ANALYSIS-Latin American trade barriers seen backfiring

Mon Apr 30, 2012 5:25pm GMT

* Argentina, Brazil curbs could ripple through region

* Region had made progress toward economic integration

* Countries trying to build domestic industries

By Krista Hughes

PUERTO VALLARTA, Mexico, April 30 (Reuters) - Import restrictions imposed by Argentina and Brazil may end up harming the very domestic industries they are trying to protect and also could affect other economies in Latin America.

Trade experts and policymakers from trading partners are dismayed by signs of protectionism creeping back to the region, which embraced free trade only in the 1980s after decades of inward-looking policies.

Brazil bullied Mexico recently into a deal to limit car imports and Argentina has upset trading partners with arbitrary import controls and the planned expropriation of Spanish-controlled energy company YPF.

The moves mark a flare-up in trade tensions, which had remained largely absent even during the global financial crisis.

Import restrictions have a direct impact on trading partners, such as Uruguay, where exports to Argentina fell in the first quarter after a 15 percent jump in 2011, and Mexico, which will have to limit car exports to Brazil to an average $1.55 billion in the next three years.   Continued...

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