and the Bicentenary Productive Financing Programme and the “REPRO” Program that cover all tariff lines. • 53 trade remedies measures involving 59 tariff lines.

These policy initiatives are described in the following subsections.

2.1 Capital Goods Regime

Domestic producers of a wide range of capital goods have received fiscal benefits for some time. They began in 2001 with Decree 379/01, just before the date agreed by Mercosur for the establishment of a common external tariff of 14% for capital goods. At that point, Argentina asked Mercosur partners for a waiver to adopt its decree and at the same time implemented a 0% import tariff for capital goods.

1 Most of the measures affect more than one country. Policies and Instruments Employed By Argentina and Brazil 31

National producers competing with these imported goods were compensated in the form of a benefit of 14% for domestic sales through a bond that could be used to offset VAT and income tax. These bonds could also be exchanged for cash in the secondary market. This regime and the Mercosur waiver were regularly extended after 2001. According to government figures, total benefits in 2011 reached US$330 million and a total of US$1,682 million over 2003–2011. The overall amount of the financial benefit for any given year depended on the volume of domestic sales, the number of firms that applied for the benefit and the speed of administrative approval by the government. This benefit was therefore implemented more than a decade ago, well before the onset of the global economic and financial crisis. Nevertheless, during 2012 an important change was introduced to this incentive scheme. While the regime was again extended until December 2012 (Decree 1027/12), an import of 14% (the Mercosur Common External Tariff) was established for those capital goods that can be provided by domestic manufacturers, while a 2% tariff was imposed for those capital goods not produced domestically (Decree 1026/12). The capital goods sector is considered strategic by the government, since it is integrated into others production chains and has competitiveness and technological spillovers into the rest of the economy. During the liberalisation experience of the 1990s, the sector’s activity level fell by 70% between 1994 and 2002. From 2003 to 2011, it grew by 78%, currently reaching 16.5% of total industrial firms and 12% of industrial jobs.

2.2 Bicentenary Productive Financing Programme

This programme was launched in 2010 and was aimed at delivering cheap credit to domestic firms that intended to invest. In practice, this credit was recommended for investment projects greater than US$200,000, due to the administrative obligations and guarantees needed. The interest rate is 9.9% annually, with five years for repayment and a maximum of one year’s grace.2 The funding available is up to 80% of the project’s value. In 2010 and 2011, these loans amounted to US$1,478 million for different sectors of the economy. Table 1 shows the principal industrial sectors that received these credits during this period. Auto parts, food and medicaments were the sectors that used this programme most intensively.

2 The interest rate can be up to 50% less than the market rate. 32 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 1 Bicentenary Productive Financial Programme 2010–2011, by sector Sector US$ million Number of projects Food 161 33 Poultry 88 12 Dairy 14 7 Swine 59 14 Leather, footwear and leather goods 9 7 Textiles and apparel 26 n.a. Wood and manufactures 9 8 Auto-parts and automotive 305 20 Agricultural machinery 6 6 Capital goods 17 15 Construction 23 10 Medicaments 114 10 TOTAL 669 109

Source: Ministry of Industry.

In 2012, the of Argentina asked the private financial sector to provide a minimum amount of credit (5% of total deposits) in order to promote productive investment projects.3 This measure has been in force since December 2012 and the maximum interest rate will be 15% a year. It is expected to amount to US$3,200 million worth of credit, with half of this going to small and medium sized enterprises (SMEs). These financial programmes appear to be a response not only to the global crisis, but also to a long-standing lack of funding by the Argentine banking sector for the productive sector, which had historically received an under-provision of credit in terms of quantity, rates and return time – particularly among SMEs. It should also be noted that since Argentina’s default in 2001, access to external financing has been extremely difficult. These programmes are therefore aimed at partially dealing with this structural lack of credit, exacerbated by the context of the global crisis.

2.3 Programme for the Recovery of Production (REPRO)

REPRO is a programme that seeks to minimise job losses when the level of economic activity falls. A firm that applies for this programme receives a subsidy to pay wages (about US$200 per worker and per month) for one year. In return, the firms agree not to reduce the number of workers.

3 Central Bank communication “A 5319.” Policies and Instruments Employed By Argentina and Brazil 33

This programme was created in 2002 by the Ministry of Labour, Employment and Social Security.4 At that time, Argentina was in the middle of an economic crisis that led to an unemployment rate of 21.5%. As Trucco and Tussie (2010) explain, the programme was revived during the global crisis as a preventive policy. This study showed that until 2010, the most favoured sectors were: a) mechanical goods, textile and automotive-parts (based on the number of manufactured enterprises; b) producers of tradable goods (as measured by kind of products); c) small and medium enterprises (96.3% of total firms). Between 2009 and 2010, the amount in subsidies grew by 450% to US$130 million.

2.4 Reference prices

Reference prices seek to establish standard or “criterion” values to prevent the under-invoicing of import operations. If imports are sold at lower prices than these reference prices, importers must obtain a warrant while a customs valuation investigation is carried out. This warrant, which is handled by the Argentine Customs, covers import duties and taxes and must be paid prior to removing the goods from customs. According to GTA, there are 86 tariff lines (Table 2) covered by reference prices, mainly textiles, metals and its manufactures, plastic products, rubber and its products and capital goods. Imports from Asian countries are mainly subject to reference prices. Importers’ complaints usually refer to situations when the stated reference values are higher than the actual market prices. They argue that in these cases, this generates “extra” protection for domestic producers. They also complain about the uncertainty raised by the investigation process and its potential outcome; in their view, the criterion value works as an “entry price”, reducing the competitiveness of imports.

4 Resolution MTEySS Nº 481/02, that was extended during 2009, 2010, 2011 y 2012 through Resolutions Nº 72/09, Nº 150/10, Nº 302/11 and Nº 163/12. 34 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 2 Products covered by reference prices Number of tariff lines Product (4 digits) Animal products 1 Vegetables 3 Chemicals 3 Rubber, plastic and their manufactures 12 Skins and leather 2 Paper and cardboard 1 Textiles 19 Footwear 5 Stone, glass and ceramic products 5 Natural pearls 1 Metals and their manufactures 13 Capital goods 10 Transport equipment 2 Optical instruments 4 Toys 3 Buttons and zippers 2 Total 86

Source: GTA.

2.5 Antidumping measures

Initiations of antidumping investigations rose in parallel with the global crisis, increasing in 2008 (19) and 2009 (28) and decreasing in 2010 (14) and 2011 (7). Antidumping measures implemented reached 15 in both 2009 and 2010, falling to 7 in 2011. The most relevant sectors for antidumping actions were textiles, footwear, machines, equipment and metals (Figure 1). These sectors are traditionally considered sensitive by Argentine governments, since they are labour intensive and are mainly carried out by SMEs. China and Brazil are the countries most affected by these antidumping actions, followed by other Asian countries such as Chinese Taipei, Indonesia and Malaysia. In this period, neither countervailing nor safeguards actions were adopted. Policies and Instruments Employed By Argentina and Brazil 35

Figure 1 Sectors covered by antidumping actions

Articles of stone, plaster, cement and similar

Glasses and products

Paper, paperbord, articles paper pulp and others

Miscellaneous articles Optical aparatus, photographic, and others

Ceramic products Chemestry Industry Transport equipments Plastic, Ruber and manufactures Footw ear Machines and equipments Metal and proucts of metal Textiles and products

024681012 Source: GTA. During the unilateral economic liberalisation programme in the 1990s, Argentina dismantled most of the instruments and policies aimed at restricting imports that were part of the import substitution industrialisation (ISI) regime. Trade remedy instruments were the exception, although the institutional setting for the administration of these instruments was deliberately designed to limit their application.5 Accordingly, a bifurcated system was implemented, with a government agency in charge of determining dumping (inspired by the US Department of Commerce) and a separate government agency in charge of the injury determination (similar to the US International Trade Commission). Nevertheless, the overvaluation of the peso under the convertibility programme, together with the unilateral trade liberalisation process and the confirmation of a with Brazil, Paraguay and Uruguay, generated an increasing demand for trade remedy actions.6 Hence, Argentina became one of main users of the post–Uruguay Round system of trade remedies, together with Brazil, India and South Africa. Trade remedy actions continued to be important in Argentine trade policy until the onset of the global crisis, when other less “burdensome” instruments began to gain pre-eminence in the country’s trade policy.7

2.6 Non-automatic import licences

After being dismantled during the 1990s, the non-automatic import licences regime began to be used again after 2004, albeit covering few sectors. In 2009

5 Trade remedies actions were considered as “poison” and as such they should be used in “small doses.” This similitude between protection and poison can be found in Edgeworth (1908). 6 Brazil and China were the main subject countries during these years. 7 In the Argentina experience, antidumping measures are frequently adopted between 14 and 18 months after the initiation of the investigation. 36 Not Just Victims: Latin America and Crisis-Era Protectionism and as a consequence of the global crisis, the coverage increased significantly as a preventive measure against a “global oversupply of imported goods at dumping prices.” Thus, the quantity of 8-digit tariff lines covered by this regime increased in 2009, and subsequently in 2010 and 2011, reaching almost 800 tariff lines (Figure 2). Figure 2 Tariff lines covered by non-automatic licences 900 800 700 600 500 400 300 200 100 0 Till 2007 2008 2009 2011

Tariff lines with non-automatic licence Source: Official Bulletin. The main imported products that required non-automatic import licences were footwear, toys, house wares, motorcycles, pneumatic tyres, balls, textiles and clothing, metallurgical products, spinning and weaving, some auto parts, motor vehicle, agricultural machine, bicycles and some types of paper. Since this regime was not used for more than a decade and when it began to be applied again, it covered just a few products. It was not until 2011 that authorities implemented a data processing system in order to administer the licensing procedure. Importers, exporters and foreign governments regularly and repeatedly complained about the administration of the system by Argentine authorities, mainly concerning delays in granting the licences. Many trade disputes began during this period, especially with Brazil, Argentina’s main trade partner. These disputes led, in some cases, to Brazilian retaliation against Argentine exports, also using a non-automatic licences regime that was more sophisticated and extensive in coverage.

2.7 Affidavit for imports

Since February 2012, importers must present an affidavit (DJAI is the acronym in Spanish) prior to removing products from customs. In this document, the importer must give details of the product being imported, its quantity, the amount of the transaction, and data about the importer. After this information is analysed by different public agencies (including the tax collection agency AFIP Policies and Instruments Employed By Argentina and Brazil 37 and the Ministry of Economy and Public Finance), an authorisation to import is issued. Each DJAI has an authorisation number, which is needed to formalise the import. This affidavit covers all imported products (all tariff lines), all imports and all trading partners. In cases when an imported product is covered by the non-automatic import licences regime, the affidavit authorisation number is needed to issue the import licence. While the coverage of the non-automatic licences regime was extended in the wake of the global economic and financial crisis to prevent job losses in sectors sensitive to import competition, the affidavit was established after a fall in central bank reserves during the last quarter of 2011. This loss of reserves and forecasts of a much lower trade surplus for 2012 worried the Argentine authorities, who began to look at dollars as “scarce goods.” Since the default, Argentina has had very strong limits on accessing the international credit market, while it is carrying out a policy of debt reduction in parallel. In Argentina’s economic history, the external sector has played a major role on many occasions by limiting growth and generating balance of payment crises. By the same token, during 2012 the government established a formal procedure for buying foreign currency. Before each purchase, the buyers (persons and companies) must ask for authorisation from the tax collection agency. Before authorisation, this agency checks that the buyer can show where the income and assets intended to be used for the purchase came from. In the case of imports, the number of the affidavit is required in order to authorise the foreign currency operation. Additionally, importers and the media have regularly reported that importers needed to show a balance of imports with exports in order for the authorities to issue the import license or authorise the affidavit.

2.8 The relation of the measures imposed by Argentina to the global crisis

According to GTA, Argentina is one of the countries that imposed the most measures that harmed trading partners during the crisis. In the previous sections, we presented a summarised description of the main measures, defined as those that cover more 4-digit tariff lines, as compiled by GTA. The following measures were therefore discussed: a) Capital Goods Regime; b) Bicentenary Productive Financing Program; c) Programme for the Recovery of Production (REPRO); d) Reference prices; e) Antidumping measures; f) Non-automatic import licences; and g) Affidavit for imports. Two questions seem relevant regarding these measures and the global crisis. First, what is the relation between each measure and the global crisis? Second, did the measure change during this period, and if so, was this change related to the global crisis? Both the Capital Goods Regime and the Programme for the Recovery of Production were adopted many years before the global crisis, in 2001 and 2002 respectively. The Capital Goods Regime was renewed many times afterwards, even in 2005, 2006 and 2007 when the economy had fully recovered from the 2001 crisis and the more recent global crisis was still to come. Nevertheless, the 38 Not Just Victims: Latin America and Crisis-Era Protectionism government linked the imposition of an import duty coupled with the fiscal benefits in 2012 to the global crisis. In fact, the state of international trade in capital goods during the crisis was one of the stated motives of that change. It is clear that the REPRO programme was revived as a preventative policy in response to the global crisis. The Bicentenary Productive Financing Programme and other financing measures adopted during the period were driven by the global crisis, with the objective of providing a countercyclical impact. Additionally, they were also motivated by what is perceived as limited access to external financing by the Argentine financial sector. Reference prices and antidumping actions clearly increased after the onset of the global crisis. It is important to keep in mind that after most of the restrictive measures affecting imports during the 1990s were dismantled, both references prices and antidumping (AD) actions were measures available to authorities that were seeking to prevent or alleviate the impact of the global crisis. It is clear that initiations of investigations and AD measures increased significantly in 2009 following the onset of the global crisis. Lower AD activity in 2011 and the first semester of 2012 could be explained by a shift by authorities away from AD as the “preferred” instrument for deterring imports. A clear correlation can be found between lower AD activity and the spreading of non- automatic licence coverage in 2011 and the implementation of the affidavit for imports on all products in 2012. On the other hand, the reference price system has not had major changes during the crisis. As explained above, the non-automatic import licences regime began to be used timidly some years before 2008. The increase in coverage during 2009, 2010 and 2011 can therefore be pinned to the global crisis. It is interesting to note that because this instrument was dismantled during the 1990s and was implemented to a limited extent after 2004, when the authorities decided to intensify its use they found a very rudimentary system of administration, contrasting with sophisticated systems used by other countries.8 As a result, the increase in coverage was complemented by the implementation of a computer system to administer the import licences regime. The major change for the non-automatic licences regime during the crisis, besides the wider coverage, was the implementation of the affidavit system in 2012. This meant that non-automatic licences lost the pre-eminence in trade policy they had during 2009–11. Yet, the implementation of the affidavit system does not seem to be motivated mainly by the global crisis. Instead, its main motivation can be found in the authorities’ concern over preserving and generating foreign currency reserves by maximising the trade balance surplus. Measures related to purchases of foreign currency appear to point in the same direction. Thus, trade policy became one of the guardians of Argentine

8 Brazil, for example, has developed a computer system called “SISCOMEX”, that allows authorities to administer many trade policy instruments, including the non-automatic licences regime. During the retaliatory episodes against the Argentina measures, Argentine firms reported that when exporting to Brazil they found they were required to fulfil the import non-automatic licence procedures once the products arrived at Brazilian customs. In contrast, in Argentina the implementation of the non- automatic licence requires the publication of the ministerial decision in the Official Gazette and is operative 60 days after this publication. Policies and Instruments Employed By Argentina and Brazil 39 macroeconomic stability. This heterodox application and administration of policies and instruments generated incessant complaints from Argentina’s major trade partners, including the Mercosur members Brazil, Paraguay and Uruguay.9 As mentioned above, some retaliation episodes by Brazil occurred between 2009 and 2012. Between May and August 2012, the EU, the US, Japan and Mexico requested consultations with Argentina over some of these measures and administration policies.10 These countries complained that Argentina often required importers to undertake certain commitments, including, inter alia: limiting their imports; balancing them with exports; making or increasing their investments in production facilities in Argentina; increasing the local content of the products they manufacture in Argentina (and thereby discriminating against imported products); and not transferring benefits abroad and/or controlling their prices. They considered that the issuance of licences and the approval of the affidavits were being systematically delayed or refused by the Argentine authorities on non-transparent grounds and that, often, the Argentine authorities made the issuance of licences and the approval of affidavit conditional upon importers undertaking to comply with these commitments. For the trading partners concerned, these measures restricted Argentine imports and discriminated between imported and domestic goods. They considered that these measures did not appear to be related to the implementation of any measure justified under the WTO Agreement, but were instead aimed at advancing the Argentine government’s stated policies of re-industrialisation, import substitution and elimination of the trade deficit.

3. Main measures adopted by Brazil

During the crisis, Brazil took 156 measures, according to the GTA database (Annex 2). Of these, 54 are classified as red (35%), 37 amber (24%) and 65 green (42%). This means that 59% of the measures (red plus amber) discriminated against trade. The most affected countries are: China (27), United States (21 measures), Germany (17), Italy (16), France (15), India (12), Japan (12), Mexico (12), Republic of Korea (12) and Spain (12). Measures that focus on the control of imports represent 90% of total, while almost 7% seek to maintain the level of economic activity. Those related to exports represent 3% of total. If discriminatory measures are analysed by the number of tariff lines affected, those measures and instruments that are included in the “Brasil Maior” programme cover much of the tariff lines universe. There are also financial measures that promote exports, especially to SMEs, and cover at least 903 tariff lines. In the group of measures that focus on imports, the automatic import licences regime covers 393 tariff lines, tariff measures affect 51 tariff lines and trade remedy measures cover 44 tariff lines. Finally, the Public Procurement Programme covers a wide range of tariff lines.

9 Recently, Venezuela became in a new member of Mercosur. 10 Turkey, Ukraine, Australia, Canada and Guatemala have requested to join these consultations. 40 Not Just Victims: Latin America and Crisis-Era Protectionism

These measures and instruments are presented in the following subsections.

3.1 “Brasil Maior” programme11

Before the global crisis, Brazil already had some programmes aimed at promoting investments and exports.12 The most common instruments are the subsidised credit lines from the National Bank of Economic Development (BNDES in Portuguese) for semi-manufactured and manufactured goods. Table 3 shows some of these credit lines, as reported by the GTA. Table 3 BNDS credit lines. Credit lines Number of tariff lines covered Export financing of consumer goods 196 Export financing of capital goods 175 Export pre-financing for SMEs 903

Source: GTA

These credit lines are aimed at boosting the competitiveness of Brazil’s industrial exports. The significant increase in Chinese demand for Brazil’s primary products brought about “Dutch disease” effects, thanks to an overvaluation of the real. Capital inflows into Brazil had the same effect. Before the crisis hit, the authorities sought to offset the movements and their effects on exports and imports. While the government offered incentives to value-added exports and tried to open new markets, private sector pressures built up for measures to offset an increased import penetration ratio. The “Brasil Maior” programme was launched during the crisis. It included measures to stimulate investment and innovation, promote exports, and strengthen the procedures for trade remedy actions and also the agency in charge of the investigations. The programme had a time frame from 2011 to 2014 and it included the following instruments:

• Exemption from Social Security Tax (Folhas de Pagamentos) that have a fiscal cost of US$4.2 billion. The most favoured sectors, in terms of the reduction in the tax rate, are construction, leather and footwear. In terms of the cost, the most favoured sectors are capital goods, auto parts, information technology and telecommunications parts and equipment, leather, footwear and textiles. • Exemption from the Industrialised Product Tax (IPI), which is paid on transactions in industrial goods. The fiscal cost is about US$284 million per quarter and applies to appliances, furnishings, PET laminates, wallpaper, light and lamps. • Exemption from IPI, Integration Social Programme Tax (PIS in Portuguese) and Contribution to Social Security Finance Tax (COFINS in Portuguese)

11 “Brasil Maior” means “Bigger Brazil.” 12 See Baruj, Kosacoff and Porta (2008). Policies and Instruments Employed By Argentina and Brazil 41

that had a fiscal cost of US$251.3 million for 2012 and 2013. The exemption is for investment in ports, sheds and machines oriented to obtain energy efficiency. • Time extensions to pay the PIS and COFINS, with a fiscal impact of US$812 million for sectors such as auto parts, textiles and apparel, footwear and furnishings.

Excluding the time extensions to pay the PIS and COFINS, the exemptions have a fiscal cost of approximately US$4.7 billion, although there are different periods of time for implementation in each case. The most favoured sectors are capital goods, auto parts, textiles and footwear. There are also subsidised credit lines that have a fiscal cost of US$39.3 billon and a guarantee fund of US$14 billion. The most important are US$1.8 billion for export pre-financing and financing, and US$37.5 billion for investment in buses and trucks, capital goods, textiles and apparel, leather and footwear, wood products, decoration products, fruits, ceramic products, accessories for automobiles and information and communication technology. These measures are of the same kind as those adopted prior to the global crisis. The difference is that the “Brasil Maior” programme allocates additional fiscal resources to cope with worsened competitiveness of the domestic industry due to the economic and financial global crisis.

3.2 Trade remedy measures

The “Brasil Maior” programme also sought to strengthen the trade remedy system.13 The period of investigation for antidumping and countervailing cases was reduced from 15 to 10 months, while the period before imposing provisional measures was reduced from 240 days to 120 days. The result was a quadrupling of the quantity of trade remedy measures, including an increased use of safeguards. Trade remedy initiations increased rapidly in 2008 (24) and 2010 (37), and decreased in 2011 (16). The number of initiations in 2010 was the highest in WTO reported data, while the number for 2008 was the second highest. The number of measures taken clearly grows during the crisis, to 12 in 2008 and to 16 in 2009 – a record for the WTO series. Figure 3 shows Brazilian trade remedy measures compiled by GTA by sector. Most measures cover metals, plastics, rubber and manufactures, chemicals, textiles, paper and footwear. The most affected countries are the US (chemicals, plastics and rubber) and China (textile, footwear and metals).

13 Another measure related to imports is an increase in physical inspections at customs in order to avoid violations of rules of origin and valuation. More aggressive measures against were implemented.. 42 Not Just Victims: Latin America and Crisis-Era Protectionism

Figure 3 Number of trade remedy measures, by sector

Pen, markers and others Optical instruments, photography and others

Food Capital goods Minerals Glass and manufacturers Footwear, hats and others Pulp, paper and paperboard Textiles Chemical products

Plastic, rubber and manufacturers Metals and manufacturers

02468101214

Source: GTA

3.3 Public procurement

The Public Procurement Programme establishes preferences for domestic products that are offered in similar technical and commercial condition to imported products. The preference is worth up to 25% of the price, depending on the kind of product. Table 4 Brazilian public procurement margins of preference for selected products Margin of Estimated annual Products Term preference value of purchases Medicaments 8% 2 years Drugs 20% 5 years US$2,034 million Biopharmaceuticals 25% 5 years Retro-excavators 10% 5 years US$233 million Graders 18% 5 years

Source: Ministry of Economy of Brazil.

This measure has important implications not only because of the significant preference margin, but also because of the large volume of government purchases expected over the next few years. In addition to infrastructure spending in preparation for the FIFA football World Cup in 2014 and the 2016 Summer Olympics, there is a very big potential market related to oil exploration and exploitation by Petrobras, a state enterprise. Mercosur members, mainly Argentina, have complained about difficulties in competing for public procurement contracts. Policies and Instruments Employed By Argentina and Brazil 43

3.4 Tariff measures

Increasing import tariffs is one of the measures that Brazil has used often during the crisis. The sectors covered by higher tariffs are textiles, capital goods, metals and their manufactures, and transport material (Table 5). Table 5 New import tariffs, by product Number of New import Sector HS Chapter tariff lines tariff covered 4. Milk and dairy products; Live animals and animal eggs, honey, edible animal 3 28% products products. Animal fats and oils 15. Animal fats and oils or or vegetable, prepared vegetable, prepared edible 1 30% edible fats. fats. 16. Preparations of meat, fish, crustaceans, molluscs 1 32% and others. Food 20. Preparations of vegetables, fruit, nuts or 1 35% other parts of plants. 32. Tanning or dyeing 1 12% extracts. Chemicals 38. Various products of 1 14% chemicals industry Leather products 42. Articles of leather. 1 35% 50. Silk. 3 26% 51. Wool and woven 4 26% fabrics. 52. Cotton. 4 26% Textiles 53. Other vegetable textile 4 8% fibres. 54. Made filaments. 4 26% 55. Synthetic fibre. 1 26% Ceramic products 69. Ceramic products. 2 14% 44 Not Just Victims: Latin America and Crisis-Era Protectionism

72. Iron and steel. 4 14% 74. Cooper and 1 12% manufactures. Metals and products of metal 82. Tools, implements, cutlery, spoons and forks, of 1 30% base metal, parts thereof, of base metal. 84. Nuclear reactors, boilers, machinery and 5 16% mechanical appliances, parts thereof or appliances.

Machines and 85. Machinery and equipment electrical equipment and parts thereof; sound recording or sound 3 14% reproducing apparatus for recording or reproducing sound. 87. Motor vehicles, tractors, cycles and other Transport equipment 5 30% land vehicles, parts and accessories. Other products 95. Toys, games and parts. 1 35%

Source: GTA.

Brazil has bound tariffs as high as 35%. Since Mercosur is a customs union, its members have to apply the common external tariff, with the exception of a group of products (200 for Argentina and 200 for Brazil) where they can depart from the common external tariff. Thus, Brazil can increase or reduce tariffs unilaterally for ony these 200 products. Increases (or decreases) in tariffs on other products need to be decided by agreement among all Mercosur members. Most of the higher tariffs for textiles were agreed in Mercosur, as was the case for some machines and for toys. Brazil also implemented many tariff reductions. GTA has identified 53 such measures, covering at least 228 tariff lines (including auto parts).

3.5 Measures imposed by Brazil and their relation with the global crisis

According to the GTA database, Brazil implemented the second-highest number of measures during the crisis era in Latin America, although Brazil also adopted many “green” measures, such as tariff reductions. As Cornet Naidin et al. (2010) discuss, until the beginning of 2010 Brazilian authorities concentrated on the mitigation of the negative effects of the crisis on exports, looking to increase Policies and Instruments Employed By Argentina and Brazil 45 supply and reduce financial costs. From mid-2010, the focus shifted to supporting competitiveness to offset the appreciation of the local currency. The export support measures were aimed at improving access to credit, increasing the span of official financing programmes and significantly propping up credit lines. There were also measures aiming to remove tax burdens from exports and enlarge the drawback system, and initiatives to facilitate trade. These measures were directly related to the global crisis. However, other measures, such as those included in the “Brasil Maior” programme, indicate that the government’s motivation was its concern over the impact of the currency appreciation on export performance. Meanwhile, measures such as public procurement, trade remedies and tariffs increases indicate concerns for the impact of the currency appreciation on import penetration ratios. In these cases, the motivations seem to stem mainly from domestic imbalances rather than the effects of the global crisis. In the case of measures directed at restricting imports, Brazil has resorted to “traditional” measures, such as tariff increases and trade remedy actions. Rios (2009) argues that the Brazilian private sector prefers the imposition of measures regulated by the WTO, such as trade remedies, rather than such as import licences, which they assume could be used with a discretionary basis. In January 2009, just after the onset of the global crisis, authorities attempted to introduce automatic import licences for a wide range of products. Following criticism from entrepreneurs and the wider public, this measure was revoked just three days after its imposition. Mesquita Moreira (2009) maintains that Brazil had implemented a policy of protection and promotion of local industry in previous years, so the new instruments were simply an amplified version of an existing pattern of trade policy. This suggests that during the economic liberalisation of the 1990s, Brazil did not dismantle import-controlling schemes with the same intensity as Argentina. These considerations should not overshadow the fact that, although they are not directly aimed at restricting imports, measures that seek to achieve increased competitiveness of domestic industry could have indirect effects on imports as well.

4. Conclusion

As the GTA database shows, Argentina and Brazil were very active since the onset of the crisis, adopting a wide set of measures. We have presented the main measures taken by both countries in terms of the products (tariff lines) that they cover. Some insights can be drawn from the analysis. First, the measures adopted by both countries in the crisis era were undoubtedly related to the shocks hitting their economies. Nevertheless, it seems that each country had different perceptions or priorities, since they implemented a very different set of measures. While Argentina appealed to border measures – such as non-automatic licences, reference prices and trade remedy actions – in order to target imports of specific products, Brazil implemented export support measures. 46 Not Just Victims: Latin America and Crisis-Era Protectionism

Argentina’s aim was to mitigate the effects of the crisis on imports, while Brazil sought to mitigate the effects of the crisis on exports. Second, as the crisis developed, both countries changed the way they implemented some of their existing measures, and adopted new ones, that were more directly related to domestic imperatives and less directly with the global crisis. Thus, in Argentina the “surgically” targeted border measures lost primacy and a “comprehensive” border measure took their place, motivated by concerns about the level of foreign currency reserves (Dalle and Lavopa 2010). In the case of Brazil, the measures adopted indicate that the focus shifted to supporting competitiveness in order to offset the appreciation of the local currency and also because of their concern over the growing competition in manufactured goods from China. Third, in relation to measures that directly affect imports, Argentina resorted to what GTA calls “murky” measures, while Brazil adopted “traditional” ones. Is this difference the result of “idiosyncrasy”, as some authors suggest? Or is this difference a “by-product” of the increasing role that Brazil is playing in the global landscape? This is an issue that requires further research. Fourth, during the crisis, both Argentina and Brazil gradually intensified their resort to protectionism. In Argentina this was mainly through trade policy, while in Brazil it was mainly through industrial policy. Is it the case that the fiscal resources available to Brazil allowed it to implement industrial policies, while Argentina was “constrained” to using trade policy? Additional research could perhaps shed light on this issue. Finally, as mentioned in the introduction, additional and complementary work could be oriented towards analysing each measure in detail, measuring their impacts and effects and evaluating their implications. Policies and Instruments Employed By Argentina and Brazil 47

Annex 1 Measures adopted by Argentina

Total Red Amber Green

Type of Number Tariff Number Tariff Number Tariff Number Tariff measure of lines of lines of lines of lines measures covered measures covered measures covered measures covered

Bail out / state 13 207 (1) 7 205 (1) 5 2 (1) 1 (1) aid measure Fiscal benefits 4 197 (1) 3 197 0 0 1 (1) Financial 8 4(1) 3 2 (1) 5 2 (1) 0 0 benefits Others 1 6 1 6 0 0 0 0 Trade defense 60 69 38 43 15 16 7 10 measures Antidumping 58 68 36 42 15 16 7 10 Safeguards 2 1 2 1 0 0 0 0 Import ban 3 19 2 16 1 3 0 0 Quotas 2 3 1 2 0 0 1 1 Imports 1 1 0 0 0 0 1 1 Exports 1 2 1 2 0 0 0 0 Non-tariff 78 172 (1) 73 152 (1) 5 20 (1) 0 0 measures References 66 90 64 86 2 4 0 0 prices Import 5 45 5 45 0 0 0 0 licenses Import taxes 1 (1) 0 0 1 (1) 0 0 Import 6 37 (1) 4 21 (1) 2 16 0 0 procedures Technical 3 69 2 61 1 8 0 0 barriers Tariff 10 40 (1) 6 22 1 15 3 3 (1) measures Local content 1 2 1 2 0 0 0 0 requirement Taxes and restrictions to 10 51 8 41 0 0 2 10 exports Tariff 1 7 0 0 0 0 1 7 Reference 1 15 1 15 0 0 0 0 prices 48 Not Just Victims: Latin America and Crisis-Era Protectionism

Quotas 2 2 2 2 0 0 0 0 Export ban 2 3 2 3 0 0 0 0 Taxes 1 3 0 0 0 0 1 3 Export 3 21 3 21 0 0 0 0 procedures Export 1 200 1 200 0 0 0 0 subsidies State- controlled 1 15 1 15 0 0 0 0 company Investment 2 (1) 1 (1) 0 0 1 (1) measures TOTAL 184 847 (1) 141 759 (1) 28 64 (1) 15 24 (1)

Source: GTA. Note: (1) refers to a measure where some of the tariff lines affected could not be identified. In certain cases, some of the tariff lines could be identified but not all – in such cases the notation (1) is placed adjacent to the number of tariff lines that could confidently be identified.

Annex 2 Measures adopted by Brazil

Total Red Amber Green Type of Number Tariff Number Tariff Number Tariff Number Tariff measure of lines of lines of lines of lines measures covered measures covered measures covered measures covered Bail out / State aid 1 (1) 1 (1) 0 0 0 0 measure Trade defense 52 51 (1) 18 19 (1) 28 26 6 6 (1) measure Antidumping 49 50 (1) 17 18 (1) 26 26 6 6 (1) Safeguards 3 1 1 1 2 0 0 0 Import 6 12 2 4 1 2 3 6 quotas Non-tariff 2 393 (1) 0 0 2 393 (1) 0 0 measures Import 1 393 0 0 1 393 0 0 license Import 1 (1) 0 0 1 (1) 0 0 procedures Tariff 77 279 (1) 22 46 2 5 53 228 (1) measures Local content 1 5 1 5 0 0 0 0 requirements Policies and Instruments Employed By Argentina and Brazil 49

Public 3 1 (1) 3 1 (1) 0 0 0 0 purchases Taxes and restrictions 1 1 1 1 0 0 0 0 to exports Export 4 96 (1) 3 (1) 1 96 0 0 subsidies Financing 4 1,274 (1) 1 196 3 1,078 (1) 0 0 Investment 4 (1) 2 (1) 0 0 2 (1) measures Migration 1 - 0 0 0 0 1 - measures TOTAL 156 2,112 (1) 54 272 (1) 37 1,600 (1) 65 240 (1)

Source: GTA. Note: (1) refers to a measure where some of the tariff lines affected could not be identified. In certain cases, some of the tariff lines could be identified but not all – in such cases the notation (1) is placed adjacent to the number of tariff lines that could confidently be identified.

References

CNCE (1999a), “Informe de Barreras a las Exportaciones Argentinas en el NAFTA”, Comisión Nacional de Comercio Exterior, Argentina. CNCE (1999b), “Informe de Barreras a las Exportaciones Argentinas en la Unión Europea”, Comisión Nacional de Comercio Exterior, Argentina. Cornet Naidin, L., P. da Motta Veiga, K. Pereira da Costa and S. Rios (2010), “Brazilian Trade Policy: New Motivations and Trends”, in S. Evenett (ed.), Managed Exports and The Recovery of World Trade: The 7th GTA Report, Centre for Economic Policy Research. Dalle, D. and F. Lavopa (2010), “In Case of Fire, Break the Glass: Argentina’s Border Emergency – Kit in Times of Global Crises”, in S. Evenett (ed.), Managed Exports and The Recovery of World Trade: The 7th GTA Report, Centre for Economic Policy Research. Deardorff, A. and R. Stern (1997), “Measurement of Non -Tariff Barriers.” Working Paper No. 179, OCDE. Edgeworth, F. (1908), “Appreciations of Mathematical Theories”, Economic Journal 18, December. Evenett, S. (2009a), “Crisis – era protectionism one year after the Washington G20 meeting: A GTA update, some new analysis, and a few words of caution”, Global Trade Alert. Evenett, S. (2009b), “What can be learned from crisis-era protectionism? An initial assessment”, Center for Economic Policy Research. Evenett, S. (2009c), “Global Overview of Contemporary Protectionism: Word Trade Recovers but Incremental Protectionism Still Matches the Pace Set During 2009”, in S. Evenett (ed.), Managed Exports and The Recovery of World Trade: The 7th GTA Report, Centre for Economic Policy Research. 50 Not Just Victims: Latin America and Crisis-Era Protectionism

Evenett, S. ed. (2012), Débâcle: The 11th GTA Report on Protectionism, Center for Economic Policy Research. Mesquita Moreira, M. (2009), Brazil’s Trade Policy: Old and New Issues, Inter- American Development Bank (IDB). Ministry of Finance of Brazil (2012), “Novas medidas do Plano Brasil Maior”, presentation of the Minister, Brazil, 3 April 2012. Ministry of Industry of Argentina (2011), “Plan Estratégico Industrial 2020.” OECD and UNCTAD (2012), “Seventh Report on G20 Investment Measures.” WTO (2011), Overview of Developments in the International Trading Environment, . WTO (2012a), “Report on G-20 Trade Measures - Mid-October 2011 to Mid-May 2012”, World Trade Organization. WTO (2012b), WTO Annual Report 2012, World Trade Organization. Rios, S. (2009), Brazil: Increased International Integration Imposes Limits on Protectionist Policies, Centre of Integration and Development Studies (CINDES). Trucco, P. and D. Tussie (2010), “Learning from Past Battles in Argentina? The Role of REPRO in the Prevention of Crisis induced Lay-offs”, Center for Economic Policy Research, Global Trade Alert.

Web sites consulted www.brasilmaior.mdic.gov.br www.infoleg.gob.ar www.mdic.gov.br www.mecon.gob.ar www.mit.gob.ar 4. Textiles and Footwear in Argentina

Carolina Szpak University of Tres de Febrero, Argentina

1. Introduction

According to the Global Trade Alert (GTA) database, Argentina is one of the countries that has imposed the most measures affecting trading patterns during the global financial and economic crisis. Indeed, on this score, Argentina was the most active Latin American country during this period. Some of the implemented measures were specific in terms of tariff lines affected, such as antidumping duties, non-automatic import licences, import tariff increases or certain programmes especially designed to promote investment and competitiveness. Other measures were general, as they affected all sectors and all trading partners, such as the affidavit for imports. While the objective of the first set of measures was related more directly to the global crisis, the latter measures were imposed not only to protect local production from the global crisis, but mainly to improve the trade balance and the level of foreign currency reserves. Changes in the types of measures used by the government seem to be related more to domestic concerns than the global crisis. The textiles and footwear industries were beneficiaries of many of these measures. Both of them are considered “sensitive” sectors. They were developed through intermittent stages of the import substitution process and are considered traditional industries with roots in the local business culture.1 These sectors suffered a large decrease in activity during the 1990s and many companies collapsed during the crisis of 2001, so their productive capabilities and employment levels were significantly affected. Footwear production fell from 91 million pairs in 1991 to 36.5 million in 2001, while production of textiles decreased 28% between 1993 and 1999. From 2003 to 2010, both sectors grew, footwear by 109% and textiles and apparel by 146%. Both industries are labour-intensive and have the ability to employ large numbers of people, with a significant contribution from small and medium sized enterprises. In 2010, 19% of all industrial companies were in textiles and 9% in footwear. Both sectors have trade deficits and both are included in the government’s import substitution process. They were also included in the

1 Rapoport (2000).

51 52 Not Just Victims: Latin America and Crisis-Era Protectionism

Strategic Industrial Plan 2020.2 Although there is a pool of specific measures to deter imports competing with both sectors, this chapter will analyse the impact of the non-automatic import licences regime. This trade policy instrument was dismantled in the 1990s during the unilateral liberalisation programme but began to be used again in 2004, with a limited coverage in terms of tariff lines. With the onset of the crisis, the coverage was extended during 2009, 2010 and 2011, reaching almost 800 8-digit tariff lines. The non-automatic import licences regime seemed to be the “preferred” instrument of trade policy from 2009 to 2011. Then, it lost its pre-eminence with the implementation of the affidavit for imports in 2012. Certain World Trade Organisation (WTO) rules allow the use of trade policy instruments should specific procedures be followed. In theory, trade policy instruments – other than trade remedy actions – should not curb imports. We therefore analyse the evolution of the imports of textiles and footwear against that background. Did domestic production and imports evolve differently over time during the crisis? Was there different behaviour between imports carried out via the non-automatic licences regime and imports excluded from this system? This chapter is organised as follows. The next section describes the recent history of Argentine industry in terms of activity, employment, wages and trade balance. The third part presents the evolution of the textiles sector, in terms of level of activity, employment, composition of firms, wages and trade balance, while Section four is dedicated to the footwear sector. The main trade policies bearing upon both sectors are also discussed. Section five concludes.

2. The development of Argentine industry

Argentine industry has developed intermittently, mainly since 1930. Economic policies of different governments have turned from import substitution to trade liberalisation programmes, which has resulted in an industry with a mixed structure. On one hand, Argentine industry suffers from niche gaps and incomplete production chains, inefficient production scale, monopoly market structures with low competitiveness, and limited global exposure and international integration.3 On the other hand, it also boasts major business assets (both tangible and intangible), skilled labour and high levels of education, some highly competitive sectors and a deeply rooted national industrial culture. In recent history, Argentina suffered a deep crisis during 2001, after a decade of openness and liberalisation of the economy with a currency tied to the US dollar, called the “convertibility plan.” While GDP rose 18% between 1993 and 1999,

2 The Strategic Industrial Plan 2020 (PEI 2020) was devised by the Ministry of Industry of Argentina and was published in 2011. The aim of the Plan was to propose some policies that should run through to 2020. Eleven industrial sectors were chosen (http://www.industria.gob.ar/planeamientoestrategico/plan- estategico-industrial-20-20). 3 The Strategic Industrial Plan 2020 argues that one challenge is to extend industrial value chains. It also calls for a reduction of the industrial trade deficit through an import substitution process. This point of view seems to differ from others that propose industrialisation through the insertion in global supply chains (Baldwin 2012). Textiles and Footwear in Argentina 53 industry grew by just 7%. Among other features of the process developed during the 1990s, Azpiazu et al. (2001) explain that local industry experienced three effects: a) de-industrialisation and regressive restructuring of manufacturing activity; b) accumulation and reproduction of large capital industries; and c) increasing concentration of manufacturing in certain sectors. During the 2001 crisis, there was a major of the domestic currency, an international default and a consequent fall in activity and employment. Industrial output fell by 18% between 1999 and 2002, while the overall unemployment rate reached 21.5% at the worst point in the crisis. The new democratic government elected in 2003 changed the objectives of economic policy, highlighting the importance of local industry, employment, social inclusion and income redistribution. These factors were considered not only essential as a political objective, but necessary for a booming domestic economy and for sustaining productive activity focused on local markets. National industrial and trade policies were aimed at promoting an import substitution process, using existing capacity and then generating new investments.4 Sectors that were especially promoted were those that had the potential to absorb large number of jobs and those considered sensitive or strategic. GDP grew by 79% between 2003 and 2011 and many industrial sectors expanded in tandem. In fact, the industrial sector has grown continuously since 2002 (95% from 2002 to 2009) but it was affected by the global crisis, particularly in 2009. As is shown in Figure 1, after 2009 the industry recovered its previous growth rate, increasing more than 9% in 2010. Meanwhile, 536,000 new jobs were created between 2002 and 2010 (from 760,000 in 2002 to 1,296,000 in 2010).5 Figure 1 Evolution of industrial activity as measured by the annual average of the Monthly Industrial Estimator (EMI)

140.0 20%

16.2% 120.0 15%

100.0 10.7% 10% 9.1% 9.7% 8.4% 8.4% 7.6% 6.5% 80.0 4.9% 5.0% 5% 2.2% 60.0 -0.3% 0.1% 0%

40.0 -5.1% -5% -6.5% -7.6% 20.0 -10.6% -10%

0.0 -15% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

EMI Interannual variation

Source: INDEC.

4 According to official sources, during 2002-2010 the investment reached 23.4% of the GDP. 5 Chapter I, PEI 20 20. 54 Not Just Victims: Latin America and Crisis-Era Protectionism

Industries expanded across the board, although the automotive sector was by far the leader followed by non-metallic minerals, metal mechanic (which includes capital goods) and textiles and apparel (see Figure 2). Figure 2 Percentage increase in production 2002-2010, by industrial sector Oil refinery 8%

Tobacco products 18%

Basic metallic industry 27%

Paper and cardboard 48%

Food and beverage 53%

Chemestry products 80%

Plastic and rubber 90%

Print and edition 110%

Textiles 145%

Metal mechanic 146%

Non metallic minerals 154%

Automotive 386%

Source: Strategic Industrial Plan 2020 – Ministry of Industry of Argentina (2011).

The growth in activity led to a fall in the unemployment rate and an increase in wages. Unemployment fell from 20.4% in the first quarter of 2003 to 7.4% in 2011, and the average wage increased by 315% over the same period.6 The trade balance in industrial products was in deficit to the tune of US$12,217 million in 1998 under the “convertibility programme.” After the 2001 crisis and devaluation, the industrial trade balance had a surplus of US$8,820 million in 2002. In 2010, the industrial trade deficit was US$4,430 million. The industrial expansion was accompanied by an increase in industrial exports, but even this dynamism apparently could not change the country’s international trade profile based primarily upon on agricultural and industrial commodities. In fact, unlike previous experiences, the industrial trade deficit did not result in a “traditional” crisis. This outcome seems to have been due to an improvement in terms of trade of agricultural products (Herrera and Tavosnanska, 2011).

3. The texiles and apparel sector

This sector’s value chain can be separated into textiles and apparel. Textiles includes the manufacture of fibre (cotton and wool) and yarn and fabric production (yarn and fabric design). The products of the manufactured fibre are commodities and require capital-intensive methods. Their demand comes from the clothing industry, footwear, automotive and steel industry, among others. The design of yarns and fabrics can be differentiated though value added. The

6 The minimum wage increased 820% between 2003 and 2011. Textiles and Footwear in Argentina 55 clothing industry includes the design and manufacture of clothes and home products. Both of these are labour-intensive, although some kind of qualification is needed, especially in the design segment. The production of textiles and apparel increased continuously from 2003 to 2008, after a fall in 2002. The onset of the global crisis hit the sector in 2008 with a reduction in the growth rate, while in 2009 there was a 4% decrease in production (Figure 3). After that, it grew again, reaching a production of US$3,618 million or 121 million garments in 2011. The activity level of the sector is quite sensitive to domestic demand changes. During the last decade, the recovery of the Argentine economy generated an increase in demand and the domestic market became attractive to more producers. Figure 3 Changes in production of textiles and apparel, by year 70% 64%

60%

50%

40%

30%

20% 15% 8% 8% 10% 7% 6% 2% 1% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 -10% -4% Source: Fundación Protejer. After 2002, the industry grew mainly by exploiting existing production capacity. Firms subsequently began to invest in new capacity. Investment reached a cumulative US$2,000 million between 2003 and 2011 for the entire value chain.7 The recovery and the investment were accompanied by an increase in employment (up 45% from 2003 to 2011).8 The industry started with 81,112 registered employees in 2003 and reached 118,036 employees in 2008. There was a brief fall in employment in 2009 (113,732 jobs) but it then recovered to reach 117,049 in 2010 and 117,663 in 2011, although these increases were not enough to reach the 2007 employment level.9 In parallel, the nominal wage of the sector grew 300% on average from 2003 to 2010. The number of enterprises in the sector grew 23% between 2003 and 2010. In this last year, there were more than 6,850 enterprises. Microenterprises represented almost 50% of total companies, while small size firms made up 34.5%. Although

7 Fundación Proteger (www.fundacionprotejer.com). 8 This sector has the characteristic of having a large percentage of unregistered employees and therefore the public statistics differ from the private ones. Informal labour is widespread and generally increases in downturns. 9 Annual Bulletin of employment and enterprise 2011, Observatory of Employment and Business Dynamics, Ministry of Employment, Labour and Social Security. 56 Not Just Victims: Latin America and Crisis-Era Protectionism these firms represent a relatively low share of sales, the structure of the sector in terms of the size of its companies shows its vulnerability to crises. Domestic production was oriented to the domestic market, which increased 74% between 2003 and 2010. This sector showed a persistent deficit in the , which reached US$688 million in 2010 across the entire value chain.10 Several state measures were adopted for the textiles and apparel sector during the crisis. In the case of the non-automatic import licences regime, the sector had nine licensed 8-digit tariff lines in 2007. One year later, after the onset of global crisis, there were 61 8-digit tariff lines incorporated in the regime. The coverage was extended afterwards, incorporating 136 tariff lines in 2009 and 28 tariff lines in 2010 and 2011. The inclusion of these tariff lines in the regime shows the “elasticity” of the government response to activity and employment levels, mainly in 2009. There were also six antidumping investigations that finished with duties imposed. China was the principal target of such measures (Table 1). Table 1 Textiles subject to antidumping duties and investigations Tariff Line Country of origin 5209 China 5210 China 5211 China 5402 China, Chinese Taipei and Indonesia 5407 China and Brazil 5503 China, Chinese Taipei and Indonesia 5509 Brazil and Indonesia 6203 China 6302 Brazil

Source: GTA China increased its share of total textiles imports from 5% in 2006 to 32% in 2010, and its portion of apparel imports grew from 18% to 44% in the same period. The sector was an active user of antidumping actions. Since 2005, when the multilateral Textile and Clothing Agreement expired, there was a huge rise in imports from Asian countries, mainly from China and, according to the private sector, in unfair trading practices. This perception was reinforced by the global crisis. The measures adopted by the government just after the onset of the crisis were undoubtedly related to the real or potential effects of the shock. Products subject to the non-automatic import licences regime increased in 2009, when both the activity level and employment fell. Numerous trade remedy actions were also implemented.

10 PEI 2020. Textiles and Footwear in Argentina 57

What was the impact of these measures on imports?

Imports in recent years show a cyclical pattern. They grew 23% from 2007 to 2008, fell 28% in 2009 and then increased again, although only exceeding the 2008 level in 2011 (Figure 4). The fall in imports in 2009 can be explained by the fall in domestic demand and also by the non-automatic import licences regime. Figure 4 Textiles and apparel imports (US$ thousands) 2.000.000

1.800.000

1.600.000

1.400.000

1.200.000

1.000.000

800.000

600.000

400.000

200.000

0 2007 2008 2009 2010 2011 Source: Fundación Protejer.

Figure 5 shows that imports fell in 2009 as a share of the domestic market, reinforcing the hypothesis that measures adopted by the government had an impact. Imports continuously increased their market share from 19% in 2002 to 30% in 2007. In 2008, there was a sharp increase in the share of imports, reaching 40% (ten percentage points in one year). This last gain may have triggered concern among the authorities, which quickly imposed measures to deter imports. The coverage of tariff lines affected by the non-automatic import licences regime started to increase during 2008, but the most important increase began in 2009. That year saw the share of imports decrease to the 2007 level amid an overall decline in activity in the sector. Figure 5 Market shares for domestic and imported products

100% 90% 19% 21% 23% 25% 27% 30% 29% 31% 80% 40% 70% 60% 50%

40% 81% 79% 77% 75% 73% 70% 71% 69% 30% 60% 20% 10% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010

National products Import ed products Source: Fundación Protejer. 58 Not Just Victims: Latin America and Crisis-Era Protectionism

Figure 6 compares imports of textiles and apparel covered by non-automatic import licences with imports from unlicensed sources. While imports subject to the non-automatic import licence regime fell by 2% between 2009 and 2011, imports without licenses increased 56% during the same period.11 This difference in the behaviour of imports would suggest the existence of an external variable that modified the normal patterns of licensed imports. Figure 6 Imports of licensed and unlicensed textiles and clothing, thousands of tonnes, January–October for each year

200.00 185.096 180.00 155.099 160.00 140.00 118.585 120.00 108.036 95.435 93.250 100.00 80.00 60.00 40.00 20.00 0.00 2009 2010 2011 Unlicensed Licensed Source: Fundación Protejer.

Not only did imports lose market share following the start of the non-automatic import licences regime, but licensed imports decreased while other imports increased, following the trends of the domestic market. One can say that the non-automatic import licences regime was not neutral for imports. For the sector, the application of the licences seemed to contribute to the sector’s recuperation post-2010. Qualitative surveys covering firms of the sector indicate that:12 • In 2009, 44% of respondents believed that the non-automatic import licensing regime had a strong impact on imports, while an additional 43% considered the impact was intermediate. Almost 87% of respondents believed the licences were not neutral. • In 2010, 69% of respondents believed this regime had a positive impact and specifically 24% considered this regime was the main driver of the increased sales. • In 2011, 20% of respondents considered this regime was the main factor behind increased sales, however, and at the beginning of 2012 this percentage had decreased to 10%.

The responses by the private sector show the perceived importance of the licensing regime following the onset of the global crisis, and how it declined over time in favour of other measures taken by the government. Finally, the comparison of the behaviour between the licensed imports of textiles and clothing and the imports of consumer goods may show that local

11 If imports are measured in dollars, imports affected by the regime increased 25% while those that were not covered grew 94%. 12 Qualitative annual surveys (www.fundacionprotejer.com.ar). Textiles and Footwear in Argentina 59 textiles producers particularly benefited from the regime, compared with the rest of consumer goods. Figure 7 Share of textiles licensed imports in total imports of consumer goods 11,0% 10,4% 10,5% 10,0% 10,0% 9,5% 9,0% 8,8% 8,5% 8,0% 7,5% 2009 2010 2011 Source: Fundación Protejer and INDEC. Figure 7 shows that textiles and apparel licensed imports as a share of total consumer goods imports decreased in 2010, while in 2011 they reached a similar share to 2009. This would imply that the government, after an initial adjustment, tried to hold the relationship between these variables stable over time.

4. The footwear sector

Argentina is a country with an important and competitive leather industry, which generated US$1,000 million of exports in 2010 and has a strong trade surplus. This leather can be exported or can be sold into the domestic market and used in the production of footwear and other leather manufactures. Footwear production is mainly destined for the domestic market. Footwear production has increased continuously from 2003 to 2011 (by 129%). It grew from 50.3 to 115 million pairs in the same period (Figure 8). The lowest growth rate was in 2009 (0.4%) when domestic demand was reduced due to the impact of the global crisis. This growth was accompanied by significant investments: US$140 million in 2010, with capital goods imports of US$81 million in 2011. Figure 8 Footwear production, 2003-11 140,0 50% 115,0 120,0 106,0 40% 39,5% 94,6 95,0 100,0 89,7 76,1 80,2 80,0 70,1 30% 50,3 60,0 20% 40,0 11,8% 11,6% 10% 20,0 8,5% 8,5% 5,4% 5,5% 0,0 0,4% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011

Production in thousands of pairs Inter annual variation Source: Chamber of Footwear Industry (CIC). 60 Not Just Victims: Latin America and Crisis-Era Protectionism

The footwear sector accounted for 20,485 registered jobs in 2003, growing to 35,037 jobs in 2011. During the global crisis, employment continued to grow, showing a growth rate of 71% over the whole period. There was a 280% increase in wages during these years. The quantity of footwear firms increased too, by 24%. There were more than 690 firms in 2010, of which 50% were SMEs while 38% were microenterprises. The size of the firms in this sector is positively related to the capability to withstand shocks. The footwear sector exhibits a strong pro-cyclical behaviour. The significant growth of Argentina’s economy since 2003 had a positive influence in this sector and generated a trade deficit which reached US$47 million in 2009 (US$58 million of imports and US$11 million of exports). The most significant government measures that were adopted to protect the sector from import competition were: • The non-automatic import licences regime, covering all final products and also parts, since 2007. • Antidumping (AD) duties on footwear from China, with a minimum FOB import price of US$13.4 since March 2010.13 This AD duty covers almost all types of footwear. • Origin investigation for imports from Malaysia, which grew after the imposition of the antidumping duties to China. It was presumed that there had been or the false declarations of origin of these products. • Private bilateral agreements with voluntary export restrictions. Imports of footwear were limited to 15 million pairs for 2011. • Reference prices for finished products and also for parts. • Special customs procedures to control imports of footwear and its parts, since 2005. These specialised procedures can be used to target different kinds of footwear products and pricing behaviour. Furthermore, technical experts at the Chamber of Footwear have deep knowledge of the custom rules, product classification, materials and commercial documentation, and can help custom officials control imports.14 • “Red channels” for imports, implying the special verification of the entire package of each import operation and its documentation. • Automatic import licences for footwear parts.

The sector has been very effective in asking the government to control imports, even before the global crisis. During the crisis, however, import control focused on prices and origin fraud. The antidumping duty imposed in 2010 could be interpreted as a reaction to the global crisis, since the rest of the instruments did not seem enough to deter imports.

13 Brazil and Asian countries are consolidated as important footwear producers of low and medium prices. These origins are the main competitors with domestic products. 14 The Government, through the Custom Office, has authorised the intervention of the Chamber since 1997. Textiles and Footwear in Argentina 61

The application of the non-automatic import licences regime began well before the global crisis and the regime did not see any formal change. The analysis of the behaviour of the licensed imports would reveal if there had been a modification in the administration of the system after the crisis. The trading partners most implicated, Brazil and China, were affected by different measures.

Did the measures have any impact on imports?

Imports grew 131% from 2003 to 2008, accompanying the cycle of domestic demand, with a strong decrease of 21% in 2009. While the decrease in 2009 coincided with the worst year for domestic production, the following years show the reverse trend. Domestic production grew 11.6% in 2010 and 8.5% in 2011, while imports decreased by 8.6% and 6.7%, respectively (Figure 9). Figure 9 Footwear imports (millions of pairs) 35 31,11 29,15 30 24,5 25 23,33 22,4 20,11 20,89 18,93 20

15 13,45

10

5

0 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: CIC and INDEC.

The different behaviour of imports and domestic production had implications for their relative market shares (Figure 10). As the share of imports fell after 2009, the share of domestic production grew over the period. The share of imports fell 10.5 percentages points from 2008 to 2011. 62 Not Just Victims: Latin America and Crisis-Era Protectionism

Figure 10 Market shares of domestic and imported products (measured in pairs) 100% 90% 17,7% 15,6% 21,5%21,6% 21,3% 22,9% 24,9% 25,1% 20,8% 80% 70% 60% 50% 82,3% 84,4% 40% 78,5%78,4% 78,7% 77,1% 75,1% 74,9% 79,2% 30% 20% 10% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011

Local production Imports Source: CIC After establishing the behaviour of overall imports, the analysis can be disaggregated between imports covered by non-automatic import licences and the rest (Figure 11). Imports with licenses grew 12% from 2007 to 2008 and then fell 29% in 2009. This significant drop contrasted with a 9% decrease in unlicensed imports. The sharp decrease of licensed imports show that, although the regime was implemented after 2007 and there were no formal changes subsequently, there was a modification in the administration of this instrument. The picture is less clear in subsequent years, although the absolute volume of licensed imports never reached pre-crisis levels. Licensed imports decreased 6% in 2010 and grew 12% in 2011. Unlicensed imports continued decreasing for the rest of the period. Figure 11 Footwear imports, licensed and unlicensed (pairs) 25.000.000

20.000.000

15.000.000

10.000.000

5.000.000

0 2007 2008 2009 2010 2011 Licensed Unlicensed Source: CIC and INDEC. Is there any difference in the behaviour of licensed imports if those coming from China and subject to antidumping duties are excluded from the 2010 and 2011 figures? The level of licensed imports excluding those from China fell 20% in 2010 and increased 2% in 2011, showing that the impact on licensed imports seemed to be very strong in both 2009 and 2010. The 2011 increase was insignificant. It could be interpreted as showing that imports from China were covered mainly by one instrument, i.e. antidumping, while the government continued using the Textiles and Footwear in Argentina 63 non-automatic import licences regime as the main instrument for other import sources. Consistent with the economic literature on antidumping, import prices for Chinese footwear increased 213% in 2009, the year when the antidumping investigation began and when the administration of the licensed imports could have changed, with further increases of 40% in 2010 and 8% in 2011. Figure 12 Average FOB price of imports from China 30,0

24,2 25,0 22,5

20,0 16,0

15,0 12,3

10,0 5,1 5,0

0,0 2007 2008 2009 2010 2011 Source: CIC.

Finally, the evolution of footwear imports under licensing and imports of consumer goods from 2007 to 2011 can be compared. Licensed imports maintained their share over time, excluding the one-off rise in 2009 (Figure 13). Figure 13 Licensed footwear imports as a percentage of total imports 6,00% 5,19%

5,00% 4,43% 4,42% 4,16% 3,88% 3,81% 4,00% 3,53% 3,51%

3,00%

2,00%

1,00%

0,00% 2007 2008 2009 2010 2011

Licensed imports Licensed imports without China Source: CIC and INDEC. If imports from China are excluded from the totals of reported licensed imports, the share of licensed footwear imports decreased between 2007 and 2010/2011.

5. Conclusion

Argentina’s industrial structure has been developed by an intermittent process of import substitution. After the 2001 crisis, economic policies were aimed at re–industrialisation, mainly through industrial promotion, and trade policy was designed to protect domestic production and encourage domestic demand. 64 Not Just Victims: Latin America and Crisis-Era Protectionism

The global crisis began during this period and some instruments of trade policy, such as the non-automatic import licences regime, which was already in place, began to be intensively used, either by extending its coverage or by modifying its administration. Traditional instruments, such as trade remedy actions, began to be used intensively by some sectors. It is clear that with the onset of global crisis, the Argentine government resorted more often to such instruments. Focusing on the non-automatic import licences regime because of its relative importance in the set of measures adopted by Argentina, the data from imports of textiles and footwear shows this regime was far from neutral. The regime had important effects on these imports, especially from 2009. First, imports lost market share in the domestic market. Second, the behaviour of licensed imports differed from the rest of imports and clearly did not follow domestic demand. The Argentine economy experienced a strong recovery after 2003 and there were many government measures other than trade policy that sought to mitigate the impact of the global crisis, especially those affecting the demand side. Nevertheless, in the context of the economic contraction underway, domestic production and competing imports are negatively correlated in both sectors. The non-automatic import licences regime clearly seems to have affected imports of textiles and footwear, by reducing their entry into the domestic market. From the analysis of available data for both sectors, the important role of non-automatic licences in the crisis era emerges.

References

Azpiazu, D., Basualdo, E. and Schorr, M. (2001), “La industrialización argentina durante los noventa: profundización y consolidación de los rasgos centrales de la dinámica sectorial post-sustitutiva”, Facultad Latinoamericana de Ciencias Sociales (FLACSO). Baldwin, R. (2012), “Global supply chains: why they emerged, why they matter, where are they going”, CEPR Discussion Paper No. 9103. Cámara de la Industria del Calzado (2012), “Medidas contra la competencia desleal externa. Sector calzado y partes de calzado”, CIC Trade Commerce Department. CNCE (2010), “Informe Anual”, Comisión Nacional de Comercio Exterior, Argentina. Dalle, D. and Lavopa, F. (2010), “In Case of Fire, Break the Glass: Argentina’s Border Emergency – Kit in Times of Global Crisis”, in S. Evenett (ed.) Managed Exports and Recovery of World Trade: The 7th GTA Report, Centre for Economic Policy Research. Fundación Protejer, (2012) “Encuesta cualitativa trimestral.” ___ (2011a) “Importaciones de Bienes de Capital.” ___ (2011b) “Una interpretación de las políticas de sintonía fina: origen e impacto en la industria textil. ___ (2010a) “Encuesta Cualitativa.” ___ (2010b) “Control de Importaciones Textiles en Aduana.” Textiles and Footwear in Argentina 65

___ (2010c), “Boletín Estadístico Económico.” ___ 2009a) “Boletín Estadístico Económico.” ___ (2009b) “Encuesta Cualitativa.” ___ (2008a) “Boletín Estadístico Económico.” ___ (2008b) “Encuesta Cualitativa.” ___ (2007) “Boletín Estadístico Económico.” Herrera, G. and Tavosnanska, A. (2011), “La industria argentina a comienzos del siglo XXI”, Revista CEPAL 104, CEPAL, August. Ministry of Industry of Argentina (2011), “Plan Estratégico Industrial 20 20.” Ministry of Labor, Employment and Social Security of Argentina (2010), “Trabajo y empleo en el Bicentenario: Cambio en la dinámica del empleo y la protección social para la inclusión – Período 2003-2010.” Rapoport, M. (2000), “Historia económica, política y social de la Argentina, 1880- 2000”, Editorial Macchi, Buenos Aires.

5. Rationales for Crisis-Era Protectionism: The Cases of Argentina and Brazil

Eduardo Bianchi and Welber Barral Latin America Trade Network and WTO co- chair, FLACSO, Argentina; Barral and M. Jorge Consultants

1. Introduction

The recent global economic and financial crisis triggered considerable protectionism, as Global Trade Alert (GTA) and multilateral organisations have repeatedly described. Latin America countries were no exception; the region was responsible for a fifth of all measures adopted worldwide and compiled by GTA between November 2008 and May 2012. This share is significantly greater that the region’s share of world trade (3.9%). Nevertheless, measures were not spread evenly across the region, but were concentrated in Argentina and Brazil, which together accounted for 70% of all Latin American discriminatory measures. While both countries implemented a wide set of measures, they differed in composition and purpose. At the onset of the crisis, Argentina favoured border measures – such as non-automatic licences, reference prices and trade remedy actions – to target products considered to be more sensitive to an “oversupply of foreign products at dumped prices.” Other measures, such as cheap credit and allowances to cover wages, were aimed at sustaining economic activity and averting job losses. The basket of measures selected by Argentina was based on a desire to mitigate the effects of the crisis on imports. However Brazil concentrated initially upon mitigating the negative effects of the crisis on exports (in addition to a tendency for exchange rate overvaluation), through support measures that expanded the scope of official financing programs, propping up credit lines and removing tax burdens. As the crisis developed, both countries changed the emphasis of some of the previous measures and adopted new ones. While the first set of measures seemed to be directly related to the global crisis and their perceived consequences, the changes in Argentina since 2012 and those in Brazil from 2010–11, appeared more

67 68 Not Just Victims: Latin America and Crisis-Era Protectionism focused on domestic circumstances. In the case of Argentina, the “surgically” targeted border measures lost primacy and a “comprehensive” border measure (affidavit for imports) took their place, coupled with new procedures for currency exchange purchases. These changes seem to be motivated by concerns about the actual and future path of foreign currency reserves. Brazil extended measures to support competitiveness through tax exemptions and also intensified the use of trade remedy actions, shortening the periods for investigations and imposition of duties and strengthening the government agencies in charge of these policy instruments. These changes seem to reflect the concerns of Brazilian authorities about the effects of currency appreciation on domestic competitiveness, such as decreases in the export ratio and increases in the import penetration ratio. Against this background, this chapter explores the rationales that authorities of both countries set out for adopting of these measures. We also intend to analyse the “underlying” rationales, whenever we consider that there is a difference between the public discourse and the actual motivations. We think this exercise is important to understand the contemporary pattern of crisis-era protectionism. In the next section, we briefly explore the main rationales raised by the economic literature. After a condensed discussion of the main discriminatory measures adopted by each country, in the third section we look at the rationales given by the heads of both governments. Finally, we conclude in Section 4.1

2. A review of arguments for restricting trade

No country permits a totally unregulated flow of goods and services across its borders. Government intervention in the trade process may be either economic or non-economic in nature, and may try to attain economic, social and/or political objectives. In this section we briefly present the main rationales analysed by the existing literature.2,3

2.1. Protecting jobs

An industry faced with increased imports from foreign competitors is under pressure to reduce production and lower costs. Consequently, productive resources such as labour will move away from this sector. Increased imports can result from many different causes such as changes in domestic demand, lower

1 For methodological aspects of GTA database and definitions used in it, like “discriminatory” measures, look at the GTA reports mentioned in the references section. 2 See, for example, Coughlin et al. (1988). 3 An obvious question is why politicians resort to protectionist measures. A branch of economics, called public choice, which focuses on the interplay between individual preferences and political outcomes, provides an answer. The public choice literature views the politician as an individual who offers voters a bundle of governmental-supplied goods in order to win elections. Many argue that politicians gain by providing protectionist legislation. Even though the national economic costs could exceed the benefits, the politician faces different costs and benefits. For those seeking protection, benefits tend to be large individually and easy to identify, while for those that would be harmed by this policy, like consumers, costs are small individually and difficult to identify. Rationales for Crisis-Era Protectionism: The Cases of Argentina and Brazil 69 prices due to unfair trade practices or even a global economic crisis. By limiting imports across the board or in specific sectors, local jobs are retained.

2.2. Optimal tariff

The optimal tariff argument applies to situations in which a country has the economic clout to alter world prices, as it is such a large producer or consumer of a good that a change in its production or consumption patterns influences world prices. Since a tariff reduces the demand for a foreign good, if the tariff-imposing country has significant market power, the world price for the good will fall. The tariff-imposing country will gain because the price per unit of its imports will have decreased.

2.3. Infant industry

First presented by Alexander Hamilton in 1792, the infant industry argument holds that a government should temporarily shield emerging industries, in which the country may ultimately possess a , from international competition until its firms are able to effectively compete in world markets on an equal footing. Eventually competitiveness will result from movement along the learning curve plus the efficiency gains from achieving the economies of large- scale production. Thus, time-limited protectionist measures are put in place in order to protect the infant industry.

2.4. Industrialisation

Here the contention is that the development and growth of domestic industry should be supported, even though domestic firms may not be competitive yet on world markets. The reasons given to back up this argument are numerous: industrialisation contributes to the utilisation of surplus workers; it promotes investment; and it mobilises nation building. While surplus workers can more easily be employed to increase manufacturing output than agricultural output, import restrictions encourage foreign direct investment by foreign firms that want to avoid the loss of a lucrative or potential market. FDI inflows in turn lead to increased local employment. Furthermore, the industrialisation process helps countries build infrastructure, advance rural development, enhance the quality of peoples’ lives and boost the skills of the workforce. Import substitution therefore represents an economic development strategy that allows developing countries, which depend heavily on raw materials and agricultural products for job creation and export earnings, to diversify their productive structure. Additionally, industrial production – infant-related or otherwise – generates economic spillovers for other industries or sectors in the domestic economy. 70 Not Just Victims: Latin America and Crisis-Era Protectionism

2.5. Strategic trade policy

Theoretical developments have identified cases in which the implementation of so-called strategic trade policy is superior to . Decreasing unit production costs and market structures that contain monopoly elements are common among industries involved in international trade. Market imperfections immediately suggest the potential benefits of government intervention. In the argument for strategic trade policies, government measures can alter the terms of competition to favour domestic over foreign firms and shift the excess returns in non-competitive markets from foreign to domestic firms.

2.6. Restoring the balance of trade

The trade balance is a major part of the balance of payments for many developing countries. Many countries enact protectionist trade policies in the hope of eliminating a trade deficit or increasing a trade surplus. If a government chooses to devalue its currency, the value of all cross-border transactions will be affected. If, however, it wishes to target certain products, then protectionist measures (both tariffs and non-tariff barriers) will be more effective.

2.7. Reciprocity or “levelling the playing field”

Here a comparable access or “fairness” argument advances the idea that a country’s firms are entitled to the same access to foreign markets as foreign firms have to its market. As the name suggests, this argument is one of equity: domestic producers argue that foreign trade barriers are unfair because they place them at a competitive disadvantage. This approach seeks reciprocity in terms of the bilateral levels of protection and over a specific range of goods. Reciprocity requires equal access, and this access can be determined by bilateral trade balances. A trade deficit with a trading partner is claimed by some to be prima facie evidence of unequal access.

2.8. Restrictions as a bargaining tool

Import restrictions may be levied to try to persuade other countries to lower their import barriers. To successfully use restrictions as a bargaining tool requires them to be believable and important to the targeted parties. This view is reinforced by the argument that retaliatory threats, combined with changes in tariffs and non–tariff barriers, allow for the simultaneous protection of domestic industries against unequal competition and induce more open foreign markets. This approach is viewed as superior to a “one-sided” free trade policy. Rationales for Crisis-Era Protectionism: The Cases of Argentina and Brazil 71

2.9. Revenues

In many developing countries, it is difficult to earn sufficient revenues from income and corporate taxes. Therefore, governments use certain trade policies in order to increase revenues, such as tariffs and auctioning off import quotas.

2.10. Non-economic rationales

Governments may choose protectionist policies for non-economic reasons such as the maintenance of essential industries or national security. This argument states that a government must apply restrictions to protect essential domestic industries (particularly defence) so that the country is not dependent on foreign sources of supply. Import barriers are seen as necessary to ensure a capacity to produce crucial goods in a national emergency.

3. Government measures and rationales

In this section, we briefly recap the findings of previous GTA papers about the main discriminatory government measures that each country adopted since November 2008. Afterwards, we present a set of rationales that heads of both countries have publicly expressed as justifications for such measures and/or of the policies that inspired them. Evidently, many different authorities in each country have publicly set out their reasons. We choose to report them as they were formulated by the highest authority in each country, i.e. President Cristina Fernandez de Kirchner of Argentina and President of Brazil. To do this, we extracted sections from their crisis-era speeches or speeches given during the announcement of such measures. We will also look for the rationale for the “strategic” objective that the wider set of polices of each country is trying to attain. We think that these portions of speeches speak for themselves.

3.1 Argentina

At the beginning of the crisis, Argentina mainly adopted border measures, such as non-automatic licences, reference prices and trade remedy actions, in order to target specific products – those considered to be more sensitive to a global over- supply. Reference prices and antidumping actions clearly increased after the onset of the crisis. The non-automatic licences regime had begun to be used timidly after 2004, but in 2009, 2010 and 2011 its coverage was extended, although they never represented more than 9% of total tariff lines (8–digits) included in the Mercosur coding system. During these years the basket of measures selected by Argentina shows a primary aim of mitigating the “expected” effects of the global crisis on imports. 72 Not Just Victims: Latin America and Crisis-Era Protectionism

In 2012, Argentina implemented an across-the-board border measure, an affidavit for each import operation. A new system to purchase foreign currency was also introduced. The motivations of these changes or new measures do not seem to be directly rooted in the global crisis. They seem to have their origin in the authorities’ aim of preserving, and generating, foreign currency reserves through improvements in the trade surplus and the minimisation of the “outflow” of foreign currency. In the Argentine case, not only is the type of measure important, but also the application and administration. The media, both pro- and anti-government, and trade partners countries have repeatedly reported that authorities require importers to undertake certain commitments to obtain the issuance of licences or the approval of affidavits. These commitments include limiting their imports, balancing them with exports, making or increasing their investments on production facilities in Argentina, and not transferring benefits abroad. We can see the motivations for these policies through the words of President Cristina Fernandez de Kirchner.

May Revolution National Holiday, May 25th 2012

[…] We protect our industry as other countries do. Some Argentine products cannot enter foreign markets. For example, high tariffs for rice in Japan, meat and butter in the EU and the restrictions on meat and lemons in the United States.

America Council, June 15th 2012.

[…] Argentina manages its trade balance, but it is not the only country to do so. Some Argentine products cannot enter other countries’ markets due to high tariffs, some above 100%, while the highest in Argentina is 35%, or non-tariff barriers, for example for meat and lemons in the United States.

Inauguration of a washing machines factory, July 23rd 2012.

[…] Many of the new investments in different areas were due to the import substitution policies and that they were being carried out thanks to labour protection policies for domestic industry. Argentina is not the only country where this type of policies is applied.

158th Anniversary of the Stock Exchange Association, August 3rd 2012.

[…] We all know that Argentina does not issue dollars…we get dollars through foreign direct investment or tourism or the trade balance. The dollars we get from the trade balance are the most genuine, because they come from the difference between what we sell and what we buy. That is why we have not only an administration of the exchange rate, but also an administration of our trade, because we do not issue dollars, but we need them so that our [companies] could buy inputs needed for production. Rationales for Crisis-Era Protectionism: The Cases of Argentina and Brazil 73

Inauguration of a new production line of harvesters and tractors, August 14th 2012.

[…] These are the first harvesters and the first tractors that John Deere manufactures in Argentina…Before we imported them from Mexico, India and Brazil. Now, we are manufacturing them here, in Argentina. This is an agreement that we made last year.

[…] They invested US$598 million; this substitutes imports for US$120 million per year. This is not only Argentine jobs, but also it is a favourable trade balance in dollars. Besides, new exports for US$155 million. This is a very virtuous circle; at the same time that we increase our exports, we reduce our imports for an equivalent amount.

[…] We have accomplished many things thanks to the administration of trade, which is what we have to do in Argentina today and it is what has always been done everywhere in the world with different policies and regulations, but ultimately it is meant to look after the interests of those that work in Argentina and of those that invest in Argentina.

Academic meeting with Joseph Stiglitz, August 14th 2012.

[…] Without doubt, it was the exchange rate (one of the factors that explains the important growth of the Argentine economy during the last years), but without doubt it was also a strong re-industrialisation policy, a policy of import substitution, a policy to generate millions of jobs and a lot of aggregate demand.

[…] There is an unstable equilibrium due to the imbalances of the world economy. One of the problems, that has not been solved yet, is the excess of productivity and of the trade balance of such a giant country as China. On the other side, China is leveraged on the US Treasury bonds, while the US have a huge deficit that we all (the world) bear, because the US issues the only , i.e. the dollar.

Industry Day, September 3rd 2012.

[…] Re-industrialisation policy responds to a political project for the country as a whole, in order to serve the larger national interest: its growth, the creation of jobs and consumption.

[…] What are we doing? What have we done? And what do we continue to do with this bet on the industry and for the re-industrialisation of the country?

[…] It is crucial for our industry that we follow with the import substitution process. For this objective we need an equilibrium exchange rate that does not imply workers losing purchasing power and that allows industry to continue buying durable equipment. 74 Not Just Victims: Latin America and Crisis-Era Protectionism

[…] Everyone in the world knows that there is an actual among all the major economies and what Argentina is doing and what is more important, what we will keep on doing, is to strictly continue protecting the domestic jobs and industry, against all odds.

[…] We are not a country that issues dollars and the dollars we get from our trade are the dollars that we have to use to pay for our imports, to pay to multilateral agencies and to pay to holders of Argentine bonds. That is why we need the dollars, because we are not a country that issues dollars.

[…] The agreements we make with different sectors to level the trade balance, if you have to import a certain amount, it means that you have to export the same amount, are meant to benefit each and very Argentine, so as to keep this level of income, popular consumption, social inclusion.

[…] I believe we must be again what we once were, when we saw those old images of those factories during the 1950s….

3.2 Brazil

Until the start of 2010, Brazilian authorities concentrated on mitigating the negative effects of the crisis on exports, by increasing supply and reducing financial costs. The export support measures were aimed at improving access to credit, increasing the span of official financing programmes and significantly expanding credit lines. There were also measures aimed at removing tax burdens from exports, such as the enlargement of the drawback system, and initiatives to facilitate trade. These measures were directly related to the global crisis. From mid-2012, the focus seems to have shifted to support competitiveness by offsetting the appreciation of the local currency. The measures included in the “Brasil Maior” programme indicate the government’s concern with the impact of the currency appreciation on export performance, while the rest of the measures, particularly public procurement, trade remedies and tariffs increases, indicate concerns over the impact of the currency appreciation on the increasing import penetration ratio. In these cases, then, the motivations seem to have their origin in domestic imbalances rather than in the effects of the global economic crisis. Brazil faced a different external context from the economic optimism experienced in the mid-2000s. The debate now focused on the manipulation of exchange rates, misuse of monetary policies and many uncertainties related to the dynamics and recovery in developed economies. At the same, in the domestic sphere, new – or resurrected – challenges were raised, such as the significant rise of imports, the falling contribution of manufactured exports, the negative impact of the exchange rate on the already weakened competitiveness of national products abroad, and the resultant increasing demand for protection of the domestic market. Rationales for Crisis-Era Protectionism: The Cases of Argentina and Brazil 75

The concern over the substitution of domestic production for imported goods, especially Chinese goods, made the trade remedies agenda and protection for local industries gain strength. At the same time, the concern with the “primarisation” of Brazilian exports now occupied the core of the trade policy debates.4

What were the motivations for Brazilian policy according to President Dilma Rousseff?

Launching of “Brasil Maior” programme, August 2011.

[...] We know we live in a period of turbulence, in which the excess of liquidity imposed by the rich countries towards the emerging countries results in oppressive currency exchange disequilibrium.

[...] It is necessary to protect our economy, our productive forces, our consumer market, [and] our employment. Today, more than ever, it is imperative to defend the Brazilian industry and our jobs from the unfair competition, the currency wars, which reduces our exports and, even worse, tries to reduce our internal market, which we built with great effort and a lot of dedication.

[...] Our challenge is to do all of this without resorting to the illegal protectionism which harms us and which we criticise so much.

Launching of new measures of “Brasil Maior” programme, April 3rd 2012.

[...] With no doubt, we also have to fight against unfair and predatory competition, against dumping, against illegitimate protectionist practices. And, facing this situation, we will act firmly in the international organisations and, at the same time, adopt all the safeguards possible to protect our businesses, our jobs and the income of our workers.

[...] We know that a kind of predatory competition is that which uses monetary expansion and the consequent currency devaluation as a measure to artificially increase the competitiveness of the economy. We know that these measures have been practised - measures of monetary devaluation, and of currency devaluation. We are alert to all these practices. And we will always act within the limits of the international norms. And we will comply with what we signed, but will continue to demand that the new practices - not that new, because they have been practiced many times in the past - of competitive devaluation of currencies, continue occurring and are not considered predatory or unfair competition.

[...] We will not hesitate, within the limits of legality, to do everything that has to be done to protect our jobs, our industry and our growth. This, it is important to be said, also includes all international businesses that want to operate here in Brazil, because

4 In 2010, manufactured goods accounted for 39% of Brazilian exports, while in the beginning of the decade it was over 50%. 76 Not Just Victims: Latin America and Crisis-Era Protectionism

our development model is open to foreign capital. Moreover, we consider that this is possible to be done without infringing in any way the sovereignty of the country. The government will not abandon the Brazilian industry. I reaffirm what I said at the launching of Plano Brasil Maior. We do not conceive our development without a strong, innovative and competitive industry. We do not.

4. Conclusions

During the crisis, both Argentina and Brazil gradually intensified their protectionist reaction. In Argentina, this was mainly through trade policy and in Brazil, through industrial policy. Using the classifications presented in Section two, we find that the rationales that can be deduced from President Kirchner’s speeches are: industrialisation (actually, re-industrialisation), infant industry, protecting jobs, balancing balance of trade and reciprocity. From President Rousseff’s statements two rationales clearly emerge: industrialisation and reciprocity. Even though some of the rationales coincide, we conclude that the significant differences in reasons given by Argentina and Brazil to justify crisis-era government measures confirm the observation by da Motta Veiga (2012) that their trade policy strategies have diverged. Thus, after the “liberal convergence” of the 1990s, some Latin American countries confirmed their liberal policies, while others opted for “revisionist” approaches. Revisionist countries, such as Argentina and Brazil, reacted differently in the immediate aftermath of the crisis. Although both countries were very active in adopting discriminatory measures using the global crisis as a justification, it seems that structural domestic problems also played a significant role. In the case of Argentina, trade restrictions increasingly reflected macroeconomic concerns and imbalances. In the case of Brazil, trade and industrial policies are pushed by industry’s competitiveness weakness and by fears of de-industrialisation. The comparative analysis of both presidents’ speeches gives also some interesting insights. First, the emphasis by President Rousseff not to resort to “illegal protectionism”, i.e. not to adopt measures incompatible with the WTO Agreements, should be noted. On the other hand, President Kirchner’s speeches show a more “pragmatic” approach. We think that the quotations reported here are consistent with previous GTA findings that during the crisis Brazil has mainly resorted to “traditional measures”, while Argentina has appealed mainly to “murky measures” (Baldwin and Evenett 2009). Second, both presidents frequently use the rationale of reciprocity or levelling the playing field. President Kirchner repeatedly mentions the lack of market access for Argentina’s products in the US and EU markets. Moreover, she refers to a “trade war” among all major economies. President Rousseff maintains that protection of the industry is an answer to the predatory, unfair competition, especially related to currencies . An often-made argument is that exchange rates manipulation creates losses for other countries. On one hand, the devaluation of a country’s currency produces similar effects to those of an import tariff, as it restricts market access to the “devaluing” country. On the other hand, Rationales for Crisis-Era Protectionism: The Cases of Argentina and Brazil 77 it works as a subsidy to the devaluing country’s exports, granting them greater competitiveness, even if artificial. This situation harms the domestic industry of the countries that receive those exports and disrupts the imports from other trading partners. Finally, both presidents acknowledge the importance of industrial development as the engine of generation of employment and progress. The rationales for industrialisation for Brazil – or re–industrialisation for Argentina – are so strong that we think they exceed the characteristics of an “economic rationale” and need to be considered as a “non-economic rationale”, since industrialisation seems to be the path to obtain many non-economic objectives, as for example “national consolidation.” Where does the importance of industry for some Latin America countries come from? In the early years of the twentieth century, Latin American countries were relatively open to foreign trade. The of the 1930s hit them very hard, leading to a sudden abandonment of the natural resource exporting strategy and laissez–faire policies. This was not ideologically motivated, but was imposed by the nature and seriousness of the economic problems generated by the slump. Latin American countries emerging from the Great Depression decided to reduce their dependence on the external sector. Development strategies in the region then began to pursue two objectives: economic independence from world markets and a reduction in external vulnerability. An import substitution industrialisation (ISI) strategy was the easiest way to achieve these two objectives. The seeds of ISI, therefore, came from abroad, from the Great Depression and the World Wars that created an acute scarcity of imported products, whose relative prices rose thereby generating incentives for domestic production. Protection was thought to be the only mechanism leading to industrialisation and the former became associated with the latter. After all, this had been the way the industrialised countries had developed in the nineteenth century. Given this history, an important question remains. Does contemporary or crisis-era protectionism have similar characteristics to “old” ISI protectionism? That question is taken up in the next chapter.

References

Baldwin, R. and S. Evenett (eds.) (2009), The Collapse of Global Trade, Murky Protectionism, and the Crisis: Recommendations for the G20, a VoxEU.org eBook. Coughlin, C., K. Chrystal and G. Wood (1988), “Protectionist Trade Policies: A Survey of Theory, Evidence and Rationale, Bank of St. Louis, January/February. da Motta Veiga, P. (2012), “Crisis, trade policies and protectionism in South America and Brazil”, presentation at the GTA–CEPR–LATN Joint Conference on Analyses of Contemporary Protectionism: Implications for Latin America, Peru, August. 78 Not Just Victims: Latin America and Crisis-Era Protectionism

Evenett, S. (ed.) (2009a), Broken Promises: a G20 Summit Report by Global Trade Alert, 2nd GTA Report, Global Trade Alert, September. Evenett, S. (ed.) (2009b), The Unrelenting Pressure of Protectionism: The 3rd GTA Report, Global Trade Alert, December. Evenett, S. (ed.) (2010a), Will Stabilisation Limit Protectionism: The 4th GTA Report, Global Trade Alert, February. Evenett, S. (ed.) (2010b), Africa Resists the Protectionist Temptation: The 5th GTA Report, Global Trade Alert, May. Evenett, S. (ed.) (2010c), Unequal Compliance: The 6th GTA Report, Global Trade Alert, June. Evenett, S. ed. (2010d), Managed Exports and the Recovery of World Trade: The 7th GTA Report, Global Trade Alert, September. Evenett, S. ed. (2010e), Tensions Contained…For Now: The 8th GTA Report, Global Trade Alert, November. Evenett, S. ed. (2011a), “Resolve Falters as Global Prospects Worsen: The 9th GTA Report”, July. Evenett, S. (ed.) (2011b), Trade Tensions Mount: The 10th GTA Report, Global Trade Alert, November. Evenett, S. (ed.) (2012), Débâcle: The 11th GTA Report on Protectionism, Global Trade Alert, June. Global Trade Alert (2009), Global Trade Alert 1st Report, July. President Kirchner speeches, http://www.presidencia.gob.ar/informacion/ discursos President Rousseff speeches, http://www2.planalto.gov.br/imprensa/discursos/ 6. Is there a New Protectionism in Latin America?

Eduardo Bianchi Latin America Trade Network and WTO co-chair, FLACSO, Argentina

1. Introduction

Latin America is one of the sources of contemporary protectionism that has spread worldwide since November 2008, in the wake of the onset of the global economic and financial crisis. Reports by Global Trade Alert (GTA) found that protectionist measures were not spread evenly across the region but were concentrated in Argentina and Brazil, which together accounted for 70% of all discriminatory measures in Latin America. GTA also found that both countries implemented a wide set of measures, although they differed in their composition and the emphasis of policies and instruments as well as in their specific goals. It also observed that as the crisis developed, both countries changed the emphasis on some of the initial measures and adopted new ones, reflecting changing concerns of authorities in each country. Previous chapters have explored the rationales that authorities of both countries claim to be the basis for the adoption of these measures. In the case of Argentina, the rationales were promoting industrialisation and infant industries, protecting jobs, improving the balance of trade and seeking reciprocity. In the case of Brazil, the objectives found to be significant were industrialisation and reciprocity. Although both countries adopted discriminatory measures using the global crisis as a justification, it appeared that structural domestic imbalances also had a significant role. Such analysis showed the importance to the governments of both countries of promoting industrialisation. Industry is considered to be the engine of progress, the way to achieve sustained economic growth, to create employment opportunities and leads to diversification and modernisation of their economies. In order to understand the importance of industry for some Latin American countries, especially for Argentina and Brazil, it is necessary to revisit the history of the import substitution industrialisation (ISI) policy that Latin American countries followed from the 1930s until the late 1980s. This review of old ISI policy, taking a look at its motivations, rationales and implementation, will allow us to answer the following question: Does contemporary or crisis-era protectionism

79 80 Not Just Victims: Latin America and Crisis-Era Protectionism in Latin America have similar characteristics to old ISI protectionism, or do they differ? Section 2 provides an explanation of the origins of Latin American protectionism and industrialisation. Section 3 relates the history of the ISI policy in Latin America, covering its origin, its implementation and also its abandonment. In Section 4 we discuss if there is a new protectionism in the cases of Argentina and Brazil. Finally, Section 5 concludes.

2. The origin of Latin American protectionism and industrialisation

The Great Depression is generally viewed as the critical turning point when Latin America turned towards protectionism and delinked from the world economy for the first time.1 Nevertheless, Coatsworth and Williamson (2004) point to a fact that they consider not to have been well appreciated: tariffs in Latin America were far higher than anywhere else in the world from the 1860s to World War I, long before the Great Depression. Tariff rates in the region were even on the rise in the decades before 1914, a period that has been called the first globalisation boom for the world economy and the belle époque for Latin America. Accordingly, in the nineteenth century Latin America already had by far the highest tariffs in the world, with the exception of the US. At the crescendo of the belle époque, tariffs were at their peak and still way above the rest of the world. Latin American tariffs were still the world’s highest in the 1920s, although the gap between the region and the rest of the world had shrunk considerably. It was in the 1930s that the rest of the world (the European “core” and Asia) finally surpassed Latin America in being more protectionist. By the 1950s, when ISI policies were flourishing, Latin American tariffs were actually lower than those in Asia and the European periphery. What were the plausible explanations for the exceptionally high tariffs in Latin America long before the Great Depression? Coatsworth and Williamson (2004) consider that a desire for revenue was the most important determinant of Latin American tariffs until the 1860s. In young, recently independent economies with low or even declining capacities to tax income, expenditure or wealth, few bureaucratic resources to implement efficient collection and limited access to foreign capital markets, customs revenues were an easy-to-collect source of revenues essential to support central government expenditures on infrastructure and defence. The preoccupation with national defence and internal security pushed the newly independent Latin American countries toward higher tariffs. In the words of Bulmer-Thomas (1994), “the tariff was the main source of government income in all [Latin] countries and virtually the only source in a few republics.” Thus, between 1820 and 1870, most Latin American governments erected tariff barriers that served to protect import competing industries, but their political motivation

1 See, for example, Diaz-Alejandro (1984), Corbo (1992) and Taylor (1998). Is there a New Protectionism in Latin America? 81 was not protection but rather to keep troops in the field against foreign and domestic enemies. The use of protection specifically and consciously to foster industry does not appear to have taken place until well after the 1870s. Latin American policymakers in the late nineteenth century were certainly aware of the “infant industry” argument (Bulmer-Thomas 1994), but tariffs were not used consciously to foster industry. Beatty (2001) and Marquez (2002) have argued that the 1880s and 1890s saw the introduction of a modern pro-industrial policy in Mexico, including a rational structure of protection. This policy was followed with a lag elsewhere in Latin America. Thus, the evidence suggests that domestic industry protection became a motivation for Latin American tariffs in the late nineteenth century. This “early protectionism” is one of the explanations for the Latin America industrial lift-off in the late nineteenth century. Williamson (2010) establishes that industrialisation spread in the poor periphery in the seven decades after 1870, while deepening and widening over time.2 Between 1870 and 1890, the fastest industrialising region in the world by far was Latin America, led by Argentina, Chile and Mexico. Russia in the European periphery and Japan in Asia were the other two countries where industrialisation was accelerating.3 But even these two did not reach the rates of industrial output growth that precocious Latin America achieved. Between 1890 and 1913, Brazil and Peru joined the club. Some of these countries were growing fast enough to start catching up on the established industrial leaders – Germany, the US and the UK (Table 1). Thus, industrialisation in Latin America started long before the 1930s, even before World War I and certainly long before the 1930s and its early ISI policies.4 Table 1 Manufacturing output growth rates per annum (%) Region 1870–1890 1890–1913 1920–1939 Three Leaders (Germany, US and UK) 3.5 3.8 3.2 European Periphery 3.1 3.8 3.5 Latin America 6.2 5.0 4.8 Asia 2.1 4.9 5.9

Source: Williamson (2010). What were the main forces driving industrial growth in Latin America? On one hand, it has been shown that Latin America was far more protectionist than anywhere else in the late nineteenth century. On the other, after a dramatic rise in the poor periphery’s terms of trade up to its late nineteenth century peak, it

2 It is interesting that Williamson (2010) explains why he cares so much about industrialisation, when the rest of the development / history literature has been content with GDP per capita and proxies for same. His answer is that “I believe that industry and cities are carriers of growth, not just proxies for the same.” He also states that faster future growth is correlated with current levels of industrialisation. 3 Besides Russia and Japan, other countries in the rest of the World with rapid industrialisation were: Serbia, China, India, Greece, Italy, Korea, Philippines and Turkey. 4 Gallo (1970) made the case for Argentina, while Dean (1969) and Haber (1989, 1990) did likewise for Brazil and for Mexico. 82 Not Just Victims: Latin America and Crisis-Era Protectionism then fell almost as dramatically through to the 1930s, thus providing a sharp rise in the relative price of manufactures, favouring home industry (Williamson 2008, 2010 and 2011). While the pre-1870s secular upswing of the terms of trade in the periphery clearly caused de-industrialisation through Dutch disease effects, the secular terms of trade deterioration implied a long run stimulus to import- competing industry in the periphery in what Galvarriato and Williamson (2008) consider “re-industrialisation.”5 Exchange rate policy also changed dramatically in favour of import-competing manufactures. The standard view is that real exchange rates were stable during the era up to World War I. Yet, there were important local currency depreciations between 1890 and 1915 and 1920 and 1940. The real exchange rate depreciation in the poor periphery made manufacturing imports more expensive and was responsible for some part of the local industrialisation surge (Campa 1990).

3. Import substitution industrialisation in Latin America 3.1. From a defensive reaction to a development strategy

The Latin American balance of payments of the late 1920s was unexpectedly and repeatedly shocked by external factors, starting in 1929 and throughout the 1930s and 1940s. As Diaz Alejandro (1983) noted, in a world of fixed exchange rates, the slowdown in the central economies already visible in 1929 was quickly translated into a decline of export values in the periphery. The deepening slump plus additional protectionist measures at the centre, such as the US Smoot- Hawley tariff of 1930, the British Abnormal Importations Act of 1931, the Ottawa Commonwealth preferences of 1932 and similar actions by the French, German and Japanese empires, led to sharp declines in the Latin American terms of trade and a milder fall of their exports.6 The emergence of a protectionist and nationalistic centre, prone to deflation and war, was the greatest shock to Latin American economies during the 1930s. Additionally, gross capital inflows fell sharply, with little fresh capital coming in after 1930. All Latin American countries had by 1932 abandoned convertibility and other gold standard rules. Exchange controls were adopted in many countries following the devaluation of the pound sterling in September 1931. The use of multiple exchange rates became widespread. One immediate motivation for adopting exchange controls and multiple rates was to guarantee national treasuries cheap access to the foreign exchange required to service the external public debts. Debt servicing rose dramatically in real terms, additionally compressing the capacity to import. By 1934, almost all Latin American countries had suspended normal servicing of the external national debt. Finally, the last shock was World War II: even when the foreign exchange was available, imports

5 See also Williamson (2006a), (2006b) and (2008). 6 Diaz Alejandro (1983) notes that the memory of this betrayal of Hume, Smith, and Ricardo would linger longer in the periphery than in the centre. Is there a New Protectionism in Latin America? 83 could not be obtained, either because of strict rationing by the Allied powers or due to shipping shortages.7 The response of Latin American countries during the 1930s was to hike import tariffs and to impose exchange controls in order to restore equilibrium in the external accounts. During this period, both exchange rates and protectionist measures moved in the same direction in active countries, i.e., real “heterodox” depreciations, tariff increases, and import and exchange quantitative restrictions were thrown into the balance of payments battle, particularly in compressing imports. These shocks led to a sudden abandonment of the natural resource exporting strategy and laissez-faire policies. This was not ideologically motivated, but was imposed by the nature and seriousness of the economic problems generated by the shocks. It was no longer possible to rely on raw materials exports to keep the national economy afloat. The damaging effect of the external shocks revealed how vulnerable Latin American economies were. Consequently, given the international climate of the time, development priorities had to be shifted in favour of sectors producing for the domestic market. While developed countries emerged from the Great Depression with the aim of preventing mass unemployment, Latin American countries decided to reduce their dependence on the external sector. The seeds of the import substitution industrialisation strategy therefore came from abroad. World War I, the Great Depression and World War II created an acute scarcity of imported products whose relative prices rose, generating incentives for import substitution. In this initial stage, market incentives, prices and differential returns, were the mechanisms that channelled resources towards domestic manufacturing. Import substitution became the engine of growth of the 1930s. The rise of importable goods prices relative both to exportable and non-traded goods prices, resulting from the exogenous deterioration in the external terms of trade as well as from exchange rate and protectionist measures, encouraged investment in import substitution. Such import replacement, often squeezing productive capacity already installed during the 1920s, helped both to cope with balance of payments difficulties and to maintain levels of employment. After the initial external blows, the active Latin America countries steadily gained in both ability and will to maintain growth regardless of foreign conditions. One of the consequences of this process was a gradual change in the macroeconomic role of governments — from liberalism to restriction, and from restriction to intervention. In addition, the public sector became a major productive actor in its own right, seeking to boost long-term growth. Nevertheless, ISI was not the result of a deliberate strategy aimed at fostering industrial development. As Rozenwurcel (2006) notes, it was basically the outcome of a defensive reaction adopted by governments in light of the new global economic scenario.

7 The more distant a country from the Allied powers, geographically and politically, the more intense and longer lived was this supply shock; for Argentina it could be said to have lasted well into the late 1940s, while it was much milder and briefer for Mexico, with its overland links to the United States (Diaz Alejandro, 1983). 84 Not Just Victims: Latin America and Crisis-Era Protectionism

After the end of World War II, import substitution industrialisation was adopted as a deliberate policy option by many governments, not only in Latin American countries but also in East Asia. In this second stage, development strategies pursued two objectives: economic independence from world markets and a reduction in vulnerability to external factors. ISI was seen as the easiest way to achieve these two objectives. In fact, prior to the 1960s, it was thought to be the only mechanism leading to industrialisation, i.e. infant industries had to be protected. Industrialisation came to be synonymous with development; if a Latin American country wanted to raise its per capita income to developed country levels, it had to industrialise. Industrialisation was considered a necessary step towards “economic independence” and national autonomy. An active role of the state was also thought crucial to advance this process. The theoretical rationale for raising trade barriers to implement ISI was founded on three pillars:

1. Infant industries – with relatively low import prices preventing local firms emerging to compete, raising domestic prices through tariffs (or non- tariff barriers) would allow new local firms to set up and begin down the learning curve. As a result, these firms would need some time to become efficient enough to compete with foreign firms.

2. The generation of positive externalities by industry justified measures to expand its size.

3. The existence of market failures in the industrial sector.

The creation of the United Nations Commission for Latin America (CEPAL/ECLAC) helped provide an intellectual underpinning for the protectionist position, particularly through the writings of Raul Prebisch and Hans Singer. These authors’ thinking was based on two fundamental premises: (1) a secular deterioration in the international price of raw materials and commodities would result, in the absence of industrialisation in the LDCs, in an ever–growing widening of the gap between rich and poor countries; and (2) in order to industrialise, the smaller countries required (temporary) assistance in the form of protection to the newly emerging manufacturing sector. This reasoning was closely related to the “infant industry” argument for industrialisation. Between the 1950s and 1970s a large number of development economists embraced the inward-oriented view and devoted enormous energy to designing planning models that relied heavily on the import substitution ideas. Prebisch’s position developed as a criticism of outward orientation, which he considered to be incapable of permitting the full development of the Latin American countries. He argued that development required industrialisation through import substitution, and that this could be stimulated by moderate and selective protection policy. Is there a New Protectionism in Latin America? 85

3.2. The implementation of import substitution industrialisation

During the ISI period (1930 to the 1980s), all kinds of restrictive mechanisms were used in Latin American countries to implement it. The main tools used to promote the strategy were high tariffs, special incentives for manufacturing industry involving cheap credit and special access to foreign currency, and public investment in infrastructure aimed at complementing industrial production. Nevertheless, the type of measure was linked to the relevant stage of the ISI. In the first stage protection offered to industry had been ad hoc, often inconsistent and geared to the defence of the balance of payments rather that the needs of industry. In addition to tariffs, intervention consisted of multiple exchange rates, import quotas and licenses, and occasionally outright prohibition (Bulmer- Thomas 1994). The shift toward explicit protection for industry was not immune to external pressures. As members of the IMF, Latin American countries were under pressure to eliminate quotas and multiple exchange rates. Some resisted. For example, Mexico persevered with its system of import quotas (introduced in 1947) until the 1980s, while Brazil not only maintained its multiple exchange rate system in the 1950s, but even added a weekly foreign exchange auction to determine the cost of many imports (Bulmer-Thomas 1994). Generally, however, international pressure was successful and protection came to rest heavily on more orthodox instruments. The most important was the tariff. At a time when successive rounds of negotiations under the auspices of the GATT were rapidly lowering the tariffs applied by the developed countries, many Latin American countries were moving in the opposite direction. In addition, many countries made use of prior deposits for imports, which had a strong protectionist effect because they increased the local currency price at which imports would subsequently be resold. Table 2 makes clear just how high these tariffs were by the beginning of the 1960s. Table 2 Nominal protection in Latin America, 1960 (%)

Nondurable Durable Semi Industrial raw Overall Country consumer consumer manufactured Capital goods material average goods goods goods Argentina 176 266 95 55 98 131 Brazil 260 328 80 106 84 168 Chile 328 90 98 111 45 138 Colombia 247 108 28 57 18 112 Mexico 114 147 28 38 14 61 Uruguay 23 24 23 14 27 21

Source: Bulmer-Thomas (1994). 86 Not Just Victims: Latin America and Crisis-Era Protectionism

The height of these nominal tariff rates partly reflects the phasing out of multiple exchange rates and quotas. Mexico and Uruguay, for example, appeared to have lower tariffs than the rest because most imports were still subject to quotas. Furthermore, the fact that exchange rates usually failed to move in line with the difference between world and domestic inflation rates led to tariffs being used to “compensate” industrialists for currency overvaluation. Nevertheless, by any standards the nominal rate of tariffs were very high, even higher than those levels Latin America had applied in earlier periods and far higher than rates adopted in developed countries. As Table 2 shows, there were different import tariffs for inputs and for finished products. This difference was reinforced by the application of different exchange rates depending on whether the import product was raw material or intermediate goods. Yet for producers, high nominal tariffs were only half the story. The crucial measure for the producer was not the nominal tariff on competing imports, but the impact of tariffs and other forms of protection on the cost of inputs. The effective rate of protection was a more appropriate indicator of the incentives being offered to industry. Generally, the effective rate of protection was higher than nominal protection for many types of products and was particularly high for consumer goods (Bulmer-Thomas 1994). Moreover, the granting of import licences required, for example, that importers prepare a report of their import activities from preceding years. In the case of Argentina, this behaviour was reinforced in 1954 when the central bank started to give import permits for capital goods on the basis of agreements with national business organisations (Diaz Alejandro 1970). There were also foreign currency permits, with priority in the distribution of currency to imports of raw material and intermediate goods. Credit policy was also an important instrument, with negative real interest rates an option. Meanwhile, public utilities (water, electricity, gas and transport) plus the public ownership of the companies in strategic sectors, such as petroleum and steel, were not only important in terms of assuring provision, but also in terms of costs faced by users, since the rates were generally subsidised to encourage the industrialisation process. Finally, there were programmes of government purchases that favoured local manufactured goods. An interesting question about the implementation of ISI in Latin America is: Why has the region historically been more inclined to use tariffs and non–tariff barriers than the use of subsidies? From the governments’ point of view, there is a clear asymmetry between tariffs and subsidies: a tariff generates resources while a subsidy uses them. A subsidy involves budgetary cost, is highly visible and is subject to annual debate; on the other hand, the tariff structure is not very visible and the amounts transferred to the protected sector are not called into question every year. Generally speaking, policies whose costs are more visible in the short run are more difficult to implement, and vice versa. In addition, in the case of protection for the manufacturing sector, the welfare gains generated in that sector tend to be perceived as greater than the costs borne by consumers. While it is understood that tariffs provide visible gains, the perception of costs is Is there a New Protectionism in Latin America? 87 minimised because they are diffuse and dispersed among many agents.8 Summarising, the main policy instruments used to promote and intensify ISI were:

1. Industrial policy.

a. Direct participation of government in certain industries, through state-owned firms or mixed enterprises.

b. To require foreign firms to form “joint ventures.”

c. To pressure local firms into increasing local content.

2. Trade policy.

a. Tariffs on final goods.

b. Quotas on imports.

c. Foreign exchange rationing.

c. Preferential import exchange rates for industrial raw materials, fuels and intermediate goods.

d. Import licences.

3. Fiscal and monetary policies.

a. Subsidies for cheap inputs.

b. Tax breaks in production.

c. Cheap loans by government development banks for favoured industries, at preferential interest rates, including negative real interest rates.

d. Accommodating .

e. The construction by governments of infrastructure especially designed to complement industries.

8 This has led to some authors to argue that, in the political calculus, what is important are visible and concentrated costs; diffuse and hidden costs do not move voters and consequently fail to arouse political passions. 88 Not Just Victims: Latin America and Crisis-Era Protectionism

3.3. The end of the import substitution industrialisation policy

During the early stages of ISI in Latin America, import substitution made fast progress in the light industries, such as manufacturing consumer goods. However, the “easy” phase of ISI, far from substituting domestic production for aggregate imports, tended to replace imports of consumer goods with those of inputs and capital goods necessary to sustain the process of industrialisation. On the other hand, availability of the foreign exchange required to pay for these vital imports remained highly dependent on primary exports and, therefore, subject to the extreme volatility of the international prices of commodities (Rozenwurcel 2006). As industrialisation went on, it became more and more reliant on imports of intermediate inputs and capital goods. In a context of stagnant exports the natural consequence was recurrent balance of payments crises that imposed a stop-go pattern on the economic performance of Latin American countries. Import dependence and the stop-go nature of the business cycle became more evident in the larger economies of the region, where industrialisation included capital-intensive sectors. From the 1960s, the ISI strategy started to come under fire. ISI had failed to make the domestic economy independent of the external sector. There were two reasons for the persistent vulnerability of the domestic economies to events in the external sector following the long ISI period. The share of exports in GDP was reduced, but given the anti-export bias inherent in ISI policies, the low level of export diversification remained unchanged. Natural resources continued to account for a high percentage of total exports. On the other hand, the proportion of imports in the economy was lower than before the Great Depression, but there was also a major change in their structure, as they came to be dominated by intermediate imports and capital goods.9 After nearly 40 years of ISI, the growth of the Latin American economies still depended on exports, which were now needed to break the bottleneck caused by a shortage of foreign currency. ISI limitations became more severe and apparent throughout the 1970s, as fiscal imbalances increased, inflation rates accelerated and economic activity tended to deteriorate together with the worsening of external conditions arising from the oil shocks at the beginning and end of the decade. As the failure of the ISI strategy became more evident, there was a change in the conventional wisdom about what the developing countries should do in order to reach sustainable development. The easy availability of financing in international markets, mainly as a consequence of the surpluses in OPEC countries, made it possible to postpone the inevitable economic adjustment (Rozenwurcel 2006). A first attempt at replacing the already useless ISI model with amarket- based development strategy took place in the late 1970s and early 1980s. The

9 Although industrialisation in the Asian Tigers was also initially based on import substitution, in the late 1960s and early 1970s its path started to diverge from the one followed by LA countries. Basically, the fact that the Tigers were not able to generate enough foreign currency through their exports of primary goods, as was the case of most LA economies, forced them to adopt export–oriented industrialisation strategies. Is there a New Protectionism in Latin America? 89 mainstream view among scholars and policymakers blamed the half-hearted and incomplete nature of these reforms for its failure. The answer to the breakdown of the first attempt was therefore a second and broader wave of market-friendly structural reforms. This second round began to take shape in the late 1980s under the umbrella of the debt relief provided by the Brady Plan and gained momentum when the region recovered access to international financial markets in the early 1990s. With the support of the IMF, the World Bank and the US government, the blueprint of the reform process became known as the Washington Consensus. Outright trade and financial liberalisation were at the core of the strategy together with widespread market deregulation and privatisation. The scope and progress of the reform process varied from country to country depending on their initial economic conditions, but the Washington Consensus ideas strongly influenced economic policies and performance throughout the region (Rozenwurcel 2006). In this context, tariffs were slashed and in many countries import licences and prohibitions were completely eliminated. The market-friendly strategy was successful initially in bringing down inflation. In several countries it also attracted significant flows of foreign direct investment (although privatisations were by far the main driver) and encouraged a more dynamic and diversified export performance. Nevertheless, without any kind of compensating policies to assist economic sectors in distress, the structural transformation that took place in Latin American economies had critical consequences on employment, income distribution and social welfare. Moreover, given the increasing external vulnerability and financial fragility of the region, when growing distress in international financial markets triggered sudden stops in capital inflows, they caused severe financial and currency crises in most Latin American countries, interrupting economic expansion abruptly and forcing several governments to unilaterally renegotiate or even default on their foreign financial obligations (Rozenwurcel 2006).10

3.4. The debate over the ISI strategy

During the 1960s and early 1970s, despite considerable achievements in terms of growth of industrial output and structural changes in developing countries, criticism regarding the implementation and outcome of ISI came forth. After an initial period of growth, ISI lost momentum as further import substitution became increasingly more difficult, and the capacity to export became a constraint on growth. There was a large consensus that ISI had been a failure (Mukherjee 2012). The neo-classical attack on ISI was initiated by Balassa (1971), Bhagwati (1978) and Krueger (1978). A number of generalisations can be made on the structure of

10 As Rozenwurcel (2006) observes, as happened during the ISI period, the two common elements that seriously undermined the overall outcome of the Washington Consensus experience were: the failure of the state to play its required role, that in this case was to properly supervise and complement the role of markets; and the inability to substitute a mature integration into the globalised world economy, properly balancing risks and opportunities, for the previous excessively inward orientation of the ISI period. The omnipresent public sector of the ISI period was replaced by a state that did not fulfil its most basic duties. The extreme protectionist policies of the past were replaced by completely unrestricted trade and financial liberalisation. 90 Not Just Victims: Latin America and Crisis-Era Protectionism protectionism. First of all, the average levels of effective protection exceeded the normal tariff level. Second, the effective protection was higher in the industries with lower rates of investment and intermediate goods compared to consumer goods. Finally, within each category there was also considerable variation in the level of protection given to particular activities. The literature also explored various adverse economic effects originating from the ISI strategy. First of all, it implied a redistribution of income towards industrial profit leading to increased income inequality within developing countries. The strategy is also heavily dependent on relatively capital-intensive technologies imported from abroad. This in turn leads to the creation of limits on the expansion of employment within the new manufacturing sector. In addition, there is also a bias against the agricultural sector, as manufacturing prices rise faster than the agricultural prices in the home market. A policy of an overvalued exchange rate also depresses export demand from abroad. Finally, protection also leads to under-utilisation of capacities in the industrial sector. On the other hand, the structuralist-radical interpretation of the ISI experience is different from the neo-classical school and traces the sources of failure in the productive structure and social class formation in developing countries. The market-based ISI strategy was heavily dependent on foreign inputs and primarily engaged in the production of high-income goods and services. In addition, direct foreign investment through local subsidiaries of multinational corporations enjoyed a protected market behind tariff barriers and monopolistic market structure. It was also observed that the imported foreign technologies were inappropriate to local conditions and led to severe capital outflows in the form of royalty payments and profit remittances. Finally, from the radical perspective, the ISI strategy was interpreted as the result of a nexus of interests of multinational corporations, domestic capital and state in a mutually-supporting fashion. Thus, the process of ISI yielded positive benefits to certain groups at the cost of lower national welfare. However, there is a broad agreement among different schools that ISI has typically created a highly protected, inefficient manufacturing sector, oligopolistic or monopolistic in nature with substantial under-utilisation of capacity, dependent upon capital-intensive technology with low employment generation potential. Furthermore, the process of industrialisation has been pursued at the cost of agricultural sector, along with a significant bias against exports of both primary and manufactured goods. The dependence on imports has not been reduced; indeed a shift in the composition towards intermediate and capital goods has increased the vulnerability to foreign exchange crisis. The extent of ISI’s failure was laid bare.

4. “New” or “old” protectionism in the crisis era?

By “old” protectionism we mean the protectionism implemented by Latin American countries in the context of the import substitution industrialisation policies that was reviewed in the previous pages. In order to answer this question, Is there a New Protectionism in Latin America? 91 we will refer exclusively to the cases of Argentina and Brazil, since it has been clearly showed by GTA that both countries account for the bulk of contemporary protectionist government measures in Latin America. In order to compare and contrast the “old” and the “new” protectionism, it is useful to consider both periods exploring the differences along three dimensions: a) the importance of industrialisation; b) protectionism as a defensive or deliberate policy; and c) the instruments used.

4.1. The importance of industrialisation

It has already been mentioned that during the ISI policy, industrialisation came to be synonymous with development and progress. Moreover, industrialisation was seen as the path for the achievement of non-economic goals, such as national consolidation and national autonomy. Is this view held nowadays? Let the presidents of Argentina and Brazil answer this question: “Re-industrialisation policy responds to a political project for the country as a whole, in order to serve the larger national interest: its growth, the creation of jobs and consumption” (President Cristina Fernandez de Kirchner of Argentina, Industry Day, September 3rd 2012); and “We do not conceive our development without a strong, innovative and competitive industry” (President Dilma Rousseff of Brazil, launching new measures of the “Brasil Maior” programme, April 3rd 2012). We can conclude then that industrialisation is currently as important for Argentina and Brazil as it was during the ISI period, with the case for industrialisation made with similar arguments.

4.2. The motivations for protectionism

Protectionism was initially a defensive reaction to the new global economic scenario that unfolded during the 1930s. After World War II, protectionism was a deliberate policy in the context of ISI implementation. Is contemporary protectionism a defensive reaction due to the economic and financial crisis that began in 2008, or is it a deliberative policy that both countries follow consistently with the importance that they attribute to industry? To answer this question, one needs to evaluate whether protection in both countries is a policy that began before the crisis. As discussed in previous chapters, it is not easy to judge if there was a protectionist bias in Latin American countries before the recent global economic crisis, because in that period there was no systematic monitoring of a wide range of trade policies. Some indicators, such as the evolution of trade remedy actions prior to the crisis, suggest that there was not a protectionist upsurge before November 2008. It follows that Argentina and Brazil began to actively adopt protectionist measures after the onset of the recent global crisis as a defensive reaction. As the crisis developed, both countries continued to be very active in adopting discriminatory measures using the global crisis as a justification, although it seems that domestic imbalances had a significant role too. 92 Not Just Victims: Latin America and Crisis-Era Protectionism

The evidence suggests that beyond a certain degree of protectionism that was always present in Brazilian policy, contemporary protectionism is more a defensive reaction to exchange rate appreciation, the growing competition of imported manufactured goods and fears of de-industrialisation. In the case of Argentina, after the initial defensive reaction to the recent global economic crisis, protectionism seems now more of a deliberate policy supporting a national re- industrialisation strategy. In fact, protectionism is a cornerstone of the Argentine “model” and is even justified using similar arguments as in the ISI period, such as the promotion of infant industries.

4.3. Instruments employed

Among protectionist instruments in the ISI era, high tariffs were the most important. However, it is more difficult to use high tariffs nowadays than during the ISI period. There are two reasons why high tariffs cannot be used nowadays. Most tariffs on imported manufactures in Argentina and Brazil are bounded in WTO accords at rates of 35%. Having said that, since Mercosur is a custom union, Argentina and Brazil cannot elevate their tariffs unilaterally, without the agreement of their partners. Nevertheless, at the initiative of both countries, in the crisis era Mercosur increased the Common External Tariff (CET) to the 35% level for textiles, footwear and other “sensitive” products. Additionally, the list of exceptions to the CET, which allows each Mercosur member to apply a tariff different to the CET, was widened from 100 to 200 products. As shown in previous chapters, both countries have turned to other instruments, although they differ in their composition and emphasis. At the onset of the crisis, Argentina relied mainly on border measures, particularly non- automatic licences, reference prices and trade remedy actions, to target precise products – those considered to be more sensitive to an “oversupply of foreign products at dumped prices.” Other measures, such as cheap credit and allowances to cover wages, were designed to sustain economic activity and avoid job losses. Nevertheless, the basket of measures selected by Argentina shows a primary concern to mitigate the effects of the recent crisis on imports. Conversely, at the beginning Brazil concentrated mainly on mitigating the negative effects of the crisis on exports (in addition to a tendency to exchange rate overvaluation), through support measures aimed at increasing the span of official financing programs, to prop up credit lines and to remove tax burdens. As the crisis developed, both countries changed the emphasis of some previous measures and adopted new ones. While the former set of measures seemed to be directly related to the global crisis and their perceived likely consequences, the changes in Argentina since 2012 and those in Brazil from 2010 to 2011 appear more focused on domestic imperatives. In the case of Argentina, the “surgically” targeted border measures lost primacy and a “comprehensive” border measure (the affidavit for imports) took their place, coupled with new procedures for currency exchange purchases. These changes seem to be motivated by concerns about the actual and the future trajectory of foreign currency reserves. Is there a New Protectionism in Latin America? 93

Brazil deepened measures to support competitiveness through tax exemptions and also intensified the use of trade remedy actions, shortening the periods for investigations and imposition of duties, and strengthening the government agencies in charge of these instruments. These changes seem to reflect the concerns of Brazilian authorities over the effects of the appreciation of the currency on domestic competitiveness, after decreases in the export ratio and increases in the import penetration ratio. In both countries, then, contemporary protectionism is based on instruments that were also used in the ISI period. Brazil has been using intensively WTO- compatible instruments, such as trade remedy actions. In contrast, Argentina has turned to the intensive use of some instruments that were not applied since the ISI period came to an end, such as import licences and affidavit for imports.

5. Conclusions

The purpose of this chapter was to examine whether contemporary protectionism in Latin American countries, and in particular in Argentina and Brazil, had characteristics similar to the protectionism that was found during the ISI period. We argued that industrialisation is now considered to be synonymous with development and progress, as it was for ISI strategies. Although it is very difficult to draw a clear line between protectionism as a defensive reaction to the recent global crisis and protectionism as a distinct policy, we suggested that contemporary protectionism in the case of Brazil seems more a defensive reaction to domestic imbalances and rising imports that are not necessarily linked to the recent global economic crisis. On the other hand, it seems to us that contemporary protectionism in Argentina is a deliberate policy – a part of the government’s re-industrialisation strategy and the cornerstone of what is called the “Argentine model.” In relation to instruments, Brazil has mainly relied on support measures focused on exports and industry competitiveness, while Argentina has preferred the intensive use of some trade policy instruments that were characteristic of the ISI period and which were dismantled at the end of the 1980s. We can conclude, therefore, that contemporary protectionism in Brazil has new elements and motivations, while contemporary protectionism in Argentina has many elements and motivations that resemble those of the ISI period, what might be referred to as the “old” protectionism. Finally, it must be noted that behind some domestic imbalances in Argentina and Brazil, there are some global structural trends pushing both countries (and other Latin America countries too) towards their “natural comparative advantages.” The tensions between these trends and the policy preferences set by the industrialist project will dominate the political economy of Latin America countries in the coming years (da Motta Vega 2012). The new profile of international specialisation, the growing relevance of global supply chains and their role in industrial development, as well as the reversal of the “natural resource curse” must be at the top of the agenda for politicians and 94 Not Just Victims: Latin America and Crisis-Era Protectionism academics in Latin America. Just as it was 80 years ago, the form and means of the integration into the world economy needs to be at the core of the debates on Latin American development.

References

Balassa, B. (1971), The Structure of Protection in Developing Countries, Johns Hopkins University Press. Baldwin, R. and S. Evenett, eds. (2009), The Collapse of Global Trade, Murky Protectionism, and the Crisis: Recommendations for the G20, a VoxEU.org eBook, March. Bhagwati, J. (1978), Anatomy and Consequences of Exchange Control Regimes, Ballinger, Cambridge. Beatty, E. (2001), Institutions and Investment. The Political Basis of Industrialization in Mexico before 1911, Stanford University Press. Bulmer–Thomas, V. (1994), The Economic History of Latin America since Independence, Cambridge University Press. Campa, J. (1990), “Exchange Rates and Economic Recovery in the 1930s: An Extension to Latin America”, Journal of Economic History 50. Coatsworth, J. and J. Williamson (2004), “The Roots of Latin America Protectionism: Looking Before the Great Depression”, in A. Estevadeordal, D. Rodrik, A.Taylor and A. Velasco (eds.), FTAA and Beyond: Prospects for Integration in the Americas, Harvard University Press. Corbo, V. (1992), “Development Strategies and Policies in Latin America: A Historical Perspective,” International Center for Economic Growth, Occasional Paper No. 22, April. da Motta Veiga, P. (2012), “Crisis, trade policies and protectionism in South America and Brazil”, presentation at the GTA – CEPR – LATN Joint Conference on Analyses of Contemporary Protectionism: Implications for Latin America, Peru, August. Dean, W. (1969), The Industrialization of Sao Paulo 1880 – 1945, Austin, University of Texas Press. Diaz Alejandro, C. (1970), Essays on the Economic History of the Argentine Republic, Yale University Press. Diaz Alejandro, C. (1983), “Stories of the 1930s for the 1980s”, in P. Aspe Armella, R. Dornbusch and M. Obstfeld (eds.), Financial Policies and the World Capital Market: The Problem of Latin American Countries, University of Chicago Press. Diaz Alejandro, C. (1984), “Latin America in the 1930s,” in R. Thorp (ed.), Latin America in the 1930s, New York: Macmillan. Evenett, S. (ed.) (2009a), Broken Promises: a G20 Summit Report by Global Trade Alert, 2nd GTA Report, Global Trade Alert, September. Evenett, S. (ed.) (2009b), The Unrelenting Pressure of Protectionism: The 3rd GTA Report, Global Trade Alert, December. Evenett, S. (ed.) (2010a), Will Stabilisation Limit Protectionism: The 4th GTA Report, Global Trade Alert, February. Is there a New Protectionism in Latin America? 95

Evenett, S. (ed.) (2010b), Africa Resists the Protectionist Temptation: The 5th GTA Report, Global Trade Alert, May. Evenett, S. (ed.) (2010c), Unequal Compliance: The 6th GTA Report, Global Trade Alert, June. Evenett, S. (ed.) (2010d), Managed Exports and the Recovery of World Trade: The 7th GTA Report, Global Trade Alert, September. Evenett, S. (ed.) (2010e), Tensions Contained…For Now: The 8th GTA Report, Global Trade Alert, November. Evenett, S. (ed.) (2011a), Resolve Falters as Global Prospects Worsen: The 9th GTA Report, Global Trade Alert, July. Evenett, S. (ed.) (2011b), Trade Tensions Mount: The 10th GTA Report, Global Trade Alert, November. Evenett, S. (ed.) (2012), Débâcle: The 11th GTA Report on Protectionism, Global Trade Alert, June. Gallo, E. (1970), “Agrarian Expansion and Industrial Development in Argentina, 1880 – 1930”, in R. Carr (ed.), Latin American Affairs, Oxford University Press. Galvarriato, A. and J. Williamson (2008), “Was it Prices, Productivity or Policy? The Timing and Pace of Latin America Industrialization after 1870”, National Bureau of Economic Research, Working Paper 13990, May. Global Trade Alert (2009), Global Trade Alert 1st Report, July. Haber, S. (1989), Industry and Underdevelopment: The Industrialization of Mexico, Stanford University Press. Haber, S. (1990), “La Economía Mexicana, 1830 – 1940: Obstáculos a la Industrialización (II)”, Revista de Historia Económica 8. Krueger, A. (1978), Liberalization Attempts and Consequences, Ballinger, Cambridge (for the National Bureau of Economic Research). Marquez, G. (2002), The Political Economy of Mexican Protectionism, 1868 – 1911, Harvard University. Mukherjee, S. (2012), “Revisiting the Debate over Import – Substituting versus Export – led Industrialization”, Trade and Development Review 5(1). Rozenwurcel, G. (2006), “Why Have All Development Strategies Failed in Latin America?”, Research Paper 2006/12, United Nations University – World Institute for Development Economics Research. Taylor, A. (1998), “On the Costs of Inward-Looking Development: Price Distortions, Growth, and Divergence in Latin America,” Journal of Economic History 58, March. Williamson, J. (2006a), “, De – Industrialization and Underdevelopment in the Third World Before the Modern Era”, Journal of Iberian and Latin American History (Revista de Historia Economica) 24. Williamson, J. (2006b), Globalization and the Poor Periphery before 1950, MIT Press. Williamson, J. (2008), “Globalization and the Great Divergence: Terms of Trade Booms and Volatility in the Poor Periphery 1782 – 1913”, European Review of Economic History 12, December. Williamson, J. (2010), “When, Where and Why? Early Industrialization in the Poor Periphery 1870 – 1940”, National Bureau of Economic Research, Working Paper 16344, September. 96 Not Just Victims: Latin America and Crisis-Era Protectionism

Williamson, J. (2011), Trade and Poverty: When the Third World Fell Behind, MIT Press. SECTION TWO Country-Specific Information on the Incidence of Protectionism in Latin America

Table notes:

[1] These measures are classified “green” in the Global Trade Alert database. [2] These measures are classified “amber” in the Global Trade Alert database. [3] These measures are classified “red” in the Global Trade Alert database. * These measures are classified “red” in the Global Trade Alert database.

Country Specific Information on Protectionism in Latin America 99 Argentina

Table 7.1 Foreign state measures affecting Argentina’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Argentina’s commercial interests measures anti-subsidy, and actions ALL MEASURES Total number of measures affecting Argentina’s 346 322 commercial interests. Total number of foreign measures found to benefit or involve no 89 88 change in the treatment of Argentina’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Argentina’s commercial interests or 88 75 (ii) that have been announced but not implemented and which would almost certainly discriminate against Argentina’s interests [2] Total number of foreign measures that have been implemented and 169 159 which almost certainly discriminate against Argentina’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Argentina’s 236 228 commercial interests Total number of implemented measures affecting Argentina’s commercial interests that are likely to be harmful or are almost 170 163 certainly harmful. Total number of implemented measures affecting Argentina’s 129 122 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Argentina’s commercial 50 37 interests Total number of pending measures that, if implemented, are likely 44 31 to harm Argentina’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Argentina’s 60 57 commercial interests but are no longer in force. ARGENTINA Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Argentina’s commercial 43 40 interests. Total number of implemented, but no longer enforced measures that 40 37 were almost certainly harmful to Argentina’s commercial interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures 60 60 that are currently in force and that harm Argentina’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Argentina” in the “Affecting Trading Partner” and clicking the button “Get Stats”. 100 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.2 Argentina’s state measures affecting other jurisdictions’ commercial interests.

All measures except Summary statistic of foreign state measures anti-dumping, All measures affecting Argentina’s commercial interests anti-subsidy, and safe-guard actions ALL MEASURES Total number of Argentina’s measures affecting other 214 141 jurisdictions’ commercial interests. Total number of Argentina’s measures found to benefit or involve no change in the treatment of other 9 9 jurisdictions’ commercial interests. [1] Total number of Argentina’s measures that (i) have been implemented and are likely to harm foreign commercial interests or 39 12 (ii) that have been announced but not implemented and which would almost certainly discriminate against foreign interests. [2] Total number of Argentina’s measures that have been implemented and which almost certainly discriminate 166 120 against foreign commercial interests. [3] MEASURES STILL IN FORCE Total number of Argentina’s measures found to 6 6 benefit or involve no change in the treatment of other jurisdictions’ commercial interests. Total number of Argentina’s measures that have been implemented and are likely to harm foreign 10 8 commercial interests. Total number of Argentina’s measures that have been implemented and which almost certainly discriminate 151 108 against foreign commercial interests. COMMERCE AFFECTED Total number of 4-digit tariff lines affected by 494 483 measures implemented by Argentina that harm foreign commercial interests. Total number of 2-digit sectors affected by measures implemented by Argentina that harm foreign 73 73 commercial interests. Total number of trading partners affected by measures implemented by Argentina that harm foreign 147 147 commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Argentina” in the “Affecting Trading Partner” and clicking the button “Get Stats”. ARGENTINA Country-Specific Information on Protectionism in Latin America 101

Table 7.3 Frequency with which trading partners’ state measures have almost certainly harmed* Argentina’s commercial interests

Jurisdiction Number of measures Russian Federation 26 Belarus 14 Kazakhstan 13 Indonesia 12 China 10 India 10 France 9 Brazil 5 Italy 5 South Africa 5 Spain 5 Germany 4 Netherlands 4 Nigeria 4 of Great Britain and Northern Ireland 4 Viet Nam 4 Algeria 3 Austria 3 Belgium 3 Bulgaria 3 Colombia 3 Cyprus 3 Czech Republic 3 Denmark 3 Estonia 3 European Communities 3 Finland 3 Greece 3 Hungary 3 Ireland 3 Latvia 3 Lithuania 3 Luxembourg 3 Malta 3 ARGENTINA Poland 3 Portugal 3 Romania 3 Slovakia 3 Slovenia 3 Sweden 3 Bolivia 2 Chile 2 Ecuador 2 Ghana 2 102 Not Just Victims: Latin America and Crisis-Era Protectionism

Jurisdiction Number of measures Japan 2 Mexico 2 Paraguay 2 Ukraine 2 United States of America 2 Venezuela 2 Australia 1 Canada 1 Egypt 1 Malaysia 1 Morocco 1 Republic of Korea 1 Saudi Arabia 1 Switzerland 1 Thailand 1 Turkey 1 Turkey 1

Table 7.4. Frequency with which Argentina’s state measures have almost certainly harmed* foreign commercial interests Jurisdiction affected Number of measures China 121 Brazil 74 United States of America 65 Italy 56 Germany 53 France 47 Spain 47 Thailand 47 Republic of Korea 46 India 44 Japan 44 Mexico 43 Indonesia 42 Chile 38 United Kingdom of Great Britain and Northern Ireland 37 Malaysia 35 Belgium 34 Sweden 31 Canada 29 Netherlands 29 Uruguay 28 Viet Nam 28 Philippines 25 Switzerland 25 Singapore 24 ARGENTINA Country-Specific Information on Protectionism in Latin America 103

Jurisdiction affected Number of measures Austria 23 Hong Kong 23 Paraguay 23 Portugal 23 Peru 22 Poland 21 Turkey 21 Colombia 20 Denmark 20 Czech Republic 19 Pakistan 19 South Africa 19 Finland 17 Israel 17 Norway 17 Australia 16 Venezuela 16 Chinese Taipei 15 Russian Federation 15 Ecuador 14 Hungary 14 Romania 14 Ireland 13 Egypt 12 Bolivia 11 Slovakia 11 United Arab Emirates 11 Greece 10 Bangladesh 9 Tunisia 9 Ukraine 9 Saudi Arabia 8 Algeria 7 Costa Rica 7 Democratic People's Republic of Korea 7 Luxembourg 7

Slovenia 7 ARGENTINA Sri Lanka 7 Bulgaria 6 Croatia 6 Dominican Republic 6 Libya 6 Malta 6 Morocco 6 New Zealand 6 Trinidad and Tobago 6 Angola 5 104 Not Just Victims: Latin America and Crisis-Era Protectionism

Jurisdiction affected Number of measures Aruba 5 Belarus 5 Cuba 5 Iceland 5 Jordan 5 Kazakhstan 5 Lithuania 5 Netherlands Antilles 5 Syrian Arab Republic 5 Albania 4 Bosnia and Herzegovina 4 Cambodia 4 Côte d'Ivoire 4 Estonia 4 Guatemala 4 Honduras 4 Latvia 4 Lebanon 4 Macedonia 4 Nigeria 4 Qatar 4 Serbia 4 Cameroon 3 Congo 3 El Salvador 3 Iran 3 Jamaica 3 Kuwait 3 Mauritius 3 Mozambique 3 Myanmar 3 Niger 3 Oman 3 Panama 3 Senegal 3 Afghanistan 2 Armenia 2 Bahamas 2 Ghana 2 Haiti 2 Mauritania 2 Nicaragua 2 Sudan 2 Suriname 2 Yemen 2 Zimbabwe 2 Andorra 1 ARGENTINA Country-Specific Information on Protectionism in Latin America 105

Jurisdiction affected Number of measures Azerbaijan 1 Bahrain 1 Barbados 1 Belize 1 Benin 1 Cape Verde 1 Chad 1 Cyprus 1 Equatorial Guinea 1 Ethiopia 1 Georgia 1 Grenada 1 Guyana 1 Iraq 1 Kenya 1 Kyrgyzstan 1 Lao People's Democratic Republic 1 Liberia 1 Malawi 1 Mali 1 Palestinian 1 Papua New Guinea 1 Saint Kitts and Nevis 1 Saint Lucia 1 Saint Vincent and the Grenadines 1 Tajikistan 1 Uganda 1 United Republic of Tanzania 1 Zimbabwe 1 ARGENTINA 106 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.5 Implemented measures that harm* Argentina’s commercial interests, by type Number of As percentage of Type of measure measures measures Tariff measure 50 22.52% Bail out / state aid measure 28 12.61% 25 11.26% Export taxes or restriction 18 8.11% Non-tariff barrier (not otherwise specified) 16 7.21% Public procurement 12 5.41% Import ban 9 4.05% Quota (including tariff rate quotas) 9 4.05% Local content requirement 8 3.60% Trade finance 8 3.60% Investment measure 7 3.15% Trade defence measure (AD, CVD, safeguard) 7 3.15% Technical Barrier to Trade 5 2.25% Competitive devaluation 4 1.80% Migration measure 4 1.80% Import subsidy 3 1.35% Other service sector measure 3 1.35% Sanitary and Phytosanitary Measure 2 0.90% State-controlled company 2 0.90% Consumption subsidy 1 0.45% Intellectual property protection 1 0.45% Total 222 100.00%

Table 7.6 Argentina’s implemented measures that harm* foreign commercial interests, by type Number of As percentage of Type of measure measures measures Non-tariff barrier (not otherwise specified) 86 53.09% Trade defence measure (AD, CVD, safeguard) 45 27.78% Tariff measure 7 4.32% Bail out / state aid measure 5 3.09% Export taxes or restriction 5 3.09% Investment measure 4 2.47% Local content requirement 3 1.85% Technical Barrier to Trade 3 1.85% Import ban 2 1.23% Export subsidy 1 0.62% State-controlled company 1 0.62% Total 162 100.00% ARGENTINA Country Specific Information on Protectionism in Latin America 107 Belize

Table 7.7 Foreign state measures affecting Belize’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Belize’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Belize’s 51 50 commercial interests. Total number of foreign measures found to benefit or involve no 14 13 change in the treatment of Belize’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Belize’s commercial interests or 13 13 (ii) that have been announced but not implemented and which would almost certainly discriminate against Belize’s interests [2] Total number of foreign measures that have been implemented and 24 24 which almost certainly discriminate against Belize’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Belize’s 36 35 commercial interests Total number of implemented measures affecting Belize’s commercial interests that are likely to be harmful or are almost 26 26 certainly harmful. Total number of implemented measures affecting Belize’s 20 20 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Belize’s commercial 8 8 interests Total number of pending measures that, if implemented, are likely 7 7 to harm Belize’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Belize’s 7 7 commercial interests but are no longer in force. Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Belize’s 4 4 commercial interests. Total number of implemented, but no longer enforced measures 4 4 that were almost certainly harmful to Belize’s commercial interests BELIZE TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures that 39 39 are currently in force and that harm Belize’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Belize” in the “Affecting Trading Partner” and clicking the button “Get Stats”. 108 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.8 Belize’s state measures affecting other jurisdictions’ commercial interests.

All measures except Summary statistic of foreign state measures anti-dumping, All measures affecting Belize’s commercial interests anti-subsidy, and safe-guard actions ALL MEASURES Total number of Belize’s measures affecting other 1 1 jurisdictions’ commercial interests. Total number of Belize’s measures found to benefit or involve no change in the treatment of other none none jurisdictions’ commercial interests. [1] Total number of Belize’s measures that (i) have been implemented and are likely to harm foreign commercial interests or none none (ii) that have been announced but not implemented and which would almost certainly discriminate against foreign interests. [2] Total number of Belize’s measures that have been implemented and which almost certainly discriminate 1 1 against foreign commercial interests. [3] MEASURES STILL IN FORCE Total number of Belize’s measures found to benefit none none or involve no change in the treatment of other jurisdictions’ commercial interests. Total number of Belize’s measures that have been implemented and are likely to harm foreign none none commercial interests. Total number of Belize’s measures that have been implemented and which almost certainly discriminate 1 1 against foreign commercial interests. COMMERCE AFFECTED Total number of 4-digit tariff lines affected by measures none none implemented by Belize that harm foreign commercial interests. Total number of 2-digit sectors affected by measures implemented by Belize that harm foreign commercial 1 1 interests. Total number of trading partners affected by measures implemented by Belize that harm foreign commercial 1 1 interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Belize” in the “Affecting Trading Partner” and clicking the button “Get Stats”. BELIZE Country-Specific Information on Protectionism in Latin America 109

Table 7.9 Frequency with which trading partners’ state measures have almost certainly harmed* Belize’s commercial interests Jurisdiction Number of measures China 6 Nigeria 4 Italy 2 Argentina 1 Austria 1 Belgium 1 Bulgaria 1 Costa Rica 1 Cyprus 1 Czech Republic 1 Denmark 1 Estonia 1 Ethiopia 1 European Communities 1 Finland 1 France 1 Germany 1 Greece 1 Hungary 1 Indonesia 1 Ireland 1 Japan 1 Kazakhstan 1 Latvia 1 Lithuania 1 Luxembourg 1 Malta 1 Netherlands 1 Poland 1 Portugal 1 Puerto Rico 1 Romania 1 Slovakia 1 Slovenia 1 Spain 1 Sweden 1 United Kingdom of Great Britain and Northern Ireland 1 United States Virgin Islands 1 Viet Nam 1 BELIZE 110 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.10 Frequency with which Belize’s state measures have almost certainly harmed* foreign commercial interests Jurisdiction affected Number of measures Canada 1

Table 7.11 Implemented measures that harm* Belize’s commercial interests, by type Number of As percentage of Type of measure measures measures Export subsidy 7 21.21% Tariff measure 7 21.21% Competitive devaluation 3 9.09% Non-tariff barrier (not otherwise specified) 3 9.09% Bail out / state aid measure 2 6.06% Export taxes or restriction 2 6.06% Migration measure 2 6.06% Trade finance 2 6.06% Import subsidy 1 3.03% Local content requirement 1 3.03% Public procurement 1 3.03% Sub-national government measure 1 3.03% Technical Barrier to Trade 1 3.03% Total 33 100.00%

Table 7.12 Belize’s implemented measures that harm* foreign commercial interests, by type Number of As percentage of Type of measure measures measures Investment measure 1 100.00% Total 1 100.00% BELIZE Country Specific Information on Protectionism in Latin America 111 Bolivia

Table 7.13 Foreign state measures affecting Bolivia’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Bolivia’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Bolivia’s 79 78 commercial interests. Total number of foreign measures found to benefit or involve no 15 15 change in the treatment of Bolivia’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Bolivia’s commercial interests or 24 23 (ii) that have been announced but not implemented and which would almost certainly discriminate against Bolivia’s interests [2] Total number of foreign measures that have been implemented and 40 40 which almost certainly discriminate against Bolivia’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Bolivia’s 51 51 commercial interests Total number of implemented measures affecting Bolivia’s commercial interests that are likely to be harmful or are almost 39 39 certainly harmful. Total number of implemented measures affecting Bolivia’s 31 31 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Bolivia’s commercial 13 12 interests Total number of pending measures that, if implemented, are likely 13 12 to harm Bolivia’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Bolivia’s 15 15 commercial interests but are no longer in force. Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Bolivia’s 12 12 commercial interests. Total number of implemented, but no longer enforced measures B 9 9 that were almost certainly harmful to Bolivia’s commercial interests oli TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures that 40 40

are currently in force and that harm Bolivia’s commercial interests. v

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the ia numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Bolivia” in the “Affecting Trading Partner” and clicking the button “Get Stats”. 112 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.14 Bolivia’s state measures affecting other jurisdictions’ commercial interests.

All measures except Summary statistic of foreign state measures anti-dumping, All measures affecting Bolivia’s commercial interests anti-subsidy, and safe-guard actions ALL MEASURES Total number of Bolivia’s measures affecting other 5 5 jurisdictions’ commercial interests. Total number of Bolivia’s measures found to benefit or involve no change in the treatment of other 1 1 jurisdictions’ commercial interests. [1] Total number of Bolivia’s measures that (i) have been implemented and are likely to harm foreign commercial interests or none none (ii) that have been announced but not implemented and which would almost certainly discriminate against foreign interests. [2] Total number of Bolivia’s measures that have been implemented and which almost certainly discriminate 4 4 against foreign commercial interests. [3] MEASURES STILL IN FORCE Total number of Bolivia’s measures found to benefit 1 1 or involve no change in the treatment of other jurisdictions’ commercial interests. Total number of Bolivia’s measures that have been implemented and are likely to harm foreign none none commercial interests. Total number of Bolivia’s measures that have been implemented and which almost certainly discriminate 4 4 against foreign commercial interests. COMMERCE AFFECTED Total number of 4-digit tariff lines affected by measures 21 21 implemented by Bolivia that harm foreign commercial interests. Total number of 2-digit sectors affected by measures implemented by Bolivia that harm foreign commercial 7 7 interests. Total number of trading partners affected by measures implemented by Bolivia that harm foreign commercial 18 18 interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Bolivia” in the “Affecting Trading Partner” and clicking the button “Get Stats”. ia v oli B Country-Specific Information on Protectionism in Latin America 113

Table 7.15 Frequency with which trading partners’ state measures have almost certainly harmed* Bolivia’s commercial interests Jurisdiction Number of measures Argentina 11 China 5 France 3 Italy 3 Austria 2 Belarus 2 Belgium 2 Bulgaria 2 Cyprus 2 Czech Republic 2 Denmark 2 Estonia 2 European Communities 2 Finland 2 Germany 2 Greece 2 Hungary 2 Ireland 2 Japan 2 Kazakhstan 2 Latvia 2 Lithuania 2 Luxembourg 2 Malta 2 Netherlands 2 Paraguay 2 Poland 2 Portugal 2 Romania 2 Russian Federation 2 Slovakia 2 Slovenia 2 Spain 2 Sweden 2 United Kingdom of Great Britain and Northern Ireland 2 Indonesia 1 Mexico 1

Sri Lanka 1 B United States of America 1 oli Venezuela 1 v ia 114 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.16 Frequency with which Bolivia’s state measures have almost certainly harmed* foreign commercial interests Jurisdiction affected Number of measures Argentina 2 Brazil 2 China 2 Mexico 2 Spain 2 Venezuela 2 Canada 1 Chile 1 France 1 Germany 1 Italy 1 Japan 1 Peru 1 Sweden 1 Switzerland 1 Thailand 1 United Kingdom of Great Britain and Northern Ireland 1 United States of America 1

Table 7.17 Implemented measures that harm* Bolivia’s commercial interests, by type Number of As percentage of Type of measure measures measures Export subsidy 10 22.22% Tariff measure 7 15.56% Export taxes or restriction 6 13.33% Non-tariff barrier (not otherwise specified) 6 13.33% Bail out / state aid measure 5 11.11% Trade finance 3 6.67% Local content requirement 2 4.44% Public procurement 2 4.44% Competitive devaluation 1 2.22% Import ban 1 2.22% Investment measure 1 2.22% Technical Barrier to Trade 1 2.22% Total 45 100.00%

Table 7.18 Bolivia’s implemented measures that harm* foreign commercial interests, by type ia Number of As percentage of

v Type of measure measures measures Investment measure 2 50.00% Import ban 1 25.00% oli Tariff measure 1 25.00%

B Total 4 100.00% Country Specific Information on Protectionism in Latin America 115 Brazil

Table 7.19 Foreign state measures affecting Brazil’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Brazil’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Brazil’s 594 540 commercial interests. Total number of foreign measures found to benefit or involve no 131 129 change in the treatment of Brazil’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Brazil’s commercial interests or 129 102 (ii) that have been announced but not implemented and which would almost certainly discriminate against Brazil’s interests [2] Total number of foreign measures that have been implemented and 334 309 which almost certainly discriminate against Brazil’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Brazil’s 415 387 commercial interests Total number of implemented measures affecting Brazil’s commercial interests that are likely to be harmful or are almost 323 297 certainly harmful. Total number of implemented measures affecting Brazil’s 262 238 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Brazil’s commercial 75 50 interests Total number of pending measures that, if implemented, are likely 64 39 to harm Brazil’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Brazil’s 104 103 commercial interests but are no longer in force. Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Brazil’s 76 75 commercial interests. Total number of implemented, but no longer enforced measures 72 71 that were almost certainly harmful to Brazil’s commercial interests BRAZIL TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures that 67 67 are currently in force and that harm Brazil’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Brazil” in the “Affecting Trading Partner” and clicking the button “Get Stats”. 116 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.20 Brazil’s state measures affecting other jurisdictions’ commercial interests.

All measures except Summary statistic of foreign state measures anti-dumping, All measures affecting Brazil’s commercial interests anti-subsidy, and safe-guard actions ALL MEASURES Total number of Brazil’s measures affecting other 195 123 jurisdictions’ commercial interests. Total number of Brazil’s measures found to benefit or involve no change in the treatment of other 75 73 jurisdictions’ commercial interests. [1] Total number of Brazil’s measures that (i) have been implemented and are likely to harm foreign commercial interests or 47 11 (ii) that have been announced but not implemented and which would almost certainly discriminate against foreign interests. [2] Total number of Brazil’s measures that have been implemented and which almost certainly discriminate 73 39 against foreign commercial interests. [3] MEASURES STILL IN FORCE Total number of Brazil’s measures found to benefit 48 46 or involve no change in the treatment of other jurisdictions’ commercial interests. Total number of Brazil’s measures that have been implemented and are likely to harm foreign 8 7 commercial interests. Total number of Brazil’s measures that have been implemented and which almost certainly discriminate 65 33 against foreign commercial interests. COMMERCE AFFECTED Total number of 4-digit tariff lines affected by measures 302 285 implemented by Brazil that harm foreign commercial interests. Total number of 2-digit sectors affected by measures implemented by Brazil that harm foreign commercial 35 33 interests. Total number of trading partners affected by measures implemented by Brazil that harm foreign commercial 89 89 interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Brazil” in the “Affecting Trading Partner” and clicking the button “Get Stats”. BRAZIL Country-Specific Information on Protectionism in Latin America 117

Table 7.21 Frequency with which trading partners’ state measures have almost certainly harmed* Brazil’s commercial interests Jurisdiction Number of measures Argentina 74 Russian Federation 27 Indonesia 17 India 15 Belarus 13 China 10 Kazakhstan 10 France 9 South Africa 8 Turkey 8 Italy 7 Nigeria 6 Viet Nam 6 Belgium 5 Germany 5 Japan 5 Netherlands 5 Spain 5 Ukraine 5 Australia 4 Egypt 4 Paraguay 4 Poland 4 Portugal 4 United Kingdom of Great Britain and Northern Ireland 4 United States of America 4 Algeria 3 Austria 3 Bulgaria 3 Cyprus 3 Czech Republic 3 Denmark 3 Ecuador 3 Estonia 3 European Communities 3 Finland 3 Greece 3 Hungary 3 Ireland 3 BRAZIL Latvia 3 Lithuania 3 Luxembourg 3 Malta 3 Republic of Korea 3 Romania 3 118 Not Just Victims: Latin America and Crisis-Era Protectionism

Jurisdiction Number of measures Slovakia 3 Slovenia 3 Sweden 3 Bolivia 2 Canada 2 Ethiopia 2 Iran 2 Malaysia 2 Mexico 2 Saudi Arabia 2 Venezuela 2 Armenia 1 Colombia 1 Democratic Republic of the Congo 1 Ghana 1 Morocco 1 Pakistan 1 Sri Lanka 1 Switzerland 1 Thailand 1 Trinidad and Tobago 1 Uzbekistan 1

Table 7.22 Frequency with which Brazil’s state measures have almost certainly harmed* foreign commercial interests Jurisdiction affected Number of measures China 36 United States of America 28 Germany 20 Italy 19 France 18 Mexico 15 Republic of Korea 15 India 14 Japan 14 Spain 14 Canada 13 Thailand 12 United Kingdom of Great Britain and Northern Ireland 12 Finland 11 Netherlands 11 Sweden 11 Belgium 10 Indonesia 9 Austria 8 Hong Kong 8 BRAZIL Country-Specific Information on Protectionism in Latin America 119

Jurisdiction affected Number of measures Malaysia 8 Australia 7 Czech Republic 7 Denmark 7 Norway 7 Singapore 7 Switzerland 7 Turkey 7 Chile 6 Hungary 6 South Africa 6 Viet Nam 6 Argentina 5 Israel 5 Philippines 5 Portugal 5 Colombia 4 Ireland 4 Luxembourg 4 Poland 4 Slovakia 4 Slovenia 4 Ukraine 4 United Arab Emirates 4 Democratic People's Republic of Korea 3 Peru 3 Romania 3 Russian Federation 3 Uruguay 3 Venezuela 3 Bangladesh 2 Bulgaria 2 Chinese Taipei 2 Ecuador 2 Egypt 2 Macao 2 Morocco 2 New Zealand 2 Nigeria 2 Paraguay 2 Saudi Arabia 2 BRAZIL Trinidad and Tobago 2 Algeria 1 Aruba 1 Bahamas 1 Bahrain 1 Belarus 1 120 Not Just Victims: Latin America and Crisis-Era Protectionism

Jurisdiction affected Number of measures Costa Rica 1 Croatia 1 Côte d'Ivoire 1 Dominican Republic 1 Estonia 1 Greece 1 Iceland 1 Iran 1 Kazakhstan 1 Kuwait 1 Lithuania 1 Malta 1 Netherlands Antilles 1 Oman 1 Pakistan 1 Panama 1 Qatar 1 Serbia 1 Sri Lanka 1 Syrian Arab Republic 1 Tunisia 1 Zimbabwe 1 BRAZIL Country-Specific Information on Protectionism in Latin America 121

Table 7.23 Implemented measures that harm* Brazil’s commercial interests, by type Number of As percentage of Type of measure measures measures Non-tariff barrier (not otherwise specified) 77 20.37% Tariff measure 69 18.25% Bail out / state aid measure 43 11.38% Export taxes or restriction 31 8.20% Export subsidy 26 6.88% Trade defence measure (AD, CVD, safeguard) 26 6.88% Import ban 13 3.44% Local content requirement 13 3.44% Public procurement 12 3.17% Investment measure 11 2.91% Trade finance 9 2.38% Migration measure 8 2.12% Quota (including tariff rate quotas) 8 2.12% Technical Barrier to Trade 8 2.12% Competitive devaluation 5 1.32% Consumption subsidy 4 1.06% Import subsidy 4 1.06% State-controlled company 4 1.06% Other service sector measure 2 0.53% Sanitary and Phytosanitary Measure 2 0.53% Sub-national government measure 2 0.53% Intellectual property protection 1 0.26% Total 378 100.00%

Table 7.24 Brazil’s implemented measures that harm* foreign commercial interests, by type Number of As percentage of Type of measure measures measures Trade defence measure (AD, CVD, safeguard) 33 42.31% Tariff measure 25 32.05% Export subsidy 4 5.13% Public procurement 4 5.13% Investment measure 3 3.85% Local content requirement 2 2.56% Trade finance 2 2.56% Bail out / state aid measure 1 1.28% Export taxes or restriction 1 1.28% Migration measure 1 1.28% Non-tariff barrier (not otherwise specified) 1 1.28% BRAZIL Quota (including tariff rate quotas) 1 1.28% Total 78 100.00% 122 Not Just Victims: Latin America and Crisis-Era Protectionism Chile

Table 7.25 Foreign state measures affecting Chile’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Chile’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Chile’s 289 280 commercial interests. Total number of foreign measures found to benefit or involve no 77 76 change in the treatment of Chile’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Chile’s commercial interests or 65 59 (ii) that have been announced but not implemented and which would almost certainly discriminate against Chile’s interests [2] Total number of foreign measures that have been implemented and 147 145 which almost certainly discriminate against Chile’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Chile’s 192 190 commercial interests Total number of implemented measures affecting Chile’s commercial interests that are likely to be harmful or are almost 141 140 certainly harmful. Total number of implemented measures affecting Chile’s 111 110 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Chile’s commercial 38 32 interests Total number of pending measures that, if implemented, are likely 31 25 to harm Chile’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Chile’s 59 58 commercial interests but are no longer in force. Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Chile’s 40 39 commercial interests. Total number of implemented, but no longer enforced measures 36 35 that were almost certainly harmful to Chile’s commercial interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures that 58 58 are currently in force and that harm Chile’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting CHILE “Chile” in the “Affecting Trading Partner” and clicking the button “Get Stats”. Country Specific Information on Protectionism in Latin America 123

Table 7.26 Chile’s state measures affecting other jurisdictions’ commercial interests.

All measures except Summary statistic of foreign state measures anti-dumping, All measures affecting Chile’s commercial interests anti-subsidy, and safe-guard actions ALL MEASURES Total number of Chile’s measures affecting other 11 3 jurisdictions’ commercial interests. Total number of Chile’s measures found to benefit or involve no change in the treatment of other 3 3 jurisdictions’ commercial interests. [1] Total number of Chile’s measures that (i) have been implemented and are likely to harm foreign commercial interests or 3 0 (ii) that have been announced but not implemented and which would almost certainly discriminate against foreign interests. [2] Total number of Chile’s measures that have been implemented and which almost certainly discriminate 5 0 against foreign commercial interests. [3] MEASURES STILL IN FORCE Total number of Chile’s measures found to benefit 2 2 or involve no change in the treatment of other jurisdictions’ commercial interests. Total number of Chile’s measures that have been implemented and are likely to harm foreign none none commercial interests. Total number of Chile’s measures that have been implemented and which almost certainly discriminate 3 none against foreign commercial interests. COMMERCE AFFECTED Total number of 4-digit tariff lines affected by measures 4 none implemented by Chile that harm foreign commercial interests. Total number of 2-digit sectors affected by measures implemented by Chile that harm foreign commercial 3 none interests. Total number of trading partners affected by measures implemented by Chile that harm foreign commercial 6 none interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Chile” in the “Affecting Trading Partner” and clicking the button “Get Stats”. CHILE 124 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.27 Frequency with which trading partners’ state measures have almost certainly harmed* Chile’s commercial interests Jurisdiction Number of measures Argentina 38 China 9 India 9 Indonesia 9 France 7 Brazil 6 Germany 4 Italy 4 Russian Federation 4 Spain 4 United Kingdom of Great Britain and Northern Ireland 4 Austria 3 Belgium 3 Bulgaria 3 Cyprus 3 Czech Republic 3 Denmark 3 Estonia 3 European Communities 3 Finland 3 Greece 3 Hungary 3 Ireland 3 Latvia 3 Lithuania 3 Luxembourg 3 Malta 3 Netherlands 3 Poland 3 Portugal 3 Romania 3 Slovakia 3 Slovenia 3 Sweden 3 Viet Nam 3 Australia 2 Ecuador 2 Japan 2 Malaysia 2 Paraguay 2 Sri Lanka 2 Venezuela 2 Algeria 1 Belarus 1 Bolivia 1 CHILE Country-Specific Information on Protectionism in Latin America 125

Jurisdiction Number of measures Canada 1 Colombia 1 Egypt 1 Ghana 1 Hong Kong 1 Kazakhstan 1 Nigeria 1 Republic of Korea 1 South Africa 1 Thailand 1 Turkey 1 United States of America 1 Uruguay 1

Table 7.28 Frequency with which Chile’s state measures have almost certainly harmed* foreign commercial interests Jurisdiction affected Number of measures Argentina 2

Table 7.29 Implemented measures that harm* Chile’s commercial interests, by type Number of As percentage of Type of measure measures measures Non-tariff barrier (not otherwise specified) 39 24.38% Tariff measure 28 17.50% Export subsidy 22 13.75% Export taxes or restriction 13 8.13% Bail out / state aid measure 11 6.88% Quota (including tariff rate quotas) 6 3.75% Trade finance 6 3.75% Investment measure 5 3.13% Public procurement 5 3.13% Technical Barrier to Trade 5 3.13% Local content requirement 4 2.50% Competitive devaluation 3 1.88% Import ban 3 1.88% Import subsidy 2 1.25% Migration measure 2 1.25% State-controlled company 2 1.25% Intellectual property protection 1 0.63% Sanitary and Phytosanitary Measure 1 0.63% CHILE Sub-national government measure 1 0.63% Trade defence measure (AD, CVD, safeguard) 1 0.63% Total 160 100.00% 126 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.30 Chile’s implemented measures that harm* foreign commercial interests, by type Number of As percentage of Type of measure measures measures Trade defence measure (AD, CVD, safeguard) 3 100.00% Total 3 100.00% CHILE Country Specific Information on Protectionism in Latin America 127 Colombia

Table 7.31 Foreign state measures affecting Colombia’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Colombia’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Colombia’s 254 250 commercial interests. Total number of foreign measures found to benefit or involve no 73 72 change in the treatment of Colombia’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Colombia’s commercial interests or 66 64 (ii) that have been announced but not implemented and which would almost certainly discriminate against Colombia’s interests [2] Total number of foreign measures that have been implemented and 115 114 which almost certainly discriminate against Colombia’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Colombia’s 171 169 commercial interests Total number of implemented measures affecting Colombia’s commercial interests that are likely to be harmful or are almost 123 122 certainly harmful. Total number of implemented measures affecting Colombia’s 92 91 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Colombia’s commercial 35 33 interests Total number of pending measures that, if implemented, are likely to 29 27 harm Colombia’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Colombia’s 48 48 commercial interests but are no longer in force.

Total number of implemented, but no longer enforced measures that COLOMBIA were harmful or almost certainly harmful to Colombia’s commercial 29 29 interests. Total number of implemented, but no longer enforced measures that 23 23 were almost certainly harmful to Colombia’s commercial interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures 53 53 that are currently in force and that harm Colombia’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Colombia” in the “Affecting Trading Partner” and clicking the button “Get Stats”. 128 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.32 Colombia’s state measures affecting other jurisdictions’ commercial interests.

All measures except Summary statistic of foreign state measures anti-dumping, All measures affecting Colombia’s commercial interests anti-subsidy, and safe-guard actions ALL MEASURES Total number of Colombia’s measures affecting other 16 9 jurisdictions’ commercial interests. Total number of Colombia’s measures found to benefit or involve no change in the treatment of other 4 4 jurisdictions’ commercial interests. [1] Total number of Colombia’s measures that (i) have been implemented and are likely to harm foreign commercial interests or 7 2 (ii) that have been announced but not implemented and which would almost certainly discriminate against foreign interests. [2] Total number of Colombia’s measures that have been implemented and which almost certainly discriminate 5 3 against foreign commercial interests. [3] MEASURES STILL IN FORCE Total number of Colombia’s measures found to 4 4 benefit or involve no change in the treatment of other jurisdictions’ commercial interests. Total number of Colombia’s measures that have been implemented and are likely to harm foreign 2 1 commercial interests. Total number of Colombia’s measures that have been implemented and which almost certainly discriminate 5 3 against foreign commercial interests. COMMERCE AFFECTED Total number of 4-digit tariff lines affected by 12 8 measures implemented by Colombia that harm foreign commercial interests. Total number of 2-digit sectors affected by measures implemented by Colombia that harm foreign 8 6 commercial interests. Total number of trading partners affected by measures implemented by Colombia that harm foreign 40 40 commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Colombia” in the “Affecting Trading Partner” and clicking the button “Get Stats”. COLOMBIA Country-Specific Information on Protectionism in Latin America 129

Table 7.33 Frequency with which trading partners’ state measures have almost certainly harmed* Colombia’s commercial interests Jurisdiction Number of measures Argentina 20 France 8 Canada 7 China 7 India 7 Indonesia 6 Germany 5 Russian Federation 5 Brazil 4 Italy 4 Netherlands 4 Spain 4 United Kingdom of Great Britain and Northern Ireland 4 Austria 3 Belarus 3 Belgium 3 Bulgaria 3 Cyprus 3 Czech Republic 3 Denmark 3 Ecuador 3 Estonia 3 European Communities 3 Finland 3 Greece 3 Hungary 3 Ireland 3 Kazakhstan 3 Latvia 3 Lithuania 3 Luxembourg 3 Malta 3 Poland 3 Portugal 3 Romania 3 COLOMBIA Slovakia 3 Slovenia 3 Sweden 3 Venezuela 3 Japan 2 Mexico 2 Egypt 1 Malaysia 1 Nigeria 1 Paraguay 1 130 Not Just Victims: Latin America and Crisis-Era Protectionism

Jurisdiction Number of measures Republic of Korea 1 Sri Lanka 1 Switzerland 1 Thailand 1 Turkey 1 Ukraine 1 United States of America 1 Viet Nam 1

Table 7.34 Frequency with which Colombia’s state measures have almost certainly harmed* foreign commercial interests Jurisdiction affected Number of measures Argentina 3 China 3 Venezuela 2 Aruba 1 Bahamas 1 Brazil 1 Canada 1 Chile 1 Costa Rica 1 Côte d'Ivoire 1 Dominican Republic 1 Ecuador 1 France 1 Germany 1 Guatemala 1 Honduras 1 Hong Kong 1 India 1 Italy 1 Jamaica 1 Japan 1 Lebanon 1 Malaysia 1 Mexico 1 Morocco 1 Netherlands 1 Netherlands Antilles 1 Nigeria 1 Panama 1 Peru 1 Republic of Korea 1 Singapore 1 COLOMBIA Country-Specific Information on Protectionism in Latin America 131

Jurisdiction affected Number of measures South Africa 1 Spain 1 Switzerland 1 Thailand 1 Trinidad and Tobago 1 United Arab Emirates 1 United Kingdom of Great Britain and Northern Ireland 1 United States of America 1

Table 7.35 Implemented measures that harm* Colombia’s commercial interests, by type Number of As percentage of Type of measure measures measures Tariff measure 23 16.55% Export subsidy 22 15.83% Non-tariff barrier (not otherwise specified) 17 12.23% Bail out / state aid measure 14 10.07% Export taxes or restriction 14 10.07% Migration measure 12 8.63% Public procurement 6 4.32% Trade finance 6 4.32% Quota (including tariff rate quotas) 5 3.60% Competitive devaluation 4 2.88% Investment measure 4 2.88% Technical Barrier to Trade 3 2.16% Import ban 2 1.44% Local content requirement 2 1.44% State-controlled company 2 1.44% Import subsidy 1 0.72% Intellectual property protection 1 0.72% Trade defence measure (AD, CVD, safeguard) 1 0.72% Total 139 100.00%

Table 7.36 Colombia’s implemented measures that harm* foreign commercial

interests, by type COLOMBIA Number of As percentage of Type of measure measures measures Tariff measure 3 33.33% Trade defence measure (AD, CVD, safeguard) 3 33.33% Quota (including tariff rate quotas) 2 22.22% Export taxes or restriction 1 11.11% Total 9 100.00% 132 Not Just Victims: Latin America and Crisis-Era Protectionism Costa Rica

Table 7.37 Foreign state measures affecting Costa Rica’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Costa Rica’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Costa Rica’s 140 135 commercial interests. Total number of foreign measures found to benefit or involve no 40 39 change in the treatment of Costa Rica’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Costa Rica’s commercial interests or 39 36 (ii) that have been announced but not implemented and which would almost certainly discriminate against Costa Rica’s interests [2] Total number of foreign measures that have been implemented and 61 60 which almost certainly discriminate against Costa Rica’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Costa Rica’s 90 88 commercial interests Total number of implemented measures affecting Costa Rica’s commercial interests that are likely to be harmful or are almost 63 62 certainly harmful. Total number of implemented measures affecting Costa Rica’s 47 46 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Costa Rica’s commercial 24 21 interests Total number of pending measures that, if implemented, are likely to 21 18 harm Costa Rica’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Costa Rica’s 26 26 commercial interests but are no longer in force. Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Costa Rica’s commercial 16 16 interests. Total number of implemented, but no longer enforced measures that 14 14 were almost certainly harmful to Costa Rica’s commercial interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures 50 50 that are currently in force and that harm Costa Rica’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the

COSTA RICA COSTA numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Costa Rica” in the “Affecting Trading Partner” and clicking the button “Get Stats”. Country Specific Information on Protectionism in Latin America 133

Table 7.38 Costa Rica’s state measures affecting other jurisdictions’ commercial interests.

All measures except Summary statistic of foreign state measures anti-dumping, All measures affecting Costa Rica’s commercial interests anti-subsidy, and safe-guard actions ALL MEASURES Total number of Costa Rica’s measures affecting other 4 2 jurisdictions’ commercial interests. Total number of Costa Rica’s measures found to benefit or involve no change in the treatment of other 1 1 jurisdictions’ commercial interests. [1] Total number of Costa Rica’s measures that (i) have been implemented and are likely to harm foreign commercial interests or 2 none (ii) that have been announced but not implemented and which would almost certainly discriminate against foreign interests. [2] Total number of Costa Rica’s measures that have been implemented and which almost certainly discriminate 1 1 against foreign commercial interests. [3] MEASURES STILL IN FORCE Total number of Costa Rica’s measures found to 1 1 benefit or involve no change in the treatment of other jurisdictions’ commercial interests. Total number of Costa Rica’s measures that have been implemented and are likely to harm foreign none none commercial interests. Total number of Costa Rica’s measures that have been implemented and which almost certainly discriminate 1 1 against foreign commercial interests. COMMERCE AFFECTED Total number of 4-digit tariff lines affected by measures none none implemented by Costa Rica that harm foreign commercial interests. Total number of 2-digit sectors affected by measures implemented by Costa Rica that harm foreign none none commercial interests.

Total number of trading partners affected by measures COSTA RICA implemented by Costa Rica that harm foreign 6 6 commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Costa Rica” in the “Affecting Trading Partner” and clicking the button “Get Stats”. 134 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.39 Frequency with which trading partners’ state measures have almost certainly harmed* Costa Rica’s commercial interests Jurisdiction Number of measures China 8 Argentina 7 France 5 Italy 5 Indonesia 4 Austria 3 Belgium 3 Bulgaria 3 Cyprus 3 Czech Republic 3 Denmark 3 Estonia 3 European Communities 3 Finland 3 Germany 3 Greece 3 Hungary 3 Ireland 3 Japan 3 Latvia 3 Lithuania 3 Luxembourg 3 Malta 3 Netherlands 3 Poland 3 Portugal 3 Romania 3 Slovakia 3 Slovenia 3 Spain 3 Sweden 3 United Kingdom of Great Britain and Northern Ireland 3 United States of America 3 Belarus 2 India 2 Republic of Korea 2 Russian Federation 2 Brazil 1 Colombia 1 Dominican Republic 1 Ecuador 1 Kazakhstan 1 Malaysia 1 Mexico 1 Puerto Rico 1 COSTA RICA COSTA Country Specific Information on Protectionism in Latin America 135

Jurisdiction Number of measures Thailand 1 Turkey 1 United States Virgin Islands 1 Venezuela 1 Viet Nam 1

Table 7.40 Frequency with which Costa Rica’s state measures have almost certainly harmed* foreign commercial interests Jurisdiction affected Number of measures Belize 1 El Salvador 1 Guatemala 1 Honduras 1 Nicaragua 1 Panama 1

Table 7.41 Implemented measures that harm* Costa Rica’s commercial interests, by type

Number of As percentage of Type of measure measures measures Tariff measure 16 21.92% Export subsidy 13 17.81% Non-tariff barrier (not otherwise specified) 11 15.07% Bail out / state aid measure 8 10.96% Export taxes or restriction 6 8.22% Public procurement 4 5.48% Trade finance 4 5.48% Local content requirement 3 4.11% Competitive devaluation 2 2.74% Intellectual property protection 2 2.74% Investment measure 1 1.37% Sub-national government measure 1 1.37% Technical Barrier to Trade 1 1.37% Trade defence measure (AD, CVD, safeguard) 1 1.37% COSTA RICA Total 73 100.00%

Table 7.42. Costa Rica’s implemented measures that harm* foreign commercial interests, by type Number of As percentage of Type of measure measures measures Migration measure 1 100.00% Total 1 100.00% 136 Not Just Victims: Latin America and Crisis-Era Protectionism Ecuador

Table 7.43 Foreign state measures affecting Ecuador’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Ecuador’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Ecuador’s 134 132 commercial interests. Total number of foreign measures found to benefit or involve no 26 25 change in the treatment of Ecuador’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Ecuador’s commercial interests or 41 40 (ii) that have been announced but not implemented and which would almost certainly discriminate against Ecuador’s interests [2] Total number of foreign measures that have been implemented and 67 67 which almost certainly discriminate against Ecuador’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Ecuador’s 97 96 commercial interests Total number of implemented measures affecting Ecuador’s commercial interests that are likely to be harmful or are almost 77 77 certainly harmful. Total number of implemented measures affecting Ecuador’s 56 56 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Ecuador’s commercial 19 18 interests Total number of pending measures that, if implemented, are likely 17 16 to harm Ecuador’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Ecuador’s 18 18 commercial interests but are no longer in force. Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Ecuador’s commercial 14 14 interests. Total number of implemented, but no longer enforced measures that 11 11 were almost certainly harmful to Ecuador’s commercial interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures that 49 49 are currently in force and that harm Ecuador’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting

ECUADOR “Ecuador” in the “Affecting Trading Partner” and clicking the button “Get Stats”. Country Specific Information on Protectionism in Latin America 137

Table 7.44 Ecuador’s state measures affecting other jurisdictions’ commercial interests.

All measures except Summary statistic of foreign state measures anti-dumping, All measures affecting Ecuador’s commercial interests anti-subsidy, and safe-guard actions ALL MEASURES Total number of Ecuador’s measures affecting other 15 14 jurisdictions’ commercial interests. Total number of Ecuador’s measures found to benefit or involve no change in the treatment of other 7 7 jurisdictions’ commercial interests. [1] Total number of Ecuador’s measures that (i) have been implemented and are likely to harm foreign commercial interests or 3 3 (ii) that have been announced but not implemented and which would almost certainly discriminate against foreign interests. [2] Total number of Ecuador’s measures that have been implemented and which almost certainly discriminate 5 4 against foreign commercial interests. [3] MEASURES STILL IN FORCE Total number of Ecuador’s measures found to benefit 3 3 or involve no change in the treatment of other jurisdictions’ commercial interests. Total number of Ecuador’s measures that have been implemented and are likely to harm foreign 2 2 commercial interests. Total number of Ecuador’s measures that have been implemented and which almost certainly discriminate 4 3 against foreign commercial interests. COMMERCE AFFECTED Total number of 4-digit tariff lines affected by 90 89 measures implemented by Ecuador that harm foreign commercial interests. Total number of 2-digit sectors affected by measures implemented by Ecuador that harm foreign 22 21 commercial interests. Total number of trading partners affected by measures implemented by Ecuador that harm foreign 43 43

commercial interests. ECUADOR

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Ecuador” in the “Affecting Trading Partner” and clicking the button “Get Stats”. 138 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.45 Frequency with which trading partners’ state measures have almost certainly harmed* Ecuador’s commercial interests Jurisdiction Number of measures Argentina 14 India 9 China 6 Indonesia 4 France 3 Brazil 2 Italy 2 Japan 2 United States of America 2 Venezuela 2 Algeria 1 Austria 1 Belarus 1 Belgium 1 Bulgaria 1 Colombia 1 Cyprus 1 Czech Republic 1 Denmark 1 Estonia 1 Ethiopia 1 European Communities 1 Finland 1 Germany 1 Greece 1 Hungary 1 Ireland 1 Kazakhstan 1 Latvia 1 Lithuania 1 Luxembourg 1 Malaysia 1 Malta 1 Mexico 1 Netherlands 1 Poland 1 Portugal 1 Republic of Korea 1 Romania 1 Russian Federation 1 Slovakia 1 Slovenia 1 Spain 1 Sweden 1 Thailand 1 ECUADOR Country Specific Information on Protectionism in Latin America 139

Jurisdiction Number of measures Turkey 1 Ukraine 1 United Kingdom of Great Britain and Northern Ireland 1 Viet Nam 1 Viet Nam 1

Table 7.46 Frequency with which Ecuador’s state measures have almost certainly harmed* foreign commercial interests Jurisdiction affected Number of measures Brazil 3 Colombia 3 Argentina 2 Belgium 2 Canada 2 Chile 2 China 2 France 2 Germany 2 India 2 Italy 2 Japan 2 Mexico 2 Netherlands 2 Panama 2 Peru 2 Republic of Korea 2 Spain 2 Sweden 2 United Kingdom of Great Britain and Northern Ireland 2 United States of America 2 Venezuela 2 Austria 1 Costa Rica 1 Denmark 1 Dominican Republic 1 Finland 1

Hong Kong 1 ECUADOR Ireland 1 Israel 1 Malaysia 1 Paraguay 1 Philippines 1 Portugal 1 Singapore 1 Sri Lanka 1 Switzerland 1 140 Not Just Victims: Latin America and Crisis-Era Protectionism

Jurisdiction affected Number of measures Thailand 1 Trinidad and Tobago 1 Turkey 1 United Arab Emirates 1 Uruguay 1 Viet Nam 1

Table 7.47 Implemented measures that harm* Ecuador’s commercial interests, by type Number of As percentage of Type of measure measures measures Tariff measure 20 22.73% Export subsidy 18 20.45% Non-tariff barrier (not otherwise specified) 12 13.64% Export taxes or restriction 9 10.23% Bail out / state aid measure 6 6.82% Trade finance 6 6.82% Competitive devaluation 4 4.55% Import ban 2 2.27% Investment measure 2 2.27% Public procurement 2 2.27% Quota (including tariff rate quotas) 2 2.27% Technical Barrier to Trade 2 2.27% Import subsidy 1 1.14% Local content requirement 1 1.14% Migration measure 1 1.14% Total 88 100.00%

Table 7.48 Ecuador’s implemented measures that harm* foreign commercial interests, by type Number of As percentage of Type of measure measures measures Tariff measure 2 33.33% Intellectual property protection 1 16.67% Non-tariff barrier (not otherwise specified) 1 16.67% State-controlled company 1 16.67% Trade defence measure (AD, CVD, safeguard) 1 16.67% Total 6 100.00% ECUADOR Country Specific Information on Protectionism in Latin America 141 El Salvador

Table 7.49 Foreign state measures affecting El Salvador’s commercial interests

All measures except anti- dumping, Summary statistic of foreign state measures All anti- affecting El Salvador’s commercial interests measures subsidy, and safeguard actions ALL MEASURES Total number of measures affecting El Salvador’s 84 79 commercial interests. Total number of foreign measures found to benefit or involve no 18 17 change in the treatment of El Salvador’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm El Salvador’s commercial interests or 28 24 (ii) that have been announced but not implemented and which would almost certainly discriminate against El Salvador’s interests [2] Total number of foreign measures that have been implemented and 28 24 which almost certainly discriminate against El Salvador’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting El Salvador’s 49 48 commercial interests Total number of implemented measures affecting El Salvador’s commercial interests that are likely to be harmful or are almost 38 38 certainly harmful. Total number of implemented measures affecting El Salvador’s 29 29 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting El Salvador’s commercial 20 16 interests Total number of pending measures that, if implemented, are likely to 17 13 harm El Salvador’s commercial interests.

MEASURES NO LONGER IN FORCE EL SAL Total number of implemented measures that affected El Salvador’s 15 15 commercial interests but are no longer in force. Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to El Salvador’s commercial 11 11 interests. V Total number of implemented, but no longer enforced measures that

9 9 ADOR were almost certainly harmful to El Salvador’s commercial interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures that are 44 44 currently in force and that harm El Salvador’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “El Salvador” in the “Affecting Trading Partner” and clicking the button “Get Stats”. 142 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.50 El Salvador’s state measures affecting other jurisdictions’ commercial interests.

All measures except Summary statistic of foreign state measures anti-dumping, All measures affecting El Salvador’s commercial interests anti-subsidy, and safe-guard actions ALL MEASURES Total number of El Salvador’s measures affecting other 1 1 jurisdictions’ commercial interests. Total number of El Salvador’s measures found to benefit or involve no change in the treatment of other 1 1 jurisdictions’ commercial interests. [1] Total number of El Salvador’s measures that (i) have been implemented and are likely to harm foreign commercial interests or none none (ii) that have been announced but not implemented and which would almost certainly discriminate against foreign interests. [2] Total number of El Salvador’s measures that have been implemented and which almost certainly discriminate none none against foreign commercial interests. [3] MEASURES STILL IN FORCE Total number of El Salvador’s measures found to 1 1 benefit or involve no change in the treatment of other jurisdictions’ commercial interests. Total number of El Salvador’s measures that have been implemented and are likely to harm foreign none none commercial interests. Total number of El Salvador’s measures that have been implemented and which almost certainly discriminate none none against foreign commercial interests. COMMERCE AFFECTED Total number of 4-digit tariff lines affected by measures 2 2 implemented by El Salvador that harm foreign commercial interests. Total number of 2-digit sectors affected by measures implemented by El Salvador that harm foreign 2 2 commercial interests. Total number of trading partners affected by measures implemented by El Salvador that harm foreign none none commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the

ADOR numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “El Salvador” in the “Affecting Trading Partner” and clicking the button “Get Stats”. V EL SAL Country Specific Information on Protectionism in Latin America 143

Table 7.51 Frequency with which trading partners’ state measures have almost certainly harmed* El Salvador’s commercial interests Jurisdiction Number of measures China 7 Italy 4 Argentina 3 Austria 3 Belgium 3 Bulgaria 3 Cyprus 3 Czech Republic 3 Denmark 3 Estonia 3 European Communities 3 Finland 3 France 3 Germany 3 Greece 3 Hungary 3 India 3 Ireland 3 Latvia 3 Lithuania 3 Luxembourg 3 Malta 3 Netherlands 3 Poland 3 Portugal 3 Romania 3 Slovakia 3 Slovenia 3 Spain 3 Sweden 3 United Kingdom of Great Britain and Northern Ireland 3 Indonesia 2 Kazakhstan 2 EL SAL Russian Federation 2 Australia 1 Belarus 1 Costa Rica 1 Malaysia 1

Nigeria 1 V

Republic of Korea 1 ADOR Thailand 1 United States of America 1 Venezuela 1 Viet Nam 1 144 Not Just Victims: Latin America and Crisis-Era Protectionism

Frequency with which El Salvador’s state measures have almost certainly harmed* foreign commercial interests No measures have been reported for this jurisdiction in the GTA database.

Table 7.52 Implemented measures that harm* El Salvador’s commercial interests, by type Number of As percentage of Type of measure measures measures Export subsidy 12 28.57% Tariff measure 8 19.05% Competitive devaluation 4 9.52% Bail out / state aid measure 3 7.14% Export taxes or restriction 3 7.14% Non-tariff barrier (not otherwise specified) 3 7.14% Public procurement 3 7.14% Trade finance 3 7.14% Local content requirement 2 4.76% Migration measure 1 2.38% Total 42 100.00%

Table 7.53 El Salvador’s implemented measures that harm* foreign commercial interests, by type Number of As percentage of Type of measure measures measures Tariff measure 1 100.00% Total 1 100.00%

ADOR V EL SAL Country Specific Information on Protectionism in Latin America 145 French Guiana

Table 7.56 Foreign state measures affecting French Guiana’s commercial interests

All measures except anti- dumping, Summary statistic of foreign state measures All anti- affecting French Guiana’s commercial interests measures subsidy, and safeguard actions ALL MEASURES Total number of measures affecting French Guiana’s 5 5 commercial interests. Total number of foreign measures found to benefit or involve no 1 1 change in the treatment of French Guiana’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm French Guiana’s commercial interests or 4 4 (ii) that have been announced but not implemented and which would almost certainly discriminate against French Guiana’s interests [2] Total number of foreign measures that have been implemented and which almost certainly discriminate against French Guiana’s interests none none [3] MEASURES STILL IN FORCE Total number of implemented measures affecting French Guiana’s 1 1 commercial interests Total number of implemented measures affecting French Guiana’s commercial interests that are likely to be harmful or are almost none none certainly harmful. Total number of implemented measures affecting French Guiana’s none none commercial interests that are almost certainly harmful. PENDING MEASURES

Total number of pending measures affecting French Guiana’s 4 4 FRENCH GUIANA commercial interests Total number of pending measures that, if implemented, are likely to 4 4 harm French Guiana’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected French Guiana’s none none commercial interests but are no longer in force. Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to French Guiana’s none none commercial interests. Total number of implemented, but no longer enforced measures that none none were almost certainly harmful to French Guiana’s commercial interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures that are none none currently in force and that harm French Guiana’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “French Guiana” in the “Affecting Trading Partner” and clicking the button “Get Stats”. 146 Not Just Victims: Latin America and Crisis-Era Protectionism

French Guiana’s state measures affecting other jurisdictions’ commercial interests. No measures have been reported for this jurisdiction in the GTA database.

Frequency with which trading partners’ state measures have almost certainly harmed* French Guiana’s commercial interests No measures have been reported for this jurisdiction in the GTA database.

Frequency with which French Guiana’s state measures have almost certainly harmed* foreign commercial interests

No measures have been reported for this jurisdiction in the GTA database.

Implemented measures that harm* French Guiana’s commercial interests, by type

No measures have been reported for this jurisdiction in the GTA database.

French Guiana’s implemented measures that harm* foreign commercial interests, by type

No measures have been reported for this jurisdiction in the GTA database. FRENCH GUIANA Country Specific Information on Protectionism in Latin America 147 Guatemala

Table 7.57 Foreign state measures affecting Guatemala’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Guatemala’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Guatemala’s 114 110 commercial interests. Total number of foreign measures found to benefit or involve no 20 19 change in the treatment of Guatemala’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Guatemala’s commercial interests or 37 35 (ii) that have been announced but not implemented and which would almost certainly discriminate against Guatemala’s interests [2] Total number of foreign measures that have been implemented and 57 56 which almost certainly discriminate against Guatemala’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Guatemala’s 73 71 commercial interests Total number of implemented measures affecting Guatemala’s commercial interests that are likely to be harmful or are almost 60 59 certainly harmful. Total number of implemented measures affecting Guatemala’s 45 44 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Guatemala’s commercial 22 20 interests Total number of pending measures that, if implemented, are likely to 20 18 harm Guatemala’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Guatemala’s 19 19 commercial interests but are no longer in force. GUATEMALA Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Guatemala’s commercial 14 14 interests. Total number of implemented, but no longer enforced measures that 12 12 were almost certainly harmful to Guatemala’s commercial interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures that are 49 49 currently in force and that harm Guatemala’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Guatemala” in the “Affecting Trading Partner” and clicking the button “Get Stats”. 148 Not Just Victims: Latin America and Crisis-Era Protectionism

Guatemala’s state measures affecting other jurisdictions’ commercial interests No measures have been reported for this jurisdiction in the GTA database.

Table 7.58 Frequency with which trading partners’ state measures have almost certainly harmed* Guatemala’s commercial interests Jurisdiction Number of measures India 7 China 6 Argentina 4 Indonesia 4 Italy 4 Belarus 3 France 3 Germany 3 Russian Federation 3 Austria 2 Belgium 2 Bulgaria 2 Cyprus 2 Czech Republic 2 Denmark 2 Estonia 2 European Communities 2 Finland 2 Greece 2 Hungary 2 Ireland 2 Japan 2 Kazakhstan 2 Latvia 2 Lithuania 2 Luxembourg 2 Malta 2 Mexico 2 Netherlands 2 Poland 2 Portugal 2 Romania 2 Slovakia 2 Slovenia 2 Spain 2 Sweden 2 United Kingdom of Great Britain and Northern Ireland 2 United States of America 2 Colombia 1 Costa Rica 1 Dominican Republic 1 GUATEMALA Country Specific Information on Protectionism in Latin America 149

Jurisdiction Number of measures Malaysia 1 Puerto Rico 1 Republic of Korea 1 Thailand 1 Turkey 1 United States Virgin Islands 1 Venezuela 1 Viet Nam 1

Frequency with which Guatemala’s state measures have almost certainly harmed* foreign commercial interests

No measures have been reported for this jurisdiction in the GTA database.

Table 7.59 Implemented measures that harm* Guatemala’s commercial interests, by type Number of As percentage of Type of measure measures measures Export subsidy 18 26.09% Tariff measure 11 15.94% Bail out / state aid measure 8 11.59% Non tariff barrier (not otherwise specified) 8 11.59% Trade finance 5 7.25% Export taxes or restriction 4 5.80% Public procurement 4 5.80% Competitive devaluation 2 2.90% Quota (including tariff rate quotas) 2 2.90% Import subsidy 1 1.45% Investment measure 1 1.45% Local content requirement 1 1.45% Migration measure 1 1.45% Other service sector measure 1 1.45% Sub-national government measure 1 1.45% Trade defence measure (AD, CVD, safeguard) 1 1.45% GUATEMALA Total 69 100.00%

Guatemala’s implemented measures that harm* foreign commercial interests, by type

No measures have been reported for this jurisdiction in the GTA database. 150 Not Just Victims: Latin America and Crisis-Era Protectionism Guyana

Table 7.60 Foreign state measures affecting Guyana’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Guyana’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Guyana’s 52 51 commercial interests. Total number of foreign measures found to benefit or involve no 14 13 change in the treatment of Guyana’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Guyana’s commercial interests or 19 19 (ii) that have been announced but not implemented and which would almost certainly discriminate against Guyana’s interests [2] Total number of foreign measures that have been implemented and 19 19 which almost certainly discriminate against Guyana’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Guyana’s 31 30 commercial interests Total number of implemented measures affecting Guyana’s commercial interests that are likely to be harmful or are almost 22 22 certainly harmful. Total number of implemented measures affecting Guyana’s 14 14 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Guyana’s commercial 10 10 interests Total number of pending measures that, if implemented, are likely 9 9 to harm Guyana’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Guyana’s 11 11 commercial interests but are no longer in force. Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Guyana’s 7 7 commercial interests. Total number of implemented, but no longer enforced measures that were almost certainly harmful to Guyana’s commercial 5 5 interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures that 35 35 are currently in force and that harm Guyana’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the GUYANA numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Guyana” in the “Affecting Trading Partner” and clicking the button “Get Stats”. Country Specific Information on Protectionism in Latin America 151

Guyana’s state measures affecting other jurisdictions’ commercial interests No measures have been reported for this jurisdiction in the GTA database.

Table 7.61 Frequency with which trading partners’ state measures have almost certainly harmed* Guyana’s commercial interests Jurisdiction Number of measures China 6 Italy 2 United Kingdom of Great Britain and Northern Ireland 2 Argentina 1 Austria 1 Belgium 1 Bulgaria 1 Cyprus 1 Czech Republic 1 Denmark 1 Estonia 1 European Communities 1 Finland 1 France 1 Germany 1 Greece 1 Hungary 1 Ireland 1 Latvia 1 Lithuania 1 Luxembourg 1 Malta 1 Netherlands 1 Poland 1 Portugal 1 Puerto Rico 1 Romania 1 Slovakia 1 Slovenia 1 Spain 1 Sweden 1

United States Virgin Islands 1 GUYANA United States of America 1 Venezuela 1 Viet Nam 1 152 Not Just Victims: Latin America and Crisis-Era Protectionism

Frequency with which Guyana’s state measures have almost certainly harmed* foreign commercial interests No measures have been reported for this jurisdiction in the GTA database.

Table 7.62 Implemented measures that harm* Guyana’s commercial interests, by type

Number of As percentage of Type of measure measures measures Export subsidy 8 32.00% Tariff measure 4 16.00% Bail out / state aid measure 2 8.00% Competitive devaluation 2 8.00% Export taxes or restriction 2 8.00% Trade finance 2 8.00% Local content requirement 1 4.00% Migration measure 1 4.00% Non tariff barrier (not otherwise specified) 1 4.00% Public procurement 1 4.00% Sub-national government measure 1 4.00% Total 25 100.00%

Guyana’s implemented measures that harm* foreign commercial interests, by type

No measures have been reported for this jurisdiction in the GTA database. GUYANA Country Specific Information on Protectionism in Latin America 153 Honduras

Table 7.63 Foreign state measures affecting Honduras’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Honduras’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Honduras’s 91 88 commercial interests. Total number of foreign measures found to benefit or involve no 21 20 change in the treatment of Honduras’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Honduras’s commercial interests or 29 28 (ii) that have been announced but not implemented and which would almost certainly discriminate against Honduras’s interests [2] Total number of foreign measures that have been implemented and 41 40 which almost certainly discriminate against Honduras’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Honduras’s 57 55 commercial interests Total number of implemented measures affecting Honduras’s commercial interests that are likely to be harmful or are almost 43 42 certainly harmful. Total number of implemented measures affecting Honduras’s 32 31 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Honduras’s commercial 20 19 interests Total number of pending measures that, if implemented, are likely 16 15 to harm Honduras’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Honduras’s 14 14 commercial interests but are no longer in force. HONDURAS Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Honduras’s commercial 11 11 interests. Total number of implemented, but no longer enforced measures that 9 9 were almost certainly harmful to Honduras’s commercial interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures 42 42 that are currently in force and that harm Honduras’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Honduras” in the “Affecting Trading Partner” and clicking the button “Get Stats”. 154 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.64 Honduras’s state measures affecting other jurisdictions’ commercial interests.

All measures except Summary statistic of foreign state measures anti-dumping, All measures affecting Honduras’s commercial interests anti-subsidy, and safe-guard actions ALL MEASURES Total number of Honduras’s measures affecting other 1 1 jurisdictions’ commercial interests. Total number of Honduras’s measures found to benefit or involve no change in the treatment of other none none jurisdictions’ commercial interests. [1] Total number of Honduras’s measures that (i) have been implemented and are likely to harm foreign commercial interests or none none (ii) that have been announced but not implemented and which would almost certainly discriminate against foreign interests. [2] Total number of Honduras’s measures that have been implemented and which almost certainly discriminate 1 1 against foreign commercial interests. [3] MEASURES STILL IN FORCE Total number of Honduras’s measures found to none none benefit or involve no change in the treatment of other jurisdictions’ commercial interests. Total number of Honduras’s measures that have been implemented and are likely to harm foreign none none commercial interests. Total number of Honduras’s measures that have been implemented and which almost certainly discriminate none none against foreign commercial interests. COMMERCE AFFECTED Total number of 4-digit tariff lines affected by none none measures implemented by Honduras that harm foreign commercial interests. Total number of 2-digit sectors affected by measures implemented by Honduras that harm foreign none none commercial interests. Total number of trading partners affected by measures implemented by Honduras that harm foreign none none commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Honduras” in the “Affecting Trading Partner” and clicking the button “Get Stats”. HONDURAS Country Specific Information on Protectionism in Latin America 155

Table 7.65 Frequency with which trading partners’ state measures have almost certainly harmed* Honduras’s commercial interests Jurisdiction Number of measures China 6 India 6 Argentina 4 France 3 Belarus 2 Italy 2 Japan 2 Austria 1 Belgium 1 Bulgaria 1 Colombia 1 Costa Rica 1 Cyprus 1 Czech Republic 1 Denmark 1 Dominican Republic 1 Estonia 1 European Communities 1 Finland 1 Germany 1 Greece 1 Hungary 1 Ireland 1 Kazakhstan 1 Latvia 1 Lithuania 1 Luxembourg 1 Malta 1 Mexico 1 Netherlands 1 Poland 1 Portugal 1 Republic of Korea 1 Romania 1 Russian Federation 1 HONDURAS Slovakia 1 Slovenia 1 Spain 1 Sweden 1 United Kingdom of Great Britain and Northern Ireland 1 United States of America 1 Venezuela 1 Viet Nam 1 156 Not Just Victims: Latin America and Crisis-Era Protectionism

Frequency with which Honduras’s state measures have almost certainly harmed* foreign commercial interests No measures have been reported for this jurisdiction in the GTA database.

Table 7.66 Implemented measures that harm* Honduras’s commercial interests, by type Number of As percentage of Type of measure measures measures Export subsidy 17 33.33% Tariff measure 9 17.65% Export taxes or restriction 5 9.80% Bail out / state aid measure 4 7.84% Trade finance 4 7.84% Non tariff barrier (not otherwise specified) 3 5.88% Competitive devaluation 2 3.92% Public procurement 2 3.92% Import subsidy 1 1.96% Investment measure 1 1.96% Local content requirement 1 1.96% Migration measure 1 1.96% Trade defence measure (AD, CVD, safeguard) 1 1.96% Total 51 100.00%

Honduras’s implemented measures that harm* foreign commercial interests, by type

No measures have been reported for this jurisdiction in the GTA database. HONDURAS Country Specific Information on Protectionism in Latin America 157 Mexico

Table 7.67 Foreign state measures affecting Mexico’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Mexico’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Mexico’s 521 489 commercial interests. Total number of foreign measures found to benefit or involve no 151 147 change in the treatment of Mexico’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Mexico’s commercial interests or 113 97 (ii) that have been announced but not implemented and which would almost certainly discriminate against Mexico’s interests [2] Total number of foreign measures that have been implemented and 257 245 which almost certainly discriminate against Mexico’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Mexico’s 360 346 commercial interests Total number of implemented measures affecting Mexico’s commercial interests that are likely to be harmful or are almost 258 248 certainly harmful. Total number of implemented measures affecting Mexico’s 207 197 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Mexico’s commercial 68 52 interests Total number of pending measures that, if implemented, are likely 55 39 to harm Mexico’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Mexico’s 93 91 commercial interests but are no longer in force. Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Mexico’s 56 54 commercial interests.

Total number of implemented, but no longer enforced measures MEXICO that were almost certainly harmful to Mexico’s commercial 49 47 interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures that 60 60 are currently in force and that harm Mexico’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Mexico” in the “Affecting Trading Partner” and clicking the button “Get Stats”. 158 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.68 Mexico’s state measures affecting other jurisdictions’ commercial interests.

All measures except Summary statistic of foreign state measures anti-dumping, All measures affecting Mexico’s commercial interests anti-subsidy, and safe-guard actions ALL MEASURES Total number of Mexico’s measures affecting other 45 20 jurisdictions’ commercial interests. Total number of Mexico’s measures found to benefit or involve no change in the treatment of other 13 10 jurisdictions’ commercial interests. [1] Total number of Mexico’s measures that (i) have been implemented and are likely to harm foreign commercial interests or 10 2 (ii) that have been announced but not implemented and which would almost certainly discriminate against foreign interests. [2] Total number of Mexico’s measures that have been implemented and which almost certainly discriminate 22 8 against foreign commercial interests. [3] MEASURES STILL IN FORCE Total number of Mexico’s measures found to benefit 12 9 or involve no change in the treatment of other jurisdictions’ commercial interests. Total number of Mexico’s measures that have been implemented and are likely to harm foreign 2 2 commercial interests. Total number of Mexico’s measures that have been implemented and which almost certainly discriminate 19 5 against foreign commercial interests. COMMERCE AFFECTED Total number of 4-digit tariff lines affected by measures 95 82 implemented by Mexico that harm foreign commercial interests. Total number of 2-digit sectors affected by measures implemented by Mexico that harm foreign commercial 27 22 interests. Total number of trading partners affected by measures implemented by Mexico that harm foreign commercial 36 36 interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Mexico” in the “Affecting Trading Partner” and clicking the button “Get Stats”. MEXICO Country Specific Information on Protectionism in Latin America 159

Table 7.69 Frequency with which trading partners’ state measures have almost certainly harmed* Mexico’s commercial interests Jurisdiction Number of measures Argentina 43 Russian Federation 34 Brazil 15 Indonesia 14 India 12 China 11 Canada 10 United States of America 10 France 8 Belarus 6 Kazakhstan 6 Italy 5 Viet Nam 5 Poland 4 Sweden 4 United Kingdom of Great Britain and Northern Ireland 4 Venezuela 4 Germany 3 Greece 3 Japan 3 Netherlands 3 Paraguay 3 Romania 3 Saudi Arabia 3 Slovakia 3 Turkey 3 Uruguay 3 Algeria 2 Australia 2 Austria 2 Belgium 2 Bolivia 2 Bulgaria 2 Cyprus 2 Czech Republic 2 Denmark 2 Ecuador 2 Egypt 2 MEXICO Estonia 2 European Communities 2 Finland 2 Hungary 2 Ireland 2 Latvia 2 Lithuania 2 160 Not Just Victims: Latin America and Crisis-Era Protectionism

Jurisdiction Number of measures Luxembourg 2 Malta 2 Nigeria 2 Portugal 2 Slovenia 2 Spain 2 Colombia 1 Ethiopia 1 Iran 1 Malaysia 1 Peru 1 Republic of Korea 1 South Africa 1 Switzerland 1 Thailand 1 Trinidad and Tobago 1

Table 7.70 Frequency with which Mexico’s state measures have almost certainly harmed* foreign commercial interests Foreign jurisdictions implementing measures Number of measures United States of America 10 China 9 Indonesia 3 Malaysia 3 Philippines 3 Argentina 2 Brazil 2 Colombia 2 Guatemala 2 Italy 2 Spain 2 Thailand 2 Viet Nam 2 Australia 1 Austria 1 Bolivia 1 Canada 1 Chinese Taipei 1 Costa Rica 1 Cuba 1 Czech Republic 1 Denmark 1 Dominican Republic 1 Ecuador 1 France 1 MEXICO Country Specific Information on Protectionism in Latin America 161

Foreign jurisdictions implementing measures Number of measures Germany 1 Honduras 1 Hungary 1 India 1 Israel 1 Japan 1 Nicaragua 1 Pakistan 1 Saudi Arabia 1 Slovenia 1 South Africa 1 United Kingdom of Great Britain and Northern Ireland 1

Table 7.71 Implemented measures that harm* Mexico’s commercial interests, by type Number of As percentage of Type of measure measures measures Tariff measure 57 18.51% Bail out / state aid measure 51 16.56% Non tariff barrier (not otherwise specified) 45 14.61% Export subsidy 28 9.09% Export taxes or restriction 21 6.82% Migration measure 14 4.55% Local content requirement 13 4.22% Public procurement 11 3.57% Trade defence measure (AD, CVD, safeguard) 10 3.25% Trade finance 7 2.27% Import ban 6 1.95% Investment measure 6 1.95% State-controlled company 6 1.95% Technical Barrier to Trade 6 1.95% Competitive devaluation 5 1.62% Quota (including tariff rate quotas) 5 1.62% Consumption subsidy 4 1.30% Import subsidy 4 1.30% Other service sector measure 3 0.97% Intellectual property protection 2 0.65% Sanitary and Phytosanitary Measure 2 0.65% State trading enterprise 1 0.32% Sub-national government measure 1 0.32% Total 308 100.00% MEXICO 162 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.72 Mexico’s implemented measures that harm* foreign commercial interests, by type Number of As percentage of Type of measure measures measures Trade defence measure (AD, CVD, safeguard) 14 66.67% Tariff measure 3 14.29% Consumption subsidy 1 4.76% Non tariff barrier (not otherwise specified) 1 4.76% Quota (including tariff rate quotas) 1 4.76% Sanitary and Phytosanitary Measure 1 4.76% Total 21 100.00% MEXICO Country Specific Information on Protectionism in Latin America 163 Nicaragua

Table 7.73 Foreign state measures affecting Nicaragua’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Nicaragua’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Nicaragua’s 78 76 commercial interests. Total number of foreign measures found to benefit or involve no 16 15 change in the treatment of Nicaragua’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Nicaragua’s commercial interests or 26 25 (ii) that have been announced but not implemented and which would almost certainly discriminate against Nicaragua’s interests [2] Total number of foreign measures that have been implemented and 36 36 which almost certainly discriminate against Nicaragua’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Nicaragua’s 45 44 commercial interests Total number of implemented measures affecting Nicaragua’s commercial interests that are likely to be harmful or are almost 36 36 certainly harmful. Total number of implemented measures affecting Nicaragua’s 27 27 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Nicaragua’s 19 18 commercial interests Total number of pending measures that, if implemented, are likely 15 14 to harm Nicaragua’s commercial interests. MEASURES NO LONGER IN FORCE

Total number of implemented measures that affected Nicaragua’s 14 14 NICARAGUA commercial interests but are no longer in force. Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Nicaragua’s 11 11 commercial interests. Total number of implemented, but no longer enforced measures that were almost certainly harmful to Nicaragua’s commercial 9 9 interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures 43 43 that are currently in force and that harm Nicaragua’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Nicaragua” in the “Affecting Trading Partner” and clicking the button “Get Stats”. 164 Not Just Victims: Latin America and Crisis-Era Protectionism

Nicaragua’s state measures affecting other jurisdictions’ commercial interests. No measures have been reported for this jurisdiction in the GTA database.

Table 7.74 Frequency with which trading partners’ state measures have almost certainly harmed* Nicaragua’s commercial interests Jurisdiction Number of measures China 6 France 5 Italy 3 Argentina 2 Austria 2 Belgium 2 Bulgaria 2 Cyprus 2 Czech Republic 2 Denmark 2 Estonia 2 European Communities 2 Finland 2 Germany 2 Greece 2 Hungary 2 India 2 Ireland 2 Japan 2 Latvia 2 Lithuania 2 Luxembourg 2 Malta 2 Netherlands 2 Poland 2 Portugal 2 Romania 2 Slovakia 2 Slovenia 2 Spain 2 Sweden 2 United Kingdom of Great Britain and Northern Ireland 2 United States of America 2 Belarus 1 Costa Rica 1 Kazakhstan 1 Mexico 1 Puerto Rico 1 Republic of Korea 1 Russian Federation 1 United States Virgin Islands 1 NICARAGUA Country Specific Information on Protectionism in Latin America 165

Jurisdiction Number of measures Venezuela 1 Viet Nam 1

Frequency with which Nicaragua’s state measures have almost certainly harmed* foreign commercial interests No measures have been reported for this jurisdiction in the GTA database.

Table 7.75 Implemented measures that harm* Nicaragua’s commercial interests, by type Number of As percentage of Type of measure measures measures Export subsidy 13 31.71% Bail out / state aid measure 8 19.51% Tariff measure 5 12.20% Trade finance 4 9.76% Competitive devaluation 2 4.88% Non tariff barrier (not otherwise specified) 2 4.88% Export taxes or restriction 1 2.44% Import subsidy 1 2.44% Local content requirement 1 2.44% Migration measure 1 2.44% Public procurement 1 2.44% Quota (including tariff rate quotas) 1 2.44% Sub-national government measure 1 2.44% Total 41 100.00%

Nicaragua’s implemented measures that harm* foreign commercial interests, by type

No measures have been reported for this jurisdiction in the GTA database. NICARAGUA 166 Not Just Victims: Latin America and Crisis-Era Protectionism Panama

Table 7.76 Foreign state measures affecting Panama’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Panama’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Panama’s 132 131 commercial interests. Total number of foreign measures found to benefit or involve no 28 27 change in the treatment of Panama’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Panama’s commercial interests or 45 45 (ii) that have been announced but not implemented and which would almost certainly discriminate against Panama’s interests [2] Total number of foreign measures that have been implemented and 59 59 which almost certainly discriminate against Panama’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Panama’s 88 87 commercial interests Total number of implemented measures affecting Panama’s commercial interests that are likely to be harmful or are almost 69 69 certainly harmful. Total number of implemented measures affecting Panama’s 44 44 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Panama’s commercial 20 20 interests Total number of pending measures that, if implemented, are likely 18 18 to harm Panama’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Panama’s 24 24 commercial interests but are no longer in force. Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Panama’s 17 17 commercial interests. Total number of implemented, but no longer enforced measures that were almost certainly harmful to Panama’s commercial 15 15 interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures that 47 47 are currently in force and that harm Panama’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the

PANAMA numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Panama” in the “Affecting Trading Partner” and clicking the button “Get Stats”. Country Specific Information on Protectionism in Latin America 167

Panama’s state measures affecting other ju No measures have been reported for this jurisdiction in the GTA database.

Table 7.77 Frequency with which trading partners’ state measures have almost certainly harmed* Panama’s commercial interests Jurisdiction Number of measures China 8 India 5 Indonesia 5 Argentina 3 Venezuela 3 Belarus 2 Ecuador 2 Egypt 2 France 2 Germany 2 Italy 2 Russian Federation 2 Austria 1 Belgium 1 Brazil 1 Bulgaria 1 Colombia 1 Costa Rica 1 Cyprus 1 Czech Republic 1 Denmark 1 Estonia 1 European Communities 1 Finland 1 Ghana 1 Greece 1 Hungary 1 Ireland 1 Japan 1 Latvia 1 Lithuania 1 Luxembourg 1 Malaysia 1 Malta 1 PANAMA Netherlands 1 Poland 1 Portugal 1 Republic of Korea 1 Republic of Moldova 1 Romania 1 Slovakia 1 168 Not Just Victims: Latin America and Crisis-Era Protectionism

Jurisdiction Number of measures Slovenia 1 Spain 1 Sweden 1 Thailand 1 United Kingdom of Great Britain and Northern Ireland 1 Viet Nam 1

Frequency with which Panama’s state measures have almost certainly harmed* foreign commercial interests

No measures have been reported for this jurisdiction in the GTA database.

Table 7.78 Implemented measures that harm* Panama’s commercial interests, by type Number of As percentage of Type of measure measures measures Export subsidy 18 22.22% Tariff measure 18 22.22% Export taxes or restriction 13 16.05% Bail out / state aid measure 7 8.64% Non tariff barrier (not otherwise specified) 7 8.64% Trade finance 6 7.41% Competitive devaluation 2 2.47% Import subsidy 2 2.47% Public procurement 2 2.47% Import ban 1 1.23% Intellectual property protection 1 1.23% Investment measure 1 1.23% Migration measure 1 1.23% Other service sector measure 1 1.23% State trading enterprise 1 1.23% Total 81 100.00%

Panama’s implemented measures that harm* foreign commercial interests, by type

No measures have been reported for this jurisdiction in the GTA database. PANAMA Country Specific Information on Protectionism in Latin America 169 Paraguay

Table 7.79 Foreign state measures affecting Paraguay’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Paraguay’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Paraguay’s 103 100 commercial interests. Total number of foreign measures found to benefit or involve no 18 17 change in the treatment of Paraguay’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Paraguay’s commercial interests or 21 21 (ii) that have been announced but not implemented and which would almost certainly discriminate against Paraguay’s interests [2] Total number of foreign measures that have been implemented and 64 62 which almost certainly discriminate against Paraguay’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Paraguay’s 76 73 commercial interests Total number of implemented measures affecting Paraguay’s commercial interests that are likely to be harmful or are almost 62 60 certainly harmful. Total number of implemented measures affecting Paraguay’s 51 49 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Paraguay’s commercial 8 8 interests Total number of pending measures that, if implemented, are likely to 8 8 harm Paraguay’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Paraguay’s 19 19 commercial interests but are no longer in force. Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Paraguay’s commercial 15 15 PARAGUAY interests. Total number of implemented, but no longer enforced measures that 13 13 were almost certainly harmful to Paraguay’s commercial interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures that 44 44 are currently in force and that harm Paraguay’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Paraguay” in the “Affecting Trading Partner” and clicking the button “Get Stats”. 170 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.80 Paraguay’s state measures affecting other jurisdictions’ commercial interests.

All measures except Summary statistic of foreign state measures anti-dumping, All measures affecting Paraguay’s commercial interests anti-subsidy, and safe-guard actions ALL MEASURES Total number of Paraguay’s measures affecting other 10 10 jurisdictions’ commercial interests. Total number of Paraguay’s measures found to benefit or involve no change in the treatment of other 2 2 jurisdictions’ commercial interests. [1] Total number of Paraguay’s measures that (i) have been implemented and are likely to harm foreign commercial interests or none none (ii) that have been announced but not implemented and which would almost certainly discriminate against foreign interests. [2] Total number of Paraguay’s measures that have been implemented and which almost certainly discriminate 8 8 against foreign commercial interests. [3] MEASURES STILL IN FORCE Total number of Paraguay’s measures found to benefit 1 1 or involve no change in the treatment of other jurisdictions’ commercial interests. Total number of Paraguay’s measures that have been implemented and are likely to harm foreign none none commercial interests. Total number of Paraguay’s measures that have been implemented and which almost certainly discriminate 8 8 against foreign commercial interests. COMMERCE AFFECTED Total number of 4-digit tariff lines affected by 72 72 measures implemented by Paraguay that harm foreign commercial interests. Total number of 2-digit sectors affected by measures implemented by Paraguay that harm foreign 12 12 commercial interests. Total number of trading partners affected by measures implemented by Paraguay that harm foreign 41 41 commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Paraguay” in the “Affecting Trading Partner” and clicking the button “Get Stats”. PARAGUAY Country Specific Information on Protectionism in Latin America 171

Table 7.81 Frequency with which trading partners’ state measures have almost certainly harmed* Paraguay’s commercial interests Jurisdiction Number of measures Argentina 23 China 6 France 4 Italy 4 Spain 4 Austria 3 Belgium 3 Bulgaria 3 Cyprus 3 Czech Republic 3 Denmark 3 Estonia 3 European Communities 3 Finland 3 Germany 3 Greece 3 Hungary 3 India 3 Ireland 3 Latvia 3 Lithuania 3 Luxembourg 3 Malta 3 Netherlands 3 Poland 3 Portugal 3 Romania 3 Slovakia 3 Slovenia 3 Sweden 3 United Kingdom of Great Britain and Northern Ireland 3 Brazil 2 Russian Federation 2 Belarus 1 Ecuador 1 Indonesia 1 PARAGUAY Japan 1 Kazakhstan 1 Morocco 1 Nigeria 1 Republic of Korea 1 Turkey 1 Venezuela 1 Viet Nam 1 172 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.82 Frequency with which Paraguay’s state measures have almost certainly harmed* foreign commercial interests Jurisdiction affected Number of measures China 6 Brazil 4 United States of America 4 Czech Republic 3 France 3 Germany 3 Indonesia 3 Italy 3 Malaysia 3 Mexico 3 Spain 3 Thailand 3 Argentina 2 Bolivia 2 Canada 2 Chile 2 India 2 Japan 2 Netherlands 2 Norway 2 Republic of Korea 2 Switzerland 2 United Kingdom of Great Britain and Northern Ireland 2 Uruguay 2 Australia 1 Austria 1 Belgium 1 Colombia 1 Denmark 1 Finland 1 Hong Kong 1 Israel 1 Philippines 1 Poland 1 Singapore 1 Slovakia 1 South Africa 1 Sweden 1 Turkey 1 United Arab Emirates 1 Viet Nam 1 PARAGUAY Country Specific Information on Protectionism in Latin America 173

Table 7.83 Implemented measures that harm* Paraguay’s commercial interests, by type Number of As percentage of Type of measure measures measures Non tariff barrier (not otherwise specified) 18 26.47% Export subsidy 15 22.06% Tariff measure 8 11.76% Export taxes or restriction 5 7.35% Trade finance 5 7.35% Bail out / state aid measure 3 4.41% Competitive devaluation 3 4.41% Quota (including tariff rate quotas) 3 4.41% Trade defence measure (AD, CVD, safeguard) 2 2.94% Import ban 1 1.47% Import subsidy 1 1.47% Intellectual property protection 1 1.47% Investment measure 1 1.47% Public procurement 1 1.47% Technical Barrier to Trade 1 1.47% Total 68 100.00%

Table 7.84 Paraguay’s implemented measures that harm* foreign commercial interests, by type Number of As percentage of Type of measure measures measures Tariff measure 3 30.00% Non tariff barrier (not otherwise specified) 2 20.00% Public procurement 2 20.00% Technical Barrier to Trade 2 20.00% Local content requirement 1 10.00% Total 10 100.00% PARAGUAY 174 Not Just Victims: Latin America and Crisis-Era Protectionism

Peru

Table 7.85 Foreign state measures affecting Peru’ commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Peru’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Peru’s 191 188 commercial interests. Total number of foreign measures found to benefit or involve no 42 41 change in the treatment of Peru’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Peru’s commercial interests or 45 45 (ii) that have been announced but not implemented and which would almost certainly discriminate against Peru’s interests [2] Total number of foreign measures that have been implemented and 104 102 which almost certainly discriminate against Peru’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Peru’s 133 131 commercial interests Total number of implemented measures affecting Peru’s commercial interests that are likely to be harmful or are almost 106 105 certainly harmful. Total number of implemented measures affecting Peru’s 83 82 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Peru’s commercial 25 25 interests Total number of pending measures that, if implemented, are likely 18 18 to harm Peru’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Peru’s 33 32 commercial interests but are no longer in force. Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Peru’s commercial 25 24 interests. Total number of implemented, but no longer enforced measures 21 20 that were almost certainly harmful to Peru’s commercial interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures that 50 50 are currently in force and that harm Peru’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting PERU “Peru” in the “Affecting Trading Partner” and clicking the button “Get Stats”. Country Specific Information on Protectionism in Latin America 175

Table 7.86 Peru’s state measures affecting other jurisdictions’ commercial interests

All measures except Summary statistic of foreign state measures anti-dumping, All measures affecting Peru’s commercial interests anti-subsidy, and safe-guard actions ALL MEASURES Total number of Peru’s measures affecting other 19 2 jurisdictions’ commercial interests. Total number of Peru’s measures found to benefit or involve no change in the treatment of other 6 2 jurisdictions’ commercial interests. [1] Total number of Peru’s measures that (i) have been implemented and are likely to harm foreign commercial interests or 8 none (ii) that have been announced but not implemented and which would almost certainly discriminate against foreign interests. [2] Total number of Peru’s measures that have been implemented and which almost certainly discriminate 5 none against foreign commercial interests. [3] MEASURES STILL IN FORCE Total number of Peru’s measures found to benefit 5 1 or involve no change in the treatment of other jurisdictions’ commercial interests. Total number of Peru’s measures that have been implemented and are likely to harm foreign none none commercial interests. Total number of Peru’s measures that have been implemented and which almost certainly discriminate 4 none against foreign commercial interests. COMMERCE AFFECTED Total number of 4-digit tariff lines affected by measures 8 none implemented by Peru that harm foreign commercial interests. Total number of 2-digit sectors affected by measures implemented by Peru that harm foreign commercial 5 none interests. Total number of trading partners affected by measures implemented by Peru that harm foreign commercial 4 none interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Peru” in the “Affecting Trading Partner” and clicking the button “Get Stats”. PERU 176 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.87 Frequency with which trading partners’ state measures have almost certainly harmed* Peru’s commercial interests Jurisdiction Number of measures Argentina 22 China 10 India 8 France 7 Indonesia 7 Russian Federation 4 Spain 4 Brazil 3 Germany 3 Italy 3 Latvia 3 Austria 2 Belgium 2 Bulgaria 2 Cyprus 2 Czech Republic 2 Denmark 2 Ecuador 2 Estonia 2 European Communities 2 Finland 2 Greece 2 Hungary 2 Ireland 2 Japan 2 Kazakhstan 2 Lithuania 2 Luxembourg 2 Malta 2 Netherlands 2 Poland 2 Portugal 2 Romania 2 Slovakia 2 Slovenia 2 Sweden 2 United Kingdom of Great Britain and Northern Ireland 2 United States of America 2 Venezuela 2 Algeria 1 Belarus 1 Bolivia 1 Canada 1 Colombia 1 Malaysia 1 PERU Country Specific Information on Protectionism in Latin America 177

Jurisdiction Number of measures Nigeria 1 Republic of Korea 1 South Africa 1 Thailand 1 Viet Nam 1

Table 7.88 Frequency with which Peru’s state measures have almost certainly harmed* foreign commercial interests Jurisdiction affected Number of measures China 1 India 1 Mexico 1 United States of America 1

Table 7.89 Implemented measures that harm* Peru’s commercial interests, by type Number of As percentage of Type of measure measures measures Tariff measure 21 17.80% Export subsidy 20 16.95% Export taxes or restriction 16 13.56% Non tariff barrier (not otherwise specified) 15 12.71% Bail out / state aid measure 11 9.32% Public procurement 6 5.08% Trade finance 6 5.08% Competitive devaluation 4 3.39% Local content requirement 4 3.39% Quota (including tariff rate quotas) 4 3.39% Import ban 2 1.69% Investment measure 2 1.69% Technical Barrier to Trade 2 1.69% Import subsidy 1 0.85% Intellectual property protection 1 0.85% Migration measure 1 0.85% Sanitary and Phytosanitary Measure 1 0.85% Trade defence measure (AD, CVD, safeguard) 1 0.85% Total 118 100.00%

Table 7.90 Peru’s implemented measures that harm* foreign commercial interests, by type

Number of As percentage of PERU Type of measure measures measures Trade defence measure (AD, CVD, safeguard) 5 100.00% Total 5 100.00% 178 Not Just Victims: Latin America and Crisis-Era Protectionism Suriname

Table 7.91 Foreign state measures affecting Suriname’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Suriname’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Suriname’s 41 40 commercial interests. Total number of foreign measures found to benefit or involve no 10 9 change in the treatment of Suriname’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Suriname’s commercial interests or 14 14 (ii) that have been announced but not implemented and which would almost certainly discriminate against Suriname’s interests [2] Total number of foreign measures that have been implemented and 17 17 which almost certainly discriminate against Suriname’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Suriname’s 28 27 commercial interests Total number of implemented measures affecting Suriname’s commercial interests that are likely to be harmful or are almost 20 20 certainly harmful. Total number of implemented measures affecting Suriname’s 13 13 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Suriname’s commercial 6 6 interests Total number of pending measures that, if implemented, are likely 5 5 to harm Suriname’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Suriname’s 7 7 commercial interests but are no longer in force. Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Suriname’s 6 6 commercial interests. Total number of implemented, but no longer enforced measures that were almost certainly harmful to Suriname’s commercial 4 4 interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures 6 6 that are currently in force and that harm Suriname’s commercial interests.

SURINAME Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Suriname” in the “Affecting Trading Partner” and clicking the button “Get Stats”. Country Specific Information on Protectionism in Latin America 179

Suriname’s state measures affecting other jurisdictions’ commercial interests. No measures have been reported for this jurisdiction in the GTA database.

Table 7.92 Frequency with which trading partners’ state measures have almost certainly harmed* Suriname’s commercial interests Jurisdiction Number of measures China 6 Argentina 2 France 2 Italy 1 Netherlands 1 Nigeria 1

Frequency with which Canada’s state measures have almost certainly harmed* foreign commercial interests

No measures have been reported for this jurisdiction in the GTA database

Table 7.93 Implemented measures that harm* Suriname’s commercial interests, by type Number of As percentage of Type of measure measures measures Export subsidy 8 38.10% Bail out / state aid measure 3 14.29% Tariff measure 3 14.29% Export taxes or restriction 2 9.52% Trade finance 2 9.52% Competitive devaluation 1 4.76% Migration measure 1 4.76% Non tariff barrier (not otherwise specified) 1 4.76% Total 21 100.00%

Suriname’s implemented measures that harm* foreign commercial interests, by type

No measures have been reported for this jurisdiction in the GTA database. SURINAME 180 Not Just Victims: Latin America and Crisis-Era Protectionism Uruguay

Table 7.94 Foreign state measures affecting Uruguay’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Uruguay’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Uruguay’s 185 179 commercial interests. Total number of foreign measures found to benefit or involve no 33 32 change in the treatment of Uruguay’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Uruguay’s commercial interests or 48 46 (ii) that have been announced but not implemented and which would almost certainly discriminate against Uruguay’s interests [2] Total number of foreign measures that have been implemented and 104 101 which almost certainly discriminate against Uruguay’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Uruguay’s 121 118 commercial interests Total number of implemented measures affecting Uruguay’s commercial interests that are likely to be harmful or are almost 98 96 certainly harmful. Total number of implemented measures affecting Uruguay’s 76 74 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Uruguay’s commercial 23 21 interests Total number of pending measures that, if implemented, are likely 22 20 to harm Uruguay’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Uruguay’s 41 40 commercial interests but are no longer in force. Total number of implemented, but no longer enforced measures that were harmful or almost certainly harmful to Uruguay’s 32 31 commercial interests. Total number of implemented, but no longer enforced measures that were almost certainly harmful to Uruguay’s commercial 28 27 interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures 50 50 that are currently in force and that harm Uruguay’s commercial interests.

URUGUAY Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Uruguay” in the “Affecting Trading Partner” and clicking the button “Get Stats”. Country Specific Information on Protectionism in Latin America 181

Table 7.95 Uruguay’s state measures affecting other jurisdictions’ commercial interests

All measures except Summary statistic of foreign state measures anti-dumping, All measures affecting Uruguay’s commercial interests anti-subsidy, and safe-guard actions ALL MEASURES Total number of Uruguay’s measures affecting other 7 6 jurisdictions’ commercial interests. Total number of Uruguay’s measures found to benefit or involve no change in the treatment of other 3 3 jurisdictions’ commercial interests. [1] Total number of Uruguay’s measures that (i) have been implemented and are likely to harm foreign commercial interests or none none (ii) that have been announced but not implemented and which would almost certainly discriminate against foreign interests. [2] Total number of Uruguay’s measures that have been implemented and which almost certainly discriminate 4 3 against foreign commercial interests. [3] MEASURES STILL IN FORCE Total number of Uruguay’s measures found to benefit 2 2 or involve no change in the treatment of other jurisdictions’ commercial interests. Total number of Uruguay’s measures that have been implemented and are likely to harm foreign none none commercial interests. Total number of Uruguay’s measures that have been implemented and which almost certainly discriminate 4 3 against foreign commercial interests. COMMERCE AFFECTED Total number of 4-digit tariff lines affected by 4 3 measures implemented by Uruguay that harm foreign commercial interests. Total number of 2-digit sectors affected by measures implemented by Uruguay that harm foreign 3 2 commercial interests. Total number of trading partners affected by measures implemented by Uruguay that harm foreign 35 35 commercial interests. URUGUAY

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Uruguay” in the “Affecting Trading Partner” and clicking the button “Get Stats”. 182 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.96 Frequency with which trading partners’ state measures have almost certainly harmed* Uruguay’s commercial interests Jurisdiction Number of measures Argentina 28 China 7 Russian Federation 7 India 5 Indonesia 5 Brazil 3 France 3 Germany 3 Italy 3 Turkey 3 Austria 2 Belarus 2 Belgium 2 Bulgaria 2 Cyprus 2 Czech Republic 2 Denmark 2 Estonia 2 European Communities 2 Finland 2 Greece 2 Hungary 2 Ireland 2 Kazakhstan 2 Latvia 2 Lithuania 2 Luxembourg 2 Malta 2 Netherlands 2 Nigeria 2 Paraguay 2 Poland 2 Portugal 2 Romania 2 Slovakia 2 Slovenia 2 Spain 2 Sweden 2 United Kingdom of Great Britain and Northern Ireland 2 Ecuador 1 Ghana 1 Japan 1 Malaysia 1 Norway 1 Republic of Korea 1 URUGUAY Country Specific Information on Protectionism in Latin America 183

Jurisdiction Number of measures Switzerland 1 Thailand 1 United States of America 1 Venezuela 1 Viet Nam 1

Table 7.97 Frequency with which Uruguay’s state measures have almost certainly harmed* foreign commercial interests Jurisdiction affected Number of measures China 4 Czech Republic 3 Italy 3 Malaysia 3 Mexico 3 Thailand 3 United States of America 3 Canada 2 France 2 Germany 2 Indonesia 2 Japan 2 Netherlands 2 Norway 2 Republic of Korea 2 Spain 2 United Kingdom of Great Britain and Northern Ireland 2 Australia 1 Austria 1 Belgium 1 Chile 1 Denmark 1 Finland 1 Hong Kong 1 India 1 Philippines 1 Poland 1

Singapore 1 URUGUAY Slovakia 1 South Africa 1 Sweden 1 Switzerland 1 Turkey 1 United Arab Emirates 1 Viet Nam 1 184 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.98 Implemented measures that harm* Uruguay’s commercial interests, by type Number of As percentage of Type of measure measures measures Non tariff barrier (not otherwise specified) 30 25.64% Tariff measure 21 17.95% Export subsidy 18 15.38% Export taxes or restriction 9 7.69% Bail out / state aid measure 8 6.84% Trade finance 6 5.13% Public procurement 4 3.42% Quota (including tariff rate quotas) 4 3.42% Competitive devaluation 3 2.56% Local content requirement 3 2.56% Technical Barrier to Trade 3 2.56% Import subsidy 2 1.71% Other service sector measure 2 1.71% Trade defence measure (AD, CVD, safeguard) 2 1.71% Intellectual property protection 1 0.85% Investment measure 1 0.85% Total 117 100.00%

Table 7.99 Uruguay’s implemented measures that harm* foreign commercial interests, by type Number of As percentage of Type of measure measures measures Tariff measure 3 75.00% Trade defence measure (AD, CVD, safeguard) 1 25.00% Total 4 100.00% URUGUAY Country Specific Information on Protectionism in Latin America 185 Venezuela

Table 7.100 Foreign state measures affecting Venezuela’s commercial interests

All measures except anti- Summary statistic of foreign state measures All dumping, affecting Venezuela’s commercial interests measures anti-subsidy, and safeguard actions ALL MEASURES Total number of measures affecting Venezuela’s 163 160 commercial interests. Total number of foreign measures found to benefit or involve no 43 41 change in the treatment of Venezuela’s commercial interests. [1] Total number of foreign measures that (i) have been implemented and are likely to harm Venezuela’s commercial interests or 42 42 (ii) that have been announced but not implemented and which would almost certainly discriminate against Venezuela’s interests [2] Total number of foreign measures that have been implemented and 78 77 which almost certainly discriminate against Venezuela’s interests [3] MEASURES STILL IN FORCE Total number of implemented measures affecting Venezuela’s 116 113 commercial interests Total number of implemented measures affecting Venezuela’s commercial interests that are likely to be harmful or are almost 84 83 certainly harmful. Total number of implemented measures affecting Venezuela’s 64 63 commercial interests that are almost certainly harmful. PENDING MEASURES Total number of pending measures affecting Venezuela’s 22 22 commercial interests Total number of pending measures that, if implemented, are likely 18 18 to harm Venezuela’s commercial interests. MEASURES NO LONGER IN FORCE Total number of implemented measures that affected Venezuela’s 25 25 commercial interests but are no longer in force. V Total number of implemented, but no longer enforced measures that

were harmful or almost certainly harmful to Venezuela’s commercial 18 18 ENEZUELA interests. Total number of implemented, but no longer enforced measures that 14 14 were almost certainly harmful to Venezuela’s commercial interests TRADING PARTNERS RESPONSIBLE Total number of trading partners that have imposed measures 23 23 that are currently in force and that harm Venezuela’s commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Venezuela” in the “Affecting Trading Partner” and clicking the button “Get Stats”. 186 Not Just Victims: Latin America and Crisis-Era Protectionism

Table 7.101 Venezuela’s state measures affecting other jurisdictions’ commercial interests.

All measures except Summary statistic of foreign state measures anti-dumping, All measures affecting Venezuela’s commercial interests anti-subsidy, and safe-guard actions ALL MEASURES Total number of Venezuela’s measures affecting other 16 16 jurisdictions’ commercial interests. Total number of Venezuela’s measures found to benefit or involve no change in the treatment of other 5 5 jurisdictions’ commercial interests. [1] Total number of Venezuela’s measures that (i) have been implemented and are likely to harm foreign commercial interests or 2 2 (ii) that have been announced but not implemented and which would almost certainly discriminate against foreign interests. [2] Total number of Venezuela’s measures that have been implemented and which almost certainly discriminate 9 9 against foreign commercial interests. [3] MEASURES STILL IN FORCE Total number of Venezuela’s measures found to 5 5 benefit or involve no change in the treatment of other jurisdictions’ commercial interests. Total number of Venezuela’s measures that have been implemented and are likely to harm foreign 2 2 commercial interests. Total number of Venezuela’s measures that have been implemented and which almost certainly discriminate 9 9 against foreign commercial interests. COMMERCE AFFECTED Total number of 4-digit tariff lines affected by measures 786 786 implemented by Venezuela that harm foreign commercial interests. Total number of 2-digit sectors affected by measures implemented by Venezuela that harm foreign 38 38 commercial interests. Total number of trading partners affected by measures implemented by Venezuela that harm foreign 73 73 commercial interests.

Note: As the Global Trade Alert database is updated frequently, the above data will change. Updates on the numbers in this table can be found by going to http://www.globaltradealert.org/site-statistics, and selecting “Venezuela” in the “Affecting Trading Partner” and clicking the button “Get Stats”. ENEZUELA V Country Specific Information on Protectionism in Latin America 187

Table 7.102 Frequency with which trading partners’ state measures have almost certainly harmed* Venezuela’s commercial interests Jurisdiction Number of measures Argentina 16 China 7 India 7 Russian Federation 4 Brazil 3 France 3 Indonesia 3 Spain 3 Bolivia 2 Colombia 2 Ecuador 2 Germany 2 Viet Nam 2 Iran 1 Italy 1 Japan 1 Kazakhstan 1 Malaysia 1 Nigeria 1 Portugal 1 Republic of Korea 1 Thailand 1 United States of America 1

Table 7.103 Frequency with which Venezuela’s state measures have almost certainly harmed* foreign commercial interests Jurisdiction affected Number of measures United States of America 5 Italy 4 Mexico 4 Colombia 3 Panama 3 Spain 3 Argentina 2 V

Austria 2 ENEZUELA Brazil 2 Chile 2 China 2 Ecuador 2 France 2 Japan 2 Peru 2 Republic of Korea 2 Sweden 2 188 Not Just Victims: Latin America and Crisis-Era Protectionism

Jurisdiction affected Number of measures Thailand 2 Albania 1 Australia 1 Barbados 1 Belgium 1 Bolivia 1 Bulgaria 1 Canada 1 Costa Rica 1 Cuba 1 Czech Republic 1 Democratic People's Republic of Korea 1 Denmark 1 Dominican Republic 1 Egypt 1 El Salvador 1 Estonia 1 Finland 1 Germany 1 Greece 1 Guatemala 1 Guyana 1 Haiti 1 Honduras 1 Hong Kong 1 Hungary 1 India 1 Indonesia 1 Ireland 1 Israel 1 Jamaica 1 Lithuania 1 Luxembourg 1 Malaysia 1 Morocco 1 Netherlands 1 Netherlands Antilles 1 New Zealand 1 Nicaragua 1 Norway 1 Pakistan 1 Paraguay 1 Philippines 1 Poland 1 Portugal 1 Romania 1 ENEZUELA Russian Federation 1 V Country Specific Information on Protectionism in Latin America 189

Jurisdiction affected Number of measures Singapore 1 Slovakia 1 South Africa 1 Switzerland 1 Trinidad and Tobago 1 Turkey 1 Ukraine 1 United Kingdom of Great Britain and Northern Ireland 1 Uruguay 1

Table 7.104 Implemented measures that harm* Venezuela’s commercial interests, by type Number of As percentage of Type of measure measures measures Export subsidy 18 19.78% Tariff measure 15 16.48% Bail out / state aid measure 12 13.19% Non tariff barrier (not otherwise specified) 12 13.19% Export taxes or restriction 11 12.09% Public procurement 7 7.69% Trade finance 5 5.49% Competitive devaluation 3 3.30% Import ban 1 1.10% Import subsidy 1 1.10% Intellectual property protection 1 1.10% Investment measure 1 1.10% Local content requirement 1 1.10% Quota (including tariff rate quotas) 1 1.10% Technical Barrier to Trade 1 1.10% Trade defence measure (AD, CVD, safeguard) 1 1.10% Total 91 100.00%

Table 7.105 Venezuela’s implemented measures that harm* foreign commercial interests, by type Number of As percentage of

Type of measure V measures measures

Investment measure 5 38.46% ENEZUELA State-controlled company 2 15.38% Competitive devaluation 1 7.69% Export subsidy 1 7.69% Import ban 1 7.69% Non tariff barrier (not otherwise specified) 1 7.69% Quota (including tariff rate quotas) 1 7.69% Trade finance 1 7.69% Total 13 100.00% Not Just Victims The global economic crisis that began to unfold in 2007 hit Latin America hard, slowing down economic growth considerably. This volume shows that Latin America has not just been a victim of protectionism imposed by other Not Just Victims parts of the world, as some policymakers and commentators assert. Drawing upon the most extensive contemporary data set on crisis-era policy responses, the Global Trade Alert, this volume shows that many Latin Latin America and Crisis-Era American governments – in particular, Argentina and Brazil – have taken Latin America and Crisis-Era Protectionism numerous, occasionally creative steps to tilt the playing field in favour of domestic firms. Protectionism This volume documents those steps and discusses their rationale and whether these changes presage a marked shift in Latin American development strategy. As such, it will be of interest to policymakers, The 13th GTA Report officials in national governments and international institutions, university researchers and trade policy analysts, and those interested in Latin American development. Edited by Simon J. Evenett

GLOB L TR DE Centre for Economic Policy Research 77 BASTWICK STREET • LONDON EC1V 3pz • UK  LERT TEL: +44 (0)20 7183 8801 • FAX: +44 (0)20 7183 8820 • EMAIL: [email protected] www.cepr.org