TRADE: Argentina and United States Iron out Differences

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Feb 17 1997 (IPS) - Negotiations between Argentina and the United States made it possible for the Southern Cone country to sign an accord on liberalisation of the basic telecoms services market reached this weekend by the World Trade Organisation (WTO).

The two countries worked out differences that had arisen over the past few months, and established mechanisms for discussing pending disputes, a trade official said Monday in Geneva.

The disputes between the two countries were over Argentine beef and peanut exports, and imports by that country of U.S. footwear, textiles and clothing.

The Argentine delegation that participated in the negotiations for the deregulation of telecoms announced Friday that the country was withdrawing its proposal for the opening of its own telecoms market.

Argentina’s new position surprised the nearly 70 countries that were preparing to conclude three years of multilateral negotiations to eliminate trade barriers in the sector.

The accord, reached on Saturday, marks the start to an opening- up of telecoms markets to foreign companies, and stipulates the establishment of national policies to safeguard such investments.

At the close of the negotiations, U.S. deputy trade representative Jeffrey Lang predicted that Argentina would soon sign, because the problem was a simple one of meat and peanuts.

The Argentine delegation ended up ratifying the same proposal it had presented in April 1996, when a first round of negotiations on telecoms was thwarted by the withdrawal of the United States.

Argentina’s telephone sector has been privatised, but two groups of operators, comprised of several of Europe’s chief state telephone companies, hold a monopoly.

The concession for Telefonica Argentina, under Spanish control, and Telecom Argentina, dominated by French and Italian firms, expires in November. But the Argentine government is expected to apply a clause that permits an extension of the concession until the year 2000.

The presence of U.S. capital in Argentina’s telecoms market – tenth in the world in 1996 – is minimal.

Trade sources here said Buenos Aires obtained assurance that the United States would renew bilateral talks in Geneva to resolve the dispute over footwear, textiles and clothing. The dispute is being studied in the WTO’s conflict resolution body, where a special panel is to be created in March to rule on the validity of the U.S. complaint.

Washington alleges that Argentina imposed, without previous consultation, a three percent tariff on imports of those goods from the United States.

But Argentina maintains that when the United States lodged its complaint and requested the creation of the panel, the two sides were still in consultation. According to the sources, Washington’s sense of urgency was due to pressure from the productive sectors in question.

The problem was discussed over the weekend by interim trade representative Charlene Barshefsky and Argentine Foreign Minister Guido Di Tella, who also examined other pending trade issues, such as approval of a U.S. quota for the importation of 20,000 tonnes of beef and certification of origin of peanuts imported by the United States.

Argentina expects the new quota for beef from Argentina to give a boost to its beef exports to other markets.

The trade sources here added that the United States would import peanuts grown in countries producing lower quality products under the label “Grown in Argentina”.