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Peru and Argentina: Different Paths
Box 4.2 Summaries of a Statement from 14 WTO Members Concerning Argentina’s Policies and Practices Restricting Imports and of Argentina’s Response (continued)
The response states that it is unfair to characterize Argentina’s policies as being import restricting for two reasons: • Such a statement prejudges their consistency with GATT/WTO rules. • Argentina’s imports have increased rapidly—recording a higher percentage increase in 2011 than any other Group of 20 country—and by 25 percent from the 14 members who signed the statement. The response continues with a reminder of the lack of progress in the Doha Round on agriculture and the proliferation of sanitary, phytosanitary, and technical barriers and of other barriers “allegedly justified, inter alia, by environmental protection, animal welfare, private standards, and consumer rights.” Argentina, the response concludes, has contributed disproportionately to its size to world trade and growth. “We object, therefore, to being made into an example to discourage developing countries from using the public policies we are fairly entitled to use.” a. The statement was released on April 4, 2012, as WTO Document G/C/W/667.
Argentina’s economic history. These institutions and policies are the main reason for the relative economic decline of that period.
Accounting for the Difference The fault, dear Brutus, is not in our stars, but in ourselves. —William Shakespeare, Julius Caesar, Act 1, Scene 2, lines 140–41.
Argentine governments in this decade have chosen bad trade policies. By the standards of classical economics, these policies are an inefficient and costly way to achieve the redistribution of income by which they might be rationalized. By the institutional standards exposited by Acemoglu and Robinson (2012), they are extractive and are, therefore, unlikely to promote long-term prosperity. They are a return to the policies and the processes that have been in place over the lengthy period during which Argentina’s economic performance has lagged the performances of countries that have chosen less restrictive trade policies. Peruvian governments have chosen good trade policies. By the standards of classical economics, those policies position Peruvian producers to take advantage of dynamic world markets. They also subject Peruvian producers to the discipline of international competition. Peru is building institutions that shape trade policy through transparent processes that include participation by interested parties. By Acemoglu and Robinson’s (2012) standards, they are inclusive institutions and will support long-term economic growth. Sustaining Trade Reform • http://dx.doi.org/10.1596/978-0-8213-9986-6