A timely piece from WSJ - How Latin America Pays the Price of Protectionism By TAOS TURNER
and PAUL KIERNAN
“For decades, South
America’s two largest economies have tried to shield their workers from global
trade, largely through high tariffs and regulations that promote domestic
production over imports. The World Bank ranks Argentina and Brazil among the
world’s most closed big economies.
In Brazil, locally
made products are enshrined in the constitution. Gadget-loving Argentines often
use the black market or go to Miami to buy iPhones, which were barred for years
because Apple wouldn’t produce them in Argentina.
These protectionist policies have created tens of
thousands of well-paid factory jobs and may have helped avoid factory layoffs
like those that rattled Midwestern U.S. states like Michigan. But they have
come at a huge cost to consumers, who now pay higher prices, and to taxpayers,
who underwrite the subsidies. Taken together, these measures essentially
transfer wealth from society at large to a smaller group of workers.”