In the context of the Argentine elections, the question arises about what will happen to the agreement between Mercosur and the European Union if the Fernández-Fernández ticket is elected in the general elections next October. In dialogue with Customs News, the lawyer and co-author of the Argentine Customs Code, made an analysis of the Mercosur pact with the European Union, considering it as Argentina's opportunity to go out into the world.
What is your opinion on the current integration processes and the momentum achieved between MERCOSUR and the European Union?
Integration schemes are very important at the moment. There are three trends in the world: multilateralism, regionalism and bilateralism. Multilateralism is stagnant because it depends on the actions of the World Trade Organization (WTO). Since 2001, when the ninth round of negotiations began, it has not been able to close the relationship between developed countries that produce industrial goods and developing countries that want to place their agricultural and livestock products. This important gap could not be overcome despite the fact that negotiations continue; the only thing that was achieved at the Bali Conference is a trade facilitation agreement. This is exceptional because the general principle in the WTO and GATT is to close all agreements. An exception was made to benefit everyone. The truth is that this agreement benefits countries that have goods in circulation and access to markets. At this time, the type of goods considered are industrial goods, while agricultural goods have difficulties entering the market of both the United States and the European Union. So, beyond the Facilitation Agreement, multilateralism remains stagnant.
In this scenario, regionalism is important. Free trade agreements are the way out to position oneself in a world that has returned to protectionism since 2008 in Europe and the US, accentuated by President Trump. And for developing countries like Argentina, the alternative is to be in a bloc that allows it to go out into the world.
Bilateralism is the third option, and the United States can pursue it as it did after the failure of the FTAA. This American country has dedicated itself to making bilateral agreements with Chile, Peru, Panama, and Colombia, although they are not very balanced due to the difference in the forces involved.
Argentina is part of Mercosur and its union with Brazil positions it better to negotiate with the European Union.
The Mercosur-European Union agreement is an alternative for Argentina to enter the world, a country whose development in the last twenty years has been negative compared to other South American countries such as Peru, Colombia and Chile. Argentina is a very uncompetitive country and will not be able to be so if the next government does not modify the labour legislation, because the current conditions make it difficult for SMEs to hire staff. In addition, we have to carry out a pension reform, because the age should be increased, in addition to the reduction of contributions due to the number of staff who work “under the table”. The reform will be imposed beyond ideologies. Finally, Argentina requires a tax reform because the tax pressure makes any economic activity unprofitable.
That is to say, the fact of participating together with Brazil in an agreement with the European Union is positive and important, because in the event that Argentina, for some ideological reason, does not support this agreement, Brazil will do so alone with the European Union. The neighbouring country does not need Paraguay, Uruguay or Argentina to sign an agreement with the European bloc. In fact, the EU has signed agreements with Peru, Colombia and Chile. And in the conditions in which Argentina is currently, it has no other alternative than to follow in their footsteps so as not to be isolated from the world.
Do you consider President Mauricio Macri's management to be positive regarding the development of international trade?
In that sense, it has been positive. Let us compare Mauricio Macri's administration with that of Cristina Fernández and Néstor Kirchner, who had a great devotion to the Venezuelan government. It is evident that they had no interest in developing international trade. These administrations were not aligned with the United States or the European Union; the foreign policy they carried out was one of ideological isolation and rapprochement with Cuba - which has no economic significance - and above all, with Venezuela and Iran. This shows that beyond making Argentina's general interests prevail, they were getting closer to certain countries that are not representative of international trade. So, the arrival of Mauricio Macri allowed our country to position itself in a normal relationship with the United States and Europe. Also, the bet on China.
The Kirchner government did not allow Argentina to be competitive, for example, it was against the interests of livestock, which caused us to lose our role as a meat producer in the world. It was an administration dedicated to the monoculture of soybeans, causing the displacement of other activities: fruit, vegetables and livestock. And reversing the situation will take time.
For this reason, I believe that the Mercosur-European Union agreement is our opportunity; I do not believe there is another opportunity to insert Argentina into the world.
The country does not have many elections. It is in a state of need that forces us to negotiate as best as possible. Argentina needs the European Union more than it needs us.
What would you suggest to the next Argentine government?
I would tell the next Argentine government to work on implementing the Mercosur-European Union agreement, in addition to the three internal reforms that will allow Argentina to be competitive, because globalization imposes these conditions on us. Currently, the way in which production takes place and companies interact makes it necessary to be inserted in the world. To do this, sacrifices must be made, and tough measures must be accepted until we have foreign trade that allows us to export more and receive the foreign currency that is essential for the domestic market, which is becoming less and less significant.
Aduana News is the first Argentine customs newspaper to launch its digital version. With 20 years of experience, its publications and initiatives aim to provide the most relevant knowledge on customs issues in order to contribute to safe trade in the region.
