CAECE University, which is constantly developing activities to update its knowledge on foreign trade-related topics, brought together its authorities, professors and graduates of the International Business Diploma for a debate on the scope of the MERCOSUR-EUROPEAN UNION agreement.
With the outstanding presence of Eugenio Mari Thomsen and Iván Cachanosky, authors of the work “Mercosur/European Union: a step towards a more integrated Argentina in the world", an issue was opened that gives hope to the Argentine economy.
In his presentation, Eugenio Mari Thomsen highlighted each of the favourable conditions included in the Agreement reached between MERCOSUR and the EU. He highlighted the opportunity to break the vicious circle that has trapped Argentina for years, preventing genuine and constant growth in international trade.
The speaker started from three fundamental pillars: “the opportunity to export to the EU”, “the boost to European FDI in Argentina” y “the timeframes of up to 15 years for a gradual commercial opening”. He also noted that “The Agreement will improve the opportunities and conditions for exports for the more than 2.200 Argentine companies that already export to that bloc, and will also create scenarios for other companies to begin selling to that market.”. He added that “The implementation of the Agreement means that Argentine companies receive the same preferential conditions that those from different competing countries in Latin America already have, such as Chile, Colombia, Costa Rica, Ecuador, Mexico and Peru.”.
In his clear speech, Thomsen made clear the advantage of eliminating tariffs and consolidating at 0%, in substantially faster time frames than those of MERCOSUR. “In the case of the European bloc, almost 75% of trade with MERCOSUR will have immediate tariff reduction and consolidation. In contrast, for the South American bloc, only 14% of trade will have immediate tariff reduction, and more than 70% has tariff reduction baskets that extend for a decade or more, or are excluded.”. He concluded: "This allows for rapid opening of opportunities in the EU for the growth of Argentine sectors in the short term, taking into account an alternative path without falling into a relationship limited to China and the US.".
For his part, Iván Cachanosky, in line with the advantages stated by his co-author, began his speech with an encouraging phrase: “It is a great opportunity to do the work to transform Argentina into a country with efficient public policies.”
The economist acknowledged that the country has had poor public policies, tax pressure, high logistics costs, discouragement of exports, protectionism and impediments to imports for decades. The Agreement would act as a tool that imposes the modification of these actions, which are contrary to economic development and openness to the world.
In line with what he considers a great opportunity for Argentina, Cachanosky stated that “In order to take advantage of the benefits of the Agreement, it is necessary to advance structural reforms that restore competitiveness and provide a framework so that companies and workers can take advantage of the advantages and opportunities of trade”.
Through tax reform, progress would be made in eliminating a large part of the more than 165 taxes, fees and contributions that weigh on companies and individuals. This would simplify the tax system and reduce the tax burden.
The elimination of regulations that increase the cost of production and trade, and the strengthening of the currency, as well as the improvement of the pension system are points that require a proper transformation and that will allow the Agreement itself to be carried out, according to Cachanosky.
In response to Professor María Soledad Britti's question as to whether the Agreement could become a direct bilateral framework between some of the countries that make up MERCOSUR, effectively leaving out others, the speakers pointed out that they did not see this as possible: Argentina and the other MERCOSUR partners would not shy away from this great opportunity that positions their economies in the world. They also considered it necessary to consolidate this Agreement prior to its implementation; this will not only be based on the self-interest of each country, but also on the impetus that the partners themselves will impose on each other, thus strengthening MERCOSUR itself.
Finally, both speakers left a positive and encouraging message for Argentina, revaluing the Agreement in light of the opportunity to have a relevant partner such as the EUROPEAN UNION, since it will enable not only a great economic and commercial opening, but also the achievement of the reforms necessary to put its execution into practice and sustain it over time. This conclusion allows us to visualize a prosperous, competitive Argentina with immense growth for the universe of companies and citizens.
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