The gift to SMEs, a greater opening of the market …

As part of the International Day of SMEs, President Mauricio Macri celebrated with the Argentine business world with an announcement that could have a negative impact on small and medium-sized businesses: he confirmed that his government was working with Brazil to achieve to a treaty. Free trade with the United States, such as that signed by Mercosur with the European Union.

"Good day for small and medium-sized enterprises," said Macri Rozagante, head of the Argentine Confederation of Medium Enterprises (CAME). "We see strong Argentineans," he said about the goal of "achieving a better future" or reaching "the country we have always wanted to be". In this regard, he clarified that the best possible scenario is that of "opening", such as the one that is currently going through Argentina since the arrival of Cambiemos to Casa Rosada. This "opening phase", continued the president, is supported by trade agreements signed with other countries or markets, such as the Mercosur agreement with the European Union.

"The Foreign Minister also said that we are discussing with Brazil a free trade agreement with the United States," Macri confirmed to the information already provided by Jorge Faurie. "What is happening is that the world wants to interact with us," said the president. Yesterday, the Minister of Foreign Affairs and Worship confirmed that he also worked under similar agreements with China, Canada, Korea and Singapore. "These are all dishes that Argentine products can achieve and it is a job," said the Minister of Foreign Affairs at La Nación +.

In front of the businessmen, Macri stressed that the country was open "a historic opportunity with the Mercosur-European Union agreement". "The demand for our products will multiply and we must prepare to produce more, the world is interested in relationships, the world believes to have the capacity to contribute and, in a few months, we will seek (agreements with) Canada, the United States, China, "he said. In addition, the President stressed that the agreement with the European Union "constituted an honest, open and fair negotiation" and that Argentine producers from different sectors now have "15 years to train and take advantage of this opportunity". The president acknowledged that SMEs "have had a very difficult year, but measures have been taken to allow them to develop, such as the law on SMEs, tax reform, the law on ART".

Critical economists

Economists and experts in international relations have exposed in detail the risks badociated with the realization of this type of agreement, because they are asymmetrical and not complementary economies. In addition, they wondered whether the treaty could be applied because it goes against the protectionist policies pursued by US President Donald Trump in his administration.

"It's a campaign announcement, there's nothing concrete, what they want, it's setting up the free trade project," he said. explained Carlos Bianco, former Secretary for International Economic Relations of Cristina Kirchner's government. While in the agreement with the European Union, the agro-export sector can be considered the big winner, it is not the same for the United States. "They are the world's largest producer of cereals, a competitive agricultural and animal powerhouse in the world, and I do not even know if we can sell food," said the researcher at the National University of Quilmes.

In the same vein, economist Alejandro Robba, former undersecretary for economic coordination, said. "With the European Union, there could be a complementarity because we could export food products, but with the United States, there is no type of supplement, because besides the industry and high technology, the agricultural sector is very competitive, "explained Robba. "They have natural resources, productive land and the government subsidizes them and protects them with tariff barriers," he said. For Robba, an integration policy must be given in an intelligent way. "In 2005, we moved away from the FTAA because we found that it was not practical because of the impact studies," he said.

Jorge Carrara, who was deputy director of the Center for International Economics at the Ministry of Foreign Affairs between 2002 and 2005, said that Macri's announcement was "smoke". On the side of Argentina, he said that the goal is to show a gesture towards the electoral base of Cambiemos and "to manage the axis of inflation, unemployment and the recession". But also, on the side of the United States, they felt that they had little aspect, because it went against the protectionist policies that had led to the management of Donald Trump. "The United States even reformulated the NAFTA agreement with Mexico and Trump even asked the Mexican president to be more restrictive with his imports from China," he said. . He felt that the fact that Argentina finds niches in which to export unique varieties could be an advantage for Argentina. For Carrara, the biggest concern is how the labor transition will take place in sectors that employ many workers but have no international competitiveness, such as textiles.

From the beginning of his term, in January 2017, Donald Trump led a protectionist economic policy. His presidential campaign was based on promoting employment for American citizens. He imposed tariffs on his Mexican trading partner, threatened to put tariffs on European cars and maintained a trade war with China. His government's economic policy decisions have also had an impact on trade with Argentina. In this regard, economist Pablo Kornblum, a specialist in international relations, asked: "How are we going to be able to conclude a treaty if we can not negotiate biodiesel and that we need two years to put ourselves in agree on the export of lemons? " In addition, he said that because of Argentina's high level of indebtedness to the IMF, the amount of the larger loan granted in the agency's history, it is difficult for trading conditions to be defined in a "fair and symmetrical" manner.