Mercedes Botto Andrea Carla Bianculli - Flacso

Between 1976 and 1979, the program of José Martínez de Hoz, the military-appointed civilian
Minister of Economy, was a heterodox and often contradictory mix of price and exchange controls,
selective tariff reduction, privatization, and state expansion. In terms of the trade policy, the reform
program was uneven: while between 1976 and 1982, the average tariff rate on imports declined
from 55 to 22%, a nucleus of branches producing intermediate goods considered to be “strategic”
retained high tariff protection: steel, aluminium, pharmaceutical, petroleum and derivatives,
transport material, and cement4. In any case, this uneven reform process was abandoned after the
crisis that hit Argentina in 1979, which led to a sharp deterioration in the current account and the
balance of payments, and the subsequent debt crisis of 1982. Quantitative restrictions would be
then re-established in order to reduce imports and in turn, the commercial deficit.
The first constitutional government would leave these measures in place, and by the end of 1983 it
would also introduce a system by which products were classified according to whether they could
be imported or not. Moreover, tariffs were increased since 1982, and by 1987 they would range
from 0 to 105%, though the average tariff was 37% and the mode, 38%. In sum, between 1985 and
1987, the predominant tariff was 53% 5.
The newly elected president Raúl Alfonsín resisted strict austerity and market liberalizing measures.
However, the designation of Juan Sourrouille and a new technical team of economists in the
Ministry of Economy would entail an important change in 1985. This new economic team,
although far from orthodox, agreed that a new economic program, including trade policy reform
was needed, and that same year the Austral Plan would put trade liberalization on the agenda, which
became an issue of debate between government and business. In spite of these changes, the process
of trade liberalization as a unilateral policy would not start until 1988 with the so-called “Canitrot
Reform” 6. While on the tariff side there was a reduction in nominal protection – the average import
tax was reduced from a level of 45% in 1987 to 29% at the end of 1988 – in terms of non-tariff
measures, there was an important reduction of tariff positions that were subject to quantitative
restrictions: the number of products subject to prohibition or quantitative restrictions was reduced
from 4.000 to 3.000, and the average tariff rate was reduced from 51 to 36% [de la Balze, 1995].
Hence, by the late 1988, there was progress in the trade liberalization agenda. In addition, by 1988,
attitudes within Argentine public officials toward far-reaching reform were already changing in
substantial ways.
Nevertheless, the decisive and final implementation of the trade liberalization reform would come
hand in hand with the closer relationship between Argentina and the International Monetary Fund
(IMF) and the World Bank, which would play a more definitive role in shaping the reform policy in
Argentina, particularly in terms of trade policy, public sector reform, and privatization. Moreover,
4 It is noteworthy that some of these industries were in the sectors controlled by the military.
5 When looking at the multilateral level, we find that since World War II, trade negotiations had reduced
average tariffs on manufactured and semi-manufactured goods from 40% in 1947 to less than 10% by the
mid-1970s. By 1986, a new set of trade talks – the Uruguay Round of Multilateral Trade Negotiations – had
already begun, and this would lead to a tariff figure of approximately 5% in the early 1990s.
6 Adolfo Canitrot was then Under Secretary of Planning, Ministry of Economy.
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