/IPS DEVELOPMENT BULLETIN/ ARGENTINA: U.S. Barriers to Exports Unleash New Storm

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Apr 12 1997 (IPS) - With the dispute over Brazilian restrictions on imports still fresh, a new threat is looming over Argentine exports: the United States has begun to eliminate preferences for purchases from Argentina.

Economist Roberto Lavagna warned in an interview with IPS that the new U.S. barriers to Argentine exports would have an even more serious impact than sales to Brazil could have suffered with that country’s elimination of credit for imports, even prior to the temporary solution reached last week.

A former secretary of foreign commerce, Lavagna si the damage that could have been wrought on Argentine sales by Brazil’s measue was estimated at 90 to 130 million dollars, and the accord reached by the economy ministers of the two largest MERCOSUR (Southern Cone Common Market) members means the impact will be even less than that amount.

“The impact of Brazil’s financial measure is significant, but the problem with the United States is much more serious,” said Lavagna, “because it involves a volume of 500 million dollars in trade” in beef, peanuts, seamless tubes and leather.

The United States had warned in January that it would implement trade sanctions against Argentina in reprisal for the approval of a patent law that did not satisfy U.S. pharmaceutical companies.

The World Trade Organisation (WTO) agreed nearly three years ago on a quota of 20,000 tonnes of Argentine beef to be sold to the United States. That deal would also open the doors of the Japanese and South Korean markets, because those two countries were only awaiting the U.S. purchase as a guarantee that Argentina was indeed free of hoof-and-mouth disease.

But the sales of beef and peanuts have been held up by discussions over health standards. Exports of leather and seamless tubes used in the oil industry are also up in the air due to allegations of subsidies and unfair competition.

While the conflict with Brazil was monopolising public attention last week, Argentine Foreign Minister Guido Di Tella flew to the United States accompanied by the Foreign Ministry’s Secretary of International Economic Relations, Jorge Campbell, to work out pending trade issues with Washington.

Argentina’s Economy Minister protested that the emergency delegation sent to Brazil was not up to resolving the crisis. Campbell, the country’s top MERCOSUR negotiator, was in Washington, and other officials went in his place.

The government of Bill Clinton, in the meantime, has announced a 50 percent reduction in tariff preferences applied to imports from Argentina.

Argentine Ambassador to the United States Ral Granillo Ocampo said the trade sanction would mean 600 million dollars in losses.

The United States had long been warning it would imply sanctions during the debate on the approval of the patent law, which gives local laboratories extra time before patent payments come due. The extension, which the United States opposed, is in accordance with WTO recommendations for developing countries.