Thank you, Chair. I am pleased to deliver a statement on behalf of the European Union on the occasion of the 5th Trade Policy Review of Argentina. Firstly, let me welcome the Argentinian delegation led by Mr Jorge NEME, Secretary for International Economic Relations. I would also like to thank the WTO Secretariat and the Government of Argentina for their reports. Finally, our appreciation goes to Ambassador Gloria PERALTA for her remarks.
Chair, Argentina is, like the EU, a firm believer in multilateralism and we appreciate its contribution to the work of this organisation. Argentina hosted our last ministerial conference in 2017, when the Organisation was able to take a qualitative step forward by launching so-called joint initiatives on e-commerce, MSMEs, investment facilitation and domestic regulation in services. For the near future, we look forward to receiving Argentina’s draft schedule in the context of the JSI on domestic regulation. This would be a welcome contribution towards a successful conclusion of negotiations ahead of MC12.
The EU is committed to achieving concrete results at the WTO’s 12th Ministerial Conference in December. Both the economic and political backdrops to this year’s conference are extremely challenging. We need to chart the right path for our Organization and show that trade policy can help to fight the pandemic, drive the economic recovery, and contribute to integrating sustainability into our economic policies. The EU is looking forward to working with Argentina to make this year’s conference a success. Success is not a given and we count on your help, Secretary Neme.
Argentina and the EU are connected by a myriad of ties, including deep historic, family and cultural links, which are reflected in the depth of our economic relations. Outside of Mercosur, the EU has been Argentina’s first trading partner for decades. We import and export between EUR 7 and 10 billion of goods each year, with a small surplus for the EU. The EU is also a major provider of foreign direct investment to Argentina, with stocks worth an estimated EUR 38 billion.
There is great potential to further develop our trade and investment relationship and we concluded our negotiations to establish an EU – Mercosur Association Agreement in 2019. This is the EU’s most important free trade agreement awaiting parliamentary ratification, and it will provide significant market access benefits for both sides while building on a number of WTO disciplines.
Today’s review takes place against the background of the COVID-19 pandemic, which has had – in addition to its tragic health cost – an important economic impact on patterns of supply and demand. You have had more than your share of lockdowns in Argentina. Fortunately, international demand for agricultural commodities was affected less than for capital or industrial goods, which means that external trade has been able to provide an important bulwark against further economic strain. Argentina faces severe economic headwinds due to its debt situation and a recession that predates the pandemic. Nonetheless, Argentina continues to be an agricultural powerhouse, an emerging player in the digital economy, endowed with vast natural resources, and above all a creative, well-educated and hard-working population.
Chair, most of us present here today in the WTO believe that trade contributes to employment and prosperity, and that it can, and indeed should, take go hand in hand with decent working conditions and high levels of protection of the environment. We have many companies in the EU that want to do business in Argentina and invest and help further realise Argentina’s potential.
It is in this field that the Secretariat report reveals several business obstacles and trade irritants that create legal uncertainty and pose concern for the EU. I am reminded Argentina had the highest standards of living anywhere on our planet in the first half of the twentieth century so it definitely has the potential to be one of the most developed economies in the world.
Unfortunately today, there are policies such as price controls, restricted access to foreign exchange, export taxes and non-automatic import licenses described in the Secretariat’s report. These impose real constraints on the ability of the private sector, and specifically of European companies and investors, to contribute to Argentina’s economic development and modernisation. Our concerns are not only about the existence of some of the measures but also about the way in which they are implemented. We would encourage Argentina to avoid taking measures with short notices and for their implementation to be carried out with greater administrative transparency and stability. This applies at both domestic and international levels. For instance, in the context of the current focus on the need to improve transparency in agriculture, in particular as part of the negotiations for the 12th WTO Ministerial Conference, the EU encourages Argentina to consider greater transparency in notifying agricultural export restrictions and prohibitions to the WTO.
As regards government procurement, the EU underlines the long-term benefits for Argentina’s economy that would arise if foreign companies were able to compete on an equal footing with domestic companies, as a means to ensure the acquisition of the best quality goods and services at the best price. Other Members of Mercosur have taken the jump and started serious negotiations to join the WTO’s GPA, and we would invite Argentina to consider this too.
Finally, the EU would also encourage Argentina to strengthen its intellectual property regime, and in particular its enforcement, as a means to help bolster both domestic and international investment in the production of high-value goods and services.
I hope that through our collective insights and responses in this TPR we can contribute to a reflection in Argentina on the best way forward, one that is in the long-term both in the interest of Argentina and its trading partners. We wish Argentina every success in this TPR and subsequent steps. Thank you.