ABSTRACT
The tariff system The purpose of the tariff scheme was twofold: (a) to reverse the situation produced by biased liberalization by increasing protection rates and (b) at the same time, to avoid distortions that were particular to the ISI stage. To this end, the non-tariff barriers imposed since 1983 were replaced by a system of tariffs with decreasing levels according to three criteria:
The features that distinguish this tariff system from other systems applied throughout Argentina’s history are as follows:
In point of fact, these were not monopolistic conditions but they encouraged companies by helping them, during a given period, to cope with market imperfections (technology suitability and economies of scale) and thus to consolidate favourable, competitive positions. The most significant difference, as compared to the previous systems, is that until 1984 effective protection was biased in favour of activities with low added value and comparative disadvantages (static and dynamic), while the tariff system implemented in 1985 shifted the effective rate to activities with higher added value and comparative advantages (Nochteff 1993).15
