Sunday 30 September 2012

Cheese smuggling or Why criminals like protectionism

A few of you, on hearing this story, will have grinned a little. Maybe even guffawed. After all cheese smuggling is funny, no?

Canadian authorities say two police constables helped smuggle more than $200,000 worth of cheaper U.S. cheeses and other foods across the border from Buffalo to sell to pizzerias and restaurants.

The Niagara Regional Police Service announced today that the pair, one of whom has been fired, were arrested and charged, along with a third man. Charges against the three, all from Fort Erie, Ontario, include smuggling and other customs violations.

The point, however, is that with a very long and pretty open border, the Canadians are daft to impose huge tariffs on imported dairy produce as well as a range of permits, licences and rules (not just on imports but on selling dairy in a different province). All to "protect" the dairy industry (at the expense of the consumer).

And, as this story shoes us, the big winners aren't the cowherds and milkmaids of Canada but a bunch of criminals (helped in this case by a pair of corrupt cops). Protectionism sounds good when politicians promise it to one or other special interest or in a sort of populist, "keep out the foreigners" campaign but when it's introduced it acts as a tax on consumers to the benefit of smugglers.

And you don't need to protect the dairy industry. Go look at New Zealand and learn.

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