Online Buying restrictions – A sign of things to come?

It has been reported that the Argentine government are introducing new online buying restrictions to restrict their citizens from buying online internationally.

Online shoppers in Argentina buying goods from abroad will now have to collect their goods from a customs office, sign a declaration and pay a 50% tax if the items total more than 25 US dollars.  This is quite a draconian measure and could make your average purchase of a tablet or set of headphones very painful!  It harks back to a bygone age of protectionist policies around the world and what we thought was more a relic of more primitive times.

Circle the Wagons

In the 1930’s Ireland engaged in a disastrous trade war with Britain, including Irish excise duty on British Coal and British excise duty on Irish Food exports. This was not likely to hurt the British as much as the Irish, at the time Britain accounted for 90% of Ireland’s food exports.  It would be the equivalent of picking a fight with the schoolyard bully, who happened to be holding most of your pocket money at the time !!!

The results were disastrous for the Irish economy and the next 20 years would end up being one of the biggest periods of Irish mass emigration. This mass emigration was ended in the 1960s by a new Irish economic policy of openness, free trade and expansionism.

So, what Argentina have failed to grasp is that protectionism has been proven many times to result in more long-term pain for countries that choose to employ that type of policy. Protectionism generally only helps to protect outdated or uncompetitive industries and a key driver of economic competitiveness is being flexible and encouraging economic freedom.

The general trend across the world ( above ) shows a growing eCommerce market and for this to continue, an open and free economic environment is required.

Some interesting e-commerce stats about the recent Christmas period :

• On Cyber Monday, Amazon.com sold more than 36.8 million items worldwide, which is a record-breaking 426 items per second
• Online sales of non-food products in the UK grew 19.2% in December versus a year earlier, the highest growth in four years.
• India, with an internet user base of 140 million, is growing its eCommerce market by over 100% annually

Other countries around the world will be keeping an eye on Argentina and whether or not it gets any traction with its new eCommerce policy. So how does this affect general eCommerce retailers? Well, it doesn’t for now but if eCommerce restrictions spread to other countries then the circling of nationalist wagons will signal a downward trend in the bar chart graphic above.