Does the Mercosur-EU agreement save us or sink us?

The signing of the agreement between Mercosur and the European Union (EU) has been described by some Argentine as a historical fact and by others as a tragedy. Would you allow yourself to be operated on by two surgeons who have such a discrepancy about your condition? Beyond the fact that Argentina is now in the middle of a political campaign, the issue of opening and closing international trade has given rise to conflicting views since birth itself from the country.

In this respect, I consulted the Irishman Charles Francis Bastable (1855-1945), author of
Theory of international trade, published in 1887, and
Public finances, manual published in 1892. He was discussing with Francis Ysidro Edgeworth how to calculate costs according to the theory of comparative advantages. According to John A. Bristow, the criticism of the neoclbadical approach praised the German history school, emphasized the importance of sociology to understand the economy and recommended it. integration of economic badysis with political science, law and the scientific principles of administration.

– The announcement of the signing of an agreement between Mercosur and the EU has generated divergent and widely divergent opinions in Argentina. What can happen as a result of this agreement?

The ease with which contemporaries describe certain events as historical makes historians smile. Time will tell. The opposite is also true: no one has described as historic the fall of listings on the New York Stock Exchange, the so-called black Thursday of October 1929, which historians allegedly ushered in the great For the same reason We should also not pay attention to those who call the deal tragedy because they are campaigning.

-How should we look, then?

-First of all, we must keep in mind that it is not an Argentina-EU agreement, but a Mercosur-EU agreement . This implies that for its validity, it must be ratified by the congresses of each of the intervening nations. In the corresponding debate should appear the advantages and objections to the ratification of the agreement.

-In which, sorry for the evidence that I will say, the agreed text should be known.

Good point, because, as we say well, we discover the type of insurance that he has when his car hits or is stolen. I tell you more, it is likely that the text can only be understood by experts. Thus, even if it is published in all languages, experts in international trade policy should be called upon to help understand what has been signed. .

-And what will continue to be negotiated.

– Of course, because nobody can think that, in practice, the negotiations were finished. And in the commercial policy, the "details" have nothing to do with the details; On the contrary, they can be very important. This is why, I insist, the collaboration of the experts is very important.

An agreement of this nature generates general enthusiasm and specific concerns. What will happen to my business ?, Demand many entrepreneurs; What will happen to my work? Ask employees and union leaders.

-Razones do not miss. When studying at the university, international trade courses dealt with the badysis of tariffs and exchange rates, while tax distortions, work-related, etc., were studied in a variety of ways. other subjects or were not studied. An agreement such as the one just signed by Mercosur and the EU requires that all these issues be badyzed simultaneously.

-What do you mean?

– Imagine that in Argentina, a business man enjoys an import tariff of the product that he manufactures, but pays a municipal tax flower for energy that he uses in his factory. The agreement is implemented, the economy is open, but the municipal tax is not eliminated. You can break a business that should not go bankrupt. Any student in economics knows this, but it is important to take it into account when implementing the agreement. The history of Argentina says that those who have implemented the processes of economic openness have generally forgotten to remove the rest of the existing distortions.

-Well, but some dream that precisely, the implementation of the agreement will force the revision of the rest of the distortions.

– As you have said, you dream. But in economic policy, dreaming can be very dangerous.

-And so?

-Professional economists, but also chambers of commerce, trade unions, have a lot to contribute. Because they have specific knowledge, useful for the best possible implementation of this type of agreements. It would be more than unfortunate that, as a result of this challenge, professional economists have merely stated the first principles and that the representatives of the economic actors have merely mocked or proposed versions of the conspiracy. There is a lot at stake, in terms of opportunities, well-being, and so on. As you usually say, in practice, economic policy is not white, but really.

-Don Charles, thank you very much.