Trade Liberalization and exports/imports diversification in Argentina: the role of tariff preferences and economies of scale (original) (raw)
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Trade liberalization and adjustment in Argentina
The Journal of International Trade & Economic Development, 2003
This paper looks at trade liberalization attempts in Argentina since 1970 with particular attention to the 1991-98 period, estimates the size of the adjustments required by the changes in the trade regimes, and looks at the degree of adjustment attained as manifested by the real effective exchange rate.
A Case Study on Trade Liberalization: Argentina in the 1990s
SSRN Electronic Journal, 2000
The link between trade and wages is embodied in the Stolper-Samuelson theorem and its generalizations. The Stolper-Samuelson logic is that trade affects relative factor rewards by changing relative prices. Since in Argentina non-skilled labor was neither as abundant a factor as land nor as scarce as capital it could not be expected to be the big winner in the opening-up process of the Argentine economy nor could it be expected to be a big loser. So, the huge amount of unemployment experienced by the Argentine economy in the 1990s as well as the widening wage gap between skilled and unskilled labor came as a complete surprise. This paper gives some reasons for this unexpected result. In Argentina, trade liberalization meant mainly import liberalization by lowering tariffs that protected labor-intensive industries like textiles. So, the short-run effect was massive destruction of jobs in non-skilled labor-intensive activities. The opening up of the economy significantly lowered the price of capital goods. This encouraged a drastic process of capital for labor substitution as well as promoting an increase in the demand for skilled labor. In those industries in which the import penetration increased the most, the wage inequality widened relatively more between unskilled and skilled workers. The reasons for the persistence of unemployment are discussed, the impact of the increasing unemployment and growing inequality in wage distribution on income distribution is analyzed, the alternatives of shock therapy vs. gradualism are discussed and finally some general conclusions are drawn from the analysis of the Argentine case.
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This study analyses how far the strong expansion of Argentine exports since 2003 has been due simply to favourable external conditions and how industrial manufactures have behaved. It finds that the country's pattern of international specialization has not greatly altered at the major category level, but that both primary products and manufactures of agricultural origin, which account for much of the trade surplus, have undergone significant changes in composition. In addition, regional trade has consolidated and traditional partners such as the European Union and the United States have been displaced to some extent by China. Industrial manufactures have continued to suffer from a strong comparative disadvantage, but certain high-technology industrial sectors, such as agricultural machinery and pumps and compressors, have started to become competitive, while seamless oil and gas tubing is already highly competitive.
Trade liberalisation and wage premium in Argentina Further evidence from the 1990s
2000
Latin American countries have been implementing policies directed to the removal of barriers on international trade. Among the reasons for following this strategy were the expectations it would help to reduce income inequality. The empirical evidence available is far from being conclusive. In the case of Argentina, the country started at the end of 1988 a unilateral reduction of imports
CEPAL Review, 1999
The combination of rapidly increasing trade openness with sharp exchange-rate appreciation formed the context in which Argentine industry had to carry out its production restructuring process from 1991 on. The inability of the spontaneous market forces to spark off this process led the Argentine government to adopt a number of measures designed to correct the problem of relative prices and further the restructuring process through fiscal means. In this context, the Industrial Specialization Regime (ISR) was established with the main objective of promoting export specialization by industrial firms. This regime was based on a subsidy for incremental exports which took the form of access at preferential tariff rates to the importation of goods similar to those exported or forming part of a given production chain of complex goods. The aim of the present article is to make a theoretical and empirical analysis of this policy instrument (in its dual dimension of restructuring policy and export subsidy), examining its underlying theoretical bases, questions relating to its design, application and control, and finally, its effects on the industrial sector.
Argentine Trade Policies in the XX Century: 60 Years of Solitude
2010
At the turn of the last century, the Argentine economy was on a path to prosperity that never fully developed. International trade and trade policies are often identified as a major culprit. In this paper, we review the history of Argentine trade policy to uncover its exceptional features and to explore its contribution to the Argentine debacle. Our analysis tells a story of bad trade policies, rooted in distributional conflict and shaped by changes in constraints, that favored industry over agriculture in a country with a fundamental comparative advantage in agriculture. While the anti-export bias impeded productivity growth in agriculture, the import substitution strategy was not successful in promoting an efficient industrialization. In the end, Argentine growth never took-off. Keywords Tariff protection Á Export taxes on agriculture Á Anti-export bias JEL Classification F13 Á F14 We thank Rafael Di Tella and Edward Glaeser for encouraging us to write this chapter. We appreciate the superb work done by Natalia Porto in the coordination of all the data collection effort. Nicolas Botan, Laura Jaitman, and Ivan Torre provided excellent research assistance. Comments from Alberto Porto and seminar participants at the ''Argentine Exceptionalism'' conference at Harvard University are greatly appreciated.
A Case Study on Trade Liberalization: Argentina in the 1990s. Economics Discussion Papers, No 2012-3
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Trade Liberalization and Wage Premium in Argentina: The Role of Trade Factor Intensity
The Developing Economies, 2012
During the 1990s, several Latin American countries implemented policies directed to the removal of barriers on international trade. However, there is a perception that reforms, especially trade liberalization, failed to deliver on their promises, easing the way for policies aimed at reversing some of them. Following Wood's hypothesis, we allow for the effects of liberalization to vary, depending on the skill intensity of production. The evidence confirms that the role of trade liberalization has been relatively small, but controlling for the presence of endogeneity gives larger estimates. Contrary to previous evidence, the wage premium of skilled workers was more sensitive to the increase of skill-intensive exports than to that of unskilled-intensive imports.