Argentina’s import restrictions increase, local clothing prices soar
A report released by the Argentine Institute of Industrial Economics on June 17 stated that Argentina’s strict restrictions on textile imports have caused domestic companies to lack the motivation to improve product competitiveness, resulting in soaring clothing prices and increasing the burden on consumers.
The report pointed out that Argentina’s textile imports in the first four months of this year were US$133.8 million, a year-on-year decrease of 12%. This is the first time since the financial crisis that Argentina’s textile imports have declined. The reduction in imports caused Argentina’s textile trade deficit to fall to US$102 million in the first four months of this year from US$124 million in the same period last year.
The report emphasizes that the Afghan government has continued to increase restrictions on textile imports, including increasing import tariffs, implementing a non-automatic import license system, and taking anti-dumping measures. Most of the restrictive measures are targeted at Chinese textiles, causing China to Argentina’s textile exports have been severely affected.
The report analyzes that over-protection has greatly reduced the competitive pressure of Argentine textile companies. They lack the motivation to invest and innovate to improve the competitiveness of products, and blindly adopt methods of raising prices to increase corporate profits. These burdens are finally passed on to on consumers’ heads.
A survey by the institute shows that from April 2011 to April 2012, clothing prices in major areas of Argentina increased by 26% to 30%, exceeding the increase in inflation during the same period. The report also predicts that the Afghan government’s restrictions on imported textiles will not be eliminated in the short term, and consumers will have to continue to purchase high-priced domestic textiles.
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