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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1 comment:

Anonymous said...

The global economy is beset by unfair trade practices—under the label of “Free Trade”—causing an increasing number of developed nations to protect their few remaining unionized workers against competition from lower-paid, third-world labor forces that have fewer benefits and are not hampered by safety and environmental regulations, at least not to the same extent. Overpriced labor forces employers to look elsewhere where skills and productivity are equal or better and transportation costs to markets are feasible.

The fact is that if nations want free trade, no treaties are necessary. Present “free trade” treaties are protectionist documents outlining items to be excluded from free exchange; they are designed to protect manufacturers, farmers, labor unions, and pharmaceutical researchers, etc. Import inspections under the guise of sanitary safety standards are frequently employed to circumvent free access to agricultural markets that are the most highly subsidized and protected. Legal recourse exists but is useless when perishable products are delayed. Higher fines must be imposed when this practice is found to be abusive.

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