Economic protectionism has two classic rationales. Sometimes, as in the case of Alberta’s clumsy attempt at an interprovincial tariff on craft beer, it is undertaken in the name of defending small, emerging “infant industries” that a government wishes to give time to establish themselves in its territory. And sometimes, as in the case of Canadian dairy supply management, it is done to defend “strategic” industries that have existed forever and that allegedly create an irreplaceable quantity of employment and profits.
Give yourself a gold star if you spotted that these canonical pretexts for trade barriers are contradictory. The inherent promise of protection for “infant industries” is that they will grow up and leave the nest. But, oops: by the time they reach adulthood, they may have become too “strategic” to expose to market forces. Heads, the favoured firms win; tails, the consumer loses.
Of course, on the level of fine detail, the arguments for trade barriers are manifold and complicated. (If you get into a quarrel about dairy, and take the free-trade side, you will find them being changed by your interlocutor every 30 seconds.) Alberta’s program for supporting small brewers has an unclear, touchy-feely small-is-beautiful justification. By design, the tariff applies only to businesses that have no intention of attaining industrial scale. It’s right there in the term “craft brewing,” isn’t it? Whatever the esthetic merits of craft beer, this is surely the deliberate encouragement of what the urbane left likes to calls “precarious” jobs that could be flung into disarray by a bad season, a shift in fashions, or a supply problem.
And, also, it’s illegal.
Colby Cosh, “A court refuses to swallow Alberta’s thinly disguised craft-beer tariff”, National Post, 2018-06-22.
June 23, 2018
QotD: The protectionist two-step, Alberta craft-beer variant
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