The weekly report presented by the Fundación Libertad y Progreso, evaluated the convenience of promoting the Mercosur – European Union agreement to encourage the flow of genuine dollars.
The organization considers that with export levels of 2007 and the same number of exporting companies as in 1994, Argentina needs to insist on the issue
According to its economists Iván Cachanosky and Eugenio Marí, the initiative “is a step towards an Argentina more integrated to the world that will serve to promote the adoption of structural reforms that manage a course of sustained growth; therefore, employment and well-being for Argentines ”.
In this sense, they affirm that the dynamics of exports in the last decade “allows us to see the results of the short-term strategies that prevailed until now. Taking the forecasts made by the government, in 2020 Argentine exports would return to the levels they had in 2007. However, this is not the result only of the current crisis, but of more than a decade of measures that affected export competitiveness ”.
“The measures that the government is taking are not only insufficient, but also avoid advancing boldly and in depth on the competitiveness problems faced by exporters. Rather, they confirm the continuation of the strategy of using patches instead of undertaking fundamental reforms ”, commented Iván Cachanosky, chief economist of Libertad y Progreso.
Our exports are not only low in level, but are also concentrated in a few markets, largely explained by few products and only 1.6% of registered companies manage to export, around 10,000 in 2019.
“Argentina has been turning its back on trade as a generator of growth opportunities and this has not been free. Less growth, less employment and greater poverty are just some of the consequences of having advanced on this agenda for so long, ”Cachanosky highlighted.
“This agreement includes the elimination of tariffs and barriers to trade between the blocs, as well as various disciplines related to bi-regional exchange, such as services, public contracts, intellectual property, sustainable development, rules of origin, and SMEs, among others” , said the economist Eugenio Marí.
The work launched by the Fundación Libertad y Progreso aims to support this structural change in Argentine economic policy. A thorough diagnosis is made on the international insertion of the country, on the contents of the Mercosur-EU bi-regional Agreement, and on the opportunities and improvements that it would imply for Argentine development.
“Nor should we lose sight of the geopolitical value of the Agreement. It means revalidating and invigorating Mercosur as Argentina’s integration platform, while allowing Argentina to abandon the growing US-China international bipolarity and strengthen its alliance with a strategic partner such as the European Union ”added Eugenio Marí.
The Mercosur-EU Agreement is therefore an instrument that will allow Argentina to advance in three major needs that Argentina has today: to recover and diversify exports, provide a better framework for attracting FDI, and achieve a better international position in an uncertain world.