Fernando Fuster-Fabra's Blog

PROTECTIONISM IN TIMES OF CRISIS | April 24, 2009

Scarcely a fortnight after the G-20’s London summit, one finds news that makes reference to confronted views on how to tackle the global crisis. Such is the case in Latin America’s varied stances on protectionism.

 

Smiling Cristina Fernández de Kirchner and Luiz Inácio Lula da Silva shook hands after their hour-long meeting during her visit to Brazil but it was evident that the Argentinean President stood firm on her posture to apply customs controls on imported goods. In fact, she counterattacked critics of her steadfast stand on Argentina’s “fair trade” customs tariff policies by accusing those who devaluate their currencies as “fiscal” protectionists. Differences between Argentina y Brazil on the protectionist issue date back to before the official recognition of a global world economic crisis.

 

In fact, Argentina’s stand has put MERCOSUR in a stalemate position due to difference with neighbouring Uruguay on the San Martin Bridge conflict that has alluded to the illegal construction of a pulp factory just across the Argentina-Uruguay border. Nevertheless, Argentina’s protectionist attitude goes beyond the supposed ecological issue into an intended blockade of free circulation of goods and citizens from one country to another. Lula’s mediator posture and clear defence of free circulation within the scope of the MERCOSUR member states in the near future has not produced the desirable effects on her Argentinean counterpart. True to say, whimsy Cristina Fernández could be annoyed by Brazil’s failure to intervene before President Obama to concede her a bilateral interview at the London meeting.

 

 

argentina-brazil-meet

 

 

Unfortunately, in spite of the WTO Director General’s insistence that protectionism will only serve to aggravate the present global economic crisis, nations all over the world seem to have turned towards a more conservative stand on this issue. The impasse that has the Doha Development Round at a stalemate since 2001 is not only caused by Latin American discrepancies among MERCOSUR or UNASUR member states but rather extended to protectionist “fair trade” policies presently applied by developed nations in defence of their own products, especially so in the agricultural sector. To cite an example, strong subsidies to cotton producers in the United State stifle intents to develop cotton plantations in African countries where such production would permit numerous labourers to earn a minimum daily wage to quench their prolonged hunger. Oxfam International has repeatedly accused of such practices in this and other issues whereby Africa is subjected to a humiliating situation of depending merely on developed nations’ cooperation aids.

 

Such conservative stance which has protectionism as a mechanism to block cheaper quality products from a territory will only serve to deepen the breach of mistrust among nations that have no other way out of this crisis but to work together with the developed countries. I must remark that it is insufficient, and probably even improper, to resource to multi-state cooperation aids and donors’ conferences to raise such funds without making a decided attempt to turn impoverished nations into independent self-sufficient productive economic entities. No matter how much money is poured into African, Asian and Latin American poor and/or developing states to quench their alimentary & health basic needs, the problem will persist as long as such beneficiaries are impeded from turning self-sufficient. And protectionism is the worst ally in attempting to motivate the less favoured citizenry of this world in crisis.

 

 

 

Madrid, April 24, 2009                 

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2 Comments »

  1. It is evident that the richer developed countries refuse to give in in their “fair trade” attitude. Otherwise, the Doha Round would have been successfully concluded. Rich prefer to subsidize on a drop by drop basis than open up their markets to real compepetitive trade. In this manner a real quality-price free-market competition is hardly ever possible.

    Comment by Inmaral — April 25, 2009 @ 2:58 pm

  2. Ireland’s excess in liberalisation in the past decade brought prosperity attracting both investors and foreign hand & skilled labour. As soon as the crisis crept in, such neo-liberal policies have turned into Ireland’s hangman, sinking the economy into the actual depressed state.

    Ireland follows Iceland’s footsteps, from a bouyant expansive economy towards sheer bankruptcy.

    Comment by Holburne — April 26, 2009 @ 9:54 am


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About author

Industrial engineer dedicated to project management and consultancy all over the world. Keen interest and deep respect for other cultures, beliefs and traditions, as the base of a shared development in a new atmosphere of peace and progress for all. Interested in contributing to a better more tolerant world where mutual respect leads to dialog and understanding. Firm believer in the the use of talent management & transformation to attain a more effective professional exercise of competitive executives & workers in quality of environment & life, working towards sustainable development objetives in this New Millennium. This in our opinión is the path towards the solutions of the world's global crisis. Publications at : http://stores.lulu.com/FusterFabra Other Blogs: http://www.blogger.com/profile/11431742 http://fernandofusterfabrasblogesp.wordpress.com/ (articles in Spanish) http://thoughtspensamientos.wordpress.com/

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