I've written before about how most developing countries have even more screwed-up energy policies than we do -- with the government expending large sums of money on environmentally destructive gasoline subsidies that are almost always regressive in the context of a poor country. One consequence of this that I hadn't considered, but which makes sense as soon as you think about it, is that if you live in the American Southwest you can head south of the border and fill up on cheap gas:
And while here he would pick up six-packs of Tecate beer and produce like passion fruit, and even visit an orthodontist. In all, he expected to save $200. The border, he said, flashing a mouthful of braces, is “our advantage.”
Things like buying passion fruit and an affordable orthodontist are conventional gains from trade, and ought to be encouraged but the kind of subsidy arbitrage represented by the gas issue isn't all that awesome. The good news, I suppose, is that this may put pressure on Mexico to start phasing these subsidies out.
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