For economists, Biden would not bring great changes to the economic relationship with Argentina

Photo Natalia Motyl
Natalia Motyl

Bachelor of Economics (UBA). Economic Analyst of Libertad y Progreso.

AMBITO FINANCIERO – The future of economic relations between Argentina and the United States would not undergo great changes with the assumption of Joe Biden as president of the North American country, although the future president needs to specify his economic program, different local economists agreed.

The measures that Biden adopts once he has assumed his mandate regarding the relationship of the United States with China and Latin America, the possibility of a new fiscal aid package or a tax reform are some elements that could affect the commercial and financial dynamics with the Argentina, both directly and indirectly.

For the director of the Center for Argentine Political Economy (CEPA), Hernán Letcher, it is premature to venture what Argentina’s relationship with Biden will be like, but he assured that “it is difficult for us to do worse commercially than with (Donald) Trump.”

“During the Trump administration our direct commercial relationship went very badly: we lost the export markets for steel and biodiesel and we won the market for lemons. I get the impression that Biden has a more moderate stance from a commercial point of view, “said Letcher.

On the other hand, he said that we will have to wait for the definitions given by Biden regarding a possible package of fiscal assistance due to the pandemic, the relationship it has with China and a possible tax reform that gives more progressivity to the system.

Regarding this last point, he pointed out that although Biden is not expected to apply a tax to large fortunes, “there may be an increase in the rate of what would be the Income tax.”

“This has a strong symbolic impact because, if the main power in the world increases taxes on those who have a greater flow of income to finance pandemic expenses, the idea that in a world more regressive due to the pandemic, the State intervenes. to balance that dispute, “said Letcher.

Natalia Motyl, an economist at the Fundación Libertad y Progreso, considered that the impact of Biden’s triumph “will not be very significant” in the economic relationship with Argentina because the US president-elect “will aim to restructure the internal economy so less in the first two years of management ”.

“In the short term we are going to see a stability in the external sector favorable for developing markets like ours; Likewise, Argentina is not a significant actor and, even though it is in the ideological line of the government, I do not believe that Biden is going to make significant changes in its commercial relations, “said Motyl.

“Yes we are going to have a chance with the great winner that is China, which recovered in ‘V’ and is going to be favored by Biden’s victory because the trade war is going to end and it can grow even faster than the the rest of the countries, and that will boost the prices of commodities, ”the economist told Télam.

For his part, the director of the Eco Go consultancy, Martín Vaunthier. He said that “to a large extent, commercial and financial relations go beyond who the authorities are. There may be changes in the tone and the times, but the volume of trade and even in the framework of the future agreement with the IMF, the bureaucracy and technical teams play more than who is in the White House ”.

Even so, he assured that “if a more positive relationship can be built in terms of diplomacy and tone, that in itself would be positive.”

For Christian Buteler, economist and financial analyst, it is actually the monetary policies defined by the Federal Reserve that most affect countries like Argentina and “not who is in the White House.”

“I don’t think we will be benefited or harmed by Biden’s coming to power. The economic link is going to be correct. I do not see any animosity against Latin America or that it will be his government objective in the next four years, “said Buteler.

Currently, the United States is the main foreign investor in Argentina with 22.7% of the stock of Foreign Direct Investment (FDI) for almost US $ 17,000 million, according to data from the Central Bank, and is the third commercial partner: in 2019 The commercial exchange exceeded US $ 10 billion and, between January and September 2020, accumulated more than US $ 5.7 billion between exports (US $ 2.526 million) and imports (US $ 3.206 million).