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Published on October 4th, 2011 | by esgaeble

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Argentina Enacts New Measures to Protect Domestic Industries: Customs Holding Books, Cars, Toys, Cell Phones

by Emilee Gaebler
Impunity Watch Reporter, South America

BUENOS AIRES, Argentina – Over 1 million books are currently being held by the Argentinian government at customs.  The books are the newest good to be affected by the stringent economic protectionist plan that President Cristina Fernández has enacted and which she is determined to see succeed.

Cartoon depicting Argentinas new policy to protect domestic industry.  (Photo Courtesy of The Economist)

Cartoon depicting Argentina's new policy to protect domestic industry. (Photo Courtesy of The Economist)

Earlier restrictions have affected many things including; textiles, tires, cars, chemicals, pharmaceutical goods and cell phones.  President Fernández’s goal is to see the Argentinian economy grow more self-sufficient by promoting local goods over imports.  Also included in the policy is the goal of increasing exports; $1 export for every $1 import.

“The editorial sector is surprised by the prolonged intervention that affects the basic right of the citizens to have access to the book as a vehicle of education and culture,” the Publishing Chamber said in objecting to the customs slowdowns.

Last year the people of Argentina purchased roughly 76 million books, government officials claims 60 million of those were printed outside of the country.  Publishers disagreed with that and instead maintain that two-thirds of all books sold are printed domestically.

The ability of the publishing industry to keep up with the volume is being called into question.  Publishing executives further note that local printers are either not of as high a quality or drastically more expensive than printers overseas.

At the opening and inauguration of the new Museum of Book and Language President Fernández championed the plan once again.

“The world is going in one direction and at times it seems like we’re going to the opposite, but this is the necessary path to recover a country that already knew how to do things,” she said.

The other sectors affected by this plan report that they have been forced into talks with government representatives from the Commerce and Industry department.in order to try and recover their stopped goods.  These talks result in the company agreeing to a plan which will increase their export capacity or increase their use of domestic products and labor.

Nordenwagen, an Argentinian car importer, had its business stopped back in January when customs would no longer allow them to bring in imported Porsches.  It took three months for the cars to be released and it was only once Nordenwagen agreed to a deal.  The owners of the business also own a vineyard and have agreed to launch a mass-market line of wines for export around the world.

Cell phones, in particular Blackberry’s, are in high demand across Argentina with all cell phone carriers having sold out of them months ago and the government refusing to allow imports of the good in.  Brightstar, a multinational manufacturer of phones, has just agreed to begin manufacturing the phones in factories located in Tierra del Fuego, south of the Magellan strait.

The phones will be made with imported parts but put together by local workers and packaged in locally sourced wrapping.  The cost of this is roughly 15 times more than the phones being made in Asia.

Global Trade Alert, a database that monitors international commerce restrictions, reported that Argentina is now second in the world in trade limitations.  The only country ahead of them is Russia.

President Fernández is unable to raise import tariffs on its own because of membership in the Mercosur customs union.  This has led her to utilize the World Trade Organization’s recognized “non-automatic licensing” method which allows a country to hold imported goods for 90 days.

Argentina has certainly not maintained this 90 day period and the list they use of goods restricted to requiring special licensing before release by customs has grown from 400 to 600.  Tax incentives are also being offered to local companies.  For example, domestically produced finished books have been made tax-free and Brightstar was offered tax incentives for starting the Blackberry manufacturing plant in Tierra del Fuego.

Concerns in the Falkland Islands have also been expressed due to the new severe protectionist policy.  Just recently President Fernández announced a plan to support local island producers of fruit, vegetables, salad and eggs.  Grants will also be made to local new businesses that help provide locally sourced foodstuffs to the islands.

“The aim is for the Falklands to become self-sufficient and less susceptible to external pressure” said David Waugh, general manager of the Falkland Islands Development Corporation (FIDC).  Easily 60% of produce consumed in the Falklands could be supported by a strong local market according to the FIDC.

The new plan for the Falklands self-sufficiency follows a period of disruption of British shipping interests by Argentinian claims that all ships between the Argentina coast and the Falklands must hold a special permit.

All of this likely stems from the 2001 crash and resulting inflation experienced in the country.  Fears of a too strong import industry have sparked this new policy as Argentina brought in roughly $5 billion in imports per year since 2009.

For more information, please see;

MercoPress – Publishing Houses Told to Print in Argentina While Imported Books are Blocked in Customs – 1 October 2011

Seattle PI – Argentina Holds Up Book Imports to Help Industry – 29 September 2011

The Economist – South America’s Two Biggest Economies are Imposing Heavy Handed Trade Restrictions – 24 September 2011

The Telegraph – Falkland Islands’ Bid to Grow its own Food Amid Fears of Argentina Blockade – 6 September 2011

The Heritage Network – Argentina: Cristina Ramps Up Protectionism – 18 July 2011

Market News International – LatamWatch: Brazil Trade Barriers Hint at Rising Protectionism? – 16 May 2011

MercoPress – ‘Argentina’s Protectionism’ the Great Obstacle for EU/Mercosur Trade Talks – 15 April 2011

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