By John Baeyens | Share This 
Protectionistic measures are coming back en vogue in 2009; big time. Especially in the US. Nevertheless it surprised me that Brazil is taking the first steps. Daring, very daring. But then again, the country can be, in a dramatic doom scenario, to a very big extent self-sufficient. Veyr much in contrast with Belgium. Brazil claims the measure to be 'temporary"; extremely curious where this will lead to on a world-scale.
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John,
I agree this move makes no sense whatsoever. Whereas supposedly intended to reinstall equilibrium for the trade balance and provide some support for domestic producers, I would argue the consequences in the longer term could be significant.
In today's world where import and export are linked on a global scale, both importers and exporters (who often depend on import of raw materials) are likely to suffer the consequences in terms of higher prices. Add to that the harm this could do to bilateral relations and Brasil's reputation within the international community, and it is clear this move is short-sighted at the very least.
Whereas it is true that Brasil can close itself off to some extent from global turmoil, perhaps the real question to ask is: how much can Brasil gain from becoming a strong player on the global economic front ? Perhaps we should not only focus on Brasil's strong internal demand, but also on the unrealized potential for export growth.
Love reading your posts, keep up the good work !
A.
Posted 16 years ago