2023-11-22 19:38:00
Doors (and ports) that open and others that might close. Javier Milei will take office on December 10 as the new President of the Nation. The libertarian won the runoff once morest Sergio Massa with various proposals, among which stands out a comprehensive economic reform which has, as one of its main aspects, the unilateral opening of international trade.
It is that the reference of Freedom Advances raised, on multiple occasionsthe need to encourage private investments that, according to the front platform, “foster trade and regional economies and promote the exchange of products” without state intervention. Online, they talk regarding “eliminate withholdings on exports and import duties”along with, of course, exchange rate unification.
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These intentions, added to the statements prior to being elected president, of “Do not think regarding a market of 45 million people, but rather one of 8 billion”like those he expressed in a meeting with the Inter-American Council of Commerce and Production (CICyP), reflects a specific interest in ‘look outside’in the middle of a Reserve bleeding framework by the Central Bankan organization that promised to close as part of its first management measures, but also of an ideology that has free competition as its flag.
Although, like all positions, This would have its derivative consequences: while some sectors would benefit from a reduction in regulationsin addition to adjusting prices in accordance with the international market, others would be seriously compromised to, for example, having to compete once morest companies with lower costs or that would even establish themselves in the country taking advantage of the complicated economic and labor situation to, through low salaries and small but significant investment, produce elements of lower quality but greater accessibility. , as has occurred in other nations.
Items that would benefit from Milei’s free market
If this economic theory expands, among the sectors that might benefit, understanding that this does not depend only on government policy but also on various factors, such as the international context, there would be all those related to raw materials and commoditiessuch as minerals, energy, livestock and agriculture.
AGRO. About, David MiazzoChief Economist of the FADA Foundationargued that this is because “these chains are inclined to export” hence “eliminating interventions, in addition to withholdings, and unifying the exchange rate would be beneficial measures”.
It should be noted, in this sense, that according to a report by PALACEin 2022 there were several complexes whose levels intended for international insertion exceeded, by far, 50% of total production, as were the cases of soy, with 84%, lemon, with 85%, and tea, with 94%.
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However, he clarified that ‘aim the guns’ outward, It should not necessarily harm the internal market. “In these, the country is very well supplied, such as meat, dairy products or wheat derivatives.where consumption levels are recorded per capita highest in the world. and the export It is the only mechanism they truly have to grow.“, he said, in dialogue with PERFIL.
ENERGY. A similar situation, although with its particularities, It is that of oil. In Argentina, a country that has Vaca Muerta as an exponent, YPF as a flag and that is even beginning to explore maritime territory in search of depositsthe hydrocarbon regime, both in terms of production and distribution, is regulated by the Ley 17.319.
This indicates, among other things, that The priority is placed on local supply and not on exportwhich is only authorized by government entities when the first is satisfied.
But still, At the moment it is not possible to send the total generated or a similar amount outside the countryunless current legislation is modified, something that would not be unusual in a government of Javier Milei that Congress will seek to modify several of the current regulations to carry out the proposals that have been outlined so much in the media during the last years, as it is, related to the theme, the privatization of the company in the hands, mostly, of the National State.
“If the laws are modified, the panorama changes. But you need to have a majority in the chambers and That’s something the new president doesn’t have.“, he expressed Jorge Lapeñaex Secretary of Energy of the Nation and president of Argentine Energy Institute ‘General Mosconi’.
In this context, put the magnifying glass on the outside for this type of resourcesof global shortages in the midst of armed conflicts in Europe and the Middle East and the approach to a deep crisis in the energy matrix, Yes, it might have its detriment on the consumption of Argentinesdepending on the measures taken.
The thing is It would not be the same to export more, with a magnifying glass on the entry of genuine currencies, with YPF or national capital companies that benefit companies that arrive from abroadgiving them the right to exploit resources to reap the profits, as can also happen with lithium, a more than precious material, mainly in the world of technologies, and of which Argentina, integrating the so-called “Lithium Triangle” together with Bolivia and Chile, concentrates 56% of resources and 30.7% of productionboth variables to level world.
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Sectors that would be harmed by Milei’s free market
On the other hand, the items that would experience difficulties in the face of a unilateral opening of international trade would be those related to industry and manufacturingdue to the pressure of global competition once morest local companies and, in line with what was previously mentioned, a fluctuation in prices of raw materials in the face of a system that encourages exports more and to nations with greater purchasing power, which would generate an imbalance that is difficult to sustain for local values.
A sensitive aspect, at this point, is related with the industrial promotion regime of Tierra del Fuegowith an extension in force until 2038, which generates tax and customs benefits for companies with development projects, mainly from the technology and electronics industriesand that Javier Milei promised to eliminate before being elected, labeling it as “a scam.”
This provision, added to a deregulation of manufacturing imports, which stops prioritizing what is national over what is foreign, would symbolize a loss of attractiveness, as a result of the benefits it had, for investmentswhich would lead to the exit of companies a drop in local production, which would end up having its impact when buying or selling this type of products, probably with more labels ‘Made in’ some foreign nation than those seen today, where the traditional orange and blue predominates and the ‘Made in UAE’.
This trend would extend to various industrial sectors and Those who would feel the biggest hit would be SMEswhich according to the Argentine Industrial Union (UIA) They generate 51% of the country’s jobs.
“This It would symbolize a very complicated situation. Argentina is not prepared for an economic opening like the one proposed by Milei. Certain guarantees must be given to ensure competition on equal terms with respect to foreign companies. If they are not the same, many companies should close their doors“, he stated Daniel RosatoPresident of Argentine Industrial SMEs (IPA)in dialogue with PROFILE.
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