The second day of the WORLD FZO SUMMIT Buenos Aires 2019 left important conclusions on the value of free zones for Argentina and its neighbors in particular. The Uruguayan experience, in the voice of Diego Licio -from Auditora Grant Thomton- and Juan Opertti- the Director of the Chamber of Free Zones- both from Uruguay, serves as a complement. Because of its value, we include their testimonies below.
Legal security in free trade zones
Diego Licio, from Grant Thomton Uruguay, explained that pIn order to strengthen the free trade zone regime between Argentina and Uruguay, more macro-level policies than those zones must be agreed upon. For example, Mercosur has to sign free trade agreements with other countries. In fact, at this point, there are some countries that are better off dealing directly with China and other relevant countries than staying in Mercosur when no member is trading much with each other.
In order for Argentina's free trade zones to be strengthened, they should have entry and exit of goods, provide services and manufacturing activities.. In particular, there should be a system that guarantees users that the regime will not change. In Uruguay, a tool was created within the law itself that establishes that the State guarantees any damages that the user may suffer in the event that the rules of the game are changed. This is legal security guaranteed by the State. Both States should then implement complementary policies to make customs more agile and efficient, especially in e-commerce, which is what is growing worldwide at double digits, and thus being able to trade more bilaterally.
The impact of free trade zones on job creation
At the same time, Juan Opertti, Director of the Chamber of Free Trade Zones of Uruguay (Czfuy) and of the Hemistion Consulting Firm, He said: “I think that AArgentina has an opportunity for inclusive and sustainable development through free trade zones, because they are the natural place where foreign investments are coming in multiple areas, whether it be information technology, the pharmaceutical industry, auto parts, oil, metalworking, shared centers, that is, the centralization of administrative operations for the region. In addition, Free zones are customs enclaves where countries are tested by international investments. If they do well in the free zone, they generally begin to develop activities outside it. On the other hand, investors in free trade zones think that they are exempt from taxes, which is true, but technological developments and investments radiate employment and indirect taxes abroad, since the employment generated in the free trade zone is better trained and paid than that generated outside the free trade zone due to the incorporation of disruptive technologies. For example, one trend is logistics costs for e-commerce, especially cross-border. Centralized operations in the region through Amazon or similar, would concentrate operations in transit to distribute in the region. They are logistics centers with very high technology (related to data centers, information technology, call centers, contact centers) that employ qualified personnel whose salaries are usually higher than average.
These employees contribute to social security, they incorporate comfort. Therefore, Free zones are important for foreign direct investment, which then undoubtedly radiates into non-free zones. Uruguay has 11 free trade zones that represent 5% of GDP, The average age of employees is less than 29 years, the average salary is three thousand dollars and there are already around 15 thousand people working in free zone companies, "But the energy generated by the free zone has an impact on more than 60 thousand jobs and exports from the free zone are worth more than 4 billion dollars. Therefore, free zones for Uruguay are, without a doubt, a strategic asset for the country."
Both speakers provided their valuable input at the Usina del Arte, during the conferences organized by the Latin American regional office of the World Free Trade Zone Organization (WFZO) that took place on April 9 and 10. These meetings demonstrated the importance of free trade zones in the development of countries that adopt them to promote investment and the generation of qualified employment in a technological world in continuous expansion.
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