Brazil’s How-Not-To Guide on Trade
Brazil’s How-Not-To Guide on Trade
A look at the sugar and ethanol industry shows why trade barriers are not the best response to globalization’s pressures.
Brazil got globalization all wrong. In fact, its approach to trade can at times practically read like a how-not-to guide.
Faced with globalization’s potential impact on national industries, it maintains a crony and closed economy, when a more efficient adaptation to increased trade would maintain a relatively open economy while implementing policies to compensate for job losses and other negative impacts of increased international competition. After all, opening up to trade increases productivity, which helps a country escape the middle-income trap, where Brazil is firmly stuck. But...
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