The Argentinean interior trade secretary has recently placed a ban on “import foods that can be produced at home” according to an article in the Financial Times. Apparently, the government is worried that a weaker Euro will negatively impact local producers and thus the economy. Still, I can’t help but think that this is a rash move that may have unintended consequences.
In many ways it reminds me of the Import Substitution Industrialization (ISI) model that many Latin American countries adopted in the 1930s. During this time, the state, in an effort to protect local infant industries placed high tariffs on imports. As history proved, this was a “bad move” economically as it provided local producers with no incentive to improve quality and become competitive on a global scale.
Perhaps the ban on food imports could have a similar impact on food quality? With no foreign competition local producers are under no pressure to maintain high standards. At the time, if foreign imports were banned on a global scale then there would be no race to the bottom as different countries attempt to provide lower prices at higher environmental and social costs.
This bold decision is definitely worth investigating further and I am curious to see what the outcome will be. How do you all feel about the government implementing local food as law?
