SAO PAULO — Donald Trump is horrifying. Still, there's a part of his package that could be quite useful to have in Brazil.
I'm referring to the president-elect's threats against General Motors, Ford and Toyota to try and force them to bring back factories installed in Mexico to the United States. It's true that a lot of what Trump says and tweets is pure bravado, and his first threats were issued months ago during the campaign. In any case, even The Washington Post, a fierce critic of the president-elect, had to admit that Trump has already saved 3,500 jobs and helped to create 700 new ones that Ford would have otherwise transferred to Mexico. And I'm only taking into account last week's tweets.
Or course, you could argue that this is a mere trifle in a country that, in December alone, still under Obama's presidency, added 156,000 jobs.
A Brazilian equivalent of Donald Trump, however, if he acted in the same manner — and didn't just tweet — could potentially help save a lot more jobs than that.
According to an extensive report published in early January in Gazeta do Povo, a newspaper in the southern Parana state, our poorer neighbor Paraguay has attracted 124 Brazilian companies since establishing the so-called "Maquila Law" (its very name indicates a copy of the Mexican system at the border with the U.S.).
A Maquila in Paraguay — Photo: MaquilaParaguay
Most of these companies, 78 of them to be precise, have moved their operations away from Brazil in or after 2014. Unsurprisingly, that was the year when the Brazilian crisis took a dramatic turn for the worse. And what is it that attracts them to Paraguay, you may ask? Well, a mere taxation of just 1% for any company that relocates 100% of its production there. To compare it to the number of jobs Ford won't be taking to Mexico, the 124 Brazilian companies who moved to Paraguay employ 11,300 people, once again most of them (6,700) since 2014.
The obvious question is simple enough: Would it be worth it to adopt the sort of blatant protectionism that Trump has been trumpeting?
I confess I used to be in favor of such policies, but the world and the modes of production have changed so much and so quickly that these policies don't seem to make sense anymore now. As The Economist recently wrote, "a smartphone might be designed and engineered in California and assembled in China, using components made or designed in half a dozen Asian and European countries, using metals from Africa."
Who are you going to protect, and against whom? In the specific case of Trump v. Mexico, the magazine reminds us that in each dollar of Mexican export, there are 40 cents of American output.
A second question could be: Is there any chance that a Brazilian government — the current one or another one in the future — might adopt non-mainstream, even protectionist, policies?
Donald Trump's great weapon is that he doesn't have an ideology — and his country has tremendous power and influence. He can, therefore, do what he does without taking major risks. In Brazil, though, there doesn't seem to be a single politician, or indeed an "outsider" like Trump, capable of going against the flow.
Going down that road, you always run the risk of ending up like Venezuela, the worst-off Latin American country at the moment. But it must be said that the scope of Brazil's crisis is such that it requires boldness and outside-the-box thinking.
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