International trade: geopolitical dispute and op …

Production: Florencia Barragan

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Federalize development

By Federico Luis Vaccarezza

While in comparative terms the differences between the structures of economies are innumerable, the common feature of all economies that have developed and those that are more advanced in this process is their level of participation in the world economy. The higher the level of participation of the external sector relative to the economy’s GDP, the higher the level of growth, stability and development. Therefore, the higher the level of integration of a geographic region with the world economy, the higher the level of income and prosperity. This same principle that applies to countries also applies to regions and provinces of the country.

The internal divide

The creation of wealth in our country is closely linked to the ability of a region to participate in the global economy. But, to explain it more clearly, it is necessary to analyze certain data on the provincial origin of exports (OPEX) that INDEC measures. In the first half of 2020, the value of total exports was $ 26,934 million. Of this value, 20,626 million corresponded to exports from the Pampas region, which is equivalent to 76.6 percent of the total exported, while the Patagonia region is equivalent to 8.8, to the north-west 6, to the region Cuyana 5.9 and northeast Argentina 2.1 percent of the total value of exports.

The Argentine Federal Territory is made up of 23 provinces and the Autonomous City of Buenos Aires, but in terms of participation in international trade the regions of Buenos Aires, Entre Ríos, Santa Fe, Córdoba, La Pampa and San Luis have more of three – a quarter (3/4) of the country’s exported value, while the remaining quarter (1/4) is unevenly distributed among the other 19 provinces.

With regard to the provinces themselves, the distribution is even more unequal. Buenos Aires represents 35.3% of the total value of the country’s exports, Santa Fe 20.1 and Córdoba 15.9%. In total, only three provinces equal 72 percent of the total value exported by the country.

With sectors, the situation is not much different: the Pampas region accounts for about 97 percent of the total export value of the oilseed complex; 84 of the cereal complex; 97 from the automotive sector; 92 from the cattle sector; 91 of the pharmaceutical complex; and 97 percent of the poultry complex; among others. The concentration is so phenomenal that, year after year, the internal gap between the development possibilities of these provinces and the rest of the country is widening.

In terms of investment, the question is similar. According to data from the Argentine Agency for Investment and International Trade (AACI), in 2018, the last year that can be counted as regular in the reception of investments, the region of Buenos Aires received 11 billion dollars , which equates to 29.8 percent of the annual total.

Although our country constitutionally adopts a federal political system, this federalism is neutralized in economic terms by the high concentration of opportunities in only three provinces, while the others are progressing every day in relative terms to improve their development possibilities. By not being able to participate with their economic structures in a virtuous integration into the world economy, most provinces are becoming less and less relevant in economic terms.

Bet on the diversification of exports

In 2020, the national government worked with Argentine food producing entities on a proposal to increase Argentina’s exports to $ 100,000 million by 2030 which, at current values ​​of our exports, have been damaged by the fall in world trade. due to the pandemic, would almost double the current value. The proposal is interesting, but it comes from the oilseeds and grains sector concentrated in the three main provinces of the country, which would further widen the gap between the exporting provinces and the inner periphery. In order to have an economy that allows equitable development of the regions, it is necessary to develop a development strategy aimed at increasing the production and export capacity of the country’s provinces.

This requires actively orienting investments in productive infrastructure, financing and stimulating exports, orienting foreign trade policy and resources intended to promote exports and investments towards the development of regional economies.

Overcoming the internal divide involves assuming that the substantial improvement in the increase and geographic diversification of Argentina’s export supply to the world market is perhaps the most important of all the challenges for our development that lie ahead. .

Master in International Business Relations (UNTreF). Professor of BA in Economics UNDAV.

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WTO changes

By Julieta Zelicovich (**)

In May 2020, in an emergency context, marked among other things by the trade war between the United States and China and the disruptive effects of the pandemic, the World Trade Organization (WTO) was shaken by the early resignation by Roberto Azevêdo. After several months, during which the geopolitical dispute prevailed more than the weighing of the backgrounds of the various candidates, on February 15, Nigerian Ngozi Okonjo-Iweala was elected director general.

In between, several rounds of unsuccessful negotiations took place in which it became clear that although neither the United States nor China on their own were able to impose their preferences regarding the direction of global governance of the international trade, the lack of cooperation between these two countries was enough for the WTO to slow down its functioning and greatly increase the levels of uncertainty about the future of cooperation in international trade. The election was made possible not only because of the change of government in the United States, but also because the other candidate, Yoo Myung-hee, withdrew her candidacy.

Ngozi is the first woman, and the first African, to hold the post of Director General of the WTO. Another significant difference from its predecessors is that its track record relates more to development issues than to the hard core of international trade. His approach is that international trade and commercial relations are “fundamentally about the people”.

As a result, his speech seems to put much more emphasis on what commerce can do for people rather than what people can do for commerce. The difference transcends the pun and places a heavy burden on public policy, in a context where what member countries expect from trade and trade policies is something that is contested. For example, in the negotiations on fisheries and environmental sustainability; in the tension between trade and development; and even in the regulation of electronic commerce.

The priorities that Ngozi has set for his leadership include a more active role for the WTO in managing the Covid-19 crisis (aiming, among other things, at less restrictive trade in health products. In addition, trade relations help to guarantee the supply of vaccines). Another of its objectives is to reform the dispute settlement mechanism, allowing the Appellate Body to function again. It also seeks in its management to make progress in updating the normative and procedural frameworks of the WTO. This point is a long-standing debt and a goal that various administrators have set for themselves without success.

In the short term, Ngozi’s goal is for the 12th Ministerial Conference to be held in 2021 to produce results in the negotiations on fisheries subsidies and digital trade, as well as a roadmap to resolve the blockade of the appeal body. In this list, and which is of interest to Argentina, there is also Ngozi’s desire to promote some sort of outcome in the removal of restrictions on exports to the United Nations World Food Program.