IN THE NEWS
Argentina, Mexico embrace free tradeSat, 30/07/2016 - 19:41
President Mauricio Macri and Mexican President Enrique Peña Nieto called yesterday for a strengthening and deepening of bilateral trade with a view to promptly signing a free trade deal by next year.
As part of that effort, the two presidents agreed to increase the scope of the ACE 6 (Acuerdo de Complementación Económica) that establishes reduced tariffs within the framework of the ALADI (Latin American Integration Association).
A deal, if inked, would be implemented in five to 10 years.
The talk of increased trade between Mexico and Buenos Aires fits in with the messages sent by the presidents throughout the day, in which they spoke of the “new stage” in the relationship.
Peña Nieto said at the Pink House that he saw a “shared vision of promoting development and prosperity.”
Macri reciprocated, saying that his government welcomed increased integration and that “we truly aspire that the agreements that we sign today are multiplied and that they lead to an agreement of absolute integration, of free trade between both countries”
Mexico is a founding member of the Pacific Alliance, the regional trade bloc that Macri has consistently said that he wants to see Argentina join in the long term. Macri has also been careful to say that he still believes in the Mercosur bloc.
Addressing a joint economic forum at Palacio San Martín yesterday after earlier meeting behind closed doors at the Pink House with Peña Nieto, Macri said that “following the strengthening of the ACE 6, we are hoping that this becomes a free trade deal in the next year.”
Peña Nieto had earlier said that any free trade deals would have to first depend on the strengthening of the ACE 6. As it currently stands, the ACE 6 between Mexico and Argentina sets out reduced tariffs for about 30-40 percent of Argentine products sold on the Mexican market.
Intense negotiations are set to commence to drive that number up to 100 percent in the next year.
“We want to get to 100 percent of the tariff universe, that is why we are talking about a deepening with a view to having free trade in five or 10 years, meeting the needs of every sectors and protecting Argentine labour” said María Cristina Boldorini, the Foreign ministry’s Secretary for International Economic Relations, to Télam. The negotiations will also tackles customs and competition guidelines together with services, government purchases and investments as well as an increase in the volume of trade.
In 2011, trade between Argentina and Mexico reached US$ 3 billion, with Argentina experiencing a deficit of US$ 896 million. But in 2014, trade dropped to US$ 2.35 billion, and the deficit decreased to US$ 252 million for Argentina.
“To reach agreements on reciprocal investments, the window of opportunity today is very large, given the convergence that exists in the political will of two governments that want to re-launch the relationship between our two nations, to take advantage of the comparative advantage of both countries to reach greater complementarity, as part of our strengths concerning in what concerns the relationship of business, is without a doubt greater than it was in the past” said the Mexican leader to the business forum.
Boldorini added that the government was seeking to revert the “very low percentage” of preferential tariffs that the agroindustiral sector enjoys in the ACE 6 and that sanitary regulations will be included in the current round of negotiations so that any agreement on tariffs can be swiftly implemented.
The existing agreement between Mexico and Argentina concerning tax exemptions on quotas of vehicle exports may also be included in the negotiations. That deal is part of a separate ACE protocol, and was updated as recently as last year for a four-year period.
Ahead of yesterday’s renewed push to increase trade, the Foreign Ministry has been contacting the Argentine Ambassador in Mexico, Daniel Chuburu.
Macri has been invited to visit Mexico next year, with all signs indicating that a trip would put pen to paper on an eventual agreement to drop existing trade barriers.
While economic cooperation was in the limelight, the two leaders yesterday presided over a signing ceremony of various tourism, science and technology, education, and social security agreements and spoke of shared visions between the regional powerhouses.
Peña Nieto, the first major Latin American leader to visit Buenos Aires since Macri was sworn in, spoke of taking advantage of the opportunities of “a global era, an era in which we work to consolidate our democracies, to the faithful defenders of human liberties, of human rights, of combatting criminal organizations that hurt so greatly shared life in our societies.”
Outside the Pink House, demonstrators were protesting against the Mexican president’s visit on account of human rights violations.
Macri beforehand had rattled off the same concerns as his visitor, linking the reduction of poverty and combatting drug-trafficking to his campaign promises.
After making their statements during an address that did not include questions from the press, Macri and Peña Nieto participated in a lunch with members of the Mexican delegation, governors and government officials from various ministries and the City.