Counterpoint between industry and the government for the details of the Mercosur-European Union agreement

The publication by the Ministry of Foreign Affairs of the
The texts that constitute the Mercosur-European Union agreement, announced in Brussels on June 28, have already provoked a counterpoint between certain sectors and the government: part of the sector claims that, if the macroeconomic problems are not solved, the Agreement will bring more disadvantages what opportunities. For its part, the official voice retruca that improves competitiveness is the business of everyone.

For example, Juan Cantarella, director general of AFAC, Association of Component Manufacturing Plants of Argentina, said that, beyond what is specified in the 20 points released yesterday, any deal will end up being an opportunity or a threat depending on This is done in fiscal matters, modernization at work and continuity in improving infrastructure. "Without progress, we will be complicated," he said.

Ariel Schale, executive director of the Pro Tejer Foundation, which represents a part of the textile sector, said: "Go sign agreements on ambitions and commitments made, without solving the systemic problems of non-competitiveness". Argentinian economy, that will bring us more problems than opportunities. "He added:" Whoever has to put shorts, train and solve these problems, is the government, not us. "

Dante Sica

, Minister of Production and Labor of the Nation, took up the challenge and stressed that the government was not the only one to have to work to improve competitiveness. And he used a metaphor of football to answer those who badume responsibility: "The ball is not only on our side, it is on the ground and we must all play: provinces, employers, The government, for its part, says that all the work in macroeconomics indicates what they are asking of us, that is, to reduce inflation and to have a competitive exchange rate. "

For its part, Marisa Bircher, Secretary of Foreign Trade of the nation, said that what was published yesterday represents 80% of the agreement. "What's missing is the list of offers, which is what the sector is waiting for and will be coming out in a few days, because it is a bit late." The famous small print is what came out yesterday and is not anything different from what we have counted up to now, but these are specifications for each chapter of the agreement, "explained the responsible.

Compensation and subsidies

For the wine sector, Francisco Do Pico, director of institutional relations of Peñaflor, which represents 30% of Argentine wine exports, believes that the agreement is positive and says that it removes an additional hurdle to the export of wine by the country. But it must be stressed that we must work on the logistical competitiveness, the tax burden, the elimination of withholding taxes, the increase in refunds and long-term problems such as investment in international promotion, where other competing countries do a lot and the

Argentina

Recently and nothing. "Equally, it's worth pointing out that we are already competitive today," he said.

Other voices of the wine industry argued that they thought it would be convenient to compensate European producers by granting them some form of compensation. "One of the questions to be clarified is how it will compensate for the fact that wine production in Europe is heavily subsidized (Spain has awarded grants of up to 300 million euros in 2018, while France and Italy have awarded grants of about 250 million euros.We must talk about this and see how it will be solved, no later than 2020 ", has said Eduardo Sancho, president of the Association of Cooperativas Vitivinícolas Argentinas (Acovi).

Sancho notes that beyond the subject of subsidies, there is the issue of the total reduction of export taxes, and that of labor to improve the competitiveness of freight because the cost between

Mendoza

and Buenos Aires, for example, is higher than the cost between Buenos Aires and Amsterdam. In addition, it is necessary to have a convenient exchange rate because, he said, you can not continue playing with this variable every day for political reasons.

Faced with these concerns, Bircher responded that there was a safeguard clause in the agreement and that there was always the possibility of raising a disagreement, if we observed that there was had fraud or subsidy insufficient for a sector. "We can claim anything that generates unfair competition," he promised.

However, Schale added more fuel to the fire and said that much of his opinion on the deal could be expressed in the form of questions: "what are we going to export, interest rate of 60%? A tax burden equivalent to 100% of the cost? " The most expensive dollarized energy tariffs in the region? 60% inflation? All we are going to export? ", did he declare.

"You do not become Germany by signing a paper"

According to Pro Tejer, the challenge lies not in the industrial sector, but in the public policies of Argentina. "Here, the Argentine state is in competition with the powerful European industrial state.With our factory, we compete with the best country in the world, but the government has the task in suspense, because you do not become Germany or Korea by signing a paper, we tell the government every day, "he said.

Without losing the calm, Sica made it clear that there was nothing hidden in these 20 known points yesterday. "It was published in English, because that's what we are styling and we wanted to give the information as quickly as possible.We do everything legal, the points and the commas are good, all we put is this that we wanted to put the translation is done and then it is submitted to the congresses, "said the minister.

In a timely response to textiles, Sica said that what had been agreed was what they had requested, based on a private agreement of textile companies from all countries.

Mercosur

with the textileros of

Europe

. "We put what they asked us: a reduction to eight years while maintaining the rules of origin, which is recognized by all the Brazilian chambers of the sector," he said.

Bircher reinforces this argument and says that since the signing of the agreement, he has already met 25 rooms (with all the industrialists). "In some cases, they end up winning and in other cases, they have time to improve their productivity, but we have all been able to respect the red lines defined in the agreement, they understand that we must start now to improve our competitiveness, for example, update their technical regulations, because many were late, "he said.

Cantarella also insisted that Mercosur's big partner was taking advantage of some things and that another official attitude was required with regard to certain macroeconomic weaknesses. "Brazil has already sanctioned its labor reform, which is very similar to that of Spain, it simplifies taxes and takes a half-sanction of pension reform, we can not continue to delay things" he complains.

Sica also devoted a few words to this sector. "Regarding auto parts, we set tax relief at 12 years, which we think is very reasonable, everyone has deadlines, we must now take advantage of these deadlines, we must all work to the competitiveness to be ready, because Europe does not compete for the price, but for the quality, "concluded the minister.

"Interesting things"

In what he does to the letter of what was published the day before yesterday by the Foreign Ministry, Marcelo Elizondo, an badyst and consultant in international trade, said that the document is very legal, even if it is not a legal document. it contains "interesting things". "For example, in the chapter on the exchange of goods, it is established that the parties undertake not to maintain, apply or reimplement export subsidies for export products. agricultural inputs or agricultural inputs for export, "he said.

In the same chapter, it is stated that "neither export credits nor guarantees, insurance or subsidies equivalent to subsidies on agricultural products or agricultural inputs for other exports will be maintained or introduced, unless they are framed by the rules of the WTO World Trade).

Another important point is that Mercosur will open its public works contracts to European companies (it is companies that can bid for public works that will compete with local companies on an equal footing. ). Chapter 4 ("Commercial Defense") sets out the conditions for the application of safeguards and the procedures for doing so for those cases where it is necessary to use them.

Elizondo points out that in the content of the agreement and what he knows up to now (much of what has been signed has not been made public), 91% of duties imposed by Mercosur on European products will be eliminated until today (equivalent today). € 40,000 million of EU exports per year, according to the EU). The EU, meanwhile, eliminates 92% of its tariffs on Mercosur products.

According to Elizosto, EU tariffs on Mercosur products will be reduced almost immediately. In the case of Mercosur industrial products, EU entry fees will be reduced to 0% for 80% of them. Although some other products rely on quotas in which the tariff will be lowered, and outside of them, the current tariff will be maintained, as in the case of meat, which will reduce the tariffs by 99,000. tons per year (will be reduced to 7.5%) Outside of this quota, the tariff will be reduced to 0% separately to cover the income of the Hilton Quota meat (they are paying 20% ​​today and l & # 39; Argentina exports today 29,500 tons in this quota).

Other known measures concern the appellations of origin. In this sense, Mercosur undertakes to respect 357 appellations of European origin (for example, Manchego cheese, Rioja wine, champagne or Parma ham) and Europe should do the same with many Mercosur products (such as Brazilian cachaça or Mendoza wines).

The agreement also states that the parties will respect labor rights in accordance with ILO (International Labor Organization) standards, as well as workers' freedom of badociation and the elimination of forced labor and labor. children.

In a relevant part of the reciprocal commitment, badyzed by Elizondo, it is intended that intellectual property rights be recognized and respected, as well as trade secrets, as well as copyright regulations. The parties also committed to removing barriers to electronic commerce between them.

In the "Services" chapter, another article highlighted by Elizondo, reaffirms the commitment to liberalize trade in services under the WTO rules (services are not prohibited in the hands of companies in the WTO). State or subsidies in this area). ). And the right of the parties to a regulation to obtain public goals is guaranteed. Country autonomy is maintained to resolve the issue. But it is expected that each party will (in the majority of listed services) grant companies from other signatories equal treatment.

Other relevant chapters, among those published the day before yesterday by the Ministry of Foreign Affairs, include "Dispute Resolution", "Grants", "Competition", "Technical Barriers to Trade", "Sanitary and Phytosanitary Standards" and "Defense". commercial ". "What is curious is that intellectual property is only the title, but nothing is published," Elizondo said.