Looking at export tariffs and export restrictions: The case of Argentina

Export taxes have been used in many countries. The 2007–2008 food price crisis shed light on export policies’ dangerous consequences for food security during periods of price spikes. Some countries, and Argentina in particular, implemented export taxes for almost all tariff lines in those years. During the past 15 years, several papers have been written on the impact of export duties and other barriers to exports in Argentina. The area of analysis (poverty, employment, public revenues, and so on) and the methodology have varied in each case. However, most of the literature is based on partial equilibrium frameworks or does not consider dynamic effects for projections of the most important economic variables (such as gross domestic product, or GDP; exports; agricultural production; and employment). Additionally, most of those studies were done in the first decade of the new millennium, when food prices and the evolution of trade and global growth were different from their current context. In December 2015, the new Argentine government repealed taxes on exports of agro-industrial goods, except for soybeans (and their by-products), on which an initial reduction of 5 percentage points was established. Likewise, the government also eliminated the quantitative restrictions that existed for some products until that moment. Based on these changes in legislation, this study aims to analyze the impact of changes in export duties and export restrictions on Argentina’s economy, measuring their impact on different economic variables. The scenario also includes the elimination of other nontariff barriers to export. The paper finds that export taxes and restrictions in Argentina do affect world prices and the country’s terms of trade, and that their removal leads to declines in the world prices of the products involved (negatively affecting producers of similar products in other countries but benefiting consumers). Second, the removal of export taxes and restrictions leads to some increases in GDP and welfare in Argentina, but with a variety of effects on productive sectors: those benefiting from the policy reduction increase, but the rest tend to contract. Third, the reduction in export taxes increases the government’s deficit and negatively affects investment, through a crowding-out effect. To avoid the latter effect, another simulation considers the level of a compensatory increase in the consumption tax. Fourth—and contrary to the idea that the elimination of the export tax differential in the oilseeds value chain would lead to a decline in the production of the processed products (such as soybean oil)—the simulations show that when the elimination of the differential is combined with an overall reduction of export taxes, both primary and processed products of the same item expand. In September 2018, in the midst of financial needs, the Argentine government once again imposed export duties on all goods and services. However, given the scope of this work, the implications of that action were not included in this paper and will be included in a new version of it.